Q4 2024 Pure Cycle Corp Earnings Call Transcript
Key Points
- Pure Cycle Corp (PCYO) reported record fourth quarter results, generating $12.5 million in Q4, driven by the delivery of Phase 2D lots.
- The company achieved a record annual revenue of $28.7 million and a gross profit of $20 million, with a gross margin close to 70%.
- Net income for the year was $11.6 million, translating to $0.48 per share, showcasing strong financial performance.
- The water utility segment had a record year, with significant contributions from oil and gas opportunities, and a 21% growth rate in utility customers.
- Pure Cycle Corp (PCYO) continues to expand its single-family rental segment, with plans to grow from 14 to 100 homes, demonstrating strong margins and recurring revenue potential.
- Despite strong financial performance, the company's share price has not reflected its underlying progress, indicating a potential disconnect with market perception.
- There is a concern about the increase in shares outstanding despite the company's stock repurchase program, raising questions about its effectiveness.
- The company faces challenges in attracting large water customers like datacenters, despite having significant water capacity.
- Interest rates have risen significantly, which could impact the carrying costs for land and potentially affect future land acquisitions or developments.
- The company is still only utilizing 5% of its utility assets, indicating underutilization of its existing resources.
Greetings, and welcome to the Pure Cycle Corporation Year-End 2024 Earnings Call. At this time, all participants are on a listen-only mode, and a question-and-answer session will follow the formal presentation. (Operator Instructions) Please note this conference is being recorded.
I will now turn the conference over to your host, Mr. Mark Harding, President and Chief Executive Officer of Pure Cycle Corporation. Sir, you may begin.
Thanks very much. Good morning, and I'd like to welcome you all to our 2024 fiscal year-end earnings call. We do have a slide deck for this call, so it is on our website if you go to purecyclewater.com. It's on the landing slide page, you can click there, and then we will note through the transition of the slides. And if you have any technical difficulties you can probably get it there. And then, you can also get it on the Investor Page for the PDF version of it.
So, with that, let me get started. First, I want to talk about our forward
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