Pure Cycle Corporation (PCYO): Business Model Canvas [Dec-2025 Updated]

You're trying to get a clear picture of Pure Cycle Corporation's (PCYO) business model, and honestly, it's more than just building lots. After twenty years analyzing these structures, I see a unique blend here: real estate development feeding a captive utility, all underpinned by energy royalties. For fiscal year 2025, the numbers tell the story: land lot sales brought in $15.3 million, but the oil and gas income surged to $6.7 million, showing their diversification is real. This canvas lays out exactly how their $\sim$$50 million in water assets supports everything from selling entry-level lots to national builders to collecting monthly service fees from residents. Dive in below to see the nine pieces that make this machine run.

Pure Cycle Corporation (PCYO) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Pure Cycle Corporation (PCYO) relies on to execute its master-planned community and water utility strategy at Sky Ranch. These partnerships are critical because they de-risk the land development timeline and lock in long-term, recurring revenue streams. Honestly, without these agreements, the entire vertical integration model stalls.

National Homebuilders for Lot Purchases

The relationship with national homebuilders is the primary engine for monetizing the land development segment. Pure Cycle Corporation has a portfolio of builders, including Lennar, D.R. Horton, KB Home, Taylor Morrison, and Challenger Homes, all delivering lots within Sky Ranch. The total build-out potential for Sky Ranch is about 3,200 single-family units, with the overall development representing up to about 5,000 single-family equivalent units (SFEs) when including commercial space. As of late 2025, the company reported closing on all 228 lots in Phase 2C and being about 50% done on Phase 2D, with Phase 2D completion rolling into 2026. For the year ended August 31, 2024, they delivered 949 finished lots to these builders. The projected net margins from monetizing the current inventory across residential and commercial is over $600 million over the next five or six years.

Here's a look at the development pacing that feeds these builder partnerships:

Oil and Gas Operators for Water Supply and Disposal Services

The water utility segment provides a crucial, though sometimes volatile, revenue stream through partnerships with oil and gas (O&G) operators. Pure Cycle Corporation provides water to these operators for drilling purposes. The total assets in the Water segment were about $65 million as of Q2 2025. The company has drilled over 150 wells to date, estimating an average of $250,000 of water sales per well. While direct water sales to O&G plummeted almost 90% in Q2 2025 due to low crude prices, the associated O&G royalty income provided a significant boost to profitability, contributing to the reported FY 2025 net income of $13.1 million. The overall water rights portfolio has the capacity to serve up to 60,000 connections, far exceeding the roughly 2,500 connections the current system supports.

Charter School Partner for K-12 Campus

Partnering with National Heritage Academy (NHA) to operate the Sky Ranch Academy is a key amenity that enhances land value. NHA is the operator for the K-12 charter school, which is a distinguishing feature for the land development. The primary school opened three years prior to late 2025, and the company just broke ground on the high school in 2025, completing the full K-12 campus on site. NHA brings experience operating 90 schools across nine states.

Contractors and Engineers for Horizontal Land Development Work

The execution of horizontal land development-the grading, utilities, and infrastructure work-relies on experienced contractors and engineers, guided internally by leadership with over two decades of local experience. As of August 31, 2024, Phase 2A was approximately 99% complete, and Phase 2B was about 92% complete. The company recognized a 135% increase in lot sales revenue for the year ended August 31, 2024, driven by this increased development activity. As of Q2 2025, the company had constructed about $77 million of lot sale revenue since the project started, representing roughly 20% of the total land development build-out capacity.

Local Governmental Jurisdictions for Note Receivable and Development Coordination

Coordination with local jurisdictions is essential for entitlements and service agreements. Pure Cycle Corporation partners with the Bennett School District 29J for the charter school initiative. Furthermore, the company provides exclusive water and wastewater services to 24,000 acres of state-owned property adjacent to Sky Ranch. On the financial side, the corporate assets include related party note receivable, which is a component of the balance sheet alongside cash and short-term investments.

The Water segment's total assets stand at about $65 million.

Pure Cycle Corporation (PCYO) - Canvas Business Model: Key Activities

You're looking for the hard numbers defining what Pure Cycle Corporation (PCYO) actually does day-to-day as of late 2025. Here's the quick math on their core operational activities based on the fiscal year ended August 31, 2025, financial results.

Developing finished, entry-level lots at Sky Ranch Master Planned Community

The land development segment generated $15.3 million in revenue for the year ended August 31, 2025. This activity is focused on delivering finished lots to national homebuilders at the Sky Ranch Master Planned Community.

Lot sales revenue for the year ended August 31, 2025, totaled $13.7 million. This was impacted by delays in closing Phase 2D lots.

The total second development phase (Phase 2) consists of 1,020 lots, broken down into subphases: 2A (229 lots), 2B (211 lots), 2C (228 lots), 2D (204 lots), and 2E (148 lots). Phase 2D is expected to be substantially complete by the end of fiscal 2026, and Phase 2E by the end of fiscal 2027.

Operating and expanding wholesale water/wastewater utility systems

The Water and Wastewater Resource Development segment generated $10.33 million in revenue for the year ended August 31, 2025. This segment includes revenue from water/wastewater activities and tap fees.

Water and wastewater tap fees accounted for $7.337 million of revenue in fiscal 2025, from the sale of 182 water or water and wastewater taps. The average price of a Sky Ranch water and wastewater tap in 2025 was approximately $40,000.

Key utility metrics include:

• Water and wastewater activities revenue (FY2025): $2,997 thousand.
• Total water and wastewater taps sold at Sky Ranch in Phases 1, 2A, 2B, and 2C (as of 8/31/2025): 965.
• Projected additional tap fee revenue from Phase 2 over the next three years (as of 8/31/2025): $19.1 million.
• Water rights in the Denver region could serve an estimated 60,000 single-family equivalents (SFEs) at buildout.
• The water rights cost basis is $14.5 million.
• Annual water and wastewater fees total $1,500 per connection in the Denver area.
• Active connections as of September 30, 2025: 1,600.

Managing and growing the single-family home rental portfolio

The single-family rental business reported revenue of $496,000 for the year ended August 31, 2025. This activity leverages land and utility assets by retaining lots for rental properties.

Rental portfolio status as of late 2025:

• Homes built and rented in Sky Ranch as of August 31, 2025: 14.
• Rental townhomes planned to come online during the fall of 2025: 5.
• Additional single-family detached homes under contract for delivery in fiscal 2026: 40.
• Expected total homes in Phase 2 rentals: 100, with the ability to add more than 200 homes as Sky Ranch builds out.

Monetizing oil and gas mineral interests through royalty collection

This activity saw a significant increase in fiscal 2025, reporting royalty income of $6.7 million. This represents a 738% increase from the $0.8 million reported in 2024.

Mineral asset details:

• Oil and gas royalty income for Q3 2025: $1.14 million.
• Oil and gas royalty income for Q1 2025: approximately $2.6 million.
• Total net mineral acres owned: over 10,000.
• Mineral acres in the Niobrara Formation/Southern Wattenberg Field: nearly 700 acres.

Securing and maintaining valuable water rights in the Denver region

The water rights are a foundational asset supporting the utility operations and land development.

The potential top-line revenue from connection fees based on the capacity of the water rights portfolio is approximately $2.5 billion. The cost basis for these water rights is $14.5 million. The water segment assets are valued around $68 million. Exclusive water services cover 24,000 acres of state-owned land.

Pure Cycle Corporation (PCYO) - Canvas Business Model: Key Resources

The Key Resources for Pure Cycle Corporation center on its proprietary water rights, extensive land holdings, and the integrated infrastructure supporting its development strategy.

The water rights portfolio in Colorado is a highly valuable asset, underpinning all other operations. Pure Cycle Corporation owns about 30,000 acre feet of water, which allows the company to serve an estimated 60,000 single-family residential units. The cost basis for these water rights is reported at $14.5 million, yet the potential revenue from connection fees is projected as high as $2.5 billion. Furthermore, exclusive water services cover 24,000 acres of state-owned land, pointing to future growth avenues.

The Sky Ranch land holdings represent a core physical asset, currently zoned to include up to 3,200 single family and multifamily homes, plus 2 million square feet of commercial and light industrial space. The development is proceeding in phases, with a significant number of lots already delivered to partners. As of August 31, 2025, Pure Cycle Corporation had sold 956 water and wastewater taps at Sky Ranch across Phases 1, 2A, 2B, and 2C. The company anticipates an additional $19.1 million in tap fee revenue and cash from Phase 2 of Sky Ranch over the next three years, based on current pricing and engineering estimates.

The integrated water and wastewater infrastructure is a critical component, with the company reporting approximately $60 million in hard assets related to this segment. This infrastructure supports the 1,600 active connections as of the September 2025 presentation. The annual water and wastewater fees generated per connection are $1,500.

Pure Cycle Corporation is growing its portfolio of single-family rental homes, a segment designed to provide stable, recurring revenue. As of August 31, 2025, the company had 14 rental home leases active. The average construction cost for these homes to date is approximately $350,000 each, with a reported market value exceeding $500,000 per home. The company plans to build 76 additional rental homes over the next several years in Phases 2B-D.

The company maintains long-term contracts and partnerships with national homebuilders for lot delivery at Sky Ranch. These partners include Lennar, DR Horton, Richmond American Homes, Challenger Homes, KB Home, and Taylor Morrison. The land development segment generated $15.25 million in revenue for the year ended August 31, 2025, from lot sales, which totaled $13.7 million for the same period. The average price of a Sky Ranch water and wastewater tap during fiscal 2025 was approximately $40,000.

Here is a summary of the Sky Ranch development progress and associated financial metrics as of late 2025:

The key resources are leveraged across several operational areas:

• Water rights support 60,000 potential residential units.
• Sky Ranch development targets 3,200 residential units.
• Infrastructure assets are valued around $60 million.
• The rental portfolio has 14 completed homes as of August 2025.
• Six national homebuilders are active partners in lot delivery.

The company's liquidity position as of August 31, 2025, included $21.9 million in cash and cash equivalents, with only $7 million in debt reported in a separate context. The water and wastewater resource development segment generated $10.33 million in revenue for fiscal 2025.

Pure Cycle Corporation (PCYO) - Canvas Business Model: Value Propositions

You're looking at the core reasons why customers choose Pure Cycle Corporation (PCYO), and honestly, it's all about owning the water and the land it serves.

Vertically integrated, reliable water and wastewater utility services

Pure Cycle Corporation owns the water and the infrastructure to treat, store, and deliver it, plus they collect, treat, store, and reuse wastewater. Their wastewater segment is capable of recycling 100% of the returned water, excluding irrigation and other outdoor usage. The company's water rights cost basis is $14.5 million, but they project a potential revenue of $2.5 billion from connection fees alone, with the rights capable of serving 60,000 single-family units in the Denver area. They currently have 1,600 active connections, with annual water and wastewater fees averaging $1,500 per connection. For the year ended August 31, 2025, water and wastewater tap sales reached 182 taps, up from 73 in fiscal 2024, driving tap fee revenue to $7.3 million, up from $3.4 million the prior year. Residential water and wastewater delivered increased to 347 acre-feet in fiscal 2025 from 306 acre-feet in fiscal 2024. The mineral estate interest provided over $1 million in royalty revenue for the third quarter of 2025, contributing to a 738% increase in oil and gas royalty income for the full fiscal year 2025.

The value proposition here is the long-term, inflation-hedged value derived from these scarce water rights.

Delivering finished, entry-level lots to national homebuilders on a steady cadence

Pure Cycle Corporation partners with national homebuilders to deliver finished lots at Sky Ranch. The company guided 228 lots for delivery in fiscal 2025 and has an additional 364 lots scheduled for delivery in fiscal 2026. To date, the company has delivered over 1,169 finished lots. Lot sales revenue for the year ended August 31, 2025, was $13.7 million, compared to $16.0 million in 2024. The land development segment generated $15.3 million in revenue for fiscal 2025, and land development has generated $80 million in lot sales to date. Lot prices have seen appreciation, moving from an average of $55,400 per lot in 2022 to $75,800 per lot in 2024. The development phases are structured to maintain a steady flow:

This cadence helps builders with steady absorption while navigating industry headwinds.

Providing a master-planned community (Sky Ranch) with K-12 school access

The Sky Ranch Master Planned Community is a key asset, covering about 930 acres with a total development plan for about 3,200 single-family units. This also includes over 2+ million square feet of commercial, retail, and light industrial space. The community is projected to be fully built out around 2030. A Charter School opened in 2023 serving students from K-8th grade, directly supporting the residential value proposition.

Offering single-family rental homes in a low-inventory market

Pure Cycle Corporation retains a portion of the development for its Build-to-Rent (BTR) portfolio to capture recurring rental income. As of August 31, 2025, the company had 14 homes built and rented. They plan to bring 5 rental townhomes online in the fall of 2025 and are under contract for the next 40 single-family detached homes for delivery in fiscal 2026. The company aims to keep a rolling inventory of about 300 units, which is roughly 10% of the overall community. The single-family rental business reported revenue of $0.5 million for the full year 2025, with an estimated annual rental revenue stream of approximately $33,000 per home.

• Total planned SFR units in portfolio: up to about 300 units.
• Rental income for Q3 2025 remained steady at $0.1 million.
• The company is exploring further land and water rights acquisitions to expand this portfolio.

Long-term, inflation-hedged value from water rights appreciation

The water rights are legacy assets with a cost basis of $14.5 million, bought more than 35 years ago, which have seen tremendous appreciation. The projected net margins from the development, heavily tied to these water assets, are expected to reach $600 million over the next five to six years. The latent value in the residential lots Pure Cycle plans to sell or keep for rental is estimated around $45 million based on past sales. The company's overall financial health supports this long-term view, reporting $13.1 million in net income for fiscal year 2025, a 13% increase from 2024.

The company maintains a strong liquidity position of $60 million with only $7 million in debt.

Pure Cycle Corporation (PCYO) - Canvas Business Model: Customer Relationships

Direct, long-term contractual relationships with national homebuilders

• Lot sales revenue recognized in the year ended August 31, 2025, totaled $\mathbf{\$15.25}$ million from the Land Development Segment, down $\mathbf{13.31\%}$ from $\mathbf{\$17.59}$ million in 2024.
• Lot sales revenue breakdown for the year ended August 31, 2025, included $\mathbf{\$10.9}$ million from Phase 2C deliveries and $\mathbf{\$1.8}$ million from Phase 2D.
• The company is partnering with national homebuilders to deliver finished lots on an annual cadence.
• The second development phase (1,020 lots) is being developed in subphases, with Phase 2D ($\mathbf{204}$ lots) expected to be substantially complete during fiscal 2026.
• $\mathbf{148}$ lots in Phase 2E have started platting, with expected completion in fiscal 2027.
• As of late 2025, the Land Development segment is about $\mathbf{18\%}$ complete on the Sky Ranch build-out, with a target to reach closer to $\mathbf{30\%}$.

Utility service agreements with residential and commercial end-users

The Water and Wastewater Resource Development Segment reported revenue of $\mathbf{\$10.33}$ million for the year ended August 31, 2025.

As of August 31, 2025, $\mathbf{965}$ water and wastewater taps have been sold at Sky Ranch across Phases 1, 2A, 2B and 2C. The company's existing systems are positioned to provide service to about $\mathbf{60,000}$ connections, with Sky Ranch expected to total about $\mathbf{5,000}$ connections. Management believes Phase 2 of Sky Ranch will produce an additional tap fee revenue of $\mathbf{\$19.1}$ million over the next three years.

Professional property management for single-family rental tenants

• Single-family rentals generated $\mathbf{\$496,000}$ in revenue for the year ended August 31, 2025, an increase from $\mathbf{\$481,000}$ in 2024.
• Rental income for the quarter ending May 31, 2025, was steady at $\mathbf{\$0.1}$ million.
• Single-family rentals revenue for Q3 2025 was $\mathbf{\$123,000}$, compared to $\mathbf{\$131,000}$ in Q3 2024.

Investor relations and shareholder capital stewardship focus

Pure Cycle Corporation reported net income to common shareholders of $\mathbf{\$13.11}$ million for the year ended August 31, 2025, which is a $\mathbf{13\%}$ increase from $\mathbf{\$11.61}$ million in 2024. This marks the eighth consecutive year and $\mathbf{25th}$ consecutive fiscal quarter with positive net income. Earnings per fully diluted common share was $\mathbf{\$0.54}$ in 2025, up $\mathbf{12.5\%}$ from $\mathbf{\$0.48}$ in 2024.

The company had $\mathbf{24,076,305}$ shares of common stock outstanding as of April 7, 2025. The Water segment assets were reported at about $\mathbf{\$68}$ million.

Pure Cycle Corporation (PCYO) - Canvas Business Model: Channels

You're looking at how Pure Cycle Corporation (PCYO) gets its value propositions to the customer, which is a mix of direct sales, utility hookups, and property management. It's a multi-pronged approach tied directly to the development of Sky Ranch Master Planned Community.

Direct sales of finished lots to national homebuilders

This channel is the core of the land development segment, moving finished lots directly to your builder partners. The timing of these deliveries really dictates the revenue recognition here. For the fiscal year ended August 31, 2025, lot sales revenue clocked in at $13.7 million, which was a step down from the $16.0 million seen in 2024. Honestly, this was impacted by delays in closing Phase 2D lots.

Looking closer at the FY 2025 lot deliveries, you can see where the bulk of the revenue came from:

For the three months ended May 31, 2025, lot sales revenue was $2.5 million, down from $4.8 million in the prior year's quarter. The company is definitely pacing construction to match builder absorptions, which means the channel flow can be lumpy.

Direct utility connection sales (water/wastewater taps) to builders/residents

This is a key part of the Water and Wastewater Resource Development Segment, where you sell the right to connect to your infrastructure. The revenue from these tap fees has shown significant growth, which is a good sign for the recurring revenue base later on. For the year ended August 31, 2025, Pure Cycle Corporation sold 182 water or water and wastewater taps, generating $7.3 million in revenue. That's a big jump from the 73 taps sold for $3.4 million in 2024.

Here's a snapshot of the tap fee activity for shorter periods in 2025:

• For the three months ended February 28, 2025, 52 taps were sold for $2.1 million.
• For the nine months ended May 31, 2025, 130 taps were sold for $5.3 million.
• For the three months ended May 31, 2025, 40 taps were sold for $1.7 million.

Management noted that tap fees are right around the $40,000 mark. Also, as of May 31, 2025, a total of 904 water and wastewater taps had been sold across Phases 1, 2A, 2B, and 2C at Sky Ranch.

Internal property management for the single-family rental units

This channel is about retaining developed lots to generate direct rental income, which feeds into the recurring revenue stream. As of August 31, 2025, there were 14 single-family rental homes built and rented in Sky Ranch. Rental income for the full year ended August 31, 2025, was $0.5 million, flat compared to 2024.

The pipeline for this channel is building out, which you'll see reflected in future periods. As of May 31, 2025, there were 17 additional homes under contract to build in Phase 2B, expected to be available for rent in fiscal 2026. The expectation is to have a total of 98 homes in Phases 1 and 2, with the ability to support more than 200 homes once Sky Ranch is fully built out. Looking ahead to 2026, management forecasted a build-out target of as many as 250 to 300 units for single-family rentals.

Direct service delivery via owned water and wastewater infrastructure

This represents the ongoing metered water and wastewater service revenue from the infrastructure Pure Cycle Corporation owns and operates. The Water and Wastewater Resource Development Segment brought in $10.3 million in revenue for the year ended August 31, 2025. This segment is paced on the potential connection points within the service area.

The current penetration level gives you a clear view of the channel's future capacity:

• Commercial connection points currently served: a little over 1,600.
• Total potential connection points guidance: 60,000.

This infrastructure also serves industrial users; oil and gas royalty income, which is related to resource extraction on the land served by the infrastructure, saw a massive 738% increase in FY 2025, hitting $6.7 million, up from $0.8 million in 2024. Finance: draft 13-week cash view by Friday.

Pure Cycle Corporation (PCYO) - Canvas Business Model: Customer Segments

You're hiring before product-market fit... well, Pure Cycle Corporation (PCYO) has clearly defined customer bases across its integrated water, land, and resource segments as of the fiscal year ended August 31, 2025.

National and regional homebuilders seeking entry-level lots represent a core segment, directly tied to the development cadence at the Sky Ranch Master Planned Community. These partners rely on Pure Cycle Corporation for the horizontal infrastructure and utility connections necessary to build homes.

• Water or water and wastewater taps sold in Fiscal Year 2025: 182 taps.
• Water or water and wastewater taps sold in Fiscal Year 2024: 73 taps.
• Lot sales revenue for the year ended August 31, 2025: $13.7 million.
• Total water and wastewater taps sold at Sky Ranch across Phases 1, 2A, 2B, and 2C as of August 31, 2025: 965 taps.
• Average price per Sky Ranch water and wastewater tap in 2025: approximately $40,000.
• Lots delivered in Phase 2C, which was completed in Q4 2025: 228 lots.

The development of the second phase at Sky Ranch involves multiple subphases with different completion statuses as of August 31, 2025:

Residential homeowners and tenants within the Sky Ranch community are served through Pure Cycle Corporation's single-family rental business, which provides a source of recurring revenue.

• Single-family rental business revenue for the year ended August 31, 2025: $0.5 million.
• Single-family detached homes built and rented in Sky Ranch as of August 31, 2025: 14 homes.
• The company is under contract to close on an additional 40 rental units in fiscal 2026.

Oil and gas exploration and production (E&P) operators are a key customer segment for Pure Cycle Corporation's water services and a significant source of mineral income, though water usage is variable.

• Oil and gas royalty income for the year ended August 31, 2025: $6.7 million.
• Year-over-year increase in oil and gas royalty income (2025 vs 2024): 738% increase.
• Water deliveries to oil and gas customers for the year ended August 31, 2025: 639 acre-feet.
• Water deliveries to oil and gas customers for the year ended August 31, 2024: 1,818 acre-feet.
• Oil and gas operators have close to 200 drilling permits on the Lowry Ranch area.

Commercial developers for the 2 million square feet of planned space represent future monetization opportunities tied to the build-out of Sky Ranch, where Pure Cycle Corporation is the sole water and wastewater service provider.

• Planned retail, commercial, and light industrial space at Sky Ranch: over 2 million square feet.
• The commercial space is equivalent to approximately 1,800 residential units.
• The CDOT 1601 interchange permit, a catalyst for commercial monetization, is targeted for clearance by year-end 2025.

Pure Cycle Corporation (PCYO) - Canvas Business Model: Cost Structure

You're looking at the costs Pure Cycle Corporation incurs to keep its integrated water and land development model running through fiscal year 2025. Honestly, the cost structure is complex because it blends utility operations with real estate development, so you see costs showing up in different places.

Significant capital expenditure on horizontal land development (roads, utilities) is a major driver, though a precise total CapEx figure for FY 2025 isn't explicitly isolated in the top-line summaries. What we do know is that development is ongoing; for instance, utility work and road work were finishing in Phase 2D as of the year-end August 31, 2025. The remaining land to develop at Sky Ranch was recorded at a book value of $3.7 million, which is a fraction of the over $600 million in potential development revenue.

Operating costs for water and wastewater treatment and distribution fall largely under the Cost of Revenue category for the Water and Wastewater Resource Development Segment. The total Cost of Revenue for the full year ended August 31, 2025, reached $10.05 million, up from $8.98 million in 2024.

Property taxes and overhead, which increased in fiscal 2025, contributed to that rise in Cost of Revenue. The company explicitly noted that the cost of revenue increased due to higher overhead in the water and wastewater system and escalating property taxes, all linked to an accelerated development schedule.

The costs associated with the acquisition and maintenance of water rights are embedded in the balance sheet's asset base. The net investments in water and water systems stood at $64.832 million as of February 28, 2025 [cite: 3 from previous search]. Furthermore, the company reported an acquisition of $3.5 million in water rights (ditch water and groundwater) in the six months ended February 28, 2025 [cite: 3 from previous search]. The overall water rights cost basis is cited at $14.5 million [cite: 2 from previous search].

General and administrative expenses for corporate and project management are captured in the Selling, General & Administrative line. For the full fiscal year 2025, Pure Cycle Corporation reported Selling, General & Administrative expenses of $7.77 million, an increase from $6.92 million in 2024. Project management costs are also a component, with project management fees revenue being $781K in FY 2025.

Here's a look at the key reported full-year 2025 expense categories compared to 2024:

The structure shows that while revenue dipped to $26.1 million in FY 2025, total costs and expenses rose to $18.41 million. Still, disciplined management led to a net income increase to $13.1 million.

You should review the cash flow statement for actual cash spent on capital projects, as the income statement only captures recognized expenses and depreciation. Finance: draft 13-week cash view by Friday.

Pure Cycle Corporation (PCYO) - Canvas Business Model: Revenue Streams

The revenue streams for Pure Cycle Corporation (PCYO) are anchored in its vertically integrated model across land development, water/wastewater services, and mineral interests as of the fiscal year ended August 31, 2025.

Core revenue components for FY 2025 include land development lot sales, totaling $15.3 million in FY 2025.

The utility side contributes significantly through water and wastewater tap fees, which reached $7.3 million in FY 2025 from the sale of 182 water or water and wastewater taps.

Oil and gas royalty income, a diversifying component, surged to $6.7 million in FY 2025, a 738% increase from the prior year.

Single-family home rental income was approximately $0.5 million in FY 2025.

The Water and Wastewater Resource Development Segment generated total revenue of $10.3 million for the year ended August 31, 2025. This segment includes the recurring service fees component, which is distinct from the one-time tap fees.

The monthly water and wastewater service fees from utility customers represent the recurring base of the utility operations, supporting long-term cash flow stability.

Here is a breakdown of the primary revenue sources for the fiscal year ended August 31, 2025:

Further detail on the Water and Wastewater Resource Development Segment revenue for the nine months ended May 31, 2025, shows the following contributions:

• Water and wastewater tap fees: $5.3 million (Year-to-date May 31, 2025)
• Water and wastewater tap fees: $7.3 million (Full Year Ended August 31, 2025)
• Project management fees: $0.781 million (Q3 2025 breakdown)
• Special facility projects and other: $0.785 million (Q3 2025 breakdown)

The company has a projected pipeline for future tap fee revenue, estimating that Phase 2 of Sky Ranch will generate more than $20 million in water and wastewater tap fee revenue and cash over the next three years, as of May 31, 2025. As of August 31, 2025, the remaining projected Phase 2 tap fee revenue was $19.1 million over the next three years.