Pure Cycle Corporation (NASDAQ:PCYO) stock rose 2% (As on April 11, 11:23:44 AM UTC-4, Source: Google Finance) after the company in the second quarter of FY 24 has reported the total revenues of $3.2 million and $3.0 million with $1.8 million and $1.5 million being generated in the water and wastewater resource development segment, $1.3 million and $1.5 million generated by the land development segment, and $0.1 million and less than $0.1 million reported in the single-family rental business. For the three months ended February 29, 2024, and February 28, 2023, the company sold 0 and 35 water or water and wastewater taps for $0 and $1.0 million. For the six months ended February 29, 2024, and February 28, 2023, the company sold 15 and 39 water or water and wastewater taps for $0.6 million and $1.1 million. The company has sold 723 water and wastewater taps at Sky Ranch in Phases 1 and 2A. Based on current prices and engineering estimates, the company believe Phase 2 of Sky Ranch will exceed $20.0 million in additional water and wastewater tap fee revenue and cash over the next 3-5 years.

As of February 29, 2024, the first development phase (509 lots) is complete and the second development phase (874 lots) is being developed in four subphases, referred to as Phase 2A (229 lots), Phase 2B (211 lots), Phase 2C (228 lots) and Phase 2D (206 lots). As of February 29, 2024, Phase 2A is approximately 96% complete and Phase 2B is approximately 52% complete. Phase 2A is substantially completed with some landscaping items remaining, and Phase 2B is expected to be complete by the end of Pure Cycle’s fiscal 2024. Phase 2C construction has begun but has not met revenue recognition criteria as of February 29, 2024. As of February 29, 2024, the single-family rental business had 14 homes built and rented in Sky Ranch and 17 additional homes forecasted for construction in Phase 2B. As noted in the prior quarters, due to the overwhelming demand for rental homes at Sky Ranch, the company expects to have a total of 93 homes in Phase 2 with the ability to add more than 200 homes as Sky Ranch builds out.

Moreover, lot sales revenue decreased slightly in Q2 2024 compared to Q2 2023 due to timing of construction in Sky Ranch for Phase 2B and not reaching a certain milestone in the development of Phase 2C to begin revenue recognition.