3Q FY26 reinforced ALCO's post-citrus transition, with revenue rising 7.7% y/y to $9.0 million as land-management activities became the primary revenue source. ALCO broadened its land monetization strategy with a new agricultural lease covering approximately 3,280 acres in Hendry County that includes a lessee-held purchase option initially valued at $29.5 million. Corkscrew Grove East Village continues to de-risk, advancing into state and federal permitting after local approval, with potential construction beginning in 2028 or 2029.
Liquidity and earnings visibility improved, with $55.6 million of cash, $29.8 million of net debt, FY26 adjusted EBITDA guidance raised to approximately $15 million, and runway extended through FY29. Valuation remains supported by $9,000-$9,761/acre transaction evidence versus $4,000-$5,000/acre agricultural assumptions, with further upside tied to entitlement progress. 3Q FY26 results increasingly reflected ALCO's post-citrus operating model, with the revenue base now centered on land-management activities. Revenue increased 7.7% y/y to $9.0 million from $8.4 million, as Land Management and Other Operations revenue rose to $7.9 million from $0.6 million, more than offsetting the 85.6% decline in Alico Citrus revenue to $1.1 million from $7.8 million following completion of the final significant citrus harvest.
Net income improved to $2.1 million from a loss of $18.3 million y/y, while adjusted EBITDA was $4.6 million and FY26 guidance was raised to approximately $15 million. Beginning in 3Q FY26 (q/e June 30, 2026), ALCO also moved to a single reportable segment following substantial completion of the citrus wind-down, providing a structural marker that the citrus wind-down is substantially complete and the financial reporting increasingly reflects execution of the land-focused model. The revenue mix has shifted decisively toward land management.
Land Management and Other Operations represented approximately 88% of 3Q FY26 revenue, versus roughly 7% in 3Q FY25, when Alico Citrus accounted for approximately 93% of revenue. The shift increasingly positions lease income, royalties and other land-management activities as the core operating revenue base, with citrus now representing only a residual contribution to consolidated results. The underlying lease base is also providing greater visibility beneath the more episodic quarterly revenue profile.
ALCO recognized $456,000 of base lease income and $6.7 million of variable lease income during 3Q, including approximately $6.6 million tied to crop-insurance proceeds received by a lessee, while rock-and-sand royalties contributed another $429,000. The quarter highlights the economic flexibility of ALCO's lease structures, although the significant variable lease contribution means the $9.0 million consolidated revenue level should not be viewed as a normalized quarterly run rate. A key strategic development is ALCO's new agricultural lease covering approximately 3,280 acres in Hendry County.
The lease commenced July 1, 2026, and initially runs through June 30, 2027, with the lessee holding the right to extend it for an additional ten years. More importantly, the agreement includes an option to acquire approximately 3,280 acres for $29.52 million, or $9,000 per acre, if exercised by June 30, 2029, subject to annual escalation and certain acreage adjustments; an extended lease would push the option period through June 2031. Rather than choosing between leasing and selling the asset today, ALCO can therefore generate agricultural income while preserving exposure to future land-value realization.
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