Five Point Holdings, LLC Q2 FY2025 earnings call

• Q2 was profitable with net income of $8.6 million, driven by Great Park land sales. • Residential markets weakened due to higher interest rates, but California markets are undersupplied. • Operating strategy elements: optimizing home site value, managing fixed costs, matching dev expenditures to revenue, and pursuing growth via Hearthstone acquisition. • Community updates: Great Park had 112 homes sold in Q2, Valencia had 49 new homes sold, San Francisco is working on infrastructure engineering. • Hearthstone acquisition benefits include broader capital solutions, enhancing capital allocation, expanding geographic reach, and introducing recurring revenue streams.

In Q2, Five Point had net income of $8.6 million. The primary driver was Great Park land sales: the Great Park Venture closed a residential land sale of 82 homesites for $63.6 million, generating net income of $48.4 million, with Five Point's share adjusted for basis differences at $16.7 million. For Valencia, 49 new homes were sold in Q2, with 6 active selling programs and plans for more programs in the last half of 2025. In San Francisco, engineering for the next infrastructure phase is ongoing with plans to start construction early next year. The Hearthstone acquisition provides a platform for broader capital solutions to homebuilders, enhancing Five Point's growth strategy.

• Expect net income for 2025 consistent with 2024's $177.6 million, largely due to potential land sales moving to 2026. • Monitoring debt markets for refinancing senior notes, including potential principal paydown. • Hearthstone joint venture expected to be profitable in 2026 with larger contribution then.

• Market uncertainty affecting homebuilding, leading to slower new home sales. • Interest rate impact on consumer confidence and homebuying. • Regulatory and approval challenges in developing communities like Valencia and San Francisco.

Q: Congrats on the Hearthstone deal, curious about its economics.

A: Kim Tobler said to think of it as a percentage of assets under management less personnel expense.

Q: Pivoting to core business, any lower land pricing?

A: Daniel Hedigan said California is supply constrained, will work with builders but market uncertainty needs to play out.

Q: On land development costs, any optimism on lowering?

A: Daniel Hedigan said technology may help move dirt smarter but no change in budgeting yet.

Q: Question about share buyback and stock valuation.

A: Kim Tobler said under senior note indenture can't buy back now, but sees stock rising over years.

Q: Clarification on debt paydown when refi.

A: Kim Tobler said amount to be determined at time of refinance as market changes daily