The St. Joe Company Q2 FY2025 earnings call

Key Messages - The company has evolved from a transactional land sales company to a diversified real estate operating company with multiple recurring revenue streams, centered on growing and enhancing the ecosystem in Northwest Florida. - In Q2, there was 16% revenue growth, 20% net income growth, led by 27% real estate revenue growth. - Capital allocation included $36.5 million in capital expenditures for growth, $10.1 million for share repurchase, $8.1 million for cash dividends, and $7.7 million for project debt reduction. Accelerated share repurchase saw $16.2 million through the first half of 2025, leaving outstanding shares below $58 million. - Key events in Q2: Bay County Commission approved Pigeon Creek Detail's specific Area Plan with entitlements for over 3,000 residential units and over 400,000 sq ft of commercial; launch of WaterSound Real Estate; Delta announced year-round daily nonstop flights; FSU Health Teaching Research Hospital bond approved; Topgolf opened in Panama City Beach; state budget included $5 million for a new sanitary sewer plant in Bay County.

In the second quarter, The St. Joe Company saw solid organic growth with 16% growth in revenue and 20% growth in net income, led by 27% growth in real estate revenue. Leasing revenue increased by 11% to a quarterly record, and hospitality revenue increased by 10% to a quarterly record. Through the first 6 months of 2025, recurring revenue accounts for 63% of total revenue, representing a significant transformation of the company.

Forward-Looking Statements - The company continues to execute on its strategic transformation, with plans for further growth in recurring revenue streams. - Accelerated share repurchase with $16.2 million through the first half of 2025, leaving shares below $58 million. - In discussions with potential partners for expansion of Latitude Margaritaville, anticipating similar market positioning in pricing and product. - Plans to expand WaterSound Real Estate with multiple future locations.

Risks - Uncertainties in actual results differing from forward-looking statements due to various risks and uncertainties outlined in filings with the SEC. - Infrastructure challenges, including transportation and utilities, needing constant planning to keep up with growth. - Mortgage interest rate impacts on housing sales, as relief in rates would help accelerate home site sales.

Q: Would the Board consider reviewing current access policies to ensure hotel guest usage in WaterSound Club doesn't dilute premium experience?

A: At this moment in time, there's no plan to change the current policy.

Q: What is the number of acres contributed to the Margaritaville joint venture with Minto?

A: Approximately 2,600 acres.

Q: What can you tell us on population growth in the area over the past year?

A: Bay and Walton County are among the fastest-growing counties in Florida by rate, expecting continuation of growth trend.

Q: What is the main bottleneck to sell more than 1,000 homesites averaged in the last year?

A: Relief in mortgage interest rates would be helpful; still seeing good traffic and in-migration, but interest rates affect consumer decisions.

Q: When will Phase 2 Margaritaville break ground and what is its size?

A: Anticipate similar market positioning, but no exact projection for groundbreaking; approved for over 4,000 units west of Latitude.