The St. Joe Company Q3 FY2025 earnings call

• Solid performance in Q3 2025 with revenue and net income growth compared to Q3 2024.
• Residential real estate revenue grew 94% to $36.8 million, with average homesite base price and gross margin increasing.
• Leasing revenue reached an all-time quarterly record of $16.7 million (7% growth), and hospitality revenue hit an all-time third quarter record of $60.6 million (9% growth).
• Residential pipeline had 1,992 units under contract at end of Q3 2025 vs. 1,381 in Q3 2024, and over 24,000 entitled units.
• Executed 40 new commercial leases and renewed 43 existing leases in first 9 months of 2025.
• Sold Watercrest senior living for $41 million, resulting in a gross profit of $19.4 million.
• Capital allocation in Q3 2025 included $20.4 million for CAPEX, $8.7 million for share repurchase, $8.1 million for cash dividends, and $28.4 million for project debt reduction.
• New daily nonstop flights from Northwest Florida Beaches International Airport to LaGuardia Airport expanded marketing for the Watersound lifestyle.

For the third quarter of 2025, The St. Joe Company showed solid performance with 63% growth in revenue and 130% growth in net income compared to Q3 2024. Residential real estate revenue grew by 94% to $36.8 million from $19 million, with the average homesite base price increasing to $150,000 from $86,000 and gross margin rising to 53% from 39%. Leasing revenue increased by 7% to an all-time quarterly record of $16.7 million, and hospitality revenue grew by 9% to an all-time third quarter record of $60.6 million. For the first 9 months of 2025, 40 new commercial leases were executed and 43 existing leases were renewed, totaling 83, compared to 26 new leases and 27 renewals totaling 53 in the same period of 2024. At the end of Q3 2025, 1,992 residential units were under contract compared to 1,381 in Q3 2024, and there were over 24,000 entitled units in the residential pipeline.

• Share repurchase is a priority, with $24.9 million spent on share repurchases in the first 9 months of 2025 compared to $0 in the same period of 2024.
• Capital allocation strategy is measured and multifaceted, varying by quarter based on circumstances.
• Cash levels in 12-18 months depend on facts and circumstances, including macroeconomic and microeconomic conditions, and residential home site progress.

• Forward-looking statements are subject to risks and uncertainties as per the Private Securities Litigation Reform Act of 1995.
• Risks include factors outlined in the earnings release and SEC filings, which could cause actual results to differ from projections.

Q: At the current buyback rate, the company is repurchasing around 1% of the company on an annual basis. We have $126 million of cash. Our recurring income continues to increase. Our outstanding debt has declined by over $50 million and the capital intensity of our business continues to decline. Management deserves all of the credit here, but why are we building our cash balance rather than investing -- I'm sorry, rather than increasing the pace of our buyback?

A: Having cash is a high-class problem. We've been generating real cash, not through gimmicks. Share repurchase is a priority, but it depends on facts and circumstances. The sale of Watercrest occurred at the end of Q3, impacting cash levels.

Q: Over the last year, there have been several land and real estate transactions -- there are several land real estate transaction in Bay and Walton Counties at valuation that would support an NAV that is materially higher than the current stock price. It seems there could be several more opportunities to either sell land or additional assets that are either outside of the Bay-Walton sector plan or where the major appreciation has already occurred. Why not sell more of these assets at values that are material relative to a current market cap and use the proceeds to meaningfully reduce our share count while we continue to own a century worth of future developable land?

A: We are evaluating operating properties and timberlands to monetize, but we won't sell at a discount. We want to get value for shareholders.

Q: Great quarter. Joe continues to shine in a sector that has seen some softness. Where does the company see cash levels 12 to 18 months from now? Also noting that the company has done some heavy lifting with CapEx during previous quarters, and we are on a side of reaping revenues from that CapEx. Also, what are the regulatory hurdles, execution, restrictions when the company is buying back its own shares. Also, what cash levels does the company feel comfortable with?

A: Cash levels in 12-18 months depend on facts and circumstances, macro and microeconomic conditions, and residential home site progress. There are regulatory requirements for share buybacks. Cash levels depend on creating the best returns for shareholders.

Q: Any progress update on the talks with a large-scale builder interested in the entire Pigeon Creek, DSAP?

A: Those talks are ongoing, but no specific report at this time, but progress is encouraged.

Q: Just wondering if there are any plans for the beachfront lots about a block east, which also includes several acres across the street. I think it's called Waverunner.

A: The project is called Wavecrest internally, it's a well-located property with beachfront frontage. Future growth to the north of this property adds value, and the Watercrest property has significant Gulf frontage, with evaluation ongoing for highest and best use.

Q: Has management identified or received interest on additional opportunities to monetize some of the assets within the hospitality or leasing segments?

A: Management is constantly evaluating assets to determine if to hold for recurring revenue or monetize, like with Watercrest.

Q: Given the look through implied piggy banks, would you consider increasing the pace of the measured capital allocation via share repurchases?

A: We look at assets and cash, and evaluate our overall capital allocation strategy, with share repurchase being a priority.

Q: The company has 46 completed townhomes at Watersound Origins Crossings with only 14 leased. Are all of the currently unleased townhomes up for sale?

A: We are transitioning from leasing to selling the remaining townhomes, with intent to sell them one at a time.

Q: Can you talk about what is going on at WindMark Beach with lot sales?

A: We changed strategy to a builder program, which has been successful, with many home sites sold and plans to expand the community with surrounding properties and potential for golf course conversion.

Q: Early reads commentary from Discover Watersound Weekend, nice concept. Could you help us understand how much of the average home site price increase was driven by mix versus genuine like-to-like pricing strength and whether you think these margins are sustainable into 2026?

A: Residential home site numbers are primarily driven by timing and mixture of communities, with different communities having different price points and margins, and margins historically around 50%.

Q: Can you estimate cumulative capital spending over the next 3 to 5 years?

A: Capital allocation is multifaceted, and share repurchase is a priority, but it depends on circumstances.

Q: What is the St. Joe's estimate of the current value of its land inventory at the end of Q3 2025? What is St. Joe's estimate of its recurring revenue at the end of Q3 2025?

A: Recurring revenue includes hospitality and leasing, with specific numbers mentioned. Land valuation is in process, with a third-party valuation in progress for operating properties.

Q: Who is going to be the builder for LLP 3 (Longleaf Park 3)?

A: We intend to continue the strategy of multiple builders in Watersound Origins West, similar to Origins, to have a unique semi-custom/customer neighborhood.

Q: Average home site sale price of $150,000 versus $86,000 is a significant jump. How can you help me understand that increase? And how should we be thinking about this going forward?

A: Residential home site numbers are primarily driven by timing and mixture of communities, with different communities behaving differently in different economic times.

Q: Can you talk generally about pricing and the level of discounting versus a year ago?

A: We have not been discounting residential home site pricing, and negotiate with builders on pricing, pace, and product to avoid cannibalization.

Q: In your view, how far away are we from the area becoming less of a secondary tertiary market for both national builders and institutional real estate firms? What else besides the hospital and direct flights is needed to get there? And are there any new signs emerging that you could share with us in terms of the area getting closer to that point?

A: The area is growing, and needs assets like the academic health center. Growth continues, with more businesses and calls from potential investors indicating progress. Efforts to attract national apparel brands to WaterSound Town Center are ongoing.

Q: Is it accurate to conclude that there is progress accelerating for home site pricing as older builder contracts conclude and new ones kick in? College station, for instance, seems to see about a 50% increase on lot prices from 2022.

A: Home site pricing increases are based on market conditions, with goals to increase pricing in new phases of communities, varying by project and location.