Seaport Entertainment Group Inc. Q1 FY2026 earnings call

Matt started by highlighting key accomplishments in the first four months of 2026: completed sale of 250 Water Street generating over $75 million liquidity; leased tin building to Lux Entertainment; opened Sadie's Restaurant and Garden Bar with positive reviews; announced partnership with Public Service; developed comprehensive programming calendar; generated 21% year-over-year improvement in non-GAAP adjusted net loss. Discussed broader opportunity of real estate assets with multi-revenue ecosystems. Talked about Sadie's Restaurant and Garden Bar's performance, including hosting events. Announced partnership with Public Service for a new offering. Mentioned 2026 concert series at the rooftop at Pier 17 with large lineup. Spoke about events pipeline including New York City Wine and Food Festival, Macy's 4th of July Fireworks, and Spotify's BTS Swimside fan experience. Progress on expanded event space at Pier 17, with expected operation by mid-2027. Progress on concept and tenant build-outs, including Meow Wolf, Flanker Kitchen and Sports Bar, Hidden Boots Saloon, and Blue Museum's flagship U.S. location. In Las Vegas, focus on delivering high-quality guest experience at Las Vegas Ballpark, with positive early results for the 2026 season.

For the quarter ending March 31st, 2026, total operating EBITDA of the company improved by 3.1 million or 21% year over year to a loss of 11.8 million despite a 21% reduction in revenue. Hospitality operating EBITDA improved by 2.9 million or 36% year-over-year driven by the closures of the Tin Building in Malibu Farm. Hospitality revenue decreased 34% or 2.6 million year-over-year primarily driven by the closures of the Tin Building and Malibu Farm. Landlord operating EBITDA remained flat year over year. Rental revenue decreased $1 million, or 27%, driven by a straight-line rent adjustment. Entertainment operating EBITDA improved by 3% compared to the prior year, as the suspension of the Pier 17 rooftop ice rink more than offset accelerated Q1 expenses related to the Las Vegas operations and the concert series. Las Vegas revenue grew by 8%, driven by two sold-out games. Las Vegas year-over-year expenses were up 26%. Concerts: stage construction pulled some production costs forward into Q1. Total G&A for Q1 2026 is $8.1 million. Depreciation and amortization expense was $20.1 million, resulting in a $12 million year-over-year increase. Net interest expense was $0.3 million in the quarter compared to net interest income of approximately $1 million in the prior year. Equity and earnings or losses from unconsolidated ventures resulted in an approximate $1 million loss for the quarter. First quarter net loss attributable to common stockholders was $44.1 million. On a non-GAAP adjusted net income basis, results improved by 21%. Capital expenditures in Q1 totaled $6.1 million. Total cash, including restricted cash, increased by $57.3 million from year-end 2025 to $144.7 million as of Q126.

Matt mentioned the $70 to $90 million CapEx number is still relevant, with minimal spend in Q1. Stated the company is opportunistic with capital allocation, evaluating different models including asset-light. Said mid-2027 is the expected timeline for the expanded event space at Pier 17, with recent agreement to get back Nike space early. Hoped corporate quarterly overhead number will continue to come down over the next 12 months. Stated 85 South Street is on the market with active conversations with buyers.

Q: With 250 Water Street behind, what's the CapEx for seaport and deployment of remaining cash?

A: $70 to $90 million is still the number, minimal spend in Q1. Will be opportunistic, evaluate different models including asset-light.

Q: Timeline for event space?

A: Mid-2027 is safe, recently negotiated to get Nike space back early.

Q: Talks on one seaport plaza?

A: Largest space remaining, trying to figure phasing, focus on right tenant with corner visibility.

Q: Differences between operating and license structure?

A: Gitano example, operated under brand while liquor license approved, transitioned to lease. Leases have percentage rent, license agreements have more operational leverage.

Q: Setbacks for Balloon Museum opening?

A: On target and on track, no major setbacks foreseen.

Q: Remaining vacancies at seaport?

A: Shermerhorn Row and Museum Block are smaller, working on Pier 17 space.

Q: Corporate quarterly overhead?

A: Hope to continue to come down.

Q: 85 South Street?

A: On the market, active conversations with buyers