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DATE
Thursday, April 30, 2026 at 4 p.m. ET
CALL PARTICIPANTS
- President, CEO, Chairman — Jorge Gonzalez
- Chief Financial Officer — Marek Bakun
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TAKEAWAYS
- Total Revenue -- $99.1 million, a 5% increase, representing the highest first-quarter revenue since the 2014 timberland sale.
- Operating Income -- Increased by 8% compared to the same period last year.
- Net Income -- Decreased by 21%, primarily due to a drop in equity in income from unconsolidated joint ventures; equity in income was $3.5 million, compared to $10.2 million in the previous year.
- Hospitality Revenue -- Rose 13% to a record $44.7 million for a first quarter.
- Real Estate Revenue -- Increased by 4% versus the comparable period.
- Leasing Revenue -- Fell by 10%, primarily from the sale of the Watercrest senior living property in September 2025.
- Recurring Revenue Contribution -- Hospitality and leasing revenues comprised 60% of total revenue.
- Hospitality Gross Margin -- Improved to 24% from 18% in the prior year period.
- Leasing Gross Margin -- Rose to 61% versus 55% previously.
- Capital Allocation -- Deployed $20.7 million in capital expenditures, paid $9.2 million in dividends, repurchased $5 million in shares, and reduced project debt by $10.9 million.
- PulteGroup Contract -- Executed a contract for up to 2,653 homesites in a newly approved DSAP, marking PulteGroup’s market entry.
- Utility Agreement -- Signed a long-range water and sewer deal covering Lake Powell and West Laird DSAPs, enabling infrastructure for thousands of potential homesites.
- Venture Crossing Data Center -- Management disclosed active discussions with potential data center users, considering ground leases or sales as monetization strategies.
- Surf Park Development -- Lease commencement at Pier Park City Center expected soon, with additional prospective tenants under negotiation.
- Origins West Custom Homesites -- New phase in planning west of the art park, with details forthcoming on lot count and timetable.
- Intracoastal Waterway Marina -- Construction started, pending final permits before project acceleration.
- Pigeon Creek Revenue Timing -- Closings, and thus revenue, are expected to begin in 2027.
SUMMARY
The St. Joe Company (JOE 6.46%) delivered its highest first-quarter revenue since 2014 despite a significant decrease in net income driven by joint venture dynamics. Strategic highlights included record hospitality revenue, enhanced recurring revenue mix, and executed partnerships with major builders and infrastructure providers, underpinning scalable growth opportunities. New initiatives and development contracts, alongside capital allocation toward higher margin segments and project debt reduction, reflect management's ongoing operational discipline.
- CFO Bakun stated, have built-in protections, in the PulteGroup takedown agreement, which management indicates will mitigate revenue variability.
- Management confirmed the majority of the uptick was organic. while preliminary results from a new geographic marketing campaign showed an early increase in hospitality bookings.
- The company signaled potential for increased commercial development activity, with Gonzalez noting a marked rise in interest from national retailers and tenants.
- Progress on Latitude Margaritaville Watersound expansion and custom homesites at Origins West are advancing, supporting long-term residential inventory.
- Management emphasized balance between capital deployment, supply pacing, and demand, referencing ongoing strategic review of builder participation to maximize margins and flexibility.
INDUSTRY GLOSSARY
- DSAP (Detailed Specific Area Plan): A site-specific land planning document defining zoning and development parameters for large tracts, utilized in Florida’s master-planned communities.
- RevPAR: Revenue per available room, a key metric for assessing hotel segment performance.
Full Conference Call Transcript
Jorge Gonzalez: Thank you, and good afternoon. I am Jorge Gonzalez, President, CEO, and Chairman of The St. Joe Company. It is my pleasure to welcome you to our quarterly earnings call. I am joined today by Marek Bakun, our Chief Financial Officer. On Wednesday, after the market closed, we issued our 2026 earnings press release. It can be found in the Investor Relations section of our corporate website at joe.com. This afternoon, we are continuing our commitment to quarterly earnings calls to provide our shareholders and the investor community with an opportunity to ask questions about our business and performance. We have always been an open and transparent company that welcomes all feedback and opinions.
Because of the types of assets that we own, we always encourage shareholders to visit us in person so they may assess firsthand the progress of the region and of our assets. If you want to send us questions for later in the call, you may do so by visiting the top right-hand corner of your screen where the words “submit question” are visible. Clicking on that text will take you to the text entry box. You can type your question and then click submit for later in the call.
Before we begin discussing our results and answering your questions, I would like to remind everyone that Wednesday’s press release and the statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in our filings with the Securities and Exchange Commission. Additionally, during today’s call, we will discuss non-GAAP measures which we believe can be useful in evaluating our performance. A reconciliation of these measures can be found in our earnings release.
Let us go ahead and get started. We assume everyone has already carefully reviewed our earnings release, which provides comprehensive details about our performance, so we are only going to mention a few key highlights of the first quarter before we move on to your questions. For the first quarter, we had a 5% increase in revenue and an 8% increase in operating income. The first quarter revenue of $99.1 million was the company’s highest first quarter revenue outside of the one-time timberland sale in 2014. The increase in total revenue included a 13% increase in hospitality revenue and a 4% increase in real estate revenue when compared to the same period last year.
Leasing revenue decreased by 10%, which was primarily due to the sale of the Watercrest senior living property in September 2025. Net income decreased by 21% primarily because of a decrease in equity in income from unconsolidated joint ventures. Equity in income was $3.5 million for the quarter when compared to $10.2 million in 2025. The decrease was primarily attributed to a lower home closing volume in the Latitude Margaritaville Watersound unconsolidated joint venture. Latitude is a large-scale, long-term project that will have ebbs and flows in quarterly and even year-to-year volume and provides benefits to us beyond its financial performance with consumers for our commercial and hospitality segments.
We continue to successfully execute our strategy of growing recurring revenue, as evidenced by the first quarter record of $44.7 million in hospitality revenue and $14.7 million in leasing revenue, which together accounted for 60% of total revenue in the quarter. As a result of the successful execution of the strategy to grow recurring revenue, the company has a sustainable business model that is poised for future growth, with a demonstrated ability to grow multiple revenue streams, all while simultaneously increasing the value of the underlying land assets. In addition to the growth in recurring revenue, we are also improving profitability, as evidenced by the increase in gross margins in hospitality and leasing.
As we have previously mentioned, since opening five new hotels in 2023 and expanding our club membership program, we have been focused on improving our hospitality operations and increasing margins. The gross margin improved across all hospitality categories to a total of 24% for 2026 as compared to 18% for 2025. Similarly, we have been focused on improving gross margins in leasing revenue to 61% for 2026 when compared to 55% for 2025. Leasing revenue is not as operationally intensive as hospitality revenue, so the strategy to increase profitability and gross margins is to invest in projects with higher margins, and divest from projects with lower margins. We are systematically evaluating our leasing portfolio to execute this strategy.
An example of investment in higher-margin projects is the Watersound Town Center, and an example of divesting is the 2025 sale of the lower-margin Watercrest senior living property. In the first quarter, we continued to implement a measured and multifaceted capital allocation strategy, with $20.7 million in capital expenditures primarily for growth, $9.2 million in cash dividends, $5 million in share repurchases, and $10.9 million in reduction of project debt. Project debt is a real cash expense, and not all project debt is the same.
The focus of our project debt reduction strategy is on the variable shorter-term higher interest rate debt, like for our hospitality assets, as opposed to our fixed longer-term lower interest rate debt, like for our apartment assets. Outside of the financial numbers, we continue to fill the pipeline for potential future growth. In the first quarter, we were pleased to announce the execution of a contract with PulteGroup for up to 2,653 homesites in our most recently approved Detailed Specific Area Plan, or DSAP. PulteGroup is the third-largest homebuilder in the country, and this is their first entry into the Northwest Florida market.
In the first quarter, we were also pleased to execute a long-range utility water and sewer agreement with the utility provider that will service the Lake Powell and West Laird DSAPs, with the potential for thousands of future residential homesites. Work on this infrastructure is planned to commence later this year. Speaking of the future, most developers and national homebuilders will admit that two of the most challenging aspects of their future growth are acquiring and entitling land. In addition to the demonstrated ability to execute our business strategy, it is important to remember that we already own over 165,000 acres of land with many entitlements in a growing part of Florida. Our competitive advantage is clear.
Now Marek and I are going to answer your questions. As a reminder, in the top right-hand corner of the screen, the words “submit question” are visible. Clicking that text will take you to the text entry box where you can type your question and click submit. We will now open the call for questions.
Marek Bakun: Thank you, Jorge. We have a few questions. Can you elaborate on the pace of takedown at Pigeon Creek DSAP? 1,300 homesites is great, but whether it is over three, five, or ten years makes a big difference. Also, are there protections in the takedown schedule as it relates to the value of the land?
Jorge Gonzalez: Thank you for the question. First, as I mentioned in my opening remarks, we are very pleased with the execution of the agreement with PulteGroup. PulteGroup is the third-largest national homebuilder in the country, and they made the decision to enter this market because they see its growth potential. We are pleased with the addition of PulteGroup to our builder group and builder relationships. The best way to answer the question is that, ultimately, pace is set by the market. PulteGroup is planning on having various product types in this community. Each product type will be a little bit different in terms of pricing and the consumer that will be interested in that product.
In terms of the agreement itself, we learn every time we do an agreement, particularly of this scale or similar scale, going back many years. We learn how things end up happening in the field, and we adjust. Those lessons learned over the years are incorporated in this agreement and will continue to be incorporated in subsequent agreements.
Marek Bakun: And our disclosure was intentional. We used the term “significant variable of revenue” because we do have built-in protections, as the questioner suggests.
Jorge Gonzalez: One last thing. When you look at agreements that we executed five, six, seven years ago, those agreements had a time and place, a context. The way that we look at new agreements is based on lessons learned and based on what is happening in the market at the moment.
Marek Bakun: Next question. There was a nice uptick in RevPAR at the hotels this quarter. Was any of that attributable to the New York City marketing campaign?
Jorge Gonzalez: Thank you for the question. The majority of the uptick was organic. So far, we have been pleased with the early part of the season in our hospitality segment. We have been carefully tracking the increase in bookings from the New York City market that may be based on the campaign we launched in December. We are cautiously optimistic. We have seen an uptick. It is still very early in the campaign. We are assessing the campaign as we measure results every day and make decisions about future phases. So the growth in RevPAR is primarily organic, but we have seen an increase from the New York City market in bookings so far this year.
Marek Bakun: With strong national demand for data centers driven by AI, have you considered or pursued marketing positions of Venture Crossing Enterprise Center for data center development? If so, how does that fit into your recurring revenue and land monetization strategy?
Jorge Gonzalez: We have had discussions with those types of users, specifically about Venture Crossings. In terms of the business structure and how we would monetize it, as we do in all of those discussions, we would consider a ground lease, which would be recurring revenue, and/or potentially a sale depending on facts and circumstances, time frame, and various factors. Yes, we have had discussions with those types of users for that location.
Marek Bakun: Can you provide additional color on the brokerage revenue either by county, average transaction value, or number of transactions?
Jorge Gonzalez: We have been pleased with the commencement of the real estate brokerage agency. We started in one location, the WaterColor Town Center. We quickly opened a second location, the Watersound Town Center, and we have plans to open three additional locations. Those three additional locations will be two in Bay County and one in Walton County. We have received a lot of interest from agents in joining the agency. We still do not have a full year of data—the agency opened its doors right before summer of last year. After we finish this year, we will have one full year of data, and that is the kind of data that we will look at to make decisions going forward.
Marek Bakun: Pier Park City Center is a beautiful location. When do you expect lease payments to start on the Surf Park? Has there been any progress toward monetizing the space beyond the Surf Park?
Jorge Gonzalez: The answer to both questions is yes. We have made significant progress with the Surf Park, and commencement is expected relatively soon. We also have been in discussions with other potential users in that location. We are being very thoughtful about the users that go into that location because it is a special site in the middle of Panama City Beach with a lot of energy and activity. We have made progress on both counts of the question.
Marek Bakun: SouthWood was part of the residential under-contract dollar numbers last quarter. Did something change in the contract with SouthWood that led you to remove it this quarter? So the answer is no. There have been no changes to the contract. With adding the Pigeon Creek contract, which is a long-term contract, in the quarter, it made more sense to show it excluding the dollars related to those two specific contracts. But there were no changes to the actual contract itself. Over the past several years, not only has migration seemingly accelerated, but also local migration seems to be picking up, with more folks leaving the area south of Highway 98 to go north of it.
The area on both sides of 331 below the bridge is one of the hottest in the region, and I am curious if, given that we have over 20,000 entitled homes in Walton County, including over 3,000 listed in the pipeline, we are looking to accelerate our offerings from the current pace. Given local demand and price points being paid for lots, it does not seem unrealistic for St. Joe to be selling at 250 to 300 homesites per year in Walton County at prices of at least $250,000 per lot. Should we open things up to more than just the current small group of builders?
It seems evident that there is not only demand, but also willingness for folks to pay premiums to current pricing if we open things up a bit. Is this something we are able to do in the next few years?
Jorge Gonzalez: Thank you for the question. It is a great question, and we agree with the majority of the observations. Ultimately, pace is determined by market demand. We try to have product and inventory available to meet market demand, but we also do not want to get too far ahead where we have inventory sitting in the ground for too many years, when we could be using that capital for other purposes, like buying back shares. It is a delicate balance to ensure we meet demand without overextending and tying up capital. We have opened it up quite a bit. An example is Camp Creek—just about every custom homebuilder has participated and built homes there.
In Origins, I would not say we have a small group of builders. We have five or six builders right now, and we are always talking to three or four new ones, which we are currently doing. We agree with the sentiment of the question. We feel very bullish about how the company is positioned to meet demand at the highest prices and highest margins possible.
Marek Bakun: The regional growth story remains very strong, yet The St. Joe Company’s current commercial development activities seem modest compared to the broader market pace. As the dominant landowner, how are you thinking about this? Should we expect The St. Joe Company to take a larger percentage of the area’s development activity at some point? How are you thinking about the pros and cons of becoming a more active commercial developer?
Jorge Gonzalez: Commercial development, similar to residential, has a market component. How proactive we will be depends on market demand. We are getting many more calls from prospective commercial tenants, particularly national tenants, than we ever have. Many years ago, we were the ones making the calls; now we are getting them, particularly from national retailers, which is very encouraging. If that trend continues, we will make decisions to meet that demand and accelerate our commercial development.
Marek Bakun: Adding to that, market demand matters, and our goal is always to have a high lease percentage. Building for market demand is important.
Analyst: Latitude available lots are declining. When would you expect to add more lots to that partnership, and do you expect it would be contiguous to the existing project? Do you see a point at which the Watersound Club membership will be full until more facilities are built—e.g., golf course, tennis, gym, amenities, etc.? If so, what is the approximate number?
Jorge Gonzalez: We have been in discussions with our partner about the next phase and have made good progress. Yes, it would be to the immediate west of the existing joint venture. Regarding the club, we have made significant investments in facilities to expand capacity in the last few years. Camp Creek is a very sizable facility that accommodates many activities for our club members and was a significant expansion of capacity. Another is the opening of a brand-new golf course, the third, which opened last year. We are constantly discussing where we will build the next facilities and the programming involved. We monitor capacity usage and aim to create more experiences for our members.
At this moment, we feel our existing facilities have a good balance of usage. We do not think we are at capacity, but we are constantly planning and looking at where the new facilities are going to be.
Marek Bakun: There was a $5 million change within the other expense line item in the Latitude joint venture this quarter. Could you give us more color on what drove this, and if it will continue into future quarters? Looking at the disclosures, the costs are very consistent. There are no operating cost changes. The income was driven purely by volume—the number of closings delivered in the quarter compared to 2025. There were no material changes in costs. The actual margins on a per-unit basis were above the margins a year ago quarter.
Marek Bakun: Any updates or information on the custom homesites near the future art park—anticipated number of lots?
Jorge Gonzalez: We have been planning another custom residential homesite product in Origins West, to the west of the art park. That is in planning now. We do not have specifics yet in terms of the number of homesites or the time frame, but it is a real project. We have done some preliminary development work in that phase. Look for us to share more information about that project in the subsequent weeks and months.
Marek Bakun: Is there any color you can give us on recent migration, population, or even tourism growth and trends in the Bay-Walton area? If you do not have quantitative figures, then even anecdotal examples would be appreciated.
Jorge Gonzalez: Beyond the tables, charts, and data that show migration and tourism in our region are growing, it still feels very positive to us on the ground every day. The migration is continuing, not only in terms of numbers, but also in terms of broadening geography—people are moving here from places that have not historically been major sources. Similarly, in hospitality, we are seeing more guests in our hotels from a broader range of locations, and we are seeing a good uptick in occupancy and rates, as noted earlier. Our first quarter results for hospitality show a solid uptick in revenue, which aligns with what we feel: migration and awareness of our region from a broader range of locations are continuing.
Marek Bakun: Any notable updates on the Intracoastal Waterway Marina?
Jorge Gonzalez: We started work on that marina. We still have a couple more permits to obtain and are in the process of obtaining those. Once we do, we will accelerate the work. We feel positive about market demand for that marina. We do not see any major regulatory challenges in obtaining those permits. It is just a process. As soon as we get the final permits, we will move forward and finalize the marina.
Marek Bakun: Based on lot sales and lots under development, it seems like there has been an increase in activity and demand growth at WindMark. Can you give us some color on what is going on there? What future plans and opportunities could occur there and in the area?
Jorge Gonzalez: We feel the residential component of WindMark has been one of our success stories. We have been very pleased with the results ever since we made the decision to partner with that one builder. The pace has been good. We see traffic and demand in the pipeline continuing to be positive. We are meeting the demand that the builder is experiencing in their home sales. In terms of future opportunities, we are always assessing what other areas we can look at in that market. We feel very positive about WindMark and are constantly assessing future opportunities.
Marek Bakun: Clubs seem to be doing very well. Given the timelines for development and some growing pains related to the size and success of what it has become, do you think it makes sense to accelerate the Lake Powell amenity or anything north of 98? Development can take a long time. The marina has been at various stages of progress for over half a decade. I imagine now the club amenities are at least three years out at best. My concern is that future growth or even quality of the club may be limited until more opens up. Can you share your thoughts and elaborate on the timelines?
Jorge Gonzalez: Great question. Part of the answer is what I mentioned earlier regarding capacity of our club, the experiences our members are having, and adding future capacity. We evaluate this constantly. Right now, we feel we are in a really good place. You do not want to be on either extreme—more demand than capacity or way more capacity than demand. We feel balanced in terms of demand and available capacity. We do have several new amenities that we have been planning. We have mentioned one in Lake Powell. We are actively in the planning and design process for that amenity. We do not have an exact start date yet. We are also looking at other locations for future club amenities.
We do not want to get too far ahead with excess capacity, but we also do not want to be behind. Right now, we feel we are in a sweet spot.
Marek Bakun: What is the expected timeline for starting to realize revenue from homesites at Pigeon Creek and also SouthWood?
Jorge Gonzalez: For Pigeon Creek, in terms of closings, it is probably going to be 2027. We are actively working on the engineering and permitting of the first phase, working very closely with PulteGroup. So in terms of closings and realizing revenue, probably the first part of 2027. In SouthWood, we do not have a homesite development strategy. In SouthWood, we sell tracts with master infrastructure to homebuilders. We have several contracts that we are working on, and we are always in discussions with homebuilders in that market who want to purchase those tracts.
Marek Bakun: How can we interpret the increase in the advanced deposits figure as a year-over-year increase in bookings demand when it comes to hotels?
Jorge Gonzalez: As I said before, we feel good about the start to the season. Our first quarter revenue numbers show that. Looking beyond the first quarter at bookings and overall demand, we feel pretty good. We are cautiously optimistic that our hospitality segment is going to have a good year and a good season this year.
Marek Bakun: There are no more questions.
Jorge Gonzalez: Let us give it a couple more minutes in case there are any last-minute questions. These have all been great questions. We greatly appreciate the quality of the questions and the depth of knowledge that the individuals asking the questions have about our business and our region. Those types of questions only make us better, so we greatly appreciate them. Okay. We do not see any more questions. Thank you for joining us today. We appreciate your interest in our company, and we look forward to speaking with you again next quarter. As a quick reminder, we are holding our annual meeting of shareholders on May 12 at 9:00 a.m. Central Time at Camp Creek Inn.
We hope to see many of you then. Thank you.
Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.
