St. Joe公布2026年二季度业绩：收入和净利双位数增长，但电话会未提供新增交易催化

Operator: Good day, and thank you for standing by. Welcome to the St. Joe Company Second Quarter 2026 Earnings Call. [Operator Instructions] Please be advised this call is being recorded. I'd now like to hand the conference over to your speaker today, Jorge Gonzalez, President, CEO and Chairman of the St. Joe Company. Please go ahead.
Jorge Gonzalez: Thank you, and good morning. I'm Jorge Gonzalez, President, CEO and Chairman of The St. Joe Company. It is my pleasure to welcome you to our quarterly earnings call. I'm joined today by Marek Bakun, our Chief Financial Officer. On Wednesday after the market closed, we issued our second quarter of 2026 earnings press release, which can be found in the Investor Relations section of our corporate website at joe.com. This morning, 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 encourage shareholders to visit us in person so they may assess firsthand the progress of the region and of our assets. If you like 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 word submit a question are visible. Clicking on that text will take you to the text entry box where you can type in your question and then click submit. 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's 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 second quarter before we move on to your questions. We had a strong second quarter with total revenue increasing by 23% and net income increasing by 37% compared to the second quarter of 2025. The total revenue of $158.9 million was the highest in the second quarter in 20 years and the net income of $40.5 million was the highest in the second quarter in the company's history, not including the one-off gain on the sale of discontinued operations in 1996. In addition to this growth, the company is also becoming more profitable with an increase in the gross margins of every segment. The gross margins in the residential segment increased to 48% from 45%. The hospitality segment increased to 42% from 39%, and the commercial segment increased to 65% from 57%. This growth in gross margin demonstrates our emphasis on profitability while we continue to scale up and grow. The increase in profitability is in part due to our continued focus on refining and improving operations. In addition, we systematically evaluate our operating assets to identify nonstrategic lower-margin assets for their potential disposition. In the short term, these decisions may cause a slight reduction in revenue inside of the segment, but an increase in income and profitability as evidenced by last year's sale of the Watercrest Senior Living Community property in the commercial segment. This strategy is being executed with a deliberate and thoughtful process that seeks to maximize the value of these assets based on timing and market conditions. Residential real estate revenue grew by 39% in the second quarter when compared to the prior year. This growth is in part due to the diverse portfolio of our residential communities, which contain a mixture of price points and product types to accommodate a wide cross-section of consumers moving to our region. The new home prices in our communities range from the high $200,000 to over $5 million. This diversity is deliberate to help insulate the residential segment from volatility in the market conditions of any one price point. Later this year, the company plans on commencing the development of 2 utility corridors, one that will serve the future residential communities in the Lake Powell and West Laird Detail Specific Area Plans or DSAPs, and the other that will serve the Pigeon Creek and West Bay Creek DSAPs. These types of off-site utility extensions are capital intensive but necessary feeding to harvest many thousands of future residential homesites in these DSAPs. It is important to remember that because of the 1- to 2-year seeding and harvesting cycles and the mixture of homesite pricing, the results of the residential segment are not linear and may vary from quarter-to-quarter. In the second quarter, we continued to implement a measured and multifaceted capital allocation strategy. We repurchased $32.7 million of the company's common stock, funded $24 million for capital expenditures, primarily for future growth, repaid $10.9 million of debt and paid $9.1 million in cash dividends. The allocation broke down is 43% for stock repurchases, 31% for capital expenditures, 14% for debt reduction and 12% for cash dividends. More than half or 55% of the capital allocation in the second quarter was to shareholders through stock repurchases and cash dividends. As of July 27, the company had repurchased [ $41 million ] of common stock in 2026 when compared to $40 million in all of 2025. As of the same date, the company now has 56,930,451 outstanding shares, which is the lowest number of outstanding shares in nearly 30 years. With 165,000 acres of mostly entitled land in one of the fastest-growing areas of Florida and a diverse operations platform with a proven track record of growing revenue, increasing profitability, distributing profits to shareholders, reducing the number of outstanding shares and planning for the future, the company is uniquely positioned like few other companies. Now Marek and I are going to answer your questions. [Operator Instructions]
Marek Bakun: Thank you, Jorge. First question, estimated residuals grew this quarter. Origins looks to have added to residuals. Did homesites in Bay County add to the estimated residual balance this quarter?
Jorge Gonzalez: Yes. The answer to the question is homesites and Bay County did add to the estimated residual balance to this quarter.
Marek Bakun: Yes. And just to add a little bit, the increase was driven by higher price point communities. For the first half of 2026, we booked a total of $14.6 million of new true-ups, but we've also collected $5.3 million worth of existing true-ups. The buyback pace this quarter was appreciated. Given your tireless work increasing the value of land holdings, it was also nice to see some of the piggy banks open along with the operating improvements funding this capital allocation.
Jorge Gonzalez: Thank you for the comment. We appreciate it. That is part of our measured and multifaceted capital allocation strategy, which we are planning to continue.
Marek Bakun: How is the new hospital on Highway 79 progressing?
Jorge Gonzalez: The new hospital, which again, is an academic health center model with teaching research and clinical delivery or teaching hospital is progressing well. Construction is ongoing. There are many other components of operations that are in the works. The anticipated completion of that hospital is still in 2028.
Marek Bakun: While record quarterly income is notable, I believe the across-the-board increase in margins and the 50% growth in net income on a trailing 12-month basis on lower amount of invested capital is far more indicative of the superb job done by management when it comes to maximizing long-term value of this great company and assets. In regards to capital allocation, when the company looks at buybacks as a capital allocation tool, are you doing via a long-term model, i.e., are you thinking about [indiscernible] terms of can we reduce the share count by a certain percentage over a 5- or 10-year period? And how allocation along [indiscernible] will be able to impact future earnings on a per share basis?
Jorge Gonzalez: Thank you for the question. That's a great question. Our capital allocation strategy and specifically our share buyback strategy is based on a longer-term model.
Marek Bakun: As the region continues to grow, are you attracting new interest from investment institutions in St. Joe? The company who have not visited the region before?
Jorge Gonzalez: Obviously, we can't answer the question of individuals or institutions that haven't called us, but we, on a regular basis, do host entities that have not been here before that are looking at the company and the region.
Marek Bakun: Given another great quarter, what is management doing to attract more sell-side coverage? This is an amazing story to tell.
Jorge Gonzalez: It's not something that is a primary focus of ours. But obviously, if there's an interest in that, we would speak to whoever has an interest in providing that service.
Marek Bakun: In the release, you said that capital allocation decisions may vary quarter-to-quarter based on the dynamic nature of our cash flows and for stock repurchases based on market conditions and the timing of open and close periods relative to our cash flows. While our lot sales and land sales are lumpy, it appears the company now has comfortably over $100 million of annualized recurring income, over $100 million in cash and highly unlevered balance sheet. At this point, why should buybacks be dependent on the timing of your cash flows? I would think given the above, we should be capable of repurchasing $100 million or more of our shares annually.
Jorge Gonzalez: Another great question. That information we provided in our earnings release was not intended to mean that our share buybacks are exclusively based on the short-term cash flows. That was not the intent of that statement. It was an attempt at describing our capital allocation strategy in broad terms and cash flows is a factor in our broad capital allocation strategy, but it was not meant to be specific to share buybacks. Like I answered in a previous question, our capital allocation strategy as a whole and our share buyback strategy specifically is based on the long-term model.
Marek Bakun: Can you confirm that the 4.87 acre commercial parcel on the corner of 30A in Watersound Parkway is under contract?
Jorge Gonzalez: We cannot disclose contractual matters in an earnings call, but we appreciate the question.
Marek Bakun: We read daily about various costs being driven higher by AI-related data center build-out demand. Are you seeing larger than previous increases in either trade personnel costs or other expenses?
Jorge Gonzalez: Not anything significant or acute.
Marek Bakun: Is there a chance that recently increased lead time for power development and grid connection will constrain Joe's ability to execute on the growth plan?
Jorge Gonzalez: If the question is specific to power generation and distribution, we don't anticipate that being a constraint at this moment in time.
Marek Bakun: While items like utility pipe improvement and new community launches are capital intensive, do we not have significant capital already within a lot development business, which can then be recycled into these community investments as our prior lots are sold? Meaning it is not as if we need to add significant additional capital into the business to fund these items.
Jorge Gonzalez: That's a great question, and it's really a description of our broader capital allocation strategy in our cash flows. That's a factor -- what's mentioned in the question or the statement, it is a factor in how we execute that strategy.
Marek Bakun: Where is the new Park Place development going to be located?
Jorge Gonzalez: We're not too clever in naming projects. So Park Place East is east of Park Place.
Marek Bakun: Could you talk about cadence of capital spend for utility expansions? Is it more lump sum or more steady periodic investment over time?
Jorge Gonzalez: It's probably somewhere in between. Off-site utility extensions are capital intensive. But at the same time, they are things that we plan well ahead of time, and we incorporate into our overall business plan budget and capital allocation strategy.
Marek Bakun: How has demand for homes evolved in Northwest Florida over the last few years?
Jorge Gonzalez: We continue to see an increase in demand, and it's really led by a continuation of in-migration into our region, not only in migration in terms of the actual numbers of people that are moving to our region, but we continue to also see a broader range of geography where those individuals are moving from, which is very encouraging. We're not seeing migration from a static historical set of states and locations. It's dynamic, and we continue to see more people moving to our region from a broader range of locations.
Marek Bakun: Okay. We have one more question. Given the negative impact fair home selling has had on the stock the last several years, have you guys given thought to a solution as far as it relates to the things in your control? As a shareholder, it becomes increasingly frustrating seeing any market enthusiasm down in a wave of Form 4. Even as it relates to attracting new investors, this dynamic is viewed very negatively, which is a shame given the outstanding assets, people and executions that occurring at St. Joe.
Jorge Gonzalez: We appreciate the question, but we don't comment on individual shareholders.
Marek Bakun: Waterfront property across the country appears to be at record demand and at record pricing. Are these assets around the Bay or the intercoastal water frontage that the company has -- the company can unlock over the next several years for residential and commercial development?
Jorge Gonzalez: Yes. The short answer to the question is absolutely yes, in all the locations mentioned in the question. It's part of our planning process. And part of the -- I guess, the best way to describe it is we don't look at those locations in isolation. We look at those locations to see how we can drive value away from the water also. So it's not just let's look at a property that's on the inter coastal or the bay and maximize the value, but how can us moving forward with the concept in those locations add value to all of our landholdings adjacent to it.
Marek Bakun: Could you talk a bit about the growth of aviation-related companies and the recent release on the Space Florida program in Bay County?
Jorge Gonzalez: Aviation in aerospace has always been a focus of the regional and local economic development authorities for a number of reasons. That has been one of the target industries to attract. And we do continue to see interest from the industry in our region. There's also a concept that's in the process of being executed led by Florida State University in an aerospace research and development center that is in the planning stage in Bay County that we believe may be a catalyst for the aerospace aviation industry.
Marek Bakun: It appears build-to-lot inventory at Origins is dwindling, especially the bunch delivered in mid-2023. Does this not provide a huge window for growth in deliveries at Origins, Walton County over the next few years? More specifically, is it intentional that you're giving builders bigger communities such as the [ Huff/Arkon ] versus the previous piecemeal strategy? If so, would this open opportunities for builders like Toll, Fischer or even Kolter, who's finishing up NatureWalk to take their own communities in the future?
Jorge Gonzalez: I guess the short answer to that question is we are considering every and all those options. We don't feel that our pipeline is dwindling. Again, it's a matter of when you look at the pipeline quarter-to-quarter because of that seeding and harvesting cycle, that we have a very long runway, a very long pipeline of potential residential home sites, both west of origins and east of origins.
Marek Bakun: There are no additional questions at this time.
Jorge Gonzalez: Great questions, as always. Let's give it a couple more minutes in case there's any other questions.
Marek Bakun: There's one more that just came in. How do you guys view your land holdings around Southport? It seems to be a unique area where there's huge and growing opportunity, given the price points for inland around Lake Merial indicate these good values there.
Jorge Gonzalez: So we look at our geography very broadly, again, going back to what I mentioned at the beginning of the call that we want to continue to have a residential segment that has diversity in price point and product type. And the Southport area is we do own property in that area. For example, the [ Ticheli ] DSAP, which we have talked about a number of times where we're planning on breaking ground on the first phase early next year, is an example of us, again, continuing to look at broader geographies, continue to maintain diversity in our residential segment.
Marek Bakun: Thank you for taking my questions. Great job as always.
Jorge Gonzalez: That is an easy answer. Thank you. Okay. Well, we don't see any more questions. So again, thank you for joining us today. We greatly appreciate you joining us and asking great questions, and we look forward to speaking with you again next quarter. Thank you.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.