JOE · The St. Joe Company

The St. Joe Company's first quarter 2026 results reflect continued strength in its hospitality segment, which posted a record $44.7 million in revenue, up 13% year-over-year, driven by a 16% increase in Watersound Club revenue and a 10% rise in hotel revenue. The hospitality gross margin improved to 24.4% from 18.2%, indicating better operating leverage. Real estate revenue grew 4% to $39.7 million, supported by 168 residential homesite sales and six townhomes, though volume declined from 249 homesites in the prior year. Leasing revenue fell 10% to $14.7 million due to the sale of a senior living property in September 2025, but gross profit margin improved to 61.2% from 54.6%. Consolidated net income decreased 21% to $13.9 million, primarily because equity in income from unconsolidated joint ventures dropped to $3.5 million from $10.2 million, reflecting lower home closings at the Latitude Margaritaville Watersound joint venture (83 completed homes vs. 192 a year ago). Management highlighted that the joint venture's long-term benefits include creating consumer demand for commercial leasing, as evidenced by the planned Publix grocery store at Watersound West Bay Center. The company ended the quarter with $136.3 million in cash, up from $129.6 million at year-end 2025, and maintained a conservative capital allocation strategy: 45% to capital expenditures, 31% returned to shareholders via dividends and buybacks, and 24% to debt reduction. The board declared a $0.16 per share quarterly dividend, consistent with the prior quarter. Notably, the residential homesite pipeline expanded dramatically, with 3,204 homesites under contract as of March 31, 2026, compared to 952 a year earlier, including a new contract with PulteGroup for up to 2,653 homesites. This positions the company for significant future revenue recognition. Overall, the quarter demonstrates robust recurring revenue growth in hospitality and leasing, offset by temporary headwinds in the joint venture homebuilding segment.