Business Context and Reporting Period
The St. Joe Company (ST JOE Co) is a diversified Florida real estate development, asset management, and operating company focused on Northwest Florida. This Form 10-Q covers the quarterly period ended June 30, 2026, and the six months ended on that date. The company operates through three primary segments: Residential, Hospitality, and Commercial.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Total Revenue | $158.8 million | $257.9 million |
| Net Income (Attributable to Company) | $40.5 million | $54.4 million |
| Diluted EPS | $0.71 | $0.95 |
| Operating Income | $54.8 million | $73.0 million |
| Cash and Cash Equivalents | $117.3 million | $117.3 million (Balance Sheet) |
| Total Debt (Principal) | $374.8 million | $374.8 million (Balance Sheet) |
| Net Cash Provided by Operating Activities | N/A | $86.2 million |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 23.0% year-over-year (YoY) for the quarter and 15.5% for the six-month period. Real estate revenue surged 58.9% in the quarter, while hospitality revenue reached a quarterly record of $74.2 million (up 7.8% YoY).
- Profitability: Net income attributable to the company rose 37.3% in the quarter and 15.8% for the six-month period compared to 2025.
- Segment Performance:
- Residential: Revenue increased 38.6% in the quarter, driven by homesite sales and residuals. Gross margin improved to 47.9%.
- Hospitality: Revenue grew 7.8% in the quarter due to higher membership spend and hotel metrics (ADR and occupancy). Gross margin improved to 41.1%.
- Commercial: Leasing revenue decreased 9.1% in the quarter, primarily due to the sale of the Watercrest JV senior living property in September 2025. However, leasing gross margin improved to 60.0%.
- Debt Reduction: Total debt principal decreased from $396.0 million at year-end 2025 to $374.8 million as of June 30, 2026, reflecting principal payments of $21.8 million in the first half of 2026.
Guidance, Outlook, and Risks
- Market Conditions: Management notes that while macroeconomic headwinds (inflation, interest rates, insurance costs) persist, Northwest Florida continues to benefit from net migration, supporting demand.
- Capital Allocation: The company remains committed to returning capital to shareholders. In the first half of 2026, it repurchased $37.7 million of common stock and paid $18.3 million in dividends. The Board increased the stock repurchase authorization to $200.0 million in May 2026, with $173.0 million remaining available.
- Dividends: A quarterly dividend of $0.16 per share was declared on July 29, 2026, payable September 18, 2026.
- Risks: Key risks include interest rate fluctuations, potential natural disasters (hurricanes), insurance costs, and the seasonality of the hospitality business. The company utilizes interest rate swaps to hedge variable-rate debt exposure.
Investor Verification Checklist
- Joint Venture Performance: Verify the impact of the Latitude Margaritaville Watersound JV (unconsolidated) on equity income, as home sale volumes decreased significantly (169 sales in H1 2026 vs. 329 in H1 2025).
- Debt Maturities: Review the debt schedule, noting significant maturities in 2027 ($60.6 million) and the reliance on refinancing or cash flow for these obligations.
- Real Estate Pipeline: Assess the 25,134 homesites in the residential pipeline and the timing of entitlements to gauge future revenue sustainability.
- Leasing Occupancy: Monitor multi-family and commercial leasing occupancy rates, which were 96% and 95% respectively as of June 30, 2026.
- Deferred Tax Liability: Note the $45.6 million deferred tax liability related to a 2014 land sale, payable in 2029, and the company's strategy to fund it via a maturing time deposit.