The St. Joe Company (JOE) Earnings

Management highlights

### Overall Financial Performance - Q2 2026 delivered strong year-over-year growth: total revenue +23%, net income +37%, with all three segments recording gross margin increases, demonstrating the company's focus on scalable, profitable growth. - Gross margin improvements are partially driven by continuous operational refinement and a deliberate strategy of disposing of non-strategic, lower-margin assets to boost overall profitability. ### Residential Business Strategy - The residential segment has a deliberately diverse portfolio of communities, with new home prices ranging from the high $200,000s to over $5 million, to accommodate a broad range of homebuyers and insulate the segment from market volatility in any single price point. - Later in 2026, the company will begin development of two new utility corridors to support future residential communities across four approved Detailed Specific Area Plans (DSAPs). These capital-intensive investments enable future development of thousands of new homesites, aligned with the company's 1-2 year seeding and harvesting cycle, which causes quarterly results to be non-linear and variable. - The company continues to see sustained increasing demand for homes in Northwest Florida driven by growing in-migration from a broader geographic range of origin areas than in prior years. ### Capital Allocation - The company executed a measured, multifaceted capital allocation strategy in Q2 2026: $32.7 million spent on common stock repurchases, $24 million allocated to capital expenditures (primarily for future growth), $10.9 million used for debt repayment, and $9.1 million paid in cash dividends, with 43% of total capital allocated to share repurchases this quarter. - Year-to-date 2026, the company has repurchased $41 million of common stock, compared to $40 million for all of 2025. As of Q2 2026, outstanding common shares total 56,930,451, the lowest count in nearly 30 years. ### Strategic Positioning - The company holds 165,000 acres of mostly entitled land in one of Florida's fastest growing regions, with a proven track record of revenue growth, rising profitability, shareholder returns, share count reduction, and long-term growth planning, giving it a unique market position.

Guidance

The company did not release explicit full-year financial guidance for 2026, but provided the following forward-looking statements: - The new academic teaching hospital on Highway 79 remains on schedule for completion in 2028, with construction ongoing and operational components in development. - The first phase of the Tee Chee DSAP residential development in the Southport area is planned to break ground in early 2027. - The company's share buyback strategy is structured around a long-term model rather than being tied solely to short-term quarterly cash flow fluctuations, and the company plans to continue its long-term multifaceted capital allocation strategy.

Segment performance

Total company revenue for Q2 2026 was $158.9 million, a 23% increase year-over-year (YoY), marking the highest Q2 revenue in 20 years. Net income was $40.5 million, a 37% YoY increase, the highest Q2 net income in company history (excluding one-off 1996 discontinued operation gains). 1. Residential Segment: Revenue grew 39% YoY, with gross margin increasing to 48% from 45% YoY, accounting for ~39% revenue contribution growth relative to total company growth. No absolute revenue value is stated explicitly in the transcript. 2. Hospitality Segment: Gross margin increased to 42% from 39% YoY. No absolute revenue value is stated explicitly in the transcript. 3. Commercial Segment: Gross margin increased to 65% from 57% YoY, partially boosted by the 2025 disposition of the lower-margin Watercress Senior Living Community asset which reduced segment revenue slightly but improved overall profitability. No absolute revenue value is stated explicitly in the transcript.

Risks & headwinds

The company noted that all forward-looking statements are subject to general risks and uncertainties that could cause actual results to differ materially from expectations, with specific risk factors outlined in the company's SEC filings and earnings release. No material new or updated risks were discussed on the call: the company stated that it does not anticipate extended lead times for power development and grid connection will constrain its ability to execute its growth plan in the near term, and it has not experienced significant acute increases in trade personnel costs or other operating expenses related to AI data center build-out demand.

Analyst Q&A

• Q: The company's share buyback strategy is tied to dynamic quarterly cash flows per the earnings release. Could the company sustain annual repurchases of $100 million or more, and is buyback planned as a long-term strategy to reduce share count and boost per-share earnings? /

  A: The earnings release note about cash flow variability was not intended to limit buybacks to short-term cash flow movements, only to describe the broad strategy. The company's share buyback strategy is explicitly structured around a long-term model that aligns with the goal of growing per-share earnings over multi-year timelines. The company will continue to prioritize buybacks as a core component of its overall long-term capital allocation plan.

• Q: National demand for waterfront property is at record prices and demand. Does St. Joe have unlocked bay and Intracoastal Waterway waterfront assets to develop over coming years, and how will the company capture that value? /

  A: Yes, the company holds substantial developable waterfront assets across all the locations referenced, and unlocking value from these holdings is integrated into long-term planning. The company does not develop waterfront assets in isolation; it plans waterfront development to add incremental value to all adjacent inland land holdings as well, maximizing the total return from the full portfolio.

• Q: Dwindling Build-A-Lot inventory at Origins suggests strong growth potential for future deliveries in Walton County. Is the new strategy of delivering larger lots to major builders intentional, and will this open opportunities for additional large builders to develop new communities in the region? /

  A: The company does not believe its overall residential pipeline is dwindling; quarterly inventory fluctuations reflect the company's standard 1-2 year seeding and harvesting cycle, with a very long runway and large pipeline of future residential homesites both east and west of Origins. The company is actively considering all possible options for future development, including partnerships with additional builders for new large communities across the region.

• Q: Is the persistent selling activity by a large long-term shareholder negatively impacting the stock price something management has considered addressing, given it discourages new investor interest? /

  A: Management does not comment on activities of individual shareholders, so it cannot address this question publicly.