The St. Joe Company (JOE) lost as much as 6% on Friday after Bruce Berkowitz, who is a 10% owner of the firm, reduced his holdings. The stock was down 5.86% to $64.77 during afternoon trading. Berkowitz let go of ...

Core Insights - St. Joe Company has established a new builder relationship with PulteGroup, Inc., a leading national home builder, to develop homesites in Northwest Florida [1][2] - The contract includes 1,326 homesites with the potential for up to 2,653 homes, with development expected to begin in 2027 [3] - This partnership reflects the growing demand for housing in the State Road 79 corridor, which is experiencing significant investment across various sectors [4] Company Overview - St. Joe Company is a diversified real estate development and asset management firm with a focus on residential, hospitality, and commercial ventures in Northwest Florida [6] - PulteGroup, Inc. is one of the largest homebuilding companies in the U.S., operating in over 45 markets and offering a variety of home designs to meet diverse consumer needs [8]

Core Insights - St. Joe Company reported significant year-over-year gains in both revenue and profitability for Q4 and full year 2025, with a revenue increase of 27% to $513.2 million and net income up 56% to $115.6 million, resulting in earnings per share of $2.00 [3][4][6] Financial Performance - Revenue for the full year increased from $402.7 million to $513.2 million, a 27% rise, while net income rose from $74.2 million to $115.6 million, a 56% increase [3][4] - The company achieved a significant milestone by exceeding $500 million in revenue for the first time in 20 years and reaching $2 per share for the first time in 23 years [2] Capital Allocation - In 2025, St. Joe allocated 47% of its capital to growth initiatives, 33% to dividends and stock repurchases, and 20% to debt reduction [5][8] - The company repurchased 798,622 shares at an average price of $50.10, marking a significant increase from 70,985 shares repurchased in 2024 [9] Development Pipeline - St. Joe has approvals for 10 Detailed Specific Area Plans (DSAPs), each with at least 1,000 acres, and approximately 23,900 home sites in various stages of planning and development [5][11] - The company is also focused on commercial construction, with 94,500 square feet under construction and approximately 76% pre-leased [15] Market Dynamics - The company reported a year-over-year increase in Q4 real estate revenue, attributed to higher average prices and specific property sales [12] - St. Joe is exploring the use of AI tools to enhance operational efficiency, indicating a focus on technological advancements [13] Hospitality Sector - The hospitality gross margin decreased slightly to 31% from 32%, primarily due to opening expenses for a new golf course and clubhouse renovations [1] - The company is focused on increasing club membership, hotel occupancy, and margins while evaluating opportunities for new hotels and amenities [14]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported a 24% increase in revenue and a 58% increase in net income compared to the previous year [4] - For the full year, revenue increased by 27% to $513.2 million from $402.7 million, and net income increased by 56% to $115.6 million from $74.2 million [5] - Earnings per share rose to $2 from $1.27, marking the first time in 23 years that the company achieved this level [5][6] Business Line Data and Key Metrics Changes - Homesite gross margins increased to 51% from 47%, while leasing gross margins rose to 57% from 54% [7] - Hospitality gross margins slightly decreased to 31% from 32%, attributed to opening expenses related to new facilities [7] Market Data and Key Metrics Changes - The company has local and state government approval for 10 Detailed Specific Area Plans (DSAPs), each with at least 1,000 acres of mixed-use projects, indicating a strong pipeline for future growth [9] - The residential home site pipeline had approximately 23,900 home sites in various stages of planning, an increase of 2,200 from the end of 2024 [9] Company Strategy and Development Direction - The company aims to continue growing its recurring revenue, which currently constitutes 56% of its total revenue, as part of its sustainable business model [6][34] - Plans for breaking ground on new commercial buildings and an apartment complex in 2026 were discussed, reflecting ongoing development efforts [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance of the new Delta flight from New York, indicating it has been performing well and may lead to increased demand for hospitality offerings [42] - The company is cautiously optimistic about the progress of the FSU Health Campus, which is expected to be a significant catalyst for the region [23] Other Important Information - The company accelerated stock repurchases in 2025, buying back 798,622 shares at an average price of $50.10, the highest repurchase in any quarter of 2025 [8] - The company has been actively managing its debt, with a focus on paying down higher-interest debt while maintaining low-cost long-term financing [24][26] Q&A Session Summary Question: Are there any new multifamily units or hotel operations planned for 2026 or 2027? - The company plans to break ground on a new apartment complex near the FSU Health campus and is constantly evaluating opportunities for new hotels and acquisitions [12] Question: What developments are coming in the Pier Park area? - The company is planning Pier Park East, which will include a family-oriented surf park as a second anchor alongside Topgolf [14] Question: Is stock buyback still a prudent allocation of capital given the recent price increase? - Management confirmed that stock buybacks remain a component of their capital allocation strategy [15] Question: How is the company addressing the high-value home sites at Camp Creek? - The company is planning new high-end retail custom home sites in Origins West, with ongoing planning and permitting [19] Question: What is the status of the Lake amenity and Pigeon Creek neighborhood? - The Lake amenity is in the planning phase, and discussions with a new builder for Pigeon Creek are progressing well [20][21] Question: How is the brokerage business performing? - The reception from the agent community has been positive, with more agents expressing interest in joining the brokerage than anticipated [43]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a 24% increase in revenue and a 58% increase in net income year-over-year [4] - Full year revenue increased by 27% to $513.2 million from $402.7 million, and net income increased by 56% to $115.6 million from $74.2 million [5] - Earnings per share rose to $2 from $1.27, marking the first time in 23 years that the company reached this level [6] Business Line Data and Key Metrics Changes - Homesite gross margins increased to 51% from 47%, while leasing gross margins rose to 57% from 54% [7] - Hospitality gross margins slightly decreased to 31% from 32%, attributed to opening expenses related to new facilities [7] Market Data and Key Metrics Changes - The company has local and state government approval for 10 Detailed Specific Area Plans (DSAPs), with only 3 currently under development, indicating significant future growth potential [9] - The residential home site pipeline increased by 2,200 home sites to approximately 23,900 at the end of the year [9] Company Strategy and Development Direction - The company aims to continue growing its recurring revenue, which is now 56% of total revenue, as part of a more sustainable business model [6][34] - Plans for breaking ground on new commercial buildings and an apartment complex in 2026 were discussed, reflecting ongoing expansion efforts [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance of the new Delta flight from New York, indicating it has been well-received and could lead to increased demand for hospitality offerings [42] - The company is cautiously optimistic about the progress of the FSU Health Campus, which is expected to be a significant catalyst for regional growth [23] Other Important Information - The company has accelerated stock repurchases, with $15.1 million spent in Q4 2025, the highest in any quarter of the year [5][8] - The company is exploring AI as a tool to improve operations, reflecting a commitment to leveraging emerging technologies [35] Q&A Session Summary Question: Are there any new multifamily units on the horizon for 2026 or 2027? - The company plans to break ground on a new apartment complex near the FSU Health campus and is constantly evaluating opportunities for new hotels and acquisitions [12] Question: Any new developments coming in the near future for the Pier Park area? - The company is planning Pier Park East, which will include a surf park as a second anchor alongside Topgolf, with infrastructure development expected to begin in 2026 [14] Question: Does management still view buybacks as a prudent allocation of capital at the current share price? - Management confirmed that stock buybacks remain a component of their capital allocation strategy, depending on market conditions [15] Question: Can you help break down the 47% year-over-year increase in real estate revenue in Q4? - The increase was attributed to higher average sales prices, new residuals, and normal land sales [18] Question: What is the status of the Pigeon Creek neighborhood? - Discussions are ongoing with a builder for the Pigeon Creek project, which has over 3,000 potential units, and management is optimistic about moving forward [21] Question: How is the brokerage business progressing? - The company has received positive feedback from agents interested in joining their brokerage, indicating strong initial reception [43]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a 24% increase in revenue and a 58% increase in net income year-over-year [4] - Full year revenue increased by 27% to $513.2 million from $402.7 million, and net income increased by 56% to $115.6 million from $74.2 million [5] - Earnings per share rose to $2 from $1.27, marking the first time the company surpassed $500 million in revenue in 20 years and reached $2 per share in 23 years [6] Business Line Data and Key Metrics Changes - Homesite gross margins increased to 51% from 47%, while leasing gross margins rose to 57% from 54% [7] - Hospitality gross margins slightly decreased to 31% from 32%, attributed to opening expenses related to new facilities [7] Market Data and Key Metrics Changes - The company has local and state government approval for 10 Detailed Specific Area Plans (DSAPs), each with at least 1,000 acres of fully entitled mixed-use projects [10] - The residential home site pipeline had approximately 23,900 home sites in various stages of planning, an increase of 2,200 home sites compared to the end of 2024 [10] Company Strategy and Development Direction - The company aims to continue growing its recurring revenue, which is seen as a more sustainable and scalable revenue stream compared to pure transactions [38] - Plans for breaking ground on new commercial buildings and an apartment complex in 2026 were discussed, indicating ongoing development efforts [11][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance of the new Delta flight from New York, indicating it has been performing well and may lead to increased demand for hospitality offerings [46][47] - The company is cautiously optimistic about the progress of the FSU Health Campus, which is expected to be a significant catalyst for the region [25] Other Important Information - The company has accelerated stock repurchases, with $15.1 million spent in Q4 2025, the highest in any quarter of 2025 [5] - The company has a multifaceted capital allocation strategy, with 47% allocated for capital expenditures, 33% for dividends and stock repurchases, and 20% for debt reduction [8] Q&A Session Summary Question: Are there any new multifamily units on the horizon for 2026 or 2027? - Management confirmed plans to break ground on a new apartment complex near the FSU Health campus and is always evaluating opportunities for new hotels and acquisitions [13] Question: Any new developments coming in the near future for the Pier Park area? - Management announced plans for Pier Park East, which will include a family-oriented surf park as a second anchor alongside Topgolf [14][15] Question: Does management still view buybacks as a prudent allocation of capital given the recent share price increase? - Management affirmed that stock buybacks remain a component of their capital allocation strategy, depending on market conditions [16] Question: Can you help break down the 47% year-over-year increase in real estate revenue in Q4? - Management explained that the increase was driven by higher average sales prices and normal land sales, alongside new residuals [19] Question: What are the company's short and long-term goals for the percentage of revenue that is recurring? - Management emphasized the importance of growing recurring revenue as a key part of their business strategy [38] Question: How is AI going to be implemented into the infrastructure of operations inside of St. Joe? - Management stated that they are exploring AI as a tool to improve operational efficiency [39] Question: What is the status and current timing around Pigeon Creek? - Management indicated they are in discussions with a builder for the Pigeon Creek project and are optimistic about moving forward soon [23] Question: Any updates on the Lake amenity or Pigeon Creek neighborhood? - Management confirmed they are in the planning phase for the Lake amenity and are progressing with discussions for Pigeon Creek [22] Question: What is the company's estimate of the average value per unused acre of land in the portfolio? - Management noted that there is no one-size-fits-all number for land value due to various factors affecting developability [40] Question: Is there any new info on West Bay Parkway, Walton segment? - Management expressed satisfaction with the progress of the road and is working closely with planning organizations for further steps [50]

Business Segments - St. Joe operates in three reportable segments: residential, hospitality, and commercial[17]. - As of December 31, 2025, St. Joe's unconsolidated joint venture, Latitude Margaritaville Watersound JV, qualifies as a significant subsidiary under Regulation S-X[20]. Employment - The company employed 906 full-time and 225 part-time and seasonal employees as of February 23, 2026[25]. Debt and Interest Rates - St. Joe's variable-rate debt outstanding totaled $115.9 million as of December 31, 2025, with a weighted average interest rate of 5.9%[299]. - A hypothetical 100 basis point increase in interest rates would increase annual interest expense by $0.8 million based on the outstanding balance of variable-rate loans[299]. Revenue Trends - Hospitality revenues are typically higher in the second and third quarters, influenced by holidays and school breaks[22]. Workforce Investment - The company has a history of investing in its workforce, enhancing wages to attract talent and improve customer experience[27]. Regulatory Compliance - St. Joe's operations are subject to various federal, state, and local regulations, which may incur significant costs if compliance issues arise[24]. Sustainability Practices - The company is committed to sustainable practices, including managing forestry operations and restoring natural ecosystems[34]. Community Engagement - St. Joe's community engagement efforts aim to create a positive impact through outreach, recruitment, and philanthropy[33].

Financial Performance - Quarterly net income attributable to the Company increased by 58% to $29.9 million, or $0.52 per share, compared to $18.9 million, or $0.32 per share in Q4 2024[2] - Total quarterly revenue increased by 24% to $128.9 million from $104.3 million in Q4 2024, with real estate revenue up 47% to $68.2 million[4] - For the full year 2025, total revenue increased by 27% to $513.2 million from $402.7 million in 2024, with real estate revenue rising 64% to $234.2 million[5] - The Company’s EBITDA for the full year 2025 increased by 32% to $219.6 million compared to $166.7 million in 2024[8] - Net income attributable to the Company for the year ended December 31, 2025, was $115.6 million, up 55.7% from $74.2 million in 2024[28] - EBITDA for the year ended December 31, 2025, was $219.6 million, compared to $166.7 million in 2024, reflecting a 31.7% increase[34] Revenue Breakdown - Hospitality revenue increased by 10% to a record $46.5 million in Q4 2025, and by 8% to a record $215.4 million for the full year 2025[16] - Leasing revenue decreased by 9% to $14.2 million in Q4 2025 due to the sale of the Watercrest joint venture senior living property, but increased by 5% to a record $63.6 million for the full year 2025[18] - The average base sales price per homesite increased from $108,000 in 2024 to $137,000 in 2025, with gross margin on homesite sales increasing from 47% to 51%[3] Capital Expenditures and Dividends - The Company funded $108.1 million in capital expenditures, paid $33.6 million in cash dividends, and repurchased $40.0 million of common stock in 2025[3] - The Company declared a cash dividend of $0.16 per share, payable on March 26, 2026[9] - The Company funded $108.1 million in capital expenditures for the full year 2025, with 47% allocated to capital expenditures, 33% to dividends and stock repurchases, and 20% to debt repayment[22] Assets and Liabilities - As of December 31, 2025, cash and cash equivalents increased to $129.6 million from $88.8 million in 2024[22][30] - Total assets as of December 31, 2025, were $1,518.4 million, a slight decrease from $1,538.6 million in 2024[30] - Total liabilities decreased to $742.8 million as of December 31, 2025, from $801.9 million in 2024[30] - The weighted average effective interest rate of outstanding debt as of December 31, 2025, was 4.8%, with 81% of the debt having a fixed or swapped interest rate[23] Business Strategy and Focus - The St. Joe Company is focused on real estate development and asset management in Northwest Florida, with significant residential and commercial land-use entitlements[39] - The company aims to utilize existing assets for residential, hospitality, and commercial ventures, actively seeking higher and better uses for its real estate[39] Risks and Challenges - The company faces various risks including financial risks related to currency fluctuations, credit risks, and market value fluctuations of its investment portfolio[37] - There is a dependence on strong migration and population expansion in the regions of development, particularly in Northwest Florida[37] - The company is subject to regulatory and insurance risks associated with its senior living facilities[37] - The ability to attract and retain qualified employees, especially in the hospitality sector, is a critical factor for the company's operations[37] - The company must navigate complex and changing laws and regulations that could impact its business[37] - The company is exposed to risks from natural disasters and severe weather conditions, which could affect its operations[37] Future Outlook - The Company plans to conduct an earnings call on February 27, 2026, to discuss performance and future outlook[24] - The company does not undertake to update forward-looking statements except as required by law[38]

Core Insights - Praetorian Capital's Fund achieved a net return of 0.21% in Q4 2025, resulting in a total return of 12.39% for the year, with an annualized net capital compounding rate of 37.12% since inception on January 1, 2019 [1] - The Fund's performance was impacted by a concentrated portfolio and a focus on asymmetric opportunities, leading to volatility [1] - The core portfolio generated modest returns in 2025, while the Event-Driven book detracted from overall performance [1] Company Focus - Praetorian Capital highlighted The St. Joe Company (NYSE:JOE) as a key investment, which is involved in real estate development and asset management [2] - As of February 13, 2026, The St. Joe Company (NYSE:JOE) stock closed at $70.18, with a one-month return of 7.33% and a 12-month increase of 46.79%, giving it a market capitalization of $4.06 billion [2] - The St. Joe Company owns approximately 167,000 acres in the Florida Panhandle and has been historically undervalued, trading at a fraction of its liquidation value without a catalyst for growth [3]

Core Insights - Fairholme Capital Management reported an equity portfolio valued at approximately $1.2–1.3 billion, maintaining a highly concentrated, value-oriented strategy focused on a limited number of deeply researched positions [1][11] - The portfolio is primarily concentrated in real estate development, energy infrastructure, and financials, reflecting a high conviction in these sectors [1][11] Portfolio Overview - Total Portfolio Value: ~$1.24 billion [3] - Top 10 Holdings account for over 99% of the portfolio, indicating extreme concentration [3] - Low turnover with minor trimming activity observed [3] Top Holdings - St. Joe Company (JOE): ~$969 million, ~78.2% of the portfolio [3] - Enterprise Products Partners (EPD): ~$170 million, ~13.8% of the portfolio [3] - Bank OZK (OZK): ~$46.7 million, ~3.8% of the portfolio [3] - Berkshire Hathaway (Class B) (BRK.B): ~$24.4 million, ~2.0% of the portfolio [3] - Other holdings include W.R. Berkley, Occidental Petroleum, and Apple, with very small allocations [3] Recent Activity - Major trims included a reduction of ~626k shares in St. Joe Company (~-3% QoQ), indicating routine position management rather than a change in investment thesis [4] - Minor reductions were also noted in Bank OZK (~-0.1%) and Berkshire Hathaway (BRK.B) (~-0.3%), appearing tactical rather than driven by conviction [5][6] - No significant new additions were disclosed, reinforcing a low-turnover, high-conviction investment posture [7] Portfolio Characteristics - Investment style is characterized as Deep Value with High-Conviction Concentration [9] - The holding period is very long-term, emphasizing intrinsic value realization over diversification [2][12] - Geographic exposure is primarily U.S.-focused, with an emphasis on asset-heavy, cash-generative businesses [15] Sector Themes - Core sector themes include real estate development, energy infrastructure, and financial services, with a notable focus on the dominant position in St. Joe Company [11][15] - The portfolio reflects a strategy aimed at income generation and cyclical recovery themes through its energy and financial holdings [11]