Core Viewpoint - Seaport Entertainment Group Inc. has successfully completed the sale of a mixed-use development project at 250 Water Street for $143.0 million to Tavros, a New York City-based real estate investment management and development firm [1] Company Summary - The project at 250 Water Street was originally acquired by Howard Hughes Holdings, the former parent of Seaport Entertainment Group, in June 2018 [1] - The site covers one acre and spans a full city block [1]

Core Insights - Pershing Square Capital Management, led by Bill Ackman, maintains a concentrated portfolio focused on high-conviction investments, emphasizing dominant franchises and long-duration cash flows [1][2] Portfolio Overview - The majority of capital is allocated to a few global compounders, with modest and selective position changes reflecting maintenance around core convictions rather than dramatic rotations [2][14] Key Holdings - **Uber Technologies (UBER)**: 30,270,518 shares valued at $2.97 billion, representing over 20% of the portfolio; slight reduction of 30,643 shares indicates rebalancing rather than a change in conviction [3][4] - **Brookfield Corp (BN)**: 41,020,231 shares valued at $2.81 billion, about 19% of assets; modest trim of 140,166 shares reinforces its status as a core compounding vehicle [5] - **Howard Hughes Holdings (HHH)**: 18,852,064 shares valued at $1.55 billion; unchanged position reflects patience in long-term real estate development strategy [6] - **Alphabet Inc. (GOOG)**: 6,324,031 shares valued at $1.54 billion; unchanged position highlights its role as a durable cash-generating franchise [7] - **Restaurant Brands International (QSR)**: 22,915,496 shares valued at $1.47 billion; slight reduction of 85,418 shares, yet remains a top holding with significant growth potential [8] - **Amazon.com (AMZN)**: 5,823,316 shares valued at $1.28 billion; unchanged position indicates confidence in long-term cash flow potential [9] - **Alphabet Inc. (GOOGL)**: 4,843,973 shares valued at $1.18 billion; reduction of 519,007 shares (-9.68%) reflects portfolio concentration management [10] - **Chipotle Mexican Grill (CMG)**: 21,541,177 shares valued at $844.2 million; unchanged position emphasizes operational excellence and brand-driven unit economics [11] - **Hilton Worldwide (HLT)**: 3,030,578 shares valued at $786.3 million; steady holding reflects confidence in asset-light lodging models [12] - **Seaport Entertainment Group (SEG)**: 5,023,780 shares valued at $115.1 million; stable position with no activity this quarter [13] Strategic Takeaways - The portfolio remains extremely concentrated, with the top five positions accounting for the majority of assets, reinforcing a preference for depth over breadth [14] - Changes in the portfolio were incremental, consisting mainly of small trims rather than aggressive repositioning [14] - High-quality compounders dominate the portfolio, with Uber, Brookfield, Alphabet, Amazon, and Chipotle anchoring it with durable cash flows [14] - Patience is a defining feature of the strategy, as minimal turnover and unchanged core positions reflect confidence in long-term investment theses [15]

Financial Data and Key Metrics Changes - Total consolidated revenues for Q3 2025 were $45.1 million, reflecting a 1% year-over-year increase compared to pro forma Q3 2024 [24] - Third-quarter net loss attributable to common stockholders was $33.2 million, a year-over-year decline of approximately $700,000 or 2%, with a net loss per share of $2.61, improving by $3.28 per share or 56% compared to Q3 2024 [31] - Non-GAAP adjusted net loss attributable to common stockholders for Q3 was $7.2 million, representing an improvement of around $18 million or 71% versus the comparable period in 2024 [32] Business Line Data and Key Metrics Changes - Hospitality revenues declined 4% year-over-year in Q3, primarily due to lower revenues at the Tin Building and softness in certain legacy standalone restaurants [25] - Same-store hospitality revenue rose 11%, driven by the success of the Long Club and the strong launch of Dutano [25] - Entertainment segment revenues decreased 5% year-over-year, primarily due to hosting seven fewer concerts at the Rooftop at Pier 17 compared to the prior year [26] Market Data and Key Metrics Changes - International visitation to New York City remains below pre-pandemic levels, currently at about 90% of 2019 volume, while domestic travel remains resilient [6][7] - Total New York City visitation is projected to reach almost 65 million visitors in 2025, surpassing 2024 levels and approaching pre-pandemic visitation levels [7] Company Strategy and Development Direction - The company aims to refine its focus and priorities to stabilize and optimize operating models, emphasizing financial discipline and thoughtful capital deployment [4] - Plans include further reinvestment into existing assets to fill vacancies and improve space utilization, while also seeking opportunities to create long-term value through partnerships in real estate-driven hospitality and entertainment [5] - The company is committed to enhancing the Seaport as a cultural and experiential destination, leveraging events to drive foot traffic and awareness [45][46] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the mixed picture of the New York City market, with a focus on curating high-quality experiences to drive visitation and customer spending [10] - The company remains optimistic about the performance of new concepts and events, which are expected to enhance the overall guest experience and drive incremental spending [16][18] - Management plans to outline a go-forward strategy for the Tin Building in the next earnings call, indicating a focus on improving operational efficiency [53] Other Important Information - The sale of 250 Water Street is expected to positively impact historical cash burn by more than $7 million, eliminating interest expenses and related carrying costs [10] - The company has completed technology initiatives to centralize point-of-sale and procurement systems across hospitality businesses, enhancing purchasing power and financial visibility [14] Q&A Session Summary Question: What are the biggest levers to drive profitability? - Management highlighted the importance of getting tenants open and operational, focusing on operational models, and creating efficiencies in G&A to achieve break-even and profitability [37] Question: Can you discuss the demand for prospective spaces? - Management noted strong demand for restaurant space and is focusing on finding the right partners and experiences for the community [38][39] Question: What is the expected timing for tenant openings? - Management anticipates increased velocity in tenant openings in the back half of the year, with specific timelines for various tenants [40][41] Question: How will special events drive exposure and awareness? - Management emphasized that events like the Macy's Wine and Food Festival are crucial for marketing and pulling visitors to the Seaport, enhancing its position as a cultural destination [43][44] Question: Will the restructuring with Jean-Georges lead to break-even in 2026? - Management stated that they are not in a position to provide forward guidance on the Tin Building's performance in 2026 but are focused on outlining plans in the next earnings call [52][53] Question: What are the expectations for capital expenditures in Q4? - Management indicated that capital expenditures for Q4 will likely be light, with a ramp-up expected in the first half of 2026 [59]

Financial Data and Key Metrics Changes - Total consolidated revenues for Q3 2025 were $45.1 million, reflecting a 1% year-over-year increase compared to pro forma Q3 2024 [23] - Net loss attributable to common stockholders was $33.2 million, a year-over-year decline of approximately $700,000 or 2%, with a net loss per share of $2.61, improving by $3.28 per share or 56% compared to Q3 2024 [31] - Non-GAAP adjusted net loss attributable to common stockholders for Q3 was $7.2 million, representing an improvement of around $18 million or 71% versus the comparable period in 2024 [32] Business Line Data and Key Metrics Changes - Hospitality revenues declined 4% year-over-year in Q3, primarily due to lower revenues at the Tin Building and certain legacy standalone restaurants [24] - Same-store hospitality revenue rose 11%, driven by the success of the Long Club and the strong launch of Dutano [25] - Entertainment segment revenues decreased 5% year-over-year, mainly due to hosting seven fewer concerts at the Rooftop at Pier 17 compared to the prior year [26] Market Data and Key Metrics Changes - International visitation to New York City remains below pre-pandemic levels, currently at about 90% of 2019 volume, while domestic travel remains resilient [5] - Total New York City visitation is projected to reach almost 65 million visitors in 2025, surpassing 2024 levels and approaching pre-pandemic visitation levels [6] - The Manhattan office market has shown strength, with leasing activity exceeding pre-COVID levels, particularly in financial services, technology, and media industries [6] Company Strategy and Development Direction - The company aims to refine its focus and priorities to stabilize and optimize operating models, emphasizing financial discipline and thoughtful capital deployment [4] - Plans include reinvestment into existing assets to improve space utilization and drive customer engagement, while also seeking opportunistic growth in real estate-driven hospitality and entertainment platforms [5] - The company is committed to enhancing the Seaport as a cultural and experiential destination, leveraging marquee events to drive visitation and awareness [39] Management's Comments on Operating Environment and Future Outlook - Management noted that the New York City market presents a mixed picture, with challenges in international tourism but resilience in domestic travel [5] - The company is optimistic about the performance of new hospitality concepts and events, which are expected to drive customer spending and engagement [12][16] - Management expressed confidence in the sale of 250 Water Street, which is expected to positively impact cash burn and eliminate associated interest expenses [10] Other Important Information - The company completed several technology initiatives, including centralizing point-of-sale and procurement systems across hospitality businesses, enhancing financial visibility and reporting accuracy [13] - The sale of 250 Water Street is expected to close by December 15, with an increased sale price of $152 million [10] - General and administrative expenses during the quarter were $18 million, reflecting a year-over-year reduction of 2% [30] Q&A Session Summary Question: What are the biggest levers to drive profitability? - Management highlighted the importance of getting tenants open and operational, focusing on operational efficiencies, and filling remaining vacancies as key drivers for profitability [35] Question: Can you discuss the demand for prospective spaces? - Management noted strong demand for restaurant space and is focusing on finding the right partners and experiences for the community [36] Question: What is the timing for opening new tenants? - Management anticipates that velocity will pick up in the back half of the year, with several openings expected before Meow Wolf [38] Question: What are the expectations for the Tin Building's break-even in 2026? - Management stated that they are not in a position to provide forward guidance on the Tin Building's performance in 2026 but will outline plans in the next earnings call [41] Question: What are the capital expenditures expected for Q4? - Management indicated that capital expenditures for Q4 will be somewhat light, with a ramp-up expected in the first half of 2026 [45]

Financial Performance - Total revenues for Q3 2025 were $45.05 million, an increase of 14.3% compared to $39.43 million in Q3 2024[7] - Net loss for Q3 2025 was $33.2 million, or $2.61 per share, a 55.7% improvement from a net loss of $5.89 per share in Q3 2024[7] - Non-GAAP Adjusted Net Loss for Q3 2025 was $7.2 million, or $0.57 per share, significantly improved by 71.2% from a loss of $25.08 million in Q3 2024[7] - Year-to-date total revenues for 2025 reached $100.92 million, up 15.2% from $87.61 million in the same period of 2024[10] - Year-to-date net loss was $79.9 million, or $6.29 per share, a 68.9% improvement from a net loss of $20.21 per share in the first nine months of 2024[11] - Total revenues for the three months ended September 30, 2025, increased to $45,050,000, up 14% from $39,430,000 in the same period of 2024[27] - Hospitality revenue rose to $16,603,000, a significant increase of 85% compared to $8,954,000 in Q3 2024[27] - Net loss attributable to common stockholders for the three months ended September 30, 2025, was $33,214,000, compared to a loss of $32,511,000 in Q3 2024[29] - Non-GAAP adjusted net loss attributable to common stockholders for the three months ended September 30, 2025, was $7,218,000, compared to $25,078,000 in Q3 2024[29] - Operating income (loss) for the three months ended September 30, 2025, was a loss of $33,898,000, compared to a loss of $20,091,000 in the same period of 2024[27] - Earnings per share attributable to common shareholders for the three months ended September 30, 2025, was $(2.61), an improvement from $(5.89) in Q3 2024[27] Assets and Liabilities - Total assets decreased to $699,074,000 as of September 30, 2025, down from $743,556,000 at the end of 2024[25] - Cash and cash equivalents decreased to $106,215,000 from $165,667,000 at the end of 2024, reflecting a decline of 36%[25] - Total liabilities increased to $203,333,000 as of September 30, 2025, compared to $172,174,000 at the end of 2024[25] Corporate Developments - The company entered into an agreement to sell the 250 Water Street development site for $150.5 million[5] - Approximately 113,100 square feet of space within the Seaport neighborhood has been leased, programmed, or has development plans established[5] - The company completed a corporate restructuring, converting various management agreements into new license agreements with Jean-Georges Restaurants[5] - As of September 30, 2025, the company had $116.8 million in cash and cash equivalents, with $101.4 million of consolidated debt at a weighted-average interest rate of 7.3%[13] - The company was uplisted to the NYSE and added to the Russell 2000 Index and Russell Microcap Index[5] Share Information - Total weighted average shares for the three months ended September 30, 2025, were 12,720,000, compared to 5,522,000 in Q3 2024[29]

Spin-off and Capital Contribution - The Company completed its spin-off from Howard Hughes Holdings Inc. on July 31, 2024, distributing all outstanding shares of common stock to HHH's stockholders [166]. - Prior to the Separation, the Company received a capital contribution of $23.4 million from HHH to support its operating, investing, and financing activities [167]. Business Segments and Operations - The Company operates through three segments: Hospitality, Entertainment, and Landlord Operations, focusing on asset management, partnerships, acquisitions, and development projects [160]. - The Tin Building by Jean-Georges, completed in Q3 2022, is fully leased and has shown improved operating results in 2024 compared to the previous year [179]. - The Las Vegas Aviators, a Triple-A Minor League Baseball team, plays at the Las Vegas Ballpark, which has a capacity of 10,000, contributing to the Company's entertainment segment [164]. - The Company aims to fill vacancies in its Landlord Operations portfolio, which is under a long-term ground lease from the City of New York [165]. - The Company's operations are highly seasonal, with increased revenue typically occurring from May through October due to outdoor events and favorable weather conditions [180]. Financial Performance - Total revenue for the three months ended September 30, 2025, increased by 14% to $45.05 million, driven by an 85% increase in hospitality revenue to $16.60 million [192]. - Hospitality costs surged by 115% to $19.92 million for the same period, contributing to an operating loss of $33.90 million, which is a 69% increase compared to the prior year [192]. - Net loss attributable to common stockholders for the three months ended September 30, 2025, increased by 2% to $33.20 million, primarily due to a $7.20 million decrease in other income [193]. - For the nine months ended September 30, 2025, total revenue rose by 15% to $100.92 million, with hospitality revenue increasing by 79% to $39.52 million [200]. - General and administrative expenses decreased by 33% to $36.01 million for the nine months ended September 30, 2025, largely due to a reduction in prior separation costs [200]. - The company incurred leadership transition costs of $11.5 million for the three months ended September 30, 2025, with no such costs recorded in the prior-year period [191]. - Rental revenue decreased by 32% to $13.64 million for the nine months ended September 30, 2025, reflecting challenges in the rental segment [200]. Adjusted EBITDA and Losses - Hospitality Adjusted EBITDA losses decreased by $2.3 million for the nine months ended September 30, 2025, compared to the prior-year period [212]. - Landlord Operations Adjusted EBITDA loss increased by $4.3 million compared to the prior-year period, primarily due to a $4.0 million loss recognized on assets held for sale [224]. - The company recorded a loss on assets held for sale of $3.99 million for both the three and nine months ended September 30, 2025, indicating asset management challenges [192]. Cash Flow and Liquidity - Cash used in operating activities decreased by $21.4 million to $26.6 million in the nine months ended September 30, 2025, compared to $48.0 million in the prior-year period [242]. - Cash used in investing activities decreased by $61.1 million to $21.1 million in the nine months ended September 30, 2025, compared to $82.2 million in the prior-year period [243]. - Cash provided by financing activities decreased by $117.5 million to cash used in financing activities of $3.4 million in the nine months ended September 30, 2025, compared to cash provided of $114.1 million in the prior-year period [244]. - As of September 30, 2025, cash and cash equivalents were $106.2 million, down from $165.7 million as of December 31, 2024 [234]. - Management believes existing cash balances and access to capital markets provide adequate liquidity to meet current and long-term obligations [239]. Interest Expense and Debt - Interest expense decreased by 96% to $0.13 million for the three months ended September 30, 2025, compared to $3.13 million in the prior-year period [198]. - As of September 30, 2025, the company had third-party mortgages payable of $101.4 million related to the 250 Water Street development [235]. - As of September 30, 2025, the weighted average interest rate on the $40.1 million of fixed-rate indebtedness outstanding was 4.92% per annum [264]. - If short-term interest rates had been 1% higher, interest expense would have increased by approximately $0.2 million and $0.5 million for the three and nine months ended September 30, 2025, respectively [264].

Core Viewpoint - Seaport Entertainment Group Inc. reported its operating and financial results for the quarter ended September 30, 2025, highlighting successful events and positioning efforts for the Seaport as a key destination [1] Financial Performance - The company hosted significant events such as the Macy's 4th of July Fireworks celebration and the New York City Wine & Food Festival, indicating strong operational performance [1] Strategic Initiatives - The company is focused on transforming the Seaport into a must-visit location, showcasing its commitment to enhancing the visitor experience and driving engagement [1]

Group 1 - Seaport Entertainment Group and Carver Road Hospitality announced the opening of Flanker Kitchen + Sports Bar in Fall 2026 [1] - The venue will be approximately 14,000 square feet and serve as the East Coast flagship for the Flanker brand [1] - Flanker New York City aims to expand its integrated dining and entertainment concept in key markets across the country [1]

Investment Rating - The report maintains an "Outperform" rating for the industry [1] Core Insights - The demand for lawn and pool robots is surging due to technological upgrades, with domestic companies competing vigorously [5] - The global lawn mower market is projected to reach $10 billion by 2024, with a compound annual growth rate (CAGR) of 2% from 2013 to 2023 [3] - The penetration rate of robotic lawn mowers is expected to increase significantly, driven by advancements in technology [3][29] Summary by Sections 1. Overseas Lawn Demand and Market Size - The lawn care culture in Europe and the U.S. has led to a substantial market for lawn mowers, with 180 million private gardens [3][12] - The global lawn mower market is expected to reach approximately $10.8 billion in 2024, with a CAGR of 2.1% from 2013 to 2023 [13][15] 2. Rapid Iteration of Boundaryless Smart Lawn Mowers - The introduction of RTK satellite differential positioning technology has significantly improved the performance of robotic lawn mowers, leading to a sales explosion [3][30] - By the first half of 2025, global sales of robotic lawn mowers are expected to grow by 327% year-on-year, reaching 2.34 million units [29] 3. Competitive Landscape of the Robotic Lawn Mower Industry - Traditional leaders like Husqvarna and Worx still hold significant market share, but domestic companies such as Ninebot, Ecovacs, and Mamotion are rapidly gaining ground [40][42] - Domestic companies are leveraging technological advantages and innovative product iterations to capture market share in overseas markets [42] 4. Pool Robot Market Dynamics - The global pool robot market is projected to reach $2.5 billion by 2024, with a CAGR of 16% from 2019 to 2024 [6] - The penetration rate of pool robots is expected to rise from 18% in 2019 to 26% in 2024, with further growth anticipated by 2029 [6] 5. Investment Recommendations - The report suggests focusing on companies like Stone Technology, Guangfeng Technology, and Ecovacs, which are well-positioned to benefit from the technological advancements in the industry [5]

Group 1 - Seaport Entertainment Group (NYSE: SEG) is a real estate holding company with diverse real estate assets, hospitality interests, and ownership of a minor league baseball team [1] - The analysis covers developments and performance of Seaport Entertainment Group over the past five months [1]