Earnings call transcript: St Joe’s Q2 2025 sees strong revenue growth

St. Joe Company (JOE), with a market capitalization of $2.8 billion, reported significant growth in its Q2 2025 earnings call, highlighting a 16% increase in revenue and a 20% rise in net income. Real estate revenue grew by 27%, driven by strategic expansions and new projects. The company’s stock closed at $47.56, reflecting a 1.79% increase, as investors reacted positively to its robust performance and strategic initiatives. According to InvestingPro analysis, the stock is currently trading slightly above its Fair Value, with a P/E ratio of 34x.

Key Takeaways

• Revenue increased by 16% in Q2 2025.
• Real estate revenue saw a 27% rise.
• Recurring revenue now constitutes 63% of total revenue.
• The company returned $26 million to equity holders.
• Stock price rose by 1.79% post-earnings.

Company Performance

St. Joe Company demonstrated strong performance in Q2 2025, with substantial growth across various revenue streams. The company capitalized on the flourishing real estate market in Northwest Florida, further enhancing its recurring revenue model. This strategic shift from land sales to recurring revenue streams has positioned the company favorably against competitors.

Financial Highlights

• Revenue: Up 16% year-over-year
• Net income: Increased by 20%
• Real estate revenue: Rose by 27%
• Leasing revenue: Grew by 11% to a quarterly record
• Hospitality revenue: Increased by 10% to a quarterly record

Outlook & Guidance

Looking forward, St. Joe Company remains focused on expanding its recurring revenue streams and exploring strategic land sales. The company anticipates further development in its Latitude Margaritaville Watersound community and potential expansion of its WaterSound Real Estate brokerage. Strategic infrastructure projects, including a medical research hospital, are also on the horizon.

Executive Commentary

CEO Jorge Gonzalez emphasized, "Our strategy centers on growing and enhancing the ecosystem in Northwest Florida." He also highlighted the company’s commitment to connecting people to place and continuously assessing the long-term potential of its assets.

Risks and Challenges

• Potential infrastructure and transportation challenges could impact future growth.
• The housing market, though currently strong, may face macroeconomic pressures.
• Competition in the real estate sector remains intense.
• Any delays in planned infrastructure projects could affect timelines and costs.

Overall, St. Joe Company’s Q2 2025 performance reflects its strategic focus on growth and diversification, setting a positive tone for future quarters. With a beta of 1.31 and strong fundamentals, the company maintains an attractive risk-reward profile. For detailed analysis and comprehensive insights, including exclusive Fair Value calculations and growth projections, explore the full St. Joe Company research report available on InvestingPro.

Full transcript - St Joe Comp (JOE) Q2 2025:

Conference Operator: Good day and thank you for standing by. Welcome to The St. Joe Company second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question and answer session. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link at any time during the conference. Please be advised that today’s conference is also being recorded. I would now like to hand the conference over to Jorge Gonzalez, President, CEO and Chairman of The St. Joe Company. Please go ahead.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Thank you. Good afternoon everyone. I am Jorge Gonzalez, President, CEO and Chairman of The St. Joe Company.

Marek Bakun, Chief Financial Officer, The St. Joe Company: It is my pleasure to welcome you.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: to the quarterly earnings call of The St. Joe Company. Yesterday afternoon after the market closed, we issued our 2025 second quarter earnings press release, which can be found in the.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Investor Relations portions of our website at joe.com as.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: A reminder, in a housekeeping matter, in the top right-hand corner of your screen, the words Submit a Question are visible.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Clicking that text will take you to.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The section where you can type in your question and then click Submit for later in this call.

Marek Bakun, Chief Financial Officer, The St. Joe Company: I’m joined today by Marek Bakun, our Chief Financial Officer. As we discussed at our 2025 Annual.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Meeting of Shareholders back in May, we committed to launching quarterly earnings calls to provide our shareholders and the investor community with another opportunity to engage with management and ask questions about our business and performance.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We have always been an open and.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Transparent company that welcomes engagement in any form throughout the year.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Because of the types of assets that.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We always encourage shareholders to visit us in person so they can assess the progress of the region and of the company.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We are excited to begin this new.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Chapter of investor engagement as the company continues to execute on our strategic transformation.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Over the past several years, we have.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Evolved from primarily a transactional land sales company to a diversified real estate operating company with multiple recurring revenue streams. Our strategy centers on growing and enhancing the ecosystem in Northwest Florida by developing scalable master planned residential communities and businesses in hospitality and commercial leasing that generate recurring revenue. We call this our virtuous circle of value creation, where investments in one area enhance the value of our adjacent assets. The essence of our business is we connect people to place.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Before we begin discussing our results.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Answering your questions, I would like to remind everyone that today’s press release and the statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Marek Bakun, Chief Financial Officer, The St. Joe Company: These statements are subject to risks and.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Uncertainties that could cause actual results to differ materially from our expectations and projections.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Such risks and uncertainties include the factors.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Set forth in the Earnings Release and in our filings with the Securities and Exchange Commission. Additionally, during today’s call, we will be discussing non-GAAP measures which we believe can be useful in evaluating our performance. A reconciliation of these measures can be found in our Earnings Release. Our Earnings Release provides comprehensive details on our performance, so I’m not going to read all the details, but I will briefly focus on hitting on some key highlights before we move to your questions.

Marek Bakun, Chief Financial Officer, The St. Joe Company: For the second quarter, we continue to.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Show solid organic growth with 16% growth in revenue, 20% growth in net income.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Led by 27% growth in real estate revenue, what is particularly encouraging is the continued.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Growth of our recurring revenue streams. Leasing revenue increased by 11% to a quarterly record, and hospitality revenue increased 10% to a quarterly record.

Marek Bakun, Chief Financial Officer, The St. Joe Company: First six months of 2025, recurring revenue is now 63% of our.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Total revenue, which is a significant transformation of the company.

Marek Bakun, Chief Financial Officer, The St. Joe Company: In the second quarter, we continue to.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Execute a measured and multifaceted capital allocation strategy with $36.5 million in capital expenditures.

Marek Bakun, Chief Financial Officer, The St. Joe Company: For growth, $10.1 million for share repurchase, $8.1 million for cash dividends, and $7.7 million.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: million for project debt reduction. We have accelerated share repurchase with $16.2 million through the first half of 2025.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Leaving the outstanding share balance below 58 million for the first time since 1996, or 29 years ago. Beyond the numbers, there were several events.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: In the second quarter that are relevant.

Marek Bakun, Chief Financial Officer, The St. Joe Company: To our business that I would like.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: To briefly mention in case anyone missed them.

Marek Bakun, Chief Financial Officer, The St. Joe Company: On April 1, the Bay County Commission.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Approved the Pigeon Creek DSAP.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Plan, or DSAP, with entitlements for over 3,000 residential units and over 400,000 square feet of commercial. We are already in discussion with a.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Home builder interested in the entire DSAP, that will be a new addition to our builder program.

Marek Bakun, Chief Financial Officer, The St. Joe Company: On May 5th we launched WaterSound Real Estate.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Estate, a boutique real estate brokerage located in the WaterColor Town Center with several other future locations planned. This is our latest asset light business to complement our existing title and insurance.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Businesses that generate recurring revenue from capital.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Investments we have already made.

Marek Bakun, Chief Financial Officer, The St. Joe Company: On May 7, Delta announced year-round.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Daily nonstop flights between New York City’s LaGuardia Airport and Northwest Florida Beaches Airport (ECP).

Marek Bakun, Chief Financial Officer, The St. Joe Company: This is an exciting opportunity for us.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: To reach a new and heavily populated market.

Marek Bakun, Chief Financial Officer, The St. Joe Company: On June 10, the Florida governor and Cabinet approved the issuance of $414 million of bonds for the construction of a.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Florida State University Health Teaching Research Hospital in.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Bay County on our medical campus on State Road 79. On June 27, Topgolf opened its doors.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: In Panama City Beach as our main anchor for Pure Park City Center, an exciting new entertainment district.

Marek Bakun, Chief Financial Officer, The St. Joe Company: On June 30, the Florida Governor signed the state budget for fiscal year 2025-2026.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Which includes a $5 million appropriation to Bay County for the planning of a new sanitary sewer plant in the northern.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Part of State Road 79 corridor too.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Help support future growth.

Marek Bakun, Chief Financial Officer, The St. Joe Company: In closing, no matter the high quality of our real estate assets, the quality.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: What stands out is our people.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We have a hardworking team that.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Is committed to executing our shared vision.

Marek Bakun, Chief Financial Officer, The St. Joe Company: It is an honor and privilege.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: To be a part of the journey with them.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We are going to transition to the question and answer part of the call. We are going to read the questions as.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: They come up on the screen.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Please, I encourage you, if you have any questions, click on the question button and submit them to us.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We can read them and answer your questions.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The first question is, would the board.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Consider reviewing the current access policies to ensure that hotel guest usage in our.

Marek Bakun, Chief Financial Officer, The St. Joe Company: WaterSound Club do not dilute the premium experience and investment for members?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: There’s currently three hotels on 30A.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We allow access to our club amenities out of a total of 12 hotels. At this moment in time, we don’t.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Have a plan to change that current policy.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, distributed cash from Latitude.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Latitude Margaritaville Watersound could you provide color on the decision making of how much.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Capital or cash is kept at Latitude Margaritaville Watersound.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Versus being distributed out to the joint venture partners? The answer to the question is there’s.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Not a specific formula that the partners.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Execute ourselves and Minto on the actual distribution.

Marek Bakun, Chief Financial Officer, The St. Joe Company: It’s a decision that’s made based on how the business is going, how sales are going, how closings are going.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Infrastructure needs, the capital needs for the infrastructure.

Marek Bakun, Chief Financial Officer, The St. Joe Company: There is not a specific formula. It is something that we work together with our partner as part of the normal day-to-day execution of the joint venture. The next question is, what is the number of acres contributed to the Margaritaville joint venture with Minto?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: It is approximately 2,600 acres.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Next question, what can you tell us?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: On the ground in terms of what you’re seeing in terms of population growth in the area over the past year, do you think it’s possible that we can see the housing market in the area buck the national trend?

Marek Bakun, Chief Financial Officer, The St. Joe Company: You return $26 million to equity holders in the form of dividends, buybacks, debt paydown.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Being able to return significant capital to shareholders while continuing to grow is essential to this investment.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Do you believe you have reached a.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Point where we can return close to $100 million annually to shareholders in the manner you did this past quarter?

Marek Bakun, Chief Financial Officer, The St. Joe Company: Let me answer those questions one.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Section at a time.

Marek Bakun, Chief Financial Officer, The St. Joe Company: What can you tell us on the.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Ground in terms of what you’re seeing in terms of population growth in the area over the past year, as we shared at the annual meeting.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Bay and Walton County are among the fastest growing counties in the state of Florida by rate. We are still seeing that level of in migration coming into our area. We’re not seeing any material difference in that aspect. The answer to the question is we expect to see a continuation of the trend in the growth rate that.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We’ve been seeing in both Bay and Walton County. Could you see the housing market in the area above the national trend?

Marek Bakun, Chief Financial Officer, The St. Joe Company: Time will tell, but so far we.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Our region is certainly doing better.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Than many other parts, many other metro.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Markets in the country.

Marek Bakun, Chief Financial Officer, The St. Joe Company: You returned $26 million to equity holders in the form of dividends. I think really the question is, do you believe you have reached a point.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Where you can return close to $100 million annually to shareholders in the manner you did this quarter? We don’t know.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Capital allocation is something that.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We look at daily.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We make decisions based on what’s happening.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: At the ground level, what’s happening.

Marek Bakun, Chief Financial Officer, The St. Joe Company: the macro level, at the micro level, share price. As I’ve said many times.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We talked about in great detail.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The annual meeting is something that is very important to us.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: It is top of mind.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Are constantly thinking about capital allocation.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The best way that we can create value for our shareholders.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, what is going on with memberships? Two things about memberships. First of all, I think that question is.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Probably because.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The question, the individual asking.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The question noticed that there was a slight decrease in memberships for the quarter.

Marek Bakun, Chief Financial Officer, The St. Joe Company: A lot of that has to.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Do with two things.

Marek Bakun, Chief Financial Officer, The St. Joe Company: One, we had an adjustment or recalibration.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Of membership types, particularly legacy family memberships.

Marek Bakun, Chief Financial Officer, The St. Joe Company: That created a bit of an anomaly in the math of the membership.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We actually had 113 new members, full.

Marek Bakun, Chief Financial Officer, The St. Joe Company: New members join so far. The second thing is we did expect a little bit of a slowdown in membership because we increased the entry fee.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Significantly starting in January of this year.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The monthly dues. Every time we’ve done that.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We increase the entry fee and the membership dues very gradually and incrementally over time. The trend has always been when we do that, there’s a little bit.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Of a slowdown in new memberships reacting.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: to the increase in entry fees and memberships, over time the market absorbs the.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Increase, and then we get back on.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Another upcycle in membership growth. Next question.

Marek Bakun, Chief Financial Officer, The St. Joe Company: There was a nice pickup to $482.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Newly contracted home sites this quarter. Were there any major communities that drove this number? The answer is no. There was not one major community that.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Drove that number that was spread out over all the active communities that we have. What is currently the main bottleneck?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: To.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Sell more than the 1,000 home sites.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: That you have averaged in the last year?

Marek Bakun, Chief Financial Officer, The St. Joe Company: I think I’m not sure I would call it a bottleneck, but probably the same driver that affects all the builders nationally.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Relief in mortgage interest rates would certainly.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Be very helpful in us accelerating.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Going beyond not only to the thousand.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Per year, even going beyond the thousand, we are still seeing good traffic in the sales centers.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We are still seeing good in migration into our region. We still get positive feedback about the.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Quality of the product that is here. It’s a matter of interest rates decreasing, so the consumer will feel a.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Little bit more comfortable about making that final decision.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Next question. How do you think about the vehicle?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Traffic you’re creating over time when traffic already seems difficult at times?

Marek Bakun, Chief Financial Officer, The St. Joe Company: Yes, infrastructure, not just in terms of transportation but utilities, is really important.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Aspect of what we do.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We as a company are constantly planning 3, 5, 7, 10 years ahead. We spend a lot of time with our partners at the state level.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The regional level and at the local level, planning for future infrastructure expansion, it is always difficult to get it just right. You’re either too far ahead or far behind, but it is something that we are.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Constantly spending time with our state, regional, and local partners trying to make.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Sure that the infrastructure keeps up with the growth.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, C. Club grads grew with lower memberships.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: What color on that can you provide? A couple things.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Higher dues was a big part of it. As I mentioned before, we increased, not.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Only the entry fee, but the monthly dues pretty significantly in January of this year.

Marek Bakun, Chief Financial Officer, The St. Joe Company: That obviously resulted in higher revenue for the club. We also have the new golf course, so we now have three golf courses. That increases the fees associated with the golf course.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We had a pretty good second.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Quarter in terms of our hotel occupancy and our rates. The next question. You have 1,209 home sites under contract.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Which is a decline versus previous years. Despite having more active selling communities and more national builders, this implies that you have fewer home sites under contract per community and per builder.

Marek Bakun, Chief Financial Officer, The St. Joe Company: What is driving this decline and how do you think about this metric versus prior years? The answer is we close a lot of lots in the first half of this year. Also, as I’ve mentioned before, it’s difficult to try to create an algorithm or a methodology on lot closings because the.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Time it takes to engineer, permit, develop.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Infrastructure in any one subdivision phase is not linear, and it takes approximately two years.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Sometimes it takes a year, sometimes it takes a year and a half.

Marek Bakun, Chief Financial Officer, The St. Joe Company: When looking at that metric, I would just caution shareholders on overreading or reading too much into that metric because.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: There’s a lot of components to delivering.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Lots of our home sites that are.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: They’re not easy to apply in a linear formula.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We sold a lot of lots, so obviously that displaced a lot of.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Those lots that were under contract, in terms of what we’re seeing at the ground level in our discussions with.

Marek Bakun, Chief Financial Officer, The St. Joe Company: All of our builders, and we talk to them very regularly, we don’t feel that there’s any material difference in that pipeline that causes us any concern at this point.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The next question, does the board believe?

Marek Bakun, Chief Financial Officer, The St. Joe Company: Florida Senate Bill 1622, customary use assigned.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Into law this year by the governor.

Marek Bakun, Chief Financial Officer, The St. Joe Company: To have negative effect on The St. Joe Company’s real estate holdings, especially in Walton County?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The answer is no.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We don’t anticipate it will have any.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Effect on The St. Joe Company’s real estate holdings.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, there’s a massive discrepancy between the market cap and NAV.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: How do you plan on closing that?

Marek Bakun, Chief Financial Officer, The St. Joe Company: Any consideration for getting sell side coverage? Our focus as management is to continue to grow the company, continue to grow the company in the most profitable way possible, and also in the best way possible.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: That’s going to be creating shareholder value. That’s our focus. That’s what our team is focused on.

Marek Bakun, Chief Financial Officer, The St. Joe Company: On a daily basis, the next question, CapEx and lot development.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Seem significant relative to the amount of lots platted under development. Can you give us some color here? Is it possible this CapEx is going towards lots and permitting planning?

Marek Bakun, Chief Financial Officer, The St. Joe Company: Yes, first of all, CapEx includes both soft dollars and hard dollars.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Soft dollars are dollars that we spend in plan, and of course hard dollars.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Are dollars that we spend in actually.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Putting infrastructure in the ground.

Marek Bakun, Chief Financial Officer, The St. Joe Company: It’s a combination of both, and again, it’s very difficult. I would caution looking at any residential home site metric as it relates to timing into.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Not reading too much into it.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Any one time just because of that two-year window.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: That’s a big variable in the time it takes to engineer, permit, and develop home sites.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, when will phase two, Margaritaville, break ground and what is its size?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Will the pricing and market positioning be similar to phase one?

Marek Bakun, Chief Financial Officer, The St. Joe Company: Thanks and great work to all the team members. As we talked about in the annual meeting, we received approval for the.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Detailed Specific Area Plan immediately west of Latitude.

Marek Bakun, Chief Financial Officer, The St. Joe Company: I believe it was one or two years ago from Bay County that’s approved.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: For over 4,000 units.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We have been engaging in planning with our potential joint venture partner, extending the.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Joint venture from Latitude Margaritaville Watersound to the property to the west.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We are in discussions with our partner about the transition and the expansion.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Latitude into that new area.

Marek Bakun, Chief Financial Officer, The St. Joe Company: At this point in time, we anticipate having a very similar market position.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Terms of pricing and product.

Marek Bakun, Chief Financial Officer, The St. Joe Company: That’s something that we hope in terms of answering the specific question when.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We’ll actually break ground. We don’t have an exact projection for.

Marek Bakun, Chief Financial Officer, The St. Joe Company: If you can kind of look at the 3,500 units that were.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Approved in the first joint venture and the current run rate that we’re.

Marek Bakun, Chief Financial Officer, The St. Joe Company: On a yearly basis, it’s probably.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Going to be a couple years away.

Marek Bakun, Chief Financial Officer, The St. Joe Company: When we break ground for the second Latitude Margaritaville Watersound project, we do feel very positive with.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Our relationship with our partner.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We feel positive about the continued market.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Acceptance, the traffic that we’re seeing in the sales center.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We obviously are planning on continuing.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: That relationship on that property to the immediate west. Next question.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Your income from equity accounted investments is getting material due to Latitude Margaritaville Watersound.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The sum of the earnings of your two Pure Park JVs and soon.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The WaterSound Fountains Independent Living JV are negative.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The value of those two assets doesn’t currently show in the P&L. What is the earnings potential of these?

Marek Bakun, Chief Financial Officer, The St. Joe Company: Properties as they ramp up?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Is St. Joe the logical owner of these properties?

Marek Bakun, Chief Financial Officer, The St. Joe Company: A couple of those properties that were mentioned are still in the startup lease up phase, particularly WaterSound Fountains. That project was delayed on the construction side, so we started leasing later than we anticipated. Residence Inn is the other hotel joint.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Venture that was referenced that’s still in the startup.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Stabilization phase.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We believe they’re both two great locations, and the long-term potential of those.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Two assets we still believe are good. For example, WaterSound Fountains, our other senior living facility, took a while to lease up.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: They don’t have the same leasing trajectory as apartments.

Marek Bakun, Chief Financial Officer, The St. Joe Company: They do take longer than apartments.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Fountains was slow to lease up and now is in the 90% and actually quite profitable for us.

Marek Bakun, Chief Financial Officer, The St. Joe Company: There’s no reason to believe that WaterSound.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Fountains is going to be any different from that.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Having said all that, we’re constantly.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Looking at all of our assets constantly, whether it’s a joint venture or it’s.

Marek Bakun, Chief Financial Officer, The St. Joe Company: One of our projects, assessing its long.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Term potential, assessing its long-term profitability.

Marek Bakun, Chief Financial Officer, The St. Joe Company: are making decisions on our long term.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Ownership of that asset. That’s something that we do constantly.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, what needs to occur?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: For the West Bay Bridge to be built, what kind of timeline do you envision for that?

Marek Bakun, Chief Financial Officer, The St. Joe Company: The question refers to the WaterSound, the West Bay Parkway, the road that would connect State Road 79 in Bay County, head west, go over the Intercoastal Waterway, and then come out in Walton County west of WaterSound Origins.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: That is a project that we’ve been engaged in planning with the Florida Department of Transportation. The Florida Department of Transportation has a.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Very specific process they go through for regional roadways like that.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The very first step is choosing the alignment, and that alignment was chosen. We worked closely with the Florida Department of Transportation in them making that decision of the alignment.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next step is engineering and permitting of the road.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We have been in discussion with the.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Local transportation planning organizations and DOT on putting together that next step in engineering and permitting.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We don’t have an exact time frame for when the road is going to be built.

Marek Bakun, Chief Financial Officer, The St. Joe Company: One thing that we do know, as with the success of Latitude, every.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Home that gets built at Latitude is.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Another consumer that is going to appreciate that road, and the more of those consumers we have, the more positive we feel about.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The potential timing of that road.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, there is a lot of real estate activity in the areas some distance from the coast.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: In your area, for example, Freeport, your raw land is appreciating even though it doesn’t show up in quarterly results.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Do you get offers to buy land?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: From third parties, and how do you.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Think about selling the land or holding onto it even though you might not.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Have immediate plans to use the land?

Marek Bakun, Chief Financial Officer, The St. Joe Company: That’s a very good observation. We do get, from time to time, offers from individuals for different parts of our land holdings. The part of our land holdings that we consider non-strategic, which is essentially the bulk of that, is the property.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: East of the Apalachicola River in Leon County, in Gadsden County and Wakulla County.

Marek Bakun, Chief Financial Officer, The St. Joe Company: In those counties, we are predisposed to.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Sell at the right price.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Obviously, we’re not discounting any land, even.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: If it’s non-strategic, on the east side of the.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Apalachicola River, Leon County, Gadsden, Wakulla and.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: A couple of those counties, those are.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Lands that we don’t consider strategic. When we get inquiries about selling or potential buyers buying property in those areas, in those counties, we are predisposed to do that.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We have sold several of those properties.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Land in our core counties, in our.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Strategic counties, whether it’s Bay, Walton or Gulf.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We’re a lot more picky about engaging with potential parties that have an interest. Oftentimes the interest is really somebody looking to buy a property at a.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Low price and wait for the appreciation.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Quite frankly, that’s not something that we do.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: it is in the best interest of our shareholders and the company.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We always listen, we always meet.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: If we think there’s a strategic opportunity to sell a piece of land, we will consider it.

Marek Bakun, Chief Financial Officer, The St. Joe Company: In one of our strategic counties.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: A good price that will be accretive.

Marek Bakun, Chief Financial Officer, The St. Joe Company: To what we’re doing, we are certainly.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Going to consider that.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, when do you expect the new marina to start construction on the ICW? We started construction of that new marina. We did a lot of grading on that property. We are still waiting for all the permits to be issued before we finalize the plan and move forward and finish the marina. We have started construction.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: We’re just waiting for all the permits before we can continue the development of that marina.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, how should we look?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: At the earnings potential of the new WaterSound Real Estate boutique? Will all St. Joe’s newly built homes be sold through your own brokerage?

Marek Bakun, Chief Financial Officer, The St. Joe Company: We have some pretty ambitious goals for the agency. We’re taking it one step at a time. We have been extremely pleased with the.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Reaction that we’ve had in the agent community.

Marek Bakun, Chief Financial Officer, The St. Joe Company: When we announced that we were forming the brokerage, we were inundated with phone calls of agents in the region wanting.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: To join the brokerage.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Right now the focus is on the first location, which is in the WaterColor town center. The focus of that location is.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Resales in that part of 30A.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We have plans to expand locations in.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Multiple.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Areas in both Bay and Walton. In terms of new home sales in communities, yes, that is something that we’re certainly looking at and targeting of how our brokerage can be involved in executing that.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Part of our business.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, as part of your strategic plan, what is the goal for growth rate of recurring revenues the next.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Three to five years? We don’t.

Marek Bakun, Chief Financial Officer, The St. Joe Company: I don’t know if I can tell you an exact goal at this moment in time.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: It’s project by project. Obviously, like I said earlier, our focus as a management team is on growth, on growing revenues, growing.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Profitability, particularly growing recurring revenue. The next question, can you talk about.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: The timing of the medical center breaking ground since the bonds have been approved, and also the impact on the region. First, the impact on the region.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We believe it’s going to be a pretty transformational impact to the region.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Transformational impact in an obviously extremely positive way.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Having a research teaching hospital in our region is going to be extremely beneficial.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: For existing residents, prospective residents.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We really believe it’s going to.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Be a transformational event for the region. The bonds were issued.

Marek Bakun, Chief Financial Officer, The St. Joe Company: FSU Health is currently in the process of finalizing an agreement with an operator, and as soon as that agreement is finalized, you’re going to be able to see the project move forward fairly quickly.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: After that.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The next question, is Pigeon Creek potentially a parcel that you would?

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Consider offloading for a sizable chunk of upfront cash to a single builder versus the slow lead approach that seems to be common with the existing builders and NPC?

Marek Bakun, Chief Financial Officer, The St. Joe Company: The location of the land and potentially.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Density a large-scale builder could quickly.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Add on the residential side appears to.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Make this sort of transaction more appealing, as I mentioned in my introductory comments.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We are in discussions with one.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Large.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Scale builder, as the question mentions, that has an interest in the entire Pigeon Creek DSAP. We’ve made a lot of progress in.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Those discussions, and we believe that builder is the right builder to accomplish what.

Marek Bakun, Chief Financial Officer, The St. Joe Company: The question asks, which is to help accelerate the pace and the trajectory of our residential segment, particularly with the scale.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: That Pigeon Creek has.

Marek Bakun, Chief Financial Officer, The St. Joe Company: I’m not seeing another question. If there’s any more questions that anybody has, please go ahead and send them in. We’ll give it a few more minutes to see if there’s any other questions that come in.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Okay.

Marek Bakun, Chief Financial Officer, The St. Joe Company: We’re not seeing any more questions. Thank you again for joining us today.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: I greatly appreciate the questions.

Marek Bakun, Chief Financial Officer, The St. Joe Company: There were some really great, insightful questions.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: From individuals that know our company pretty well.

Marek Bakun, Chief Financial Officer, The St. Joe Company: Appreciate the questions, appreciate the interest and the engagement, and again, we’re looking forward to this new phase of engagement with our shareholders and look forward to speaking with you again next quarter. Thank you everybody.

Jorge Gonzalez, President, CEO and Chairman, The St. Joe Company: Have a great day.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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