The St. Joe Company (JOE) Q3 2026 earnings review
St. Joe expands its resort communities, but builder lot sales drop
St. Joe expanded its flagship retirement community and set a summer hospitality record while everyday lot sales to homebuilders slowed. Reported revenue slipped 3% to $156 million against last year's senior-living property sale, though chief executive Jorge Gonzalez noted underlying growth, which came in at 4% by our math when also stripping out a $31 million land sale to its own Latitude joint venture. That joint-venture land transaction lifted operating profit 16%, while an accounting elimination on the same deal pushed net income down 5%.
| Revenue excluding major property sales | +3.9% from a year ago by our math (reported: -3.0%) |
|---|---|
| Operating income | $61.5M +16.3% from a year ago |
| Hospitality revenue | $66.0M +8.9% from a year ago (Q3 record) |
| Q4 cash dividend outlook | Raised 13% to $0.18 per share from $0.16 |
⚖️ Verdict: 🟢 Bullish
The story got better because the Phase 2 Latitude land deal doubled the size of St. Joe's best-selling community to 7,200 planned homes at raw land prices 44% above the initial 2020 deal, while new home orders there jumped 49%. A 13% dividend increase and another 412,800 shares retired also strengthened the capital-return track record. One caution: individual lot closings with homebuilders dropped 58% to 80 lots, and the near-term contracted backlog outside two mega-projects shrank for a third straight quarter.
The question now is whether the slowdown in builder lot closings is a brief pause between community phases or a broader demand dip before the 3,000-home Havenry project breaks ground in early 2027. If builders are waiting for finished lots, closings will rebound as new phases open; if buyer demand is cooling, residential revenue will rely on bulk land sales. Fourth-quarter lot closings and the early-2027 Havenry groundbreaking will tell.
🐂 Bull Case
Latitude Joint Venture Doubled Size at Higher Prices
Latitude Margaritaville Watersound is an active-adult housing community that St. Joe develops through an unconsolidated 50-50 joint venture with partner Minto. Chief executive Jorge Gonzalez said the company "moved forward with a second phase of the Latitude Margaritaville Watersound joint venture that will add approximately 3,500 additional homes to the community". That brings the planned community to about 7,200 homes.
- Contractual land value: $50.4 million, or $14,400 per raw homesite, up 44% from the $10,000 average in June 2020
- Third-quarter accounting recognition: $31.4 million of real estate revenue and $21.8 million of operating profit, with $10.9 million eliminated in joint venture income
- Joint venture demand: 106 net new home contracts in Q3, up 49% from 71 a year ago
- Joint venture backlog: 222 homes under contract worth $140.9 million at completion, up from 183 homes worth $115.1 million last quarter
This land sale matters because it proves the Florida developer can raise raw land prices while buyer demand at the community speeds up. The transaction also lifted company-wide operating margin by 6.5 percentage points to 39.4%, because cost of real estate revenue dropped by 8.6 percentage points of total revenue.
What to watch: completed home sales at the joint venture over the next two quarters. Rising completions will convert the 222-home backlog into cash distributions of $14,400 per home and reverse the $10.9 million accounting elimination.
Hospitality Set a Q3 Record on Club Growth
St. Joe operates 12 hotels with 1,298 rooms alongside the Watersound Club, a private beach and golf membership program in Northwest Florida. Gonzalez said the segment finished another strong summer peak season, with guests from all 50 states staying at its hotels through September and the fastest visitor growth coming from New York, South Carolina, Illinois and Michigan.
Hospitality revenue grew 9% from a year ago to a third-quarter record of $66.0 million. Watersound Club revenue rose 14% to $26.4 million as the club added 108 net new members in the quarter to reach 3,831, while hotel revenue increased 7% to $35.5 million. Segment gross margin — revenue minus direct operating costs — expanded to 37% from 35% a year earlier because high-margin club dues grew twice as fast as hotel lodging.
What to watch: net new Watersound Club member additions in the fourth quarter. Continued additions above last year's 16-member fourth-quarter pace would show that incoming residents are still joining the club at record rates.
Dividend Raised 13% as Shares Hit 29-Year Low
The company returns cash to investors through quarterly dividends and share buybacks while funding new property development. In the third quarter, the real estate group spent $27.2 million to buy back 412,800 shares at an average price of $65.89 by our math, bringing nine-month buybacks to $64.9 million, up 161% from $24.9 million a year ago.
Those purchases lowered the share count to 56,578,851 at the end of September, the lowest level since 1997. Alongside the release, the board raised the fourth-quarter cash dividend by 13% to $0.18 per share, after holding it at $0.16 for four straight quarters. Returning 53% of third-quarter capital to shareholders while spending $22.8 million on development shows cash generation covers both construction and rising payouts.
What to watch: fourth-quarter share repurchase spending in the full-year report. Another quarter above $25 million would push full-year buybacks past $90 million, more than double last year's $40 million total.
🐻 Bear Case
Homebuilder Lot Closings Fell by More Than Half
"Although the Watercrest joint venture property sale totaling $41.0 million in the third quarter of 2025 boosted prior year results, the third quarter of 2026 had organic growth," Gonzalez said. In St. Joe's residential segment, national and regional homebuilders sign contracts for lots and buy them as they build houses. Excluding both last year's $41.0 million Watercrest senior living sale and this quarter's $31.4 million bulk land sale to its own Latitude joint venture, real estate revenue grew just 4.4% by our math.
- Homesites closed in Q3: 80 lots, down 58% from 189 a year ago and down from 224 in Q2
- Townhomes sold in Q3: 5 units, down from 8 a year ago and 15 in Q2
- Near-term contracted backlog (excluding Havenry and SouthWood): 1,048 lots worth $103.6 million, down 22% in volume and 25% in value from a year ago
- Total contracted homesites: 3,021 lots, down 56 lots from last quarter
The drop in lot closings cuts against management's growth framing because builders slowed their purchases of ready-to-build lots while the near-term contract book shrank for a third straight quarter. Meanwhile, 1,973 of the 3,021 contracted lots sit in the long-term Havenry (Pigeon Creek) and SouthWood projects, where Havenry does not break ground until early 2027.
What to watch: fourth-quarter homesite closings and near-term contracted lots outside Havenry and SouthWood. A fourth consecutive drop in the near-term book would leave residential revenue dependent on bulk land sales until Havenry starts closing.
Fewer Joint Venture Closings Reduced Equity Income
St. Joe records its 50% share of profit from the Latitude Margaritaville Watersound community and other unconsolidated partnerships on the equity in income line below operating profit. This quarter that line swung to a loss of $8.2 million from a $3.5 million profit a year ago, because the company had to eliminate $10.9 million of internal profit from its Phase 2 land sale to the Latitude partnership.
Even excluding that $10.9 million accounting elimination, underlying joint venture equity income fell 23% to $2.7 million by our math, down from $3.5 million a year ago and $4.5 million in the second quarter. Revenue across unconsolidated joint ventures dropped 10% to $51.2 million as completed home sales at Latitude slipped to 67 from 82 a year earlier, dragging company net income down 5% to $36.9 million.
What to watch: quarterly home completions at the Latitude joint venture. Until completions climb back above 80 per quarter, lower joint venture earnings will continue to weigh on net profit.
Risks this quarter didn't answer
Several standing business, accounting and balance-sheet risks received no new numbers in the third-quarter earnings release and await the full quarterly filing or future periods.
- Undisclosed contract values: St. Joe still gives no dollar value for 1,326 Havenry lots — "positioned to include significant variable revenue due to its long-term nature" — or 647 SouthWood lots; any pricing disclosure at groundbreaking in early 2027 will size the pipeline.
- Estimated homesite residuals: the release does not split out how much third-quarter real estate revenue and margin came from non-cash residual estimates versus cash collections; the quarterly filing's footnote will show the receivable balance.
- Utility corridor spending and 2027 debt maturities: the release gives no update on capital commitments for the two off-site utility corridors or the refinancing of the $49.3 million Pier Park hotel loan due April 2027; the filing's liquidity notes will update both.
- Geographic concentration, buyer financing and buyback discipline: all land sits in Northwest Florida exposed to Gulf weather and insurance costs, and management gave no price framework for buying back stock at $65.89 per share.
👓 Other Themes
Property Sales Shrank the Commercial Leasing Portfolio
Leasing revenue fell 16% from a year ago to $14.1 million because St. Joe sold the Watercrest senior living property in September 2025 and the 44,748-square-foot WindMark Beach Town Center for $10.3 million in July 2026. Those sales reduced total leasable space by 2% to 1,148,000 square feet (97% leased), though the developer has 85,946 square feet under construction, 78% pre-leased, across Watersound West Bay Center and Town Center.
💲 Other KPIs
Net debt — project debt of $361.7 million minus $117.9 million of cash, excluding special-purpose entity notes — fell 10.7% from $273.0 million a year ago by our math. The Florida developer repaid $8.8 million of debt in the third quarter and $30.6 million over the first nine months, cutting quarterly interest expense by $1.0 million to $6.8 million.
Deferred revenue — cash collected up front, primarily non-refundable Watersound Club initiation fees recognized over the estimated life of a membership — rose 5.3% from $60.3 million a year ago and 1.8% from $62.4 million last quarter. It has climbed in every quarter of 2026 as new club members join.
Overhead costs rose 15.9% ($1.1 million) from $6.9 million a year ago and increased from $7.2 million last quarter. Higher professional fees ($1.2 million versus $0.8 million), employee costs ($3.7 million versus $3.4 million), and repairs drove the increase, lifting overhead to 5.1% of third-quarter revenue from 4.3% a year earlier.
🔮 Guidance
Raised. The board increased the quarterly cash dividend by 13% from $0.16 per share, payable December 11, 2026, after holding it flat for four quarters. St. Joe does not issue revenue or profit forecasts, making the dividend its only formal financial commitment; the payout is up 157% since starting at $0.07 in 2020.
❓ Key Questions
What are the lot prices for the Havenry community?
PulteGroup's 1,326 contracted lots in the Havenry community break ground in early 2027 and include variable revenue, but St. Joe still excludes them from its backlog dollar disclosures. Investors need the base lot price and revenue-sharing formula to model 2027 cash flows.
Why did homebuilder lot closings drop to 80?
Third-quarter residential homesite closings fell 58% from a year ago and 64% from the second quarter's 224 lots. Management has not explained whether builders delayed purchases due to mortgage rates or whether St. Joe simply had fewer finished lots ready to close.
How much of Q3 residential profit was non-cash estimates?
In the first half of 2026, St. Joe booked $14.6 million of estimated future home-sale bonuses (residuals) while collecting only $5.3 million in cash. With the third-quarter filing not yet out, investors do not know how much of this quarter's real estate profit was cash.
How will St. Joe refinance the April 2027 hotel loan?
A $49.3 million joint venture loan on the Pier Park Resort Hotel matures in April 2027 alongside its 3.2% interest-rate swap. Refinancing at current market rates will raise interest costs unless the company pays down the principal with cash.