The St. Joe Company reported second quarter 2026 net income of $40.5 million, or $0.71 per share, marking a 37% increase from $29.5 million in the same period last year. This represents the highest second quarter net income for the company in 30 years, excluding a one-off gain on discontinued operations in 1996. Total revenue climbed 23% to $158.8 million, reaching its highest level for a second quarter in two decades. The results underscore the strength of the company’s integrated model in Northwest Florida, where growth in hospitality and residential segments is mutually reinforcing.

Jorge Gonzalez, President, Chief Executive Officer and Chairman of the Board, attributed the performance to across-the-board gross margin expansion. Residential gross margins improved to 48% from 45%, hospitality margins rose to 42% from 39%, and commercial margins increased to 65% from 57%. "This across-the-board increase in gross margin demonstrates that the Company continues to refine operations and increase profitability," Gonzalez said. The company highlighted its 'Virtuous Circle of Value Creation,' where hotel guests convert into residential buyers and commercial customers, driving demand across its ecosystem.

Segment Performance

Real estate revenue surged 59% to $69.6 million from $43.8 million, supported by 224 residential homesite sales and 15 townhome closings. Hospitality revenue set a new quarterly record at $74.2 million, up 8% from $68.8 million, bolstered by a 13% increase in Watersound Club revenue to $28.6 million. Conversely, leasing revenue declined 9% to $15.0 million due to the September 2025 sale of the Watercrest joint venture senior living community property. Despite the revenue drop, leasing gross profit increased slightly to $9.0 million, with gross margins improving to 60% from 54%.

What the Numbers Show

The divergence between leasing revenue decline and overall profit growth highlights the structural shift in The St. Joe Company’s portfolio. While the exit from the Watercrest senior living venture reduced top-line leasing figures, the remaining commercial portfolio achieved higher efficiency, evidenced by the margin expansion to 60%. Simultaneously, the company’s focus on high-margin residential land sales and recurring hospitality membership fees (Watersound Club members grew to 3,723) has insulated net income from volatility in traditional leasing cycles. This mix shift suggests a strategic pivot toward higher-yield, vertically integrated revenue streams rather than passive rental income.

Capital Allocation and Dividends

For the second quarter, the company allocated capital as follows: 43% to stock repurchases ($32.7 million), 31% to capital expenditures ($24.0 million), 14% to debt repayment ($10.9 million), and 12% to dividends ($9.1 million). As of June 30, 2026, outstanding shares fell to 56,991,651, the lowest since 1997. On July 29, 2026, the Board of Directors declared a cash dividend of $0.16 per share, payable on September 18, 2026, to shareholders of record as of August 21, 2026. The company ended the quarter with $117.3 million in cash and cash equivalents.

The St. Joe Company has opened new retailers at its Watersound Town Center in Inlet Beach, Florida, marking the next phase of growth for the open-air lifestyle center. National and regional brands including FP Movement, Hemline, Monkee’s and Sunset Shoes & Lifestyles have recently opened, with Johnnie-O expected to follow later this summer. The center is currently 98% leased, featuring approximately 160,000 square feet of retail, restaurant, service and office space.

To meet growing demand from national apparel brand stores, two additional buildings are planned to break ground this year at Watersound Town Center. Retailers planned for these buildings will be announced in the near future. The recent activity extends beyond apparel retail, with Jersey Mike’s Subs and Lagree 30A opening to expand dining and wellness offerings. National homebuilder Fischer Homes has also opened an office and showroom, while Art-of-Fact(s) has joined the center with curated home décor, gifts and artwork.

William Brock, St. Joe Vice President of Commercial Real Estate, said the decision by established brands to invest in the center is a strong validation of the market. Rebecca Waters, St. Joe Director of Commercial Sales and Leasing, said the team remains committed to thoughtfully growing the tenant mix and creating a destination that will evolve alongside the community.

Plans call for Watersound Town Center to grow to approximately 400,000 square feet. Supporting that growth, the nearby Watersound Origins, Watersound Camp Creek and Watersound Origins Crossings residential communities continue to expand. These communities have more than 1,700 completed homes, townhomes and apartment units, with additional homesites in various stages of development.

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