Seaport Entertainment Group Inc. (SEG) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights positive financial performance with increased EBITDA across segments and strong entertainment revenue growth. Despite a decline in hospitality revenue, cost-cutting measures improved EBITDA. The Q&A indicates strategic capital allocation and potential growth in event spaces. However, vague responses on buyback specifics and apartment monetization introduce some uncertainty. Overall, the strong financial metrics, optimistic guidance, and strategic initiatives suggest a positive stock price movement.
Key Financial Performance
Net Loss Net loss improved by 24% year-over-year for the full year 2025, amounting to $116.7 million. The improvement was attributed to cost optimization initiatives and stabilization of the operating structure as a stand-alone public company.
Non-GAAP Adjusted Net Loss Non-GAAP adjusted net loss improved by 49% year-over-year for the full year 2025, amounting to $54.1 million. This was driven by cost savings and better operational efficiencies.
Total Consolidated Revenues Total consolidated revenues for the full year 2025 were $130.4 million, essentially flat compared to 2024. The flat performance was due to declines in certain segments offset by growth in others.
Hospitality Revenue Hospitality revenue declined by 16% year-over-year for the full year 2025, primarily due to underperformance at the Tin Building and declines in legacy stand-alone restaurants. However, this was partially offset by growth at Gitano and larger events like Macy's 4th of July Fireworks.
Hospitality Operating EBITDA Hospitality operating EBITDA increased by 25% year-over-year for the full year 2025, driven by cost-cutting measures, internalization of food and beverage operations, and strong performance at the Lawn Club and Gitano.
Entertainment Revenue Entertainment revenue increased by 14% year-over-year for the full year 2025, driven by internalization of Enchant operations, increased sponsorship revenue, and new revenue from larger events.
Entertainment Adjusted EBITDA Entertainment adjusted EBITDA increased by 124% year-over-year for the full year 2025, benefiting from improved collections, reduced bad debt, and better cost management.
Landlord Rental Revenue Landlord rental revenue increased by 21% year-over-year for the full year 2025, driven by private event rental activity and termination-related income from the Nike office lease.
Landlord Operating EBITDA Landlord operating EBITDA increased by 36% year-over-year for the full year 2025, excluding nonrecurring items. This was due to revenue growth and reduced overhead costs.
Consolidated Operating EBITDA Consolidated operating EBITDA increased by 33% year-over-year for the full year 2025, driven by cost optimization and stabilization of the operating structure.
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Operating Highlights
Balloon Museum Lease: Signed a new lease with Lux Entertainment to bring the Balloon Museum experience to the Tin Building, transitioning it from a negative cash-burning operation to a positive free cash-flowing asset. Estimated $22 million annual EBITDA improvement.
New Restaurant - Sadie's: Opening a 400-seat restaurant and bar called Sadie's, featuring new American food and a robust programming calendar.
Expanded Event Space at Pier 17: Expanding event space from 17,500 to over 40,000 square feet, creating one of the largest multifaceted event spaces in NYC with an estimated payback period under 5 years.
Seaport Leasing and Programming: Leased or programmed over 220,000 square feet since becoming a public company, expected to generate over $30 million in stabilized EBITDA.
Las Vegas Aviators: Strong ticket sales for the 2026 season, including Big League weekend and Savannah Bananas games, indicating strong market demand.
Internalization of Food and Beverage Operations: Internalized operations across many restaurants, leading to cost savings and improved EBITDA.
Cost Optimization: Implemented cost-cutting measures, resulting in a 33% year-over-year increase in consolidated operating EBITDA.
Sale of 250 Water Street: Generated $75 million in net proceeds, eliminating $7 million in annual cash burn and strengthening the balance sheet.
Stock Repurchase Program: Board approved a $50 million stock repurchase program, providing flexibility for capital allocation.
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Risk or Challenges
Sale of 250 Water Street: The process of finalizing the sale was longer than anticipated, and the transaction required additional diligence and evaluation of market conditions. Post-closing obligations remain to be resolved, and the sale was necessary to eliminate $7 million of annual cash burn related to interest expense and carry costs.
Closure of the Tin Building: The Tin Building faced historical challenges and required a fundamental repositioning of its use and operating structure to achieve long-term sustainability. This led to its closure as a culinary experience and transition to a new lease with Lux Entertainment.
Malibu Farm Closure: The closure of the Malibu Farm location at Pier 17 indicates challenges in maintaining certain restaurant operations. Discussions are ongoing for replacement concepts to address culinary gaps.
Hospitality Segment Performance: Declines in revenue were noted, particularly in the Tin Building and certain legacy stand-alone restaurants. Food and beverage revenue declined 16% year-over-year, reflecting closures and increasing top-line softness.
Landlord Segment Challenges: The termination of the ESPN lease and nonrecurring legal settlement proceeds impacted rental revenue. Additionally, there were increased operating expenses for cleaning, security, and utilities.
Interest Expense: Interest expense increased due to the suspension of interest capitalization on 250 Water Street and a decrease in interest earned on invested cash.
Las Vegas Operations: The internalization of Enchant operations resulted in transitional costs, though it is expected to improve execution and profitability in 2026.
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Guidance & Outlook
Future Financial Projections: The company expects the Balloon Museum lease to improve pro forma annual EBITDA by more than $22 million, transitioning the Tin Building from a negative cash-burning operation to a stabilized positive free cash-flowing asset. The expanded event space at Pier 17 is expected to generate long-term unlevered cash-on-cash returns above 20% with an estimated payback period under 5 years.
Growth Expectations: The Seaport neighborhood is approximately 90% leased or programmed, with plans to lease the remaining 53,000 square feet to complementary daily needs, amenity-oriented tenants, and incremental food and beverage opportunities. The company anticipates additional stabilized EBITDA of more than $30 million from the 220,000 square feet leased or programmed since becoming a stand-alone public company.
Market Recovery Assumptions: The Las Vegas Aviators' group and season ticket sales are pacing ahead of last year, with strong momentum for Big League weekend and other events. The Las Vegas Ballpark will host the Savannah Bananas for three games, with ticket sales outpacing 2024 levels. Incremental efficiencies and better control of variable expenses are expected to drive margin improvement in 2026 across the Las Vegas operation.
Strategic Plans with Future Implications: The company plans to open a new 400-seat, 1,000-person open container district anchored by a new restaurant called Sadie's, which will feature new American food and a robust programming calendar. The expanded Pier 17 event space will create one of the largest multifaceted event spaces in New York City, focusing on premium corporate, not-for-profit, convention, and social events. The company is also exploring the sale of its 21-unit apartment building at 85 South Street and has received Board approval for a $150 million shelf registration statement and a $50 million stock repurchase program.
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Shareholder Return Plan
Stock Repurchase Program: The company recently received Board approval to file a $150 million shelf registration statement and a $50 million stock repurchase program. The shelf provides flexibility to access capital markets efficiently in the future if a strategic opportunity arises. The stock repurchase program is intended to maintain optionality to buy back stock, which could be a good long-term capital allocation decision. However, it was emphasized that neither the shelf registration nor the stock repurchase program should be interpreted as an immediate plan to issue or repurchase securities.
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Key Q&A
Q:How much of the $163 million cash pro forma is committed to current projects and getting them online at the Seaport?
A:Approximately $30 million has been spent in 2025, with an additional $70 million to $90 million expected to reach stabilization. The total target range remains $100 million to $125 million.
Q:What are the company's plans for capital allocation?
A:The company is evaluating opportunities in hospitality, entertainment, and event spaces, as well as potentially acquiring assets similar to the Seaport or companies with scalable intellectual property and brand recognition. They may also utilize the buyback program opportunistically.
Q:Are there any internal hurdles for achieving returns as the company deploys cash?
A:There are no hard and fast financial targets yet. The company is focused on growing earnings efficiently and leveraging the existing team's talent to improve flow-through.
Q:What is the status of the remaining space at the Seaport, and what growth can it drive?
A:There is over 50,000 square feet left, with about one-third being restaurant-oriented space. The company plans to complement existing concepts and expects anchors like the Balloon Museum, Meow Wolf, and the Rooftop of Pier 17 Concert series to drive growth.
Q:Are there any special events planned for the year?
A:Yes, events include concerts on the Cobblestones and Pier, FIFA World Cup-related activities, America's 250-year anniversary celebrations, and cultural and sporting events. The company aims to bring people to the Seaport and support local businesses.
Q:What should be expected for G&A expenses throughout the year?
A:Q4 is the new reference point for G&A expenses. There will be transitional costs in Q1, but the back half of the year is expected to benefit from these changes. The company aims to stabilize and improve upon Q4 levels.
Q:What are the criteria for the buyback program?
A:The company will not disclose specific parameters or timing for the buyback program. It will be used opportunistically, and decisions will be made by the Board based on stock performance and capital allocation alternatives.
Q:How does the Balloon Museum complement the Meow Wolf experience?
A:The Balloon Museum and Meow Wolf are complementary, with mutual respect between the teams. Both are ticketed experiences and aim to create a full-day destination at the Seaport for visitors.
Q:What details are available about the apartment building being monetized?
A:The building is almost 100% leased, with some rent-stabilized units. It is cash-flowing and has attracted significant interest. Updates will be provided if and when the building is sold.
Q:How does the company view its Las Vegas property compared to New York?
A:The Las Vegas Ballpark is a high-quality facility with a strong local fan base. The company sees opportunities to add value through off-season events like Enchant. While live sports is a valuable business, the company is open to offers for the team and Ballpark.
Q:Review of Unclear Management Responses
A:Management avoided providing specific parameters or timing for the buyback program, stating only that it would be used opportunistically. Additionally, they did not disclose real-time updates on the apartment building monetization process, citing competitive disadvantages.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
America
Balloon Museum
Bar
Championship
Chef Jean
Cobblestones
Jean Georges
League
Lux Entertainment
Macy th
Malibu Farm
Pier event
Rooftop Pier
Seaport neighborhood
Wine
activation
addition
art
balance sheet
beverage opportunity
capital
closure
floor
foot vacancy
margin
moment
music
operation
option
plan
program
shelf
staff
standpoint
stock
th Fireworks
transaction
SEG Transcript
Seaport Entertainment Group Inc. (SEG) Q4 2025 Earnings Call Transcript
Positive3-5
The earnings call highlights positive financial performance with increased EBITDA across segments and strong entertainment revenue growth. Despite a decline in hospitality revenue, cost-cutting measures improved EBITDA. The Q&A indicates strategic capital allocation and potential growth in event spaces. However, vague responses on buyback specifics and apartment monetization introduce some uncertainty. Overall, the strong financial metrics, optimistic guidance, and strategic initiatives suggest a positive stock price movement.
Seaport Entertainment Group Inc. (SEG) Q3 2025 Earnings Call Transcript
Unknown11-11
The earnings call indicates mixed results: strong rental revenue growth and improved net loss metrics are offset by decreased EBITDA and ongoing losses. The Q&A reveals strong leasing demand but uncertainty about specific projects. No guidance on Tin Building's breakeven raises concerns. Despite positive signs like reduced expenses and improved net loss, the lack of clear guidance and ongoing challenges suggest a neutral sentiment.
Earnings call transcript: Seaport Entertainment Q1 2025 sees revenue dip
Unknown5-13
The earnings call reflects mixed signals: while there are improvements in net loss and operational EBITDA, revenues have decreased, and guidance is lacking. The partnership with Meow Wolf and new developments like the Catano restaurant and Pier 17 enhancements are positive, yet the lack of clear future guidance and declining hospitality revenues are concerning. The Q&A highlighted management's evasive responses on breakeven timelines and strategic impacts, adding uncertainty. Given these factors, the stock price is likely to remain stable, resulting in a neutral sentiment.
Seaport Entertainment Group Inc. (SEG) Q1 2025 Earnings Call Transcript
Unknown5-13
The earnings call highlights several concerning factors: a 12% decrease in consolidated revenues, significant declines in hospitality revenue, and no guidance provided. Despite some operational improvements and a negative net debt position, the lack of a shareholder return plan and strategic restaurant closures are worrying. The Q&A did not alleviate these concerns. Given the absence of guidance and the revenue decline, a negative stock price movement is anticipated.
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