SEG — Seaport Entertainment Group Inc.

Seaport Entertainment Group Inc. (SEG) Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Net Loss: Q4 2025 net loss attributable to common stockholders was $36.9 million, improving 11% year-over-year. Full-year net loss was $116.7 million, a 24% improvement.
• Per Share Loss: Q4 loss per share was $2.89, and for the full year, it was $9.18, reflecting a 2045% improvement.
• Non-GAAP Adjusted Net Loss: Q4 adjusted net loss was $17.5 million (down 949% YoY), with a full-year adjusted loss of $54.1 million (also down 949% YoY).
• Consolidated Revenues: Q4 revenues were $29.5 million (up 7% YoY), while full-year revenues were $130.4 million (flat YoY).
• Hospitality Segment: Q4 revenues declined 23% YoY, primarily due to lower performance at the Tin Building.
• Entertainment Segment: Q4 revenues increased 68% YoY, driven by internalizing operations in Las Vegas.
• Adjusted EBITDA: Consolidated adjusted EBITDA improved by $1.3 million in Q4 and $2.8 million for the full year on a pro forma basis.

2. Strategic Updates and Business Highlights:

• Operational Improvements: The company internalized food and beverage operations, leading to improved cost efficiencies.
• New Developments:
  • Signed a lease with Lux Entertainment for the Balloon Museum at the Tin Building, expected to enhance cash flow significantly.
  • Planned expansion of Pier 17 event space from 17,500 to over 40,000 square feet.
  • New restaurant Sadie’s to open, featuring a robust programming calendar.
• Las Vegas Operations: Transitioned to regular baseball programming with strong early ticket sales for the Las Vegas Aviators.
• Sale of 250 Water Street: Completed sale, eliminating $7 million in cash burn and providing additional capital for strategic initiatives.

3. Forward Guidance and Outlook:

• The company expects to stabilize its operations and improve profitability in 2026, with a focus on enhancing revenue through new partnerships and expanded event offerings.
• Anticipated capital expenditures of $70 to $90 million to achieve stabilization.
• The management is optimistic about leveraging existing assets and exploring new opportunities in hospitality and entertainment.

4. Bad News, Challenges, or Points of Concern:

• Tin Building Performance: The closure of the Tin Building in its current form and its historical challenges have raised concerns about revenue stability.
• Hospitality Revenue Declines: The segment experienced a 16% decline in revenue for the full year, primarily due to the Tin Building's performance and the closure of certain venues.
• G&A Expenses: While G&A expenses improved, there were transitional costs related to leadership changes that may impact future financials.
• Market Conditions: The company acknowledged ongoing risks related to market conditions and operational challenges as it continues to reposition its assets.

5. Notable Q&A Insights:

• Cash Deployment: Management indicated that of the pro forma $163 million cash, approximately $70 to $90 million is targeted for current projects at the Seaport.
• Buyback Program: The buyback program will be used opportunistically, with no immediate plans to execute but a recognition of the stock's undervaluation.
• Event Programming: Upcoming events and programming around cultural and sporting occasions, including the World Cup, are expected to drive traffic and revenue.
• Las Vegas vs. New York: Management emphasized the potential for growth in Las Vegas through improved operations and the local fan base's support for the Aviators.

Overall, SEG demonstrated progress in financial performance and strategic initiatives while facing challenges in specific segments, particularly in hospitality. The outlook for 2026 appears cautiously optimistic with a focus on operational improvements and new developments.