SEG — Seaport Entertainment Group Inc.

Seaport Entertainment Group (SEG) Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Operating EBITDA: Loss of $11.8 million, improved by $3.1 million (21%) year-over-year despite a 21% revenue decline.
• Hospitality Segment: Operating EBITDA improved by $2.9 million (36%) year-over-year; however, revenue decreased by 34% due to closures of the Tin Building and Malibu Farm.
• Net Loss: $44.1 million, a 38% increase year-over-year; net loss per share rose to $3.47 from $2.51.
• Non-GAAP Adjusted Net Loss: Improved by 21% to a loss of $17.9 million ($1.41 per share).
• Cash Position: Increased by $57.3 million to $144.7 million, primarily due to the sale of 250 Water Street. Net cash position stood at $105.6 million.

2. Strategic Updates and Business Highlights:

• Property Sales and Leasing: Completed the sale of 250 Water Street for over $75 million, leasing the Tin Building to Lux Entertainment for cash flow generation.
• New Developments: Opened Sadie's Restaurant and Garden Bar, which has received positive reviews and is expected to drive traffic during the summer.
• Partnerships: Announced collaboration with Public Service for a new experience at the Seaport, and a comprehensive programming calendar to enhance visitor engagement.
• Event Programming: Launched a concert series at the Rooftop at Pier 17 with a record number of shows; hosted high-profile events like Spotify's BTS Swimside experience.

3. Forward Guidance and Outlook:

• Capital Expenditures: Expected to remain in the $70 million to $90 million range to stabilize the portfolio by 2028.
• Event Space Development: Anticipated operational by mid-2027, following negotiations to regain control of space previously leased to Nike.
• Incremental Improvements: Expected in rental revenue as new tenants commence operations, including Cork and the Balloon Museum.

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

• Revenue Declines: Hospitality revenue decreased significantly due to weather-related impacts and closures of key venues.
• Increased Net Loss: Driven by accelerated depreciation from the Tin Building repositioning and restructuring costs.
• Operational Challenges: Weather conditions negatively affected performance across various venues, contributing to losses in unconsolidated ventures.
• Market Risks: Ongoing geopolitical events and policy actions pose headwinds to tourism growth in New York City.

5. Notable Q&A Insights:

• Capital Deployment: Management remains opportunistic with cash reserves, considering buyback options and potential new investments.
• Event Space Timeline: Confirmed mid-2027 for the new event space, with recent progress on negotiations to regain control of the space.
• Tenant Leasing Strategy: Discussed plans for leasing remaining vacancies, including One Seaport Plaza, with a focus on finding the right tenant mix.
• Corporate Overhead: Current G&A expenses are viewed as manageable, with expectations for continued reductions as the company stabilizes.

Overall, SEG is navigating challenges while making strategic moves to enhance its operational framework and capitalize on market opportunities, positioning itself for long-term growth despite current headwinds.