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    SEG
    Earnings call· Jun 2026(Q2 FY26)

    Seaport Entertainment Group Q2 FY26 earnings call SEG

    Aug 6, 2026 Source

    Executive summary

    Seaport Entertainment Group Q2 FY26 — First Ever Positive Operating EBITDA and Non-GAAP Adjusted Net Income

    Seaport Entertainment Group achieved a significant milestone in Q2 FY26, reporting its first-ever positive operating EBITDA and non-GAAP adjusted net income, driven by operational efficiencies, G&A cost reductions, and strategic lease terminations. While some segments faced headwinds, the company is focused on stabilizing assets by 2028, leveraging new openings and event programming to drive future growth and improve earnings.

    Highlights

    5

    • Achieved positive operating EBITDA and non-GAAP adjusted net income for the first time in company history.

    • Reported seventh consecutive quarter of double-digit non-GAAP adjusted net income per share improvement, with a 103% year-over-year increase in Q2.

    • Total operating EBITDA improved by $5.6 million year-over-year to positive $4.5 million, with all business segments generating positive results.

    • General and administrative costs reduced by over 20% on a trailing 12-month basis, and by $1.7 million or 20% year-over-year in Q2.

    • Nike lease termination resulted in an additional $2.7 million in rental revenue year-over-year and accelerated construction of the planned event space.

    Concerns

    4

    • Entertainment segment operating EBITDA declined $1 million or 23% year-over-year due to increased expenses and decreased sponsorship revenue.

    • Legacy full-service restaurants within the hospitality segment faced softer top-line sales.

    • Equity in earnings from unconsolidated ventures declined $0.5 million or 61% year-over-year, reflecting lower EBITDA from Lawn Club and John George Restaurant Group.

    • Leasing timelines for remaining smaller vacant spaces are expected to take longer due to detailed negotiations to identify suitable tenants.

    Guidance & targets

    6
    CategoryTargetConfidence
    Earnings Profile
    improved earnings profile
    high materiality
    Medium
    Earnings Profile
    even more improved earnings profile
    high materiality
    Medium
    Asset Stabilization
    initial stabilization of our existing assets
    high materiality
    High
    Incremental Annualized Operating EBITDA
    more than 20 million
    high materiality
    High
    Remaining Capital Expenditures
    $50 million to $70 million
    medium materiality
    High
    G&A Cost Reduction Trend
    continue this trend
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Landlord Operations
    Operating EBITDA improved by $3.6 million year-over-year. The increase in rental revenue was mainly due to the Nike lease termination transaction. Operating costs saw significant savings from insurance premium reductions and reduced spending on cleaning, security, and technology.
    Rental revenue increase: $2.8 millionOperating costs decrease: $0.8 million or 10% YoYOperating EBITDA improvement (excluding Nike): 23% YoY
    		—67%—$0.6 million
    Hospitality
    Achieved positive operating EBITDA, primarily driven by the full quarter benefit of the TIN building closure (which had a $2.8 million loss impact in the prior year). Sadie's, an internally developed concept, generated positive operating EBITDA in its first full quarter. However, legacy full-service restaurants faced softer top-line sales.
    Operating EBITDA improvement: $3.1 million YoYSadie's Garden Bar revenue increase: 125% YoY
    		———$0.28 million
    Entertainment
    Operating EBITDA declined due to increased repair and maintenance expenses and operating costs for rooftop concerts, as well as decreased sponsorship revenue following a non-renewal. The Las Vegas team delivered higher operating EBITDA year-over-year despite fewer home games, driven by cost management and successful non-Aviator events like the sold-out Athletics series and Banana Ball.
    Rooftop concerts: 22 shows in Q2 FY26Rooftop concerts sellouts: 13Rooftop concerts sell-through rate: 91%Las Vegas merchandise sales increase (with Athletics games): 50% YoYLas Vegas retail sales increase (excluding Athletics games): 8% YoY
    		—-23%—declined $1 million

    Operational metrics

    20
    Non-GAAP adjusted net income
    $320,000improved $7.7 million YoY from -$7.4 million
    Q2 FY26

    First time achieving positive non-GAAP adjusted net income in company history.

    Non-GAAP adjusted net income per share
    $0.02improved from -$0.58 YoY
    Q2 FY26

    Attributable to common stockholders.

    Non-GAAP adjusted net income per share improvement
    103%YoY
    Q2 FY26

    Highest comparable quarter of per share improvement during the company's two-year existence.

    Trailing 12-month General and administrative costs
    <$27 millionreduced by >20% from $34 million in Q3 2025
    Q2 FY26

    Adjusted for one-time leadership transition costs.

    General and administrative expense
    $6.6 millionimproved $1.7 million or 20% YoY
    Q2 FY26

    Compared to $8.3 million in Q2 FY25.

    Non-income producing space opening
    >194,000
    next 18 months

    Space opening with new concepts, contributing to future incremental EBITDA.

    Capital expenditures
    $14.8 million
    Q2 FY26

    Majority invested in landlord work for Balloon Museum, Flanker Kitchen, Hidden Booth Saloon, and other maintenance projects.

    Net cash position
    $88.9 million
    June 30, 2026

    Reflects cash, cash equivalents, and restricted cash of $127 million less outstanding debt.

    Cash, cash equivalents, and restricted cash
    $127 million
    June 30, 2026

    Balance at quarter end.

    Escrow received (250 Water Street)
    $20.8 million
    Q2 FY26

    Received for 250 Water Street post-closing obligations.

    Outstanding debt (Las Vegas ballpark loan)
    $38.1 million
    Q2 FY26

    The company's only outstanding debt.

    Recurring principal payments (Las Vegas ballpark loan)
    $1 million
    Q2 FY26

    Paid during the quarter.

    Net interest income
    $0.7 milliondown $0.1 million or 14% YoY
    Q2 FY26

    Reflecting a lower interest rate environment.

    Net loss attributable to common stockholders
    $10.5 millionimproved 29% YoY
    Q2 FY26

    Compared to prior year.

    Net loss per share
    $0.82improved from -$1.16 YoY
    Q2 FY26

    Compared to Q2 FY25.

    Rooftop concerts
    22
    Q2 FY26

    Concert series performance at Pier 17.

    Aviators highest attended regular season game
    >11,000
    April 2026

    Highest attended regular season game in franchise history.

    Athletics series attendance
    >50,000
    Q2 FY26

    Sold-out series hosted at the ballpark.

    Sadie's Garden Bar revenue
    125%increase YoY
    Q2 FY26

    Compared to prior year when the outdoor bar was not managed directly by SEG.

    Vacant spaces remaining
    <50,000
    Q2 FY26

    Remaining vacant spaces on the Seaport, down from roughly 150,000 sq ft initially available.

    Industry KPIs

    3
    MetricValueDetails
    Leasing revenue growth67%%
    Development in process pipeline>$20 millionUSD
    Segment operating profit growth$5.6 millionUSD

    Orderbook & backlog

    1
    Non-income producing space opening pipeline>$20 millionQ2 FY26

    Incremental annualized operating EBITDA expected from >194,000 square feet of new concepts opening in the next 18 months.

    Deals & partnerships

    2
    NikeEarly termination of lease agreement for space at Pier 17.$2 million termination fees received in 2025, another $2 million due in Q1 2027 (received early in Q2 2026), plus payment for majority of remaining rent.Original lease term revised to expire in Q1 2027 (three years ahead of original contractual end date).

    Nike exercised a lease termination option in 2025. In Q2 26, an agreement was reached to terminate the lease effective April 30, 2026, with the remaining termination payment and majority of rent received. This enabled earlier construction of the planned event space.

    Blue Fox EntertainmentAcquisition of 46,000 square foot lease for former IPIC theater space through bankruptcy process.Paid all outstanding balances.

    Blue Fox Entertainment, a global film distribution and sales company, acquired the lease for the 46,000 sq ft former IPIC theater space, paying all outstanding balances. They intend to rebrand and enhance the movie theater experience.

    Capital programs

    3
    Pier 17 Event Space Constructionunderway
    Start: Q2 FY26

    Benefit: Dedicated entrance, elevator access to 2nd, 3rd, and 4th floors with sweeping views, designed for flexible programming (corporate off-sites, conventions, product launches, consumer engagement) with full infrastructure.

    Construction began sooner than anticipated following the early termination of the Nike lease. This space is designed to be highly flexible and accommodate various event types, contributing to the Seaport's entertainment offerings.

    Balloon Museum Developmentnearing completion
    Period spend: majority of $14.8 million CapEx in Q2 FY26
    Spent to date: landlord work completed and space delivered in June of 2026
    Start: Q1 FY26

    Benefit: Expected to be a key driver of additional foot traffic to the Seaport neighborhood and partially offset seasonality during colder months as an indoor ticketed experience.

    An ambitious project requiring delivery of a white box to the tenant in less than 120 days. Landlord work was completed and the space delivered in June 2026, with the museum expected to open and rent commence in August 2026.

    Meow Wolf Developmentunderway

    Benefit: Adds to the neighborhood's growing roster of culturally relevant entertainment experiences, helping solidify the Seaport as one of New York City's premier entertainment destinations.

    Part of the pipeline of new concepts opening, expected to contribute to the Seaport's entertainment offerings by 2028. Management remains confident in its progress.

    Risks & headwinds

    5
    Seasonality and Variability in Quarterly Performancenext three quarters

    The next three quarters should show year-over-year improvement but may not result in the same level of per share performance we achieved this quarter.

    Mitigation: As new tenants and businesses open, events grow, and full-year benefits of organizational efficiency changes are realized, an improved earnings profile is anticipated in 2027 and 2028.

    Sponsorship Revenue Decline (Entertainment Segment)Q2 FY26

    Entertainment operating EBITDA declined $1 million or 23% year-over-year due to decreased sponsorship revenue.

    Mitigation: Replacing sponsorship partners is a longer-term proposition, but it opens the door to diversified opportunities that align with the entertainment-focused strategy and customer base. The company is in active conversations with potential new partners.

    Softer Sales in Legacy Full-Service RestaurantsQ2 FY26

    Hospitality operating EBITDA was positive $280,000, but this was despite softer sales in legacy restaurants.

    Mitigation: The hospitality team is evaluating opportunities to strengthen performance, including menu optimization, expanded programming, and targeted marketing to build awareness and drive visitation.

    Decline in Equity in Earnings from Unconsolidated VenturesQ2 FY26

    Equity in earnings or losses from unconsolidated ventures declined approximately $0.5 million or 61% year-over-year.

    Mitigation: Reflects lower EBITDA from Lawn Club (due to revenue shift to Sadie's Garden Bar) and reduced earnings from the John George Restaurant Group (as new restaurants ramp up). Both teams are focusing on improving operations and driving value.

    Longer Leasing Timelines for Remaining Spacesnear term

    Less than 50,000 square feet of vacant space remains, but detailed negotiations for smaller footprints are leading to longer leasing timelines.

    Mitigation: The company remains confident in its ability to drive overall leasing and programming demand and improve rent terms by identifying the right tenants and deal structures that fit the Seaport's unique placemaking strategy.

    What to watch in Q3 FY26

    5

    Balloon Museum opening and rent commencement

    August 2026
    CurrentLandlord work completed, space delivered in June 2026.
    TargetMuseum opens and rent commences.

    Why it matters

    Expected to drive additional foot traffic and partially offset seasonality, contributing to incremental annualized operating EBITDA.

    We completed landlord work and delivered the tin building space to the Balloon Museum in June of 2026. And as Matt mentioned, we expect the museum to open soon and rent to commence concurrently with opening.

    Q&A highlights

    7

    Is the previously guided CapEx range of $70-90 million still valid for future investments?

    Lena Elaiwat confirmed that after spending $20 million in the first half of the year, the remaining CapEx for committed projects is $50-70 million, expected to be deployed over the next two years into mid-2028.

    “So we've spent about 20 million over the first half of the year. And so we're thinking that 50 to 70 remaining is still the right number for a lot of the projects and committed capital we have already in.”

    asked by Matthew Erdner · answered by Lenah Elaiwat

    2 min read6 chapters

    Detailed Narrative

    01

    Path to Profitability Milestone

    Seaport Entertainment Group achieved its first positive operating EBITDA and non-GAAP adjusted net income in Q2 FY26, marking a significant turnaround. This milestone reflects seven consecutive quarters of double-digit non-GAAP adjusted net income per share improvement, with a 103% year-over-year increase in Q2, demonstrating strong operational momentum and efficiency gains since the company's inception. Management emphasized that while this quarter benefited from certain timing items, it primarily reflects two years of stabilizing operations, corporate costs, and repositioning assets.

    02

    Strategic Leasing and Asset Repositioning

    The company strategically terminated the Nike lease at Pier 17, accelerating plans for a new event space and contributing an additional $2.7 million in rental revenue year-over-year. This, combined with the closure of the TIN building operations, allowed for significant operational improvements and asset repositioning. The upcoming Balloon Museum, Flanker Kitchen, Hidden Booth Saloon, and Meow Wolf (2028) are key components of this strategy, aiming to solidify the Seaport as a premier entertainment destination and drive future earnings.

    03

    G&A Cost Optimization

    A key focus on optimizing the G&A cost structure led to a reduction of over 20% in trailing 12-month G&A costs, from $34 million in Q3 2025 to less than $27 million in Q2 2026. Quarterly G&A improved by $1.7 million or 20% year-over-year, and $2.9 million or 35% when excluding restructuring costs. Further benefits are expected in 2027 as full-year impacts are realized and legacy contracts are renegotiated or not renewed.

    04

    Event-Driven Revenue and Placemaking

    The Seaport's strategy of placemaking, marquee events, and cultural activations significantly drove revenue and foot traffic. Highlights included 22 concerts at Pier 17 (13 sellouts, 91% sell-through), the FIFA World Cup roster reveal, HBO Max premiere, and the success of Sadie's restaurant. Sadie's particularly benefited from the Knicks' NBA championship run and World Cup activities, drawing over 10,000 people to the Seaport for Game 5 watch parties, demonstrating the value of event-driven experiences.

    05

    Las Vegas Operations Strength

    The Las Vegas Aviators maintained first place in the Pacific Coast League, securing a playoff spot. The Las Vegas ballpark hosted record-breaking events, including the highest-attended regular season game (over 11,000 fans), a sold-out six-game series with the Athletics (over 50,000 fans), and a three-day banana ball series. These non-Aviator events led to record one-day food/beverage and merchandise sales, contributing to higher operating EBITDA year-over-year despite fewer home games, driven by disciplined cost management.

    06

    Development Pipeline and Future Growth

    The company has over 194,000 square feet of non-income producing space expected to open with new concepts in the next 18 months, projected to generate over $20 million in incremental annualized operating EBITDA. Major projects like the Balloon Museum, Flanker Kitchen, Hidden Booth Saloon, and Meow Wolf (2028) are on track, contributing to an anticipated improved earnings profile in 2027 and stabilization by 2028. The remaining vacant spaces, less than 50,000 square feet, are smaller and require more detailed negotiations for tenant selection.

    AI-generated summary of the company’s earnings call. Not investment advice.