Five Point Q4 Earnings Call Highlights

Five Point (NYSE:FPH) reported what management described as another record year in 2025, highlighting higher annual net income, continued land sale activity at its active communities, major entitlement approvals, and progress integrating its newly acquired Hearthstone land banking platform.

Record earnings and fourth-quarter land sale activity

President and CEO Dan Hedigan said the company generated $58.7 million of net income in the fourth quarter, bringing full-year 2025 consolidated net income to $183.5 million. Hedigan said the result exceeded the company’s revised guidance from the second quarter by roughly $6 million, attributing the performance to execution, disciplined capital management, and continued pricing strength at The Great Park.

During the quarter, the company closed land sales at both active communities:

• Valencia: An industrial land sale of 13.8 acres for a $42.5 million purchase price.
• The Great Park: The Great Park Venture closed three new home programs totaling 187 home sites on 19.7 acres for an aggregate base purchase price of $181.5 million.

Hedigan said the company received $73.6 million in distributions and incentive compensation payments from The Great Park Venture during the fourth quarter.

Market conditions and operational strategy

Management framed 2025 against a “challenging” housing backdrop characterized by economic uncertainty, elevated interest rates, and affordability constraints. Hedigan said Five Point’s California footprint in supply-constrained markets supported resilience, noting that demand at The Great Park remained strong while Valencia saw more impact from affordability headwinds.

Hedigan reiterated Five Point’s operating and growth strategy as four pillars:

• Maximizing value of existing communities by aligning land sales with builder demand and pacing development.
• Maintaining a lean operating structure and controlling overhead.
• Matching development spending with revenue generation.
• Expanding the platform through targeted growth initiatives, including Hearthstone and a shorter-duration land banking business.

Community updates: Great Park, Valencia, and Candlestick

The Great Park Neighborhoods. Hedigan said builders sold 78 homes in the fourth quarter, compared with 187 in the third quarter, citing seasonality and lower available supply as certain collections sold out. The community had 12 actively selling programs and eight additional programs planned to open later in 2026, according to management.

Hedigan said Five Point closed 13 different programs during 2025 totaling 920 home sites and maintained pricing discipline. He also noted that multiple land sales during the year incorporated price participation structures. The three programs closed in the fourth quarter used that model, with an average base purchase price of $9.2 million per acre before potential price participation.

Five Point said it was in the bidding process for four new residential programs totaling about 27 acres and expected to complete bidding and close those sales by year-end 2026. Hedigan also highlighted an entitlement approval by the City Council that allows conversion of approximately 100 acres of commercial land into additional market-rate home sites. In the Q&A, CFO Kim Tobler clarified that Five Point had 155 net acres of residential land remaining at the start of 2026 at The Great Park, consisting of 55 acres previously designated residential plus 100 acres redesignated from commercial to residential.

Valencia. Hedigan said builder home sales improved in the fourth quarter, with 70 new homes sold versus 50 in the third quarter. Two programs sold out during the quarter, and the community had 10 builder programs open. Management anticipates six new programs opening during 2026.

The company’s fourth-quarter Valencia transaction represented its “first significant industrial land sale in over 15 years” at the community, Hedigan said. He added that Five Point chose to delay residential land sales in 2025 to optimize land values and is in discussions with builders about potential 2026 land sales.

Valencia’s 2025 milestone, management said, was entitlement progress. Hedigan reported unanimous approval by the Los Angeles County Board of Supervisors for the Entrada South and Valencia Commerce Center entitlements, and said no litigation was filed challenging the approvals. Entrada South is expected to consist of approximately 120 net acres of residential land, over 1,300 market-rate home sites, and approximately 40 net acres of commercial land. Valencia Commerce Center is expected to include about 110 net acres catering to industrial-focused uses. Hedigan said the company is pursuing approvals for three additional villages which, combined with existing entitlements, would provide over 10,000 entitled home sites.

San Francisco (Candlestick). Five Point said it is finalizing engineering for the next infrastructure phase and working with local agencies on ministerial infrastructure permits for initial site work. Management reiterated it expects to begin initial site work at Candlestick in the first half of 2026.

Hearthstone integration and balance sheet actions

Management highlighted the acquisition and integration of Hearthstone, which Hedigan described as adding “a pivotal new earning stream.” Hedigan said Hearthstone had approximately $2.6 billion of assets under management at closing in the third quarter of 2025 and has since grown to approximately $3.4 billion. He also said the company anticipates securing $300 million to $500 million of newly originated capital commitments in the first quarter.

Tobler reported that in the fourth quarter Hearthstone generated $8.4 million of revenue and $3 million of net income. For the five months of 2025 it was part of Five Point, Hearthstone generated $11.8 million of revenue and $3.9 million of net income, including approximately $800,000 of intangible asset amortization from purchase accounting. Tobler said the company expects to exceed $4 billion of assets under management before the end of 2026, with revenue and net income expected to grow commensurately.

On capital structure, Hedigan said Five Point refinanced its senior notes by issuing $400 million of 8% notes due October 2030 and repaid another $75 million, which management expects will reduce annual interest expense by about $20 million. Since January 2024, the company said it has paid down $175 million of debt. Five Point also expanded and extended its revolving credit facility to $217.5 million with a new maturity of July 2029. The company ended 2025 with $425 million of cash and $643 million of total liquidity, according to Hedigan.

2026 guidance and development spending expectations

Management guided to approximately $100 million of consolidated net income in 2026, with earnings expected to be weighted toward the second half as land sales and fee-based income accelerate. Tobler said the company expects a small loss in the first quarter because it is not planning to close land sales in that period.

For 2026 land sales expectations, Tobler said the company currently plans to sell 20 acres of land in Valencia and 50 acres of land in The Great Park. She also provided land inventory context at the start of 2026, excluding recently approved Valencia entitlements: approximately 155 net acres of residential land remaining at The Great Park, and at Valencia approximately 55 net acres of residential land, 11 net acres of retail land, and 13 net acres of industrial land. Tobler said sales from the newly approved Entrada South and Valencia Commerce Center entitlements are expected to begin early in 2028.

In the Q&A, management addressed development spending at Valencia and San Francisco. Hedigan suggested using a combined development capital spend for those projects of about $125 million, similar to the current year, with spending spread between the two and intended to keep pace relatively constant as development increases.

About Five Point (NYSE:FPH)

Five Point Holdings, L.P. (NYSE:FPH) is a California‐based master planned community developer specializing in residential, commercial and mixed‐use projects. Headquartered in Walnut Creek, the company focuses on acquiring and entitling raw land, designing infrastructure and delivering fully integrated neighborhoods that include single‐family homes, multifamily housing, retail centers, office space and community amenities.

Since its formation in 2014, Five Point has concentrated its land development efforts in the San Francisco Bay Area and the Los Angeles Basin, targeting key growth corridors with large‐scale, long-term projects.