Executive Summary

Q3 2025 delivered a clean beat on the top line and EPS: revenue $177.5M vs S&P Global consensus ~$162.3M*, and Primary EPS $0.32 vs ~$0.22*; Adjusted EBITDA surged to $114.3M on outsized Real Estate closings and stronger Southern Timber volumes .*
Management raised the outlook qualitatively to “at or above the higher end” of prior FY25 ranges for both Adjusted EBITDA ($215–$235M prior) and pro forma EPS ($0.34–$0.41 prior); Q4 guide: EPS $0.08–$0.11, pro forma EPS $0.11–$0.14, Adjusted EBITDA $50–$60M .
Real Estate was the swing factor: $90.8M sales (+$60.7M YoY) and $73.8M Adjusted EBITDA on a 21,601-acre Florida conservation sale and improved development activity at Wildlight/Heartwood .
Strategic update: announced all‑stock merger of equals with PotlatchDeltic (expected close late Q1/early Q2 2026; ~$40M run-rate synergies targeted) and declared a $0.2725/share Q4 dividend; cash ended at $919.6M with $232.3M remaining on buyback authorization .

What Went Well and What Went Wrong

What Went Well
- Real Estate outperformed expectations: $73.8M Adjusted EBITDA on strong conservation and development closings; CEO: “Adjusted EBITDA roughly doubled…driven by strong performance in our real estate segment” .
- Southern Timber execution: harvest volumes +24% YoY (1.94M tons) as drier weather and normalized demand offset pricing pressure; Adjusted EBITDA +13% YoY to $42.7M .
- Capital and interest income tailwinds: Q3 interest income $9.8M on elevated cash balance; repurchased ~1.226M shares at $24.55; quarter-end cash $919.6M .
What Went Wrong
- Pacific Northwest Timber softer: harvest volumes −34% YoY due to prior “Large Dispositions”; Adjusted EBITDA down 26% YoY to $6.4M despite better pricing, as mills reduced production and inventories remained elevated .
- Pulpwood headwinds in the South: pricing −20% YoY to $13.77/ton amid recent mill closures and salvage overhang; management expects only gradual improvement with regional variability .
- Impairment in Real Estate: $7.0M asset impairment on Washington assets tied to the 2020 Pope Resources acquisition impacted GAAP results (offset in pro forma) .

Financial Results

Headline metrics (actuals)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$82.9	$106.5	$177.5
Diluted EPS (GAAP)	($0.02)	$2.63 (includes NZ gain)	$0.28
Pro forma EPS (non-GAAP)	($0.02)	$0.06	$0.32
Operating Income ($M)	$0.1	$14.5	$41.7
Adjusted EBITDA ($M)	$27.1	$44.9	$114.3

Q3 2025 YoY snapshot

Metric	Q3 2024	Q3 2025
Revenue ($M)	$124.1	$177.5
Diluted EPS (GAAP)	$0.19	$0.28
Pro forma EPS (non-GAAP)	$0.07	$0.32
Adjusted EBITDA ($M)	$57.2	$114.3

Versus S&P Global consensus (Q3 2025)

Metric	Consensus*	Actual	Beat/Miss
Revenue ($M)	$162.3*	$177.5	Beat
Primary EPS ($)	$0.22*	$0.32*	Beat
EBITDA ($M)	$87.1*	$83.5* vs Company Adj. EBITDA $114.3	Miss on SPGI EBITDA; note definition difference

Values retrieved from S&P Global.*

Segment performance (sales and Adjusted EBITDA)

	Q3 2024	Q2 2025 (recast)	Q3 2025
Southern Timber – Sales ($M)	$62.4	$53.3	$66.8
Southern Timber – Adjusted EBITDA ($M)	$37.9	$28.4	$42.7
Pacific NW Timber – Sales ($M)	$31.6	$23.8	$19.9
Pacific NW Timber – Adjusted EBITDA ($M)	$8.7	$6.8	$6.4
Real Estate – Sales ($M)	$30.1	$29.4	$90.8
Real Estate – Adjusted EBITDA ($M)	$19.9	$18.6	$73.8

Selected KPIs

KPI	Q3 2024	Q3 2025
Southern Timber harvest (tons, M)	1.57	1.94
Southern weighted-average net stumpage ($/ton)	$20.77	$19.81
Pine sawtimber stumpage ($/ton)	$27.46	$26.73
Pine pulpwood stumpage ($/ton)	$17.21	$13.77
PNW harvest (tons, 000s)	319	210
PNW delivered sawtimber ($/ton)	$95.27	$100.16
Real Estate acres sold	2,916	23,348
Real Estate avg price ($/acre)	$8,835	$3,486

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA (total)	FY 2025	$215–$235M (Q1 set)	“At or above the higher end” of prior range	Raised qualitatively
Pro forma EPS	FY 2025	$0.34–$0.41 (Q1 set)	“At or above the higher end” of prior range	Raised qualitatively
Southern Timber Adj. EBITDA	FY 2025	$135–$140M (Q1)	Modestly below prior range	Lowered
Pacific NW Timber Adj. EBITDA	FY 2025	$22–$26M (Q1)	Toward low end of prior range	Lowered within range
Real Estate Adj. EBITDA	FY 2025	$90–$100M (Q1)	Exceed high end of prior range	Raised
Consolidated EPS	Q4 2025	—	$0.08–$0.11; pro forma EPS $0.11–$0.14; Adj. EBITDA $50–$60M	New quarterly guide
Q3 2025 (for reference)	Q3 2025	Adj. EBITDA $80–$100M (Q2 guide)	Actual Adj. EBITDA $114.3M	Beat guidance

Earnings Call Themes & Trends

Topic	Q1 2025 (prior)	Q2 2025 (prior)	Q3 2025 (current)	Trend
Real Estate cadence	H2-weighted closings; FY25 $90–$100M Adj. EBITDA guide	Pipeline “significant”; Q3 Real Estate guide $50–$65M	Outperformed; $73.8M Adj. EBITDA on conservation + development	Strengthening
Southern Timber markets	Salvage overhang pressuring volumes/pricing	Expect 2H volume > 1H; modestly higher pine stumpage in 2H	Volumes +24% YoY; pulpwood remains weak on mill closures; mix shifting to sawtimber	Gradual improvement, mixed pricing
PNW lumber dynamics	Benefiting from higher duties; pricing modestly better	Expect modestly higher 2H pricing on duties	Mills reduced output; inventories elevated; still well-positioned with higher Canadian duties/Section 232	Near-term soft, medium-term constructive
Tariffs/Macro	—	Anticipated Canadian duty increases supportive	Section 232 10% softwood tariffs; potential rate cuts → improved housing demand	Supportive into 2026
Land-based solutions	—	—	Advancing utility solar/CCS/carbon projects; AI/data center energy demand a tailwind	Emerging growth vector
Corporate/Strategic	NZ JV sale; leverage/capital return focus	NZ sale closed; buybacks ongoing	Announced PCH merger; ~$40M run-rate synergies; integration planning underway	Transformational

Management Commentary

“Adjusted EBITDA roughly doubled compared to the prior year quarter, driven by strong performance in our real estate segment, improved results in our southern timber segment…partially offset by lower results in our Pacific Northwest Timber segment.” — CEO Mark McHugh .
“Real estate segment adjusted EBITDA…was above our prior guidance range…due to the successful closing of the large conservation sale, as well as better‑than‑expected results in our improved development category.” — CFO April Tice .
“We believe [the PotlatchDeltic] combination will create a premier land resources company…with roughly $40 million of estimated run rate synergies.” — CEO Mark McHugh ; merger press release details .
“We finished the third quarter with $920 million of cash and roughly $1.1 billion of debt…net debt was less than one time the midpoint of our adjusted EBITDA guidance.” — CFO April Tice .

Q&A Highlights

Real Estate sustainability: management emphasized lumpy but compelling arbitrage in conservation when pricing exceeds timberland value; development momentum at Wildlight/Heartwood continues .
Pulpwood outlook/alternatives: exploring export relief (EU fumigation rules), carbon projects, and biofuels demand (multi‑year timeline); near-term flexibility via geographic harvest shifts and mix toward sawtimber .
Capital allocation heading into merger: maintain IG balance sheet, grow dividend, opportunistic buybacks viewed as compelling at current price; high bar for external growth .
PNW tensioning: inventories elevated; some mills taking downtime; tariffs supportive longer term; quick rebound possible with housing demand improvement .

Estimates Context

Q3 2025 vs S&P Global consensus: Revenue $177.5M vs ~$162.3M* (Beat), Primary EPS $0.32 vs ~$0.22* (Beat). SPGI EBITDA compares unfavorably ($83.5M* actual vs ~$87.1M* est.) due to definition differences with company Adjusted EBITDA ($114.3M) . Values retrieved from S&P Global.*

Where estimates may adjust: upward revisions likely for Real Estate contribution and consolidated pro forma EPS/Adjusted EBITDA given the Q3 outperformance and qualitative raise to “at or above high end” for FY25 .

Key Takeaways for Investors

The quarter’s beat was primarily Real Estate-driven; expect continued variability, but pipeline supports FY upside; company now tracking to “at or above” the high end of prior FY ranges .
Southern Timber is normalizing operationally (volumes up), but pulpwood remains pressured; product mix shift toward sawtimber is a positive lever .
PNW remains soft near-term; duties and Section 232 tariffs underpin a more constructive medium-term setup as demand recovers .
Capital optionality is significant (cash ~$920M, net debt low); buybacks remain a favored tool, though activity is constrained pre-merger .
The PotlatchDeltic merger is the key medium-term catalyst (scale, HBU platform, wood products exposure, ~$40M synergies); integration planning progressing .
Q4 guide embeds a seasonal step-down (EPS $0.08–$0.11; Adj. EBITDA $50–$60M), limiting near-term run-rate extrapolation from Q3’s Real Estate outperformance .
Watch for land-based solutions monetization (utility solar/CCS/carbon) and any policy moves on exports; both could mitigate pulpwood demand headwinds over time .

Footnotes: Values retrieved from S&P Global.*

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