United Homes Group, Inc. Reports 2025 First Quarter Results
First Quarter 2025 Highlights
-
Home closings of 252, a decrease of
19% year over year compared to 311 home closings in Q1 2024, resulting in revenue, net of sales discounts, of$87.0 million 14% -
Net new orders of 296, a decrease of
23% year over year compared to 384 net new orders in Q1 2024 - Net new orders and gross margin improved sequentially throughout the first quarter
-
Average sale price ("ASP") of production-built homes increased to approximately
$345,000 $335,000 - Lot pipeline as of March 31, 2025 consists of approximately 7,500 lots owned or controlled by the Company or related parties
-
Available liquidity of
$86.9 million $25.0 million $61.9 million
First Quarter 2025 Operating Results
For the first quarter 2025, net income was
“We previously reported our first quarter sales and closings. Our sales pace began to improve during the second half of February, but given the slow sales pace in January, our closing volume was down during the quarter as we close a high proportion of homes sold during the first half of the quarter in the second half of the quarter," said Jamie Pirrello, Interim Chief Executive Officer of United Homes Group.
Pirrello continued, “We continued to make progress moving completed homes of an older design with low gross margins. Sequentially we saw meaningful improvement in sales and gross margins during the quarter. Our new home designs continue to achieve significantly higher gross margins. Our strategy of moving away from building all-spec inventory, and now offering pre-sales, is also achieving higher gross margins than our traditional spec sales. Additionally, our direct cost reduction initiative is delivering meaningful results. We expect to generate a vast majority of these savings in the second half of the year as they run through cost of sales.”
Revenue, net of sales discounts, for the first quarter 2025 was
Gross profit percentage during the first quarter of 2025 was
“Gross margins increased 400 basis points between January and March, due in part to the closings of 23 homes that were newly refreshed plans with average gross margins of approximately
“Gross margins in April were stronger than the first quarter as we closed more of our higher margin refreshed plans and pre-sales,” stated Keith Feldman, Chief Financial Officer of United Homes Group. “Our direct cost reduction initiative is actively underway, and we are seeing strong results. We have already identified over
Selling, general and administrative expenses ("SG&A") as a percentage of revenues was
Adjusted EBITDA4 during the first quarter 2025 was
Earnings Conference Call
The Company will host a conference call via live webcast for investors and other interested parties beginning at 8:30 a.m. Eastern Time on Wednesday, May 14, 2025. Interested parties can listen to the call live on the Internet under the Events & Presentations heading in the Investors section of the Company’s website at www.unitedhomesgroup.com. Listeners should log into the website at least fifteen minutes prior to the call to download and install any necessary audio software. The call can also be accessed toll free at 800-715-9871, or 646-307-1963 for international participants, Conference ID: 4731284. Those dialing in should do so at least ten minutes prior to the start of the call. An archive of the webcast will also be available on the Company’s website.
About United Homes Group, Inc.
The Company is a publicly traded residential builder headquartered near
The Company employs a land-light operating strategy with a focus on the design, construction and sale of entry-level, first, second and third move-up single-family houses. The Company principally builds detached single-family houses, and, to a lesser extent, attached single-family houses, including duplex houses and town houses. The Company seeks to operate its homebuilding business in high-growth markets, with substantial in-migrations and employment growth.
Under its land-light lot operating strategy, the Company controls its supply of finished building lots through lot option contracts with third parties, related parties, and land bank partners, which provide the Company with the right to purchase finished lots after they have been developed. This land-light operating strategy provides the Company with the ability to amass a pipeline of lots without the risks associated with acquiring and developing raw land.
As the Company reviews potential geographic markets into which it could expand its homebuilding business, it intends to focus on selecting markets with positive population and employment growth trends, favorable migration patterns, attractive housing affordability, low state and local income taxes, and desirable lifestyle and weather characteristics.
Forward-Looking Statements
Certain statements contained in this earnings release, other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “seek,” “continue,” or other similar words.
Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of, and assumptions made by, our management and involve uncertainties that could significantly affect our financial results. Such statements include, but are not limited to, statements about our future financial performance, strategy, expansion plans, future operations, future operating results, estimated revenues, losses, projected costs, prospects, plans and objectives of management. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation:
- disruption in the terms or availability of mortgage financing or an increase in the number of foreclosures in our markets;
- volatility and uncertainty in the credit markets and broader financial markets;
- a slowdown in the homebuilding industry or changes in population growth rates in our markets;
- shortages of, or increased prices for, labor, land or raw materials used in land development and housing construction, including due to changes in trade policies;
- increases in interest rates or inflationary pressures, including potential tariffs;
- our ability to execute our business model, including the success of our operations in new markets and our ability to expand into additional new markets;
- our ability to successfully integrate homebuilding operations that we acquire;
- our ability to realize the expected results of strategic initiatives;
- delays in land development or home construction resulting from natural disasters, adverse weather conditions or other events outside our control;
- changes in applicable laws or regulations;
- the outcome of any legal proceedings;
- our ability to continue to leverage our land-light operating strategy;
- the ability to maintain the listing of our securities on Nasdaq or any other exchange; and
- the possibility that we may be adversely affected by other economic, business or competitive factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release and are not intended to be a guarantee of our performance in future periods. We cannot guarantee the accuracy of any such forward-looking statements contained in this release, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
For further information regarding other risks and uncertainties associated with our business, and important factors that could cause our actual results to vary materially from those expressed or implied in such forward-looking statements, please refer to the factors listed and described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Risk Factors” sections of the documents we file from time to time with the
UNITED HOMES GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) |
|||||||
|
March 31, 2025 |
|
December 31, 2024 |
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
25,016 |
|
$ |
22,629 |
||
Restricted cash |
|
2,920 |
|
|
|
2,920 |
|
Accounts receivable, net |
|
7,072 |
|
|
|
4,122 |
|
Inventories |
|
138,449 |
|
|
|
139,270 |
|
Real estate inventory not owned |
|
6,074 |
|
|
|
8,445 |
|
Due from related party |
|
196 |
|
|
|
191 |
|
Related party note receivable |
|
511 |
|
|
|
532 |
|
Income tax receivable |
|
4,185 |
|
|
|
2,079 |
|
Lot deposits |
|
46,880 |
|
|
|
48,153 |
|
Investment in joint venture |
|
908 |
|
|
|
691 |
|
Property and equipment, net |
|
672 |
|
|
|
759 |
|
Operating right-of-use assets |
|
2,614 |
|
|
|
2,779 |
|
Deferred tax asset, net |
|
14,439 |
|
|
|
15,248 |
|
Prepaid expenses and other assets |
|
7,011 |
|
|
|
8,283 |
|
Goodwill |
|
9,280 |
|
|
|
9,280 |
|
Total Assets |
$ |
266,227 |
|
|
$ |
265,381 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Accounts payable |
$ |
19,672 |
|
|
$ |
17,801 |
|
Syndicated line of credit |
|
53,196 |
|
|
|
50,196 |
|
Liabilities from real estate inventory not owned |
|
4,715 |
|
|
|
6,584 |
|
Due to related parties |
|
515 |
|
|
|
122 |
|
Other accrued expenses and liabilities |
|
13,181 |
|
|
|
14,545 |
|
Operating lease liabilities |
|
2,781 |
|
|
|
2,958 |
|
Derivative liabilities |
|
17,836 |
|
|
|
39,158 |
|
Term loan, net |
|
67,230 |
|
|
|
67,150 |
|
Total Liabilities |
|
179,126 |
|
|
|
198,514 |
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
||||
|
|
|
|
||||
Preferred Stock, |
|
— |
|
|
|
— |
|
Class A common stock, |
|
2 |
|
|
|
2 |
|
Class B common stock, |
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
55,991 |
|
|
|
53,937 |
|
Retained earnings |
|
31,104 |
|
|
|
12,924 |
|
Total Stockholders' equity |
|
87,101 |
|
|
|
66,867 |
|
Total Liabilities and Stockholders' equity |
$ |
266,227 |
|
|
$ |
265,381 |
|
UNITED HOMES GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts) (Unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
|
|
2025 |
|
|
|
2024 |
|
Revenue, net of sales discounts |
$ |
87,001 |
|
|
$ |
100,838 |
|
Cost of sales |
|
72,873 |
|
|
|
84,744 |
|
Gross profit |
|
14,128 |
|
|
|
16,094 |
|
|
|
|
|
||||
Selling, general and administrative expense |
|
16,160 |
|
|
|
17,054 |
|
Net loss from operations |
|
(2,032 |
) |
|
|
(960 |
) |
|
|
|
|
||||
Other expense, net |
|
(2,510 |
) |
|
|
(1,963 |
) |
Equity in net earnings from investment in joint venture |
|
222 |
|
|
|
318 |
|
Change in fair value of derivative liabilities |
|
21,209 |
|
|
|
26,380 |
|
Income before taxes |
|
16,889 |
|
|
|
23,775 |
|
Income tax benefit |
|
(1,291 |
) |
|
|
(1,163 |
) |
Net income |
$ |
18,180 |
|
|
$ |
24,938 |
|
|
|
|
|
||||
Earnings per share |
|
|
|
||||
Basic |
$ |
0.31 |
|
|
$ |
0.52 |
|
Diluted |
$ |
0.31 |
|
|
$ |
0.44 |
|
|
|
|
|
||||
Weighted-average number of shares |
|
|
|
||||
Basic |
|
58,595,204 |
|
|
|
48,362,589 |
|
Diluted |
|
58,742,095 |
|
|
|
63,111,404 |
|
UNITED HOMES GROUP, INC.
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
Adjusted gross profit is a non-GAAP financial measure used by management of the Company as a supplemental measure in evaluating operating performance. The Company defines adjusted gross profit as gross profit excluding the effects of capitalized interest expensed in cost of sales, amortization included in homebuilding cost of sales, abandoned project costs, non-recurring remediation costs, and severance expense in cost of sales. The Company’s management believes this information is meaningful because it separates the impact that capitalized interest and non-recurring costs directly expensed in cost of sales have on gross profit to provide a more specific measurement of the Company’s gross profits. However, because adjusted gross profit information excludes certain balances expensed in cost of sales, which have real economic effects and could impact the Company’s results of operations, the utility of adjusted gross profit information as a measure of the Company’s operating performance may be limited. Other companies may not calculate adjusted gross profit information in the same manner that the Company does. Accordingly, adjusted gross profit information should be considered only as a supplement to gross profit information as a measure of the Company’s performance.
The following table presents a reconciliation of adjusted gross profit to the GAAP financial measure of gross profit for each of the periods indicated (in thousands, except percentages).
|
Three Months Ended March 31, |
|||||||
|
|
2025 |
|
|
|
2024 |
|
|
Revenue, net of sales discounts |
$ |
87,001 |
|
|
$ |
100,838 |
|
|
Cost of sales |
|
72,873 |
|
|
|
84,744 |
|
|
Gross profit |
$ |
14,128 |
|
|
$ |
16,094 |
|
|
Interest expense in cost of sales |
|
1,501 |
|
|
|
3,513 |
|
|
Amortization in homebuilding cost of sales(a) |
|
681 |
|
|
|
948 |
|
|
Abandoned project costs |
|
55 |
|
|
|
— |
|
|
Non-recurring remediation costs |
|
— |
|
|
|
59 |
|
|
Adjusted gross profit |
$ |
16,365 |
|
|
$ |
20,614 |
|
|
Gross profit %(b) |
|
16.2 |
% |
|
|
16.0 |
% |
|
Adjusted gross profit %(b) |
|
18.8 |
% |
|
|
20.4 |
% |
|
(a) Represents expense recognized resulting from purchase accounting adjustments |
(b) Calculated as a percentage of revenue |
UNITED HOMES GROUP, INC.
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
Earnings before interest, taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA are supplemental non-GAAP financial measures used by management of the Company. The Company defines EBITDA as net income before (i) capitalized interest expensed in cost of sales, (ii) interest expensed in other (expense) income, net, (iii) depreciation and amortization, and (iv) taxes. The Company defines adjusted EBITDA as EBITDA before stock-based compensation expense, amortization included in homebuilding cost of sales, severance expense, abandoned project costs, loss on extinguishment of Convertible Notes, change in fair value of derivative liabilities, transaction cost expense, and non-recurring remediation costs. Management of the Company believes EBITDA and adjusted EBITDA are useful because they provide a more effective evaluation of UHG’s operating performance and allow comparison of UHG’s results of operations from period to period without regard to UHG’s financing methods or capital structure or other items that impact comparability of financial results from period to period such as fluctuations in interest expense or effective tax rates, levels of depreciation or amortization, or unusual items. EBITDA and adjusted EBITDA should not be considered as alternatives to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. UHG’s computations of EBITDA and adjusted EBITDA may not be comparable to EBITDA or adjusted EBITDA of other companies.
The following table presents a reconciliation of EBITDA and adjusted EBITDA to the GAAP financial measure of net income for each of the periods indicated (in thousands, except percentages).
|
Three Months Ended March 31, |
|||||||
|
|
2025 |
|
|
|
2024 |
|
|
Net income |
$ |
18,180 |
|
|
$ |
24,938 |
|
|
Interest expense in cost of sales |
|
1,501 |
|
|
|
3,513 |
|
|
Interest expense in other expense, net |
|
2,461 |
|
|
|
2,142 |
|
|
Depreciation and amortization |
|
492 |
|
|
|
450 |
|
|
Taxes |
|
(1,245 |
) |
|
|
(1,122 |
) |
|
EBITDA |
$ |
21,389 |
|
|
$ |
29,921 |
|
|
Stock-based compensation expense |
|
1,957 |
|
|
|
1,510 |
|
|
Abandoned project costs |
|
55 |
|
|
|
— |
|
|
Amortization in homebuilding cost of sales(b) |
|
681 |
|
|
|
948 |
|
|
Change in fair value of derivative liabilities |
|
(21,209 |
) |
|
|
(26,380 |
) |
|
Transaction cost expense |
|
— |
|
|
|
1,225 |
|
|
Non-recurring remediation costs |
|
— |
|
|
|
59 |
|
|
Adjusted EBITDA |
$ |
2,873 |
|
|
$ |
7,283 |
|
|
EBITDA margin(a) |
|
24.6 |
% |
|
|
29.7 |
% |
|
Adjusted EBITDA margin(a) |
|
3.3 |
% |
|
|
7.2 |
% |
|
(a) Calculated as a percentage of revenue |
(b) Represents expense recognized resulting from purchase accounting adjustments |
UNITED HOMES GROUP, INC.
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
Adjusted selling, general and administrative expense, or adjusted SG&A, is a supplemental non-GAAP financial measure used by management of the Company. UHG defines adjusted SG&A as SG&A, excluding the effects of stock-based compensation expense, transaction cost expense, and severance expense included in SG&A. Management of UHG believes adjusted SG&A provides useful information to investors because it enables an alternative assessment of the Company's operating results in a manner that is focused on its operating performance.
The following table presents a reconciliation of Adjusted SG&A to the GAAP financial measure of SG&A for the three months ended March 31, 2025 (in thousands, except percentages).
|
Three Months Ended March 31, |
|||
|
|
2025 |
|
|
Selling, general and administrative expense |
$ |
16,160 |
|
|
Stock-based compensation expense |
|
1,957 |
|
|
Adjusted SG&A |
$ |
14,203 |
|
|
SG&A %(a) |
|
18.6 |
% |
|
Adjusted SG&A %(a) |
|
16.3 |
% |
|
(a) Calculated as a percentage of revenue |
UNITED HOMES GROUP, INC.
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
Adjusted book value is a supplemental non-GAAP financial measure used by management of the Company. UHG defines adjusted book value as total stockholders' equity (book value), excluding the effect of goodwill and derivative instruments. Management of UHG believes adjusted book value is useful to investors because it excludes the impact of purchase accounting and fair value adjustments on derivative instruments which are not expected to result in economic gain or loss.
The following table presents a reconciliation of adjusted book value to the GAAP financial measure of total stockholders' equity for the period indicated (in thousands).
|
|
|
March 31, 2025 |
||
Total Stockholders' equity |
|
|
$ |
87,101 |
|
Derivative liabilities |
|
|
|
17,836 |
|
Goodwill |
|
|
|
(9,280 |
) |
Adjusted book value |
|
|
$ |
95,657 |
|
UNITED HOMES GROUP, INC.
OPERATIONAL METRICS BY MARKET
$’s in millions
|
|
Three Months Ended March 31, |
|
|
|
|
||||||||||||
|
|
2025 |
|
2024 |
|
Period Over Period % Change |
||||||||||||
Market |
|
Net New Orders |
|
Closings |
|
Net New Orders |
|
Closings |
|
Net New Orders |
|
Closings |
||||||
Coastal |
|
39 |
|
45 |
|
68 |
|
45 |
|
-43 |
% |
|
— |
% |
||||
|
|
151 |
|
|
124 |
|
|
209 |
|
|
150 |
|
|
-28 |
% |
|
-17 |
% |
Upstate |
|
72 |
|
|
55 |
|
|
95 |
|
|
98 |
|
|
-24 |
% |
|
-44 |
% |
Rosewood |
|
17 |
|
|
13 |
|
|
8 |
|
|
14 |
|
|
113 |
% |
|
-7 |
% |
|
|
17 |
|
|
15 |
|
|
4 |
|
|
4 |
|
|
325 |
% |
|
275 |
% |
Total |
|
296 |
|
|
252 |
|
|
384 |
|
|
311 |
|
|
-23 |
% |
|
-19 |
% |
|
|
As of March 31, 2025 |
|
As of March 31, 2024 |
|
Period Over Period % Change |
||||||||||||||
Market |
|
Backlog Inventory5 |
|
Backlog Value6 |
|
Backlog Inventory5 |
|
Backlog Value6 |
|
Backlog Inventory |
|
Backlog Value |
||||||||
Coastal |
|
42 |
|
$ |
16.1 |
|
37 |
|
$ |
12.3 |
|
14 |
% |
|
31 |
% |
||||
|
|
94 |
|
|
|
33.1 |
|
|
132 |
|
|
|
44.1 |
|
|
-29 |
% |
|
-25 |
% |
Upstate |
|
45 |
|
|
|
13.6 |
|
|
80 |
|
|
|
19.2 |
|
|
-44 |
% |
|
-29 |
% |
Rosewood |
|
14 |
|
|
|
10.0 |
|
|
10 |
|
|
|
6.0 |
|
|
40 |
% |
|
67 |
% |
|
|
6 |
|
|
|
2.5 |
|
|
3 |
|
|
|
1.9 |
|
|
100 |
% |
|
32 |
% |
Total |
|
201 |
|
|
$ |
75.3 |
|
|
262 |
|
|
$ |
83.5 |
|
|
-23 |
% |
|
-10 |
% |
1 Adjusted book value is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures.” |
2 Adjusted gross profit percentage is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures.” |
3 Adjusted SG&A is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures.” |
4 Adjusted EBITDA is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures.” |
5 Backlog inventory consists of homes that are under a sales contract but have not closed. Backlog may be impacted by customer cancellations. |
6 Backlog value is calculated as the total contract value of homes in backlog. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250513923323/en/
Investor Relations Contact:
Drew Mackintosh
drew@mackintoshir.com
Mobile: 310-924-9036
Media Contact:
Erin Reeves-McGinnis
erinreevesmcginnis@unitedhomesgroup.com
Phone: 844-766-4663
Source: United Homes Group, Inc.
