[10-Q] United Homes Group, Inc Quarterly Earnings Report
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Filing Sentiment
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10-Q
United Homes Group (UHG) Q2 2025 10-Q highlights
Revenue slipped 3.6% to $105.5 m, yet gross profit inched up 1.7% to $19.9 m as gross margin widened to 18.9% (vs 17.9%). SG&A fell 8.1% to $18.0 m, trimming the expense ratio to 17.1%. Operating income turned positive at $1.9 m (-$0.04 m LY) but a $6.2 m non-cash loss from re-valuing derivative liabilities and $2.6 m of other expense produced a net loss of $6.3 m (EPS -$0.11) versus Q2 2024 net income of $28.6 m (EPS $0.59).
Year-to-date (6 M)
- Revenue $192.5 m (-8.4%).
- Net income $11.8 m vs $53.6 m; diluted EPS $0.20 vs $0.93.
- Operating cash flow swung to +$2.8 m from -$19.1 m; free cash boosted cash & equivalents 61% to $36.5 m.
Balance sheet: Assets rose to $281.1 m; inventories $144.5 m (+3.7% YTD). Cash $36.5 m (+$13.9 m YTD). Syndicated revolver borrowings grew to $64.2 m (from $50.2 m) and the $67.3 m term loan remained unchanged; total liabilities stable at $198.9 m. Mark-to-market derivative liabilities fell to $24.0 m from $39.2 m, lifting stockholders’ equity 23% to $82.2 m.
Segment view: GSH South Carolina delivered 86% of quarterly sales and $5.0 m pre-tax profit; Rosewood and Other segments posted small losses. No guidance was issued.
Principali dati del 10-Q del secondo trimestre 2025 di United Homes Group (UHG)
I ricavi sono diminuiti del 3,6% a 105,5 milioni di dollari, mentre il profitto lordo è aumentato dell'1,7% raggiungendo 19,9 milioni di dollari, con un margine lordo salito al 18,9% (dal 17,9%). Le spese SG&A sono calate dell'8,1% a 18,0 milioni di dollari, riducendo il rapporto di spesa al 17,1%. L'utile operativo è tornato positivo a 1,9 milioni di dollari (rispetto a una perdita di 0,04 milioni nello stesso periodo dell'anno precedente), ma una perdita non monetaria di 6,2 milioni derivante dalla rivalutazione delle passività da derivati e altri costi per 2,6 milioni hanno generato una perdita netta di 6,3 milioni di dollari (EPS -0,11), rispetto a un utile netto di 28,6 milioni (EPS 0,59) nel secondo trimestre 2024.
Primo semestre (6 mesi)
- Ricavi pari a 192,5 milioni di dollari (-8,4%).
- Utile netto di 11,8 milioni rispetto a 53,6 milioni; EPS diluito 0,20 contro 0,93.
- Il flusso di cassa operativo è passato da -19,1 milioni a +2,8 milioni; il flusso di cassa libero ha aumentato la liquidità e equivalenti del 61% a 36,5 milioni.
Bilancio: Gli attivi sono saliti a 281,1 milioni; le scorte a 144,5 milioni (+3,7% da inizio anno). La liquidità è aumentata a 36,5 milioni (+13,9 milioni da inizio anno). I prestiti da linea di credito sindacata sono cresciuti a 64,2 milioni (da 50,2 milioni) mentre il prestito a termine da 67,3 milioni è rimasto stabile; le passività totali sono ferme a 198,9 milioni. Le passività da derivati valutate a mercato sono scese a 24,0 milioni da 39,2 milioni, aumentando il patrimonio netto del 23% a 82,2 milioni.
Vista per segmento: GSH South Carolina ha generato l'86% delle vendite trimestrali e un utile ante imposte di 5,0 milioni; i segmenti Rosewood e Altri hanno registrato piccole perdite. Non è stata fornita alcuna previsione.
Aspectos destacados del 10-Q del segundo trimestre 2025 de United Homes Group (UHG)
Los ingresos disminuyeron un 3,6% hasta 105,5 millones de dólares, aunque el beneficio bruto aumentó un 1,7% hasta 19,9 millones, con un margen bruto que se amplió al 18,9% (frente al 17,9%). Los gastos SG&A cayeron un 8,1% a 18,0 millones, reduciendo la proporción de gastos al 17,1%. El ingreso operativo volvió a positivo con 1,9 millones (-0,04 millones el año anterior), pero una pérdida no monetaria de 6,2 millones por la revalorización de pasivos derivados y otros gastos por 2,6 millones produjeron una pérdida neta de 6,3 millones (EPS -0,11) frente a una ganancia neta de 28,6 millones (EPS 0,59) en el segundo trimestre de 2024.
Acumulado del año (6 meses)
- Ingresos de 192,5 millones (-8,4%).
- Ingreso neto de 11,8 millones frente a 53,6 millones; EPS diluido 0,20 frente a 0,93.
- El flujo de caja operativo cambió a +2,8 millones desde -19,1 millones; el flujo de caja libre aumentó el efectivo y equivalentes un 61% hasta 36,5 millones.
Balance: Los activos aumentaron a 281,1 millones; inventarios 144,5 millones (+3,7% en el año). Efectivo 36,5 millones (+13,9 millones en el año). Los préstamos de la línea de crédito sindicada crecieron a 64,2 millones (desde 50,2 millones) y el préstamo a plazo de 67,3 millones permaneció sin cambios; pasivos totales estables en 198,9 millones. Los pasivos derivados valorados al mercado bajaron a 24,0 millones desde 39,2 millones, aumentando el patrimonio neto un 23% a 82,2 millones.
Vista por segmento: GSH South Carolina aportó el 86% de las ventas trimestrales y 5,0 millones de beneficio antes de impuestos; los segmentos Rosewood y Otros registraron pequeñas pérdidas. No se emitió ninguna guía.
United Homes Group (UHG) 2025년 2분기 10-Q 주요 내용
매출은 3.6% 감소한 1억 555만 달러였으나, 총이익은 1.7% 증가한 1,990만 달러로 총이익률은 18.9%로 확대되었습니다 (전년 동기 17.9%). 판매관리비(SG&A)는 8.1% 감소한 1,800만 달러로 비용 비율을 17.1%로 낮췄습니다. 영업이익은 190만 달러로 흑자 전환했으나 (전년 동기 -4만 달러), 파생상품 부채 재평가로 인한 비현금 손실 620만 달러와 기타 비용 260만 달러로 인해 순손실 630만 달러(EPS -0.11)를 기록했으며, 이는 2024년 2분기 순이익 2,860만 달러(EPS 0.59)와 대비됩니다.
연초 대비 (6개월)
- 매출 1억 9,250만 달러 (-8.4%).
- 순이익 1,180만 달러, 전년 동기 5,360만 달러 대비; 희석 주당순이익 0.20달러, 전년 0.93달러 대비.
- 영업활동 현금흐름은 -1,910만 달러에서 +280만 달러로 전환; 잉여현금흐름으로 현금 및 현금성자산이 61% 증가한 3,650만 달러가 되었습니다.
재무상태표: 자산은 2억 8,110만 달러로 증가; 재고는 1억 4,450만 달러로 연초 대비 3.7% 증가. 현금은 3,650만 달러로 연초 대비 1,390만 달러 증가. 신디케이트 회전대출금은 6,420만 달러로 증가(기존 5,020만 달러)했으며, 6,730만 달러의 만기 대출은 변동 없음; 총 부채는 1억 9,890만 달러로 안정적. 시장가치 평가된 파생상품 부채는 3,920만 달러에서 2,400만 달러로 감소해 주주지분이 23% 증가한 8,220만 달러가 되었습니다.
부문별 현황: GSH South Carolina가 분기 매출의 86%와 세전 이익 500만 달러를 기록했으며, Rosewood 및 기타 부문은 소규모 손실을 냈습니다. 가이던스는 발표되지 않았습니다.
Points clés du rapport 10-Q du deuxième trimestre 2025 de United Homes Group (UHG)
Le chiffre d’affaires a reculé de 3,6 % à 105,5 millions de dollars, mais le bénéfice brut a progressé de 1,7 % pour atteindre 19,9 millions, avec une marge brute élargie à 18,9 % (contre 17,9 %). Les frais SG&A ont diminué de 8,1 % à 18,0 millions, réduisant le ratio des charges à 17,1 %. Le résultat opérationnel est redevenu positif à 1,9 million (-0,04 million l’an dernier), mais une perte non monétaire de 6,2 millions liée à la réévaluation des passifs dérivés et 2,6 millions d’autres charges ont engendré une perte nette de 6,3 millions (BPA -0,11), contre un bénéfice net de 28,6 millions (BPA 0,59) au deuxième trimestre 2024.
Année en cours (6 mois)
- Chiffre d’affaires 192,5 millions (-8,4 %).
- Résultat net 11,8 millions contre 53,6 millions ; BPA dilué 0,20 contre 0,93.
- Les flux de trésorerie d’exploitation sont passés de -19,1 millions à +2,8 millions ; la trésorerie disponible a augmenté de 61 % à 36,5 millions.
Bilan : Les actifs ont augmenté à 281,1 millions ; les stocks à 144,5 millions (+3,7 % depuis le début de l’année). La trésorerie s’élève à 36,5 millions (+13,9 millions depuis le début de l’année). Les emprunts sur ligne de crédit syndiquée ont augmenté à 64,2 millions (contre 50,2 millions) et le prêt à terme de 67,3 millions est resté stable ; le total des passifs est stable à 198,9 millions. Les passifs dérivés valorisés à la juste valeur ont diminué à 24,0 millions contre 39,2 millions, augmentant les capitaux propres de 23 % à 82,2 millions.
Vue par segment : GSH South Carolina a généré 86 % des ventes trimestrielles et 5,0 millions de bénéfice avant impôts ; les segments Rosewood et Autres ont enregistré de petites pertes. Aucune prévision n’a été donnée.
United Homes Group (UHG) Highlights aus dem 10-Q für Q2 2025
Der Umsatz sank um 3,6 % auf 105,5 Mio. USD, während der Bruttogewinn um 1,7 % auf 19,9 Mio. USD stieg, da die Bruttomarge auf 18,9 % (vorher 17,9 %) anstieg. SG&A fielen um 8,1 % auf 18,0 Mio. USD, wodurch die Aufwandsquote auf 17,1 % gesenkt wurde. Das operative Ergebnis wurde mit 1,9 Mio. USD positiv (vorjahr -0,04 Mio.), jedoch führten ein nicht zahlungswirksamer Verlust von 6,2 Mio. USD durch Neubewertung derivativer Verbindlichkeiten und sonstige Aufwendungen von 2,6 Mio. USD zu einem Nettoverlust von 6,3 Mio. USD (EPS -0,11) gegenüber einem Nettogewinn von 28,6 Mio. USD (EPS 0,59) im Q2 2024.
Jahresergebnis (6 Monate)
- Umsatz 192,5 Mio. USD (-8,4 %).
- Nettoeinkommen 11,8 Mio. USD gegenüber 53,6 Mio.; verwässertes EPS 0,20 gegenüber 0,93.
- Operativer Cashflow drehte auf +2,8 Mio. USD von -19,1 Mio.; freier Cashflow steigerte Kassenbestand und Äquivalente um 61 % auf 36,5 Mio.
Bilanz: Aktiva stiegen auf 281,1 Mio.; Vorräte 144,5 Mio. (+3,7 % im Jahresverlauf). Zahlungsmittel 36,5 Mio. (+13,9 Mio. im Jahresverlauf). Syndizierte revolvierende Kredite stiegen auf 64,2 Mio. (von 50,2 Mio.), und der Terminkredit von 67,3 Mio. blieb unverändert; Gesamtverbindlichkeiten stabil bei 198,9 Mio. Marktwertbewertete derivative Verbindlichkeiten sanken von 39,2 Mio. auf 24,0 Mio., was das Eigenkapital um 23 % auf 82,2 Mio. anhob.
Segmentübersicht: GSH South Carolina erzielte 86 % des Quartalsumsatzes und einen Vorsteuergewinn von 5,0 Mio.; Rosewood und andere Segmente verzeichneten kleine Verluste. Es wurde kein Ausblick gegeben.
Positive
- Gross margin improved to 18.9% from 17.9%, indicating better pricing or cost control.
- SG&A expenses cut by 8.1%, lowering the expense ratio to 17.1%.
- Operating cash flow turned positive $2.8 m versus a $19.1 m outflow last year.
- Cash and cash equivalents rose 61% to $36.5 m since year-end.
- Derivative liabilities dropped $15.1 m, boosting equity 23% to $82.2 m.
Negative
- Revenue declined 3.6% YoY for the quarter and 8.4% year-to-date.
- Net loss of $6.3 m versus prior-year profit of $28.6 m; EPS swung to -$0.11.
- Revolver borrowings climbed 28% to $64.2 m, increasing leverage and interest expense.
- Interest expense remains high at $4.0 m in Q2 and $8.0 m YTD.
- Inventory levels increased to $144.5 m, tying up additional capital amid slower sales.
Insights
TL;DR: Core margins up and cash stronger, but revenue drift and derivative swing drove GAAP loss—overall neutral impact.
Operationally UHG executed well: gross margin expanded 100 bps and SG&A dollars fell, showing cost discipline despite housing headwinds. Cash rose to $36 m while equity climbed 23%, aided by a $15 m reduction in fair-value derivatives. However, top-line softness (-3.6% QoQ) and higher revolver borrowings point to slower closings and heavier working-capital needs. The $6 m mark-to-market hit flipped results to a net loss, masking operating improvement but reminding investors of earnings volatility tied to warrants and earn-outs. Absent that non-cash item, underlying EBIT would have been modestly positive. Near-term share performance may hinge on sales acceleration and leverage management rather than accounting noise.
TL;DR: Leverage up, but liquidity and covenant headroom remain adequate—slightly negative for credit.
Net debt increased as the revolver balance rose $14 m to fund inventory, pushing total debt to $131 m. Nevertheless, cash growth and $58.7 m of undrawn revolver capacity keep liquidity acceptable. Key covenants—tangible net worth ≥$70 m (actual $82 m) and leverage ≤2.25×—appear comfortably met, but rising inventory and a 7.61% average revolver rate elevate interest burden ($8.2 m cash interest YTD). The term loan’s 11.6% coupon weighs on coverage, though YTD operating cash flow turned positive. Continued revenue contraction or housing slowdown would pressure the debt service ratio. Overall, credit profile edges weaker but does not threaten near-term solvency.
Principali dati del 10-Q del secondo trimestre 2025 di United Homes Group (UHG)
I ricavi sono diminuiti del 3,6% a 105,5 milioni di dollari, mentre il profitto lordo è aumentato dell'1,7% raggiungendo 19,9 milioni di dollari, con un margine lordo salito al 18,9% (dal 17,9%). Le spese SG&A sono calate dell'8,1% a 18,0 milioni di dollari, riducendo il rapporto di spesa al 17,1%. L'utile operativo è tornato positivo a 1,9 milioni di dollari (rispetto a una perdita di 0,04 milioni nello stesso periodo dell'anno precedente), ma una perdita non monetaria di 6,2 milioni derivante dalla rivalutazione delle passività da derivati e altri costi per 2,6 milioni hanno generato una perdita netta di 6,3 milioni di dollari (EPS -0,11), rispetto a un utile netto di 28,6 milioni (EPS 0,59) nel secondo trimestre 2024.
Primo semestre (6 mesi)
- Ricavi pari a 192,5 milioni di dollari (-8,4%).
- Utile netto di 11,8 milioni rispetto a 53,6 milioni; EPS diluito 0,20 contro 0,93.
- Il flusso di cassa operativo è passato da -19,1 milioni a +2,8 milioni; il flusso di cassa libero ha aumentato la liquidità e equivalenti del 61% a 36,5 milioni.
Bilancio: Gli attivi sono saliti a 281,1 milioni; le scorte a 144,5 milioni (+3,7% da inizio anno). La liquidità è aumentata a 36,5 milioni (+13,9 milioni da inizio anno). I prestiti da linea di credito sindacata sono cresciuti a 64,2 milioni (da 50,2 milioni) mentre il prestito a termine da 67,3 milioni è rimasto stabile; le passività totali sono ferme a 198,9 milioni. Le passività da derivati valutate a mercato sono scese a 24,0 milioni da 39,2 milioni, aumentando il patrimonio netto del 23% a 82,2 milioni.
Vista per segmento: GSH South Carolina ha generato l'86% delle vendite trimestrali e un utile ante imposte di 5,0 milioni; i segmenti Rosewood e Altri hanno registrato piccole perdite. Non è stata fornita alcuna previsione.
Aspectos destacados del 10-Q del segundo trimestre 2025 de United Homes Group (UHG)
Los ingresos disminuyeron un 3,6% hasta 105,5 millones de dólares, aunque el beneficio bruto aumentó un 1,7% hasta 19,9 millones, con un margen bruto que se amplió al 18,9% (frente al 17,9%). Los gastos SG&A cayeron un 8,1% a 18,0 millones, reduciendo la proporción de gastos al 17,1%. El ingreso operativo volvió a positivo con 1,9 millones (-0,04 millones el año anterior), pero una pérdida no monetaria de 6,2 millones por la revalorización de pasivos derivados y otros gastos por 2,6 millones produjeron una pérdida neta de 6,3 millones (EPS -0,11) frente a una ganancia neta de 28,6 millones (EPS 0,59) en el segundo trimestre de 2024.
Acumulado del año (6 meses)
- Ingresos de 192,5 millones (-8,4%).
- Ingreso neto de 11,8 millones frente a 53,6 millones; EPS diluido 0,20 frente a 0,93.
- El flujo de caja operativo cambió a +2,8 millones desde -19,1 millones; el flujo de caja libre aumentó el efectivo y equivalentes un 61% hasta 36,5 millones.
Balance: Los activos aumentaron a 281,1 millones; inventarios 144,5 millones (+3,7% en el año). Efectivo 36,5 millones (+13,9 millones en el año). Los préstamos de la línea de crédito sindicada crecieron a 64,2 millones (desde 50,2 millones) y el préstamo a plazo de 67,3 millones permaneció sin cambios; pasivos totales estables en 198,9 millones. Los pasivos derivados valorados al mercado bajaron a 24,0 millones desde 39,2 millones, aumentando el patrimonio neto un 23% a 82,2 millones.
Vista por segmento: GSH South Carolina aportó el 86% de las ventas trimestrales y 5,0 millones de beneficio antes de impuestos; los segmentos Rosewood y Otros registraron pequeñas pérdidas. No se emitió ninguna guía.
United Homes Group (UHG) 2025년 2분기 10-Q 주요 내용
매출은 3.6% 감소한 1억 555만 달러였으나, 총이익은 1.7% 증가한 1,990만 달러로 총이익률은 18.9%로 확대되었습니다 (전년 동기 17.9%). 판매관리비(SG&A)는 8.1% 감소한 1,800만 달러로 비용 비율을 17.1%로 낮췄습니다. 영업이익은 190만 달러로 흑자 전환했으나 (전년 동기 -4만 달러), 파생상품 부채 재평가로 인한 비현금 손실 620만 달러와 기타 비용 260만 달러로 인해 순손실 630만 달러(EPS -0.11)를 기록했으며, 이는 2024년 2분기 순이익 2,860만 달러(EPS 0.59)와 대비됩니다.
연초 대비 (6개월)
- 매출 1억 9,250만 달러 (-8.4%).
- 순이익 1,180만 달러, 전년 동기 5,360만 달러 대비; 희석 주당순이익 0.20달러, 전년 0.93달러 대비.
- 영업활동 현금흐름은 -1,910만 달러에서 +280만 달러로 전환; 잉여현금흐름으로 현금 및 현금성자산이 61% 증가한 3,650만 달러가 되었습니다.
재무상태표: 자산은 2억 8,110만 달러로 증가; 재고는 1억 4,450만 달러로 연초 대비 3.7% 증가. 현금은 3,650만 달러로 연초 대비 1,390만 달러 증가. 신디케이트 회전대출금은 6,420만 달러로 증가(기존 5,020만 달러)했으며, 6,730만 달러의 만기 대출은 변동 없음; 총 부채는 1억 9,890만 달러로 안정적. 시장가치 평가된 파생상품 부채는 3,920만 달러에서 2,400만 달러로 감소해 주주지분이 23% 증가한 8,220만 달러가 되었습니다.
부문별 현황: GSH South Carolina가 분기 매출의 86%와 세전 이익 500만 달러를 기록했으며, Rosewood 및 기타 부문은 소규모 손실을 냈습니다. 가이던스는 발표되지 않았습니다.
Points clés du rapport 10-Q du deuxième trimestre 2025 de United Homes Group (UHG)
Le chiffre d’affaires a reculé de 3,6 % à 105,5 millions de dollars, mais le bénéfice brut a progressé de 1,7 % pour atteindre 19,9 millions, avec une marge brute élargie à 18,9 % (contre 17,9 %). Les frais SG&A ont diminué de 8,1 % à 18,0 millions, réduisant le ratio des charges à 17,1 %. Le résultat opérationnel est redevenu positif à 1,9 million (-0,04 million l’an dernier), mais une perte non monétaire de 6,2 millions liée à la réévaluation des passifs dérivés et 2,6 millions d’autres charges ont engendré une perte nette de 6,3 millions (BPA -0,11), contre un bénéfice net de 28,6 millions (BPA 0,59) au deuxième trimestre 2024.
Année en cours (6 mois)
- Chiffre d’affaires 192,5 millions (-8,4 %).
- Résultat net 11,8 millions contre 53,6 millions ; BPA dilué 0,20 contre 0,93.
- Les flux de trésorerie d’exploitation sont passés de -19,1 millions à +2,8 millions ; la trésorerie disponible a augmenté de 61 % à 36,5 millions.
Bilan : Les actifs ont augmenté à 281,1 millions ; les stocks à 144,5 millions (+3,7 % depuis le début de l’année). La trésorerie s’élève à 36,5 millions (+13,9 millions depuis le début de l’année). Les emprunts sur ligne de crédit syndiquée ont augmenté à 64,2 millions (contre 50,2 millions) et le prêt à terme de 67,3 millions est resté stable ; le total des passifs est stable à 198,9 millions. Les passifs dérivés valorisés à la juste valeur ont diminué à 24,0 millions contre 39,2 millions, augmentant les capitaux propres de 23 % à 82,2 millions.
Vue par segment : GSH South Carolina a généré 86 % des ventes trimestrielles et 5,0 millions de bénéfice avant impôts ; les segments Rosewood et Autres ont enregistré de petites pertes. Aucune prévision n’a été donnée.
United Homes Group (UHG) Highlights aus dem 10-Q für Q2 2025
Der Umsatz sank um 3,6 % auf 105,5 Mio. USD, während der Bruttogewinn um 1,7 % auf 19,9 Mio. USD stieg, da die Bruttomarge auf 18,9 % (vorher 17,9 %) anstieg. SG&A fielen um 8,1 % auf 18,0 Mio. USD, wodurch die Aufwandsquote auf 17,1 % gesenkt wurde. Das operative Ergebnis wurde mit 1,9 Mio. USD positiv (vorjahr -0,04 Mio.), jedoch führten ein nicht zahlungswirksamer Verlust von 6,2 Mio. USD durch Neubewertung derivativer Verbindlichkeiten und sonstige Aufwendungen von 2,6 Mio. USD zu einem Nettoverlust von 6,3 Mio. USD (EPS -0,11) gegenüber einem Nettogewinn von 28,6 Mio. USD (EPS 0,59) im Q2 2024.
Jahresergebnis (6 Monate)
- Umsatz 192,5 Mio. USD (-8,4 %).
- Nettoeinkommen 11,8 Mio. USD gegenüber 53,6 Mio.; verwässertes EPS 0,20 gegenüber 0,93.
- Operativer Cashflow drehte auf +2,8 Mio. USD von -19,1 Mio.; freier Cashflow steigerte Kassenbestand und Äquivalente um 61 % auf 36,5 Mio.
Bilanz: Aktiva stiegen auf 281,1 Mio.; Vorräte 144,5 Mio. (+3,7 % im Jahresverlauf). Zahlungsmittel 36,5 Mio. (+13,9 Mio. im Jahresverlauf). Syndizierte revolvierende Kredite stiegen auf 64,2 Mio. (von 50,2 Mio.), und der Terminkredit von 67,3 Mio. blieb unverändert; Gesamtverbindlichkeiten stabil bei 198,9 Mio. Marktwertbewertete derivative Verbindlichkeiten sanken von 39,2 Mio. auf 24,0 Mio., was das Eigenkapital um 23 % auf 82,2 Mio. anhob.
Segmentübersicht: GSH South Carolina erzielte 86 % des Quartalsumsatzes und einen Vorsteuergewinn von 5,0 Mio.; Rosewood und andere Segmente verzeichneten kleine Verluste. Es wurde kein Ausblick gegeben.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2025
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ___ to ___
Commission File Number: 001-39936
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |||||||
(Address of principal executive offices)
(844 ) 766-4663
(Registrant’s telephone number)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | Accelerated filer | o | |||||||||||
| x | Smaller reporting company | |||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of August 4, 2025, 21,828,983 Class A Common Shares, par value $0.0001 per share, and 36,973,876 Class B Common Shares, par value $0.0001 per share, were issued and outstanding.
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FORM 10-Q
UNITED HOMES GROUP, INC.
TABLE OF CONTENTS
| Page No. | ||||||||
PART I. | FINANCIAL INFORMATION | 3 | ||||||
Item 1. | Condensed Consolidated Financial Statements: | 3 | ||||||
Condensed Consolidated Balance Sheets (unaudited) | 3 | |||||||
Condensed Consolidated Statements of Operations (unaudited) | 4 | |||||||
Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) | 5 | |||||||
Condensed Consolidated Statements of Cash Flows (unaudited) | 6 | |||||||
Notes to Condensed Consolidated Financial Statements (unaudited) | 8 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 35 | ||||||
Item 4. | Controls and Procedures | 36 | ||||||
PART II. | OTHER INFORMATION | 37 | ||||||
Item 1. | Legal Proceedings | 37 | ||||||
Item 1A. | Risk Factors | 37 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 38 | ||||||
Item 3. | Defaults Upon Senior Securities | 39 | ||||||
Item 4. | Mine Safety Disclosures | 39 | ||||||
Item 5. | Other Information | 39 | ||||||
Item 6. | Exhibits | 40 | ||||||
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Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-Q, 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 statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “should,” “could,” “would,” “expect,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “seek,” “continue,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the Securities and Exchange Commission (“SEC”). We cannot guarantee the accuracy of any such forward-looking statements contained in this Form 10-Q, 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 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 in this report and in our other SEC filings.
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PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
UNITED HOMES GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
| June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | |||||||||||||||||||||||||||
| Restricted cash | |||||||||||||||||||||||||||||
| Accounts receivable, net | |||||||||||||||||||||||||||||
| Inventories | |||||||||||||||||||||||||||||
| Real estate inventory not owned | |||||||||||||||||||||||||||||
| Due from related party | |||||||||||||||||||||||||||||
| Related party note receivable | |||||||||||||||||||||||||||||
| Income tax receivable | |||||||||||||||||||||||||||||
| Lot deposits | |||||||||||||||||||||||||||||
| Investment in joint venture | |||||||||||||||||||||||||||||
| Property and equipment, net | |||||||||||||||||||||||||||||
| Operating right-of-use assets | |||||||||||||||||||||||||||||
| Deferred tax asset, net | |||||||||||||||||||||||||||||
| Prepaid expenses and other assets | |||||||||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||||||||
| Total assets | $ | $ | |||||||||||||||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||||
| Accounts payable | $ | $ | |||||||||||||||||||||||||||
| Syndicated line of credit | |||||||||||||||||||||||||||||
| Liabilities from real estate inventory not owned | |||||||||||||||||||||||||||||
| Due to related parties | |||||||||||||||||||||||||||||
| Other accrued expenses and liabilities | |||||||||||||||||||||||||||||
| Operating lease liabilities | |||||||||||||||||||||||||||||
| Derivative liabilities | |||||||||||||||||||||||||||||
| Term loan, net | |||||||||||||||||||||||||||||
| Total liabilities | |||||||||||||||||||||||||||||
| Commitments and contingencies (Note 9) | |||||||||||||||||||||||||||||
Preferred Stock, $ | |||||||||||||||||||||||||||||
Class A common stock, $ | |||||||||||||||||||||||||||||
Class B common stock, $ | |||||||||||||||||||||||||||||
| Additional paid-in capital | |||||||||||||||||||||||||||||
| Retained earnings | |||||||||||||||||||||||||||||
| Total stockholders' equity | |||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||||||||||||||||||||
The accompanying unaudited Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
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UNITED HOMES GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue, net of sales discounts | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative expense | |||||||||||||||||||||||
| Net income (loss) from operations | ( | ( | ( | ||||||||||||||||||||
| Other expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Equity in net earnings from investment in joint venture | |||||||||||||||||||||||
| Change in fair value of derivative liabilities | ( | ||||||||||||||||||||||
| (Loss) income before taxes | ( | ||||||||||||||||||||||
| Income tax (benefit) expense | ( | ( | ( | ||||||||||||||||||||
| Net (loss) income | $ | ( | $ | $ | $ | ||||||||||||||||||
| (Loss)/earnings per share | |||||||||||||||||||||||
| Basic | $ | ( | $ | $ | $ | ||||||||||||||||||
| Diluted | $ | ( | $ | $ | $ | ||||||||||||||||||
| Weighted-average number of shares | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying unaudited Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
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UNITED HOMES GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands, except share amounts)
(Unaudited)
| Common stock | Additional paid-in capital | Retained earnings | Total stockholders' equity | |||||||||||||||||||||||||||||||||||||||||
| Class A | Class B | |||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Taxes related to net share settlement of restricted stock units | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Issuance of shares related to restricted stock units | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Derecognition of derivative liability | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Recognition of derivative liability related to equity incentive plan | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Taxes related to net share settlement of restricted stock units | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Common stock | Additional paid-in capital | (Accumulated deficit) Retained eanings | Total stockholders' equity | |||||||||||||||||||||||||||||||||||||||||
| Class A | Class B | |||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||
| Exercise of employee stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Issuance of shares related to restricted stock units | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||
| Taxes related to net share settlement of performance stock units | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Exercise of employee stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Issuance of shares related to performance stock units | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Forfeiture of stock options under the 2023 Plan | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
The accompanying unaudited Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
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UNITED HOMES GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||
| Credit loss | |||||||||||
| Investment earnings in joint venture | ( | ( | |||||||||
| Depreciation expense | |||||||||||
| Loss on disposal of property and equipment | |||||||||||
| Loss on extinguishment of debt | |||||||||||
| Gain on lease modification | ( | ||||||||||
| Amortization of intangible assets | |||||||||||
| Amortization of deferred financing costs | |||||||||||
| Amortization of discount on Convertible Notes | |||||||||||
| Amortization of discount on private investor debt | |||||||||||
| Amortization of discount on term loan | |||||||||||
| Stock-based compensation expense | |||||||||||
| Amortization of operating lease right-of-use assets | |||||||||||
| Provision for deferred income taxes | ( | ( | |||||||||
| Change in fair value of contingent earnout liability | ( | ( | |||||||||
| Change in fair value of warrant liabilities | ( | ( | |||||||||
| Change in fair value of equity incentive plan | ( | ( | |||||||||
| Change in fair value of contingent consideration | ( | ||||||||||
| Net change in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Due from related party | ( | ||||||||||
| Inventories | ( | ||||||||||
| Lot deposits | ( | ||||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||
| Accounts payable | ( | ||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Income tax receivable/ payable | ( | ( | |||||||||
| Due to related parties | ( | ||||||||||
| Other accrued expenses and liabilities | |||||||||||
| Net cash flows provided by (used in) operating activities | ( | ||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Proceeds from the sale of property and equipment | |||||||||||
| Payments on business acquisition | ( | ||||||||||
| Proceeds from related party note receivable | |||||||||||
| Net cash flows used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from syndicated line of credit | |||||||||||
| Repayments of syndicated line of credit | ( | ( | |||||||||
| Proceeds from sale of real estate inventory not owned | |||||||||||
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| Repayments of liabilities from real estate inventory not owned | ( | ( | |||||||||
| Repayments on private investor loans | ( | ||||||||||
| Payment of deferred financing costs | ( | ||||||||||
| Taxes related to net share settlement of restricted stock units | ( | ||||||||||
| Proceeds from exercise of employee stock options | |||||||||||
| Net cash flows provided by financing activities | |||||||||||
| Net change in cash, cash equivalents, and restricted cash | ( | ||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | |||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | $ | |||||||||
| Supplemental cash flow information: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for income taxes | $ | $ | |||||||||
| Supplemental disclosures of non-cash activities: | |||||||||||
| Derecognition of derivative liability | |||||||||||
| Modification of existing lease | |||||||||||
| Recogonition of derivative liability related to equity incentive plan | |||||||||||
| Termination of existing lease | |||||||||||
| Noncash exercise of employee stock options | |||||||||||
| Taxes related to net share settlement of performance stock units | |||||||||||
| Total non-cash activities | $ | $ | |||||||||
The accompanying unaudited Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
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UNITED HOMES GROUP, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Nature of business and summary of significant accounting policies
Nature of business
United Homes Group, Inc. (together with its subsidiaries, “UHG” or the “Company”), a Delaware corporation, is a homebuilding business which operates with a land-light strategy. UHG primarily constructs single-family residential homes and has active operations in South Carolina, North Carolina, and Georgia offering a range of residential products.
The Company is a former blank check company incorporated on October 7, 2020 under the name DiamondHead Holdings Corp. (“DHHC”) as a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On September 10, 2022, DHHC entered into a Business Combination Agreement with Hestia Merger Sub, Inc., a South Carolina corporation and wholly owned subsidiary of DHHC (“Merger Sub”), and Great Southern Homes, Inc., a South Carolina corporation (“GSH”). Upon the consummation of the transaction on March 30, 2023, Merger Sub merged with and into GSH. As a result of the transaction, GSH became a wholly owned subsidiary of DHHC, which changed its name to UHG.
Basis of presentation
Unaudited interim condensed consolidated financial statements - The accompanying Condensed Consolidated Financial Statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) for interim financial information and the rules and regulations of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, certain information, notes, and disclosures normally included in the annual financial statements prepared under GAAP have been condensed or omitted in accordance with SEC rules and regulations. Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The accompanying Condensed Consolidated Financial Statements as of June 30, 2025 and for the three and six months ended June 30, 2025 and 2024 are unaudited. The unaudited interim Condensed Consolidated Financial Statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, which include only normal recurring adjustments, considered necessary for the fair presentation of the Company’s results for the interim periods presented. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2025 and 2024 are also unaudited. The Condensed Consolidated Balance Sheet at December 31, 2024 was derived from audited annual financial statements but does not contain all of the note disclosures from the annual financial statements. Other than policies noted below in these Notes, there have been no significant changes to the significant accounting policies disclosed since the Company’s previous annual financial statements. The results for the three and six months ended June 30, 2025 and 2024 are not necessarily indicative of results to be expected for the year ended December 31, 2025, any other interim periods, or any future year or period.
Principles of consolidation – The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. The Company’s fiscal year end is December 31, and, unless otherwise stated, all years and dates refer to the fiscal year.
Use of estimates – The preparation of the accompanying Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Management continually evaluates the estimates used to prepare the Condensed Consolidated Financial Statements and updates those estimates as necessary. In general, UHG’s estimates are based on historical experience, on information from third party professionals, and other various assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ materially from those estimates made by management.
Revenue recognition - The Company recognizes revenue in accordance with ASC 606. For the three months ended June 30, 2025 and 2024, revenue recognized at a point in time from speculative home closings totaled $105.5 million and $108.7 million, respectively, and revenue recognized over time from construction activities on land owned by customers
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totaled less than $0.1 million and $0.8 million, respectively. For the six months ended June 30, 2025 and 2024, revenue recognized at a point in time from speculative homes totaled $192.0 million and $209.0 million, respectively, and for the six months ended June 30, 2025 and 2024, revenue recognized over time from land owned by customers totaled $0.5 million and $1.3 million, respectively.
Advertising – The Company expenses advertising and marketing costs as incurred and includes such costs within Selling, general, and administrative expense in the Condensed Consolidated Statements of Operations. For the three months ended June 30, 2025 and 2024, the Company incurred $0.7 million and $0.9 million, respectively, in advertising and marketing costs. For the six months ended June 30, 2025 and 2024, the Company incurred $1.4 million and $1.6 million, respectively.
Recently issued accounting pronouncements – In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the Company’s Consolidated Financial Statement disclosures.
Note 2 - Variable interest entities
The Company enters into lot option contracts with third party and related party land developers, and land bank option contracts to procure land or lots for the construction of homes. Under these option contracts, the Company funds a stated deposit in consideration for the right, but not the obligation, to purchase land or lots at a future point in time at predetermined prices. Such contracts allow the Company to defer acquiring portions of properties owned by land sellers or land bank partners until the Company has determined whether and when to exercise the option, which may serve to reduce the Company’s financial risks associated with long-term land holdings. Under the terms of the option contracts, the option deposits are not refundable. Management determined it holds a variable interest through its potential to absorb some of the land seller and land bank partners’ first dollar risk of loss by placing a non-refundable deposit. Management determined that these counterparties to option contracts are Variable Interest Entities (“VIEs”), however the Company is not the primary beneficiary of the VIE as it does not have the power to direct the VIE’s significant activities related to land development and therefore does not consolidate these VIEs. The creditors of the entities with which the Company has option agreements have no recourse against the Company and the maximum exposure to loss due to its involvement with the VIEs is limited to the non-refundable lot deposits and capitalized pre-acquisition costs. In certain instances where the Company has entered into option contracts to purchase developed lots from a land bank partner, the Company may also enter into an agreement to complete the development of the lots on behalf of the land bank partner at a fixed cost. The Company may be at risk for cost overruns related to the development of the property under option.
As of June 30, 2025, the Company had lot deposits of $44.9 million related to option contracts with an aggregate remaining purchase price of $340.9 million. As of December 31, 2024 the Company had lot deposits of $48.2 million related to option contracts with an aggregate remaining purchase price of $352.2 million. The Company had no 0.3 million and $0.3 million, respectively, in forfeited option contract deposits.
In limited circumstances, the Company may transfer developed lots it owns to a land banker and simultaneously enter into an option contract to repurchase those lots. In this instance, consistent with ASC 606, the Company is required to continue recognizing the finished lots sold on its Consolidated Balance Sheets as the transaction is accounted for as a
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financing arrangement rather than a sale. At the time the Company sells finished lots to the land banker and simultaneously enters into option contracts to repurchase those finished lots, the net cash received by the land banker represents approximately 80 % of the carrying value of the associated finished lots. In these circumstances, management determined it holds a variable interest in the land banker through its potential to absorb some of the third-party’s first dollar risk of loss by not receiving an amount equal to or greater than the value of the associated finished lots the Company continues to recognize on its Consolidated Balance Sheets as Real estate inventory not owned. Management determined that the land banker is a VIE, however, the Company is not the primary beneficiary of the VIE as it does not have the power to direct the VIE’s significant activities related to land development. The maximum exposure to loss with respect to the sale and subsequent repurchase of lots to the land banker is limited to the value of the real estate inventory not owned not financed by the land banker, which was $0.8 million and $1.9 million as of June 30, 2025 and December 31, 2024, respectively.
The Company has a shared services agreement with a related party that operates in the land development business in which the Company receives property maintenance services, due diligence and negotiation assistance with purchasing third party finished lots and previously provided accounting, IT, HR, and other administrative support services. Management has analyzed and concluded that it has a variable interest in this entity through the services agreement that provides the Company with the obligation to absorb losses and the right to receive benefits based on fees that are below market rates. Management determined the related party is a VIE, however, the Company is not the primary beneficiary of the VIE as it does not have the power to direct the VIE’s most significant activities. Accordingly, the Company does not consolidate the VIE. As of June 30, 2025 and December 31, 2024, the Company recognized a receivable of $0.2 million and $0.2 million, respectively, related to the shared services agreement included within Due from related party on the Condensed Consolidated Balance Sheets.
Note 3 - Segment reporting
An operating segment is defined as a component of an enterprise for which separate financial information is available and for which segment results are evaluated regularly by the Company’s Chief Operating Decision Maker (“CODM”). The Company’s CODM is identified as the Executive Management Team, comprising the Company’s Chief Executive Officer and President, Chief Financial Officer, and Co-Chief Operating Officers. Together, these individuals assess the performance of the Company’s operating segments and allocate resources. The CODM functions collectively rather than as individuals, ensuring that decisions reflect a balanced and strategic approach to managing operations.
UHG primarily operates in the homebuilding business and is organized and reported by division. The identification of reporting segments is based primarily on similarities in economic and geographic characteristics, product types, regulatory environments, and methods used to sell and construct homes. The Company has three reportable segments: GSH South Carolina, Rosewood Communities, Inc. (“Rosewood”), and Other. Each segment represents distinct geographical and operational aspects of UHG’s business.
GSH South Carolina represents the homebuilding operations of GSH primarily across the state of South Carolina. The main products for GSH South Carolina include entry-level homes and first-move-up homes, catering to a wide range of buyers transitioning into homeownership or seeking to upgrade from their initial purchase. South Carolina operations span the Upstate, Midlands, and Coastal regions, with a smaller presence in Georgia.
Rosewood, which also operates in South Carolina, encompasses UHG’s operations focused on delivering second and third move-up homes in the South Carolina market. These homes cater to buyers seeking more luxurious and customized living spaces, and typically feature larger floor plans, high-end finishes, and premium amenities.
Other consists of UHG’s homebuilding operations in Raleigh, NC and mortgage operations conducted through a mortgage banking joint venture (“Joint Venture”), Homeowners Mortgage, LLC, which do not meet the quantitative thresholds to be disclosed separately. Raleigh offers a similar product line to GSH South Carolina in a different geographical market, serving North Carolina, primarily in and around Raleigh. The Joint Venture is primarily engaged in brokering residential mortgage loans and enhances the Company’s ability to offer integrated homebuying experiences by providing financing solutions directly to customers while generating additional income streams.
The accounting policies of the segments are consistent with those outlined in Note 3 - Summary of significant accounting policies of our most recent Annual Report on Form 10-K for the year ended December 31, 2024. The CODM evaluates performance and allocates resources for GSH South Carolina, Rosewood, and Other based on both segment gross profit and segment income or loss before taxes. These financial metrics are used to view operating trends, perform analytical comparisons and benchmark performance between periods and to monitor budget-to-actual variances on a monthly basis. Segment gross profit is used to evaluate product pricing strategies, monitor margins, and assess return on inventory, while segment income or loss before taxes is utilized to assess overall segment profitability and performance of each market and product type on a consistent and comparable basis.
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The following tables summarize revenues, gross profit, income or loss before taxes and total assets by segment, with reconciliations to the amounts reported for the consolidated company, where applicable (in thousands):
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| GSH South Carolina | Rosewood | Other | Corporate (3) | Totals | |||||||||||||||||||||||||
Segment revenue, net (1) | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||
| Segment gross profit (loss) | ( | ||||||||||||||||||||||||||||
| Selling, general and administrative expense | |||||||||||||||||||||||||||||
Other expense (income), net (2) | ( | ||||||||||||||||||||||||||||
| Total segment income (loss) before taxes | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
| Reconciling items: | |||||||||||||||||||||||||||||
| Reconciling items from equity method investments | |||||||||||||||||||||||||||||
| Change in fair value of derivative liabilities | ( | ||||||||||||||||||||||||||||
| Consolidated loss before taxes | $ | ( | |||||||||||||||||||||||||||
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||
| GSH South Carolina | Rosewood | Other | Corporate (3) | Totals | |||||||||||||||||||||||||
Segment revenue, net (1) | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||
| Segment gross profit (loss) | ( | ||||||||||||||||||||||||||||
| Severance expense | |||||||||||||||||||||||||||||
| Selling, general and administrative expense | |||||||||||||||||||||||||||||
Other expense, net (2) | |||||||||||||||||||||||||||||
| Total segment income (loss) before taxes | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
| Reconciling items: | |||||||||||||||||||||||||||||
| Reconciling items from equity method investments | |||||||||||||||||||||||||||||
| Change in fair value of derivative liabilities | |||||||||||||||||||||||||||||
| Consolidated income before taxes | $ | ||||||||||||||||||||||||||||
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| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| GSH South Carolina | Rosewood | Other | Corporate (3) | Totals | |||||||||||||||||||||||||
Segment revenue, net (1) | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||
| Segment gross profit (loss) | ( | ||||||||||||||||||||||||||||
| Selling, general and administrative expense | |||||||||||||||||||||||||||||
Other expense (income), net (2) | ( | ||||||||||||||||||||||||||||
| Total segment income (loss) before taxes | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
| Reconciling items: | |||||||||||||||||||||||||||||
| Reconciling items from equity method investments | |||||||||||||||||||||||||||||
| Change in fair value of derivative liabilities | |||||||||||||||||||||||||||||
| Consolidated income before taxes | $ | ||||||||||||||||||||||||||||
| Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||
| GSH South Carolina | Rosewood | Other | Corporate (3) | Totals | |||||||||||||||||||||||||
Segment revenue, net (1) | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||
| Segment gross profit (loss) | ( | ||||||||||||||||||||||||||||
| Severance expense | |||||||||||||||||||||||||||||
| Selling, general and administrative expense | |||||||||||||||||||||||||||||
Other expense, net (2) | |||||||||||||||||||||||||||||
| Total segment income (loss) before taxes | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Reconciling items: | |||||||||||||||||||||||||||||
| Reconciling items from equity method investments | |||||||||||||||||||||||||||||
| Change in fair value of derivative liabilities | |||||||||||||||||||||||||||||
| Consolidated income before taxes | $ | ||||||||||||||||||||||||||||
| As of June 30, 2025 | |||||||||||||||||||||||||||||
| GSH South Carolina | Rosewood | Other | Corporate (3) | Totals | |||||||||||||||||||||||||
| Goodwill | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Investment in joint venture | |||||||||||||||||||||||||||||
| Other assets | |||||||||||||||||||||||||||||
| Total segment assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||||||||
| GSH South Carolina | Rosewood | Other | Corporate (3) | Totals | |||||||||||||||||||||||||
| Goodwill | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Investment in joint venture | |||||||||||||||||||||||||||||
| Other assets | |||||||||||||||||||||||||||||
| Total segment assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
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| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Other segment disclosures | GSH South Carolina | Rosewood | Other | Corporate (3) | Totals | ||||||||||||||||||||||||
| Equity in net earnings from investment in joint venture | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
Interest expense(4) | |||||||||||||||||||||||||||||
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||
| Other segment disclosures | GSH South Carolina | Rosewood | Other | Corporate (3) | Totals | ||||||||||||||||||||||||
| Equity in net earnings from investment in joint venture | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
Interest expense(4) | |||||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Other segment disclosures | GSH South Carolina | Rosewood | Other | Corporate (3) | Totals | ||||||||||||||||||||||||
| Equity in net earnings from investment in joint venture | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
Interest expense(4) | |||||||||||||||||||||||||||||
| Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||
| Other segment disclosures | GSH South Carolina | Rosewood | Other | Corporate (3) | Totals | ||||||||||||||||||||||||
| Equity in net earnings from investment in joint venture | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
Interest expense(4) | |||||||||||||||||||||||||||||
____________
(1)Segment revenues include revenue recognized at a point in time from speculative home closings and revenue recognized over time from construction activities on land owned by customers, in accordance with the Company's revenue recognition policy.
(2)Other (income) expense, net includes, among other items, interest expense not attributable to homebuilding activities, investment income, and amortization expense.
(3)Corporate items included within consolidated income before taxes include unallocated corporate overhead, stock-based compensation, corporate interest income and expense, and other corporate level items not allocated to the segments. Similarly, corporate items included within consolidated assets include corporate cash and cash equivalents, deferred tax assets attributable to the corporate entity, and operating lease right-of-use assets.
Note 4 - Fair value measurement
Certain assets and liabilities measured and reported at fair value under GAAP are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. Categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs as follows:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in
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active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data.
Level 3 – Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be the Company’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.
Due to the short-term nature of the Company’s cash and cash equivalents, accounts receivable, and accounts payable, the carrying amounts of these instruments approximate their fair value. Lot deposits are recorded at the agreed-upon contract value, which approximates fair value. The interest rates on the syndicated line of credit and the term loan vary and are the greater of either a reference rate plus an applicable margin, or the base rate plus the aforementioned applicable margin. Refer to Note 6 - Debt for additional detail on the determination of these instruments’ interest rates. As the reference rate of the syndicated line of credit and the term loan at any point in time are reflective of the current interest rate environment the Company operates in, the carrying amount of these instruments approximates their fair value.
The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation (in thousands):
| Fair Value Measurements as of June 30, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Contingent earnout liability | $ | $ | $ | $ | |||||||||||||||||||
| Derivative private placement warrant liability | |||||||||||||||||||||||
| Derivative public warrant liability | |||||||||||||||||||||||
| Derivative stock option liability | |||||||||||||||||||||||
| Total derivative liability | |||||||||||||||||||||||
| Contingent consideration | |||||||||||||||||||||||
| Total fair value | $ | $ | $ | $ | |||||||||||||||||||
| Fair Value Measurements as of December 31, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Contingent earnout liability | $ | $ | $ | $ | |||||||||||||||||||
| Derivative private placement warrant liability | |||||||||||||||||||||||
| Derivative public warrant liability | |||||||||||||||||||||||
| Derivative stock option liability | |||||||||||||||||||||||
| Total derivative liability | |||||||||||||||||||||||
| Contingent consideration | |||||||||||||||||||||||
| Total fair value | $ | $ | $ | $ | |||||||||||||||||||
Transfers to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period. There were no transfers to/from levels during the six month period ended June 30, 2025 and the year ended December 31, 2024.
The following table presents a roll forward of the Level 3 liabilities measured at fair value on a recurring basis (in thousands):
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| Contingent earnout liability | Derivative private placement warrant liability | Derivative stock option liability | Contingent consideration | ||||||||||||||||||||
| Liability at January 1, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Settlements | — | — | — | ( | |||||||||||||||||||
| Derecognition of derivative liability | ( | ||||||||||||||||||||||
| Change in fair value | ( | ( | ( | ||||||||||||||||||||
| Liability at March 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Recognition of derivative liability | |||||||||||||||||||||||
| Change in fair value | |||||||||||||||||||||||
| Liability at June 30, 2025 | $ | $ | $ | $ | |||||||||||||||||||
Note 5 - Inventories
The following table and descriptions summarize the Company’s inventory (in thousands):
| June 30, 2025 | December 31, 2024 | ||||||||||
| Pre-acquisition land costs | $ | $ | |||||||||
| Developed lots | |||||||||||
| Homes under construction | |||||||||||
| Finished homes | |||||||||||
| Total inventories | $ | $ | |||||||||
The Company capitalizes into inventories interest costs incurred on homes under construction during the construction period until they are substantially complete. A summary of capitalized interest is as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Capitalized interest at beginning of the period: | $ | $ | $ | $ | |||||||||||||||||||
| Interest incurred | |||||||||||||||||||||||
| Interest expensed: | |||||||||||||||||||||||
| Included in cost of sales | ( | ( | ( | ( | |||||||||||||||||||
| Directly to interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Capitalized interest at end of the period: | $ | $ | $ | $ | |||||||||||||||||||
Note 6 - Debt
The following table and descriptions summarize the amounts outstanding under the Company’s syndicated line of credit and term loan (dollars presented in thousands):
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| June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Weighted average interest rate | Outstanding Balance | ||||||||||||||||||||||||||||||||||
| Syndicated line of credit | |||||||||||||||||||||||||||||||||||
| Wells Fargo Bank | % | $ | |||||||||||||||||||||||||||||||||
| Regions Bank | % | ||||||||||||||||||||||||||||||||||
| Flagstar Bank | % | ||||||||||||||||||||||||||||||||||
| United Bank | % | ||||||||||||||||||||||||||||||||||
| Third Coast Bank | % | ||||||||||||||||||||||||||||||||||
| Total Syndicated line of credit | $ | ||||||||||||||||||||||||||||||||||
| Term loan, net | % | $ | |||||||||||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Weighted average interest rate | Outstanding Balance | ||||||||||||||||||||||||||||||||||
| Syndicated line of credit | |||||||||||||||||||||||||||||||||||
| Wells Fargo Bank | % | $ | |||||||||||||||||||||||||||||||||
| Regions Bank | % | ||||||||||||||||||||||||||||||||||
| Flagstar Bank | % | ||||||||||||||||||||||||||||||||||
| United Bank | % | ||||||||||||||||||||||||||||||||||
| Third Coast Bank | % | ||||||||||||||||||||||||||||||||||
| Total Syndicated line of credit | $ | ||||||||||||||||||||||||||||||||||
| Term loan, net | % | $ | |||||||||||||||||||||||||||||||||
Syndicated line of credit
On January 26, 2024, the Company entered into the Second Amendment to its existing credit facility (as amended, the "Syndicated Line"). As a result of this amendment the Company established a process for the joinder of additional subsidiary borrowers of the Company, and Rosewood was joined, jointly and severally with the Company and GSH, as a borrower to the Syndicated line of credit with Wells Fargo Bank, National Association (“Wells Fargo”). On August 2, 2024 (the “Third Amendment Effective Date”), the Company entered into the Third Amendment to the Syndicated Line (“Third Amendment”) which extended the maturity date to August 2, 2027 except with respect to two non-extending lenders (representing $73.3 million of the committed amount), reduced the borrowing capacity to $220.0 million, and amended three financial covenants. No other significant terms of the arrangements were changed as a result of these amendments other than those relating to the interest rate terms described below. The financial covenants referenced below are reflective of these amendments.
The advances from the Syndicated Line are used to build homes and are repaid incrementally upon individual home sales. The Syndicated Line is collateralized by the homes under construction and developed lots. The Syndicated Line is fully secured, and the availability of funds is based on the inventory value at the time of the draw request. Interest is accrued based on the total syndication balance and is paid monthly. As the average construction time for homes is less than one year, the Syndicated Line is considered short-term as of June 30, 2025 and December 31, 2024.
The interest rate is based on Secured Overnight Financing Rate (“SOFR”) plus an applicable margin (ranging from 275 basis points to 350 basis points) based on the Company’s leverage ratio as determined in accordance with a pricing grid, or the base rate plus the aforementioned applicable margin.
The remaining availability to be drawn down, calculated in accordance with the Syndicated Line, was $58.7 million as of June 30, 2025 and $96.4 million as of December 31, 2024. The Syndicated Line also includes a $2.0 million letter of credit as a sub-facility subjected to the same terms and conditions as the Syndicated Line. The Company pays a fee ranging between 15 and 30 basis points per annum depending on the unused amount of the Syndicated Line. The fee is computed on a daily basis and paid quarterly in arrears.
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The Syndicated Line contains financial covenants, including (a) a minimum tangible net worth of no less than the sum of (i) $70 million, plus (ii) 25 % of positive actual consolidated earnings earned in any fiscal quarter end, (iii) 100 % of new equity contributed to the Company, (iv) 100 % of any increase in tangible net worth resulting from an equity issuance upon the conversion or exchange of any security constituting indebtedness that is convertible or exchangeable, or is being converted or exchanged, for equity interests; and (v) 100 % of the amount of any repurchase of equity interests in the Company, (b) a maximum leverage covenant that prohibits the leverage ratio from exceeding 2.25 to 1.00, except for up to two quarterly measurement periods in which the ratio shall not exceed 2.50 to 1.00 during the period beginning on the Third Amendment Effective Date and ending on December 31, 2025, (c) a minimum debt service coverage ratio of no less than 1.50 to 1.00 for the period from and after June 30, 2024 until June 30, 2025, and a minimum of 2.00 to 1.00 thereafter, and permits a minimum debt service coverage ratio of no less than 1.35 to 1.00 for up to two quarterly measurement periods during the period beginning on the Third Amendment Effective Date and ending on June 30, 2025, (d) a minimum liquidity amount of not less than the greater of $37.5 million from and after June 30, 2024, provided that during any period in which the debt service coverage ratio is less than 1.50 to 1.00, the minimum liquidity threshold will be at least (i) $45.0 million, or (ii) an amount equal to 1.50 x the trailing twelve month interest incurred and (e) unrestricted cash of not less than $15.0 million at all times. The Company was in compliance with all debt covenants as of June 30, 2025 and December 31, 2024.
The Company recognized $0.3 million and $0.3 million of amortized deferred financing costs within Other expense, net for the three months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025 and 2024, the Company recognized $0.7 million and $0.6 million, respectively. Outstanding deferred financing costs related to the Company’s Syndicated line of credit were $2.8 million and $3.5 million as of June 30, 2025 and December 31, 2024, respectively, and are included in Prepaid expenses and other assets on the Condensed Consolidated Balance Sheets as the Syndicated Line is a revolving arrangement.
Term loan
On December 11, 2024, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, GSH, Kennedy Lewis Agency Partners, LLC (“Administrative Agent”), and the lenders party thereto (the “Lenders”) pursuant to which the Lenders thereunder funded a $70.0 million subordinated term loan, the proceeds of which were used to redeem the outstanding Convertible Notes. See Note 10 - Convertible Notes payable for further details.
The Credit Agreement provides for a term loan of $70.0 million maturing on the earlier of (a) (i) December 11, 2030, or (ii) the maturity date as defined in the Company’s Second Amended and Restated Credit Agreement, dated as of August 10, 2023, as amended and (iii) the date on which the indebtedness pursuant to the Syndicated Line is accelerated in accordance with the terms of the Syndicated Line with Wells Fargo. As of December 31, 2024, the effective maturity date based on these provisions is August 2, 2027. At the election of the Company, the term loan will either be (i) a SOFR Loan or (ii) an Alternate Base Rate (“ABR”) Loan. Each SOFR Loan will bear interest for each day during each interest period at a rate per annum equal to (a) Adjusted Term SOFR (as defined by the Credit Agreement), plus (b) the applicable margin (ranging from 675 basis points to 775 basis points) based on the Company’s leverage ratio as determined in accordance with the pricing grid set forth in the Credit Agreement. The Company may elect from time to time to convert SOFR Loans to ABR Loans; provided that such conversion be made on the last day of an interest period with respect thereto. Additionally, the Company may elect from time to time to convert ABR Loans to SOFR Loans; provided that no such conversion can take place when any Event of Default (as defined by the Credit Agreement) has occurred and is continuing. As of June 30, 2025, the term loan under the Credit Agreement is classified as a SOFR Loan. The effective interest rate of the Credit Agreement is 12.67 %.
The Credit Agreement contains certain financial covenants, including (a) that the Company must maintain a minimum tangible net worth of at least $70.0 million; (b) a maximum leverage covenant that prohibits the Consolidated total leverage ratio of the Company and its Subsidiaries from exceeding 2.50 to 1.00 for any fiscal quarter (as determined on the last day of each fiscal quarter); provided that the Company may exceed such ratio in two instances from December 11, 2024 until December 31, 2025 so long as the Consolidated total leverage ratio does not exceed 2.63 to 1.00 as of the last day of such fiscal quarter; (c) a minimum debt service coverage ratio of the Company and its Subsidiaries (as determined on the last day of each fiscal quarter) of (x) not less than 1.35 to 1.00 until June 30, 2025 and (y) thereafter to be greater than 1.50 to 1.00, provided that the Company and its Subsidiaries may allow such debt service coverage ratio to be less than 1.35 to 1.00 in two instances from December 11, 2024 until June 30, 2025 so long as the debt service coverage ratio is greater than or equal to 1.20 to 1.00 as of the last day of such fiscal quarter; and (d) that the Company maintain minimum liquidity of not less than $20.0 million and unrestricted cash of not less than $10.0 million at all times. The obligations of the Company under the Credit Agreement are guaranteed by the Company and secured by granting the Administrative Agent a security interest in 100 % of the ownership and economic interest of the Company. The Company was in compliance with all debt covenants as of June 30, 2025 and December 31, 2024.
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Note 7 - Related party transactions
Lot deposits
The Company enters into option contracts with related parties to acquire lots for the construction of homes. Out of the lot deposits outstanding as of June 30, 2025 and December 31, 2024, $5.1 million and $6.8 million, respectively, are with related parties.
Leases
The Company has four separate operating lease agreements with a related party, including a lease of an office space used for its corporate headquarters. In addition, the Company leases certain model homes from related parties. During the second quarter of 2024, the Company modified the lease of its corporate headquarters to reduce the leased space for the premises, which was accounted for as a lease modification and partial termination. The Company recorded a gain of $0.2 million as a result of the modification. The terms of the related party leases, including rent expense and future minimum payments, are described in Note 9 - Commitments and contingencies.
Services agreement
The Company previously shared office spaces with a related party and certain employees of the Company provided services to the same related party. As such, the Company allocated certain shared costs to the related party in line with a predetermined methodology based on headcount. The Company allocated no overhead costs to the related party during the three and six months ended June 30, 2025. During the three and six months ended June 30, 2024, the Company allocated overhead costs to the related party in the amounts of $0.1 million and $0.2 million, respectively. The balance outstanding as of June 30, 2025 and December 31, 2024 was a receivable of $0.2 million and $0.2 million, respectively, and is presented within Due from related party on the Condensed Consolidated Balance Sheets. The Company was charged for property maintenance, consulting, and land development management services in the amount of less than $0.1 million and $0.3 million for the three months ended June 30, 2025 and 2024, and $0.1 million and $0.4 million for the six months ended June 30, 2025 and 2024, respectively, by the same related party. The balance outstanding as of June 30, 2025 and December 31, 2024 was de minimis and is presented within Due to related parties on the Condensed Consolidated Balance Sheets.
General contracting
The Company may occasionally be engaged as a general contractor by several related parties. There was no related party general contracting activity during the three and six months ended June 30, 2025. For the three and six months ended June 30, 2024, Revenue of $0.3 million and $0.5 million, respectively, and Cost of sales of $0.2 million and $0.4 million, respectively, were recognized in the Condensed Consolidated Statements of Operations.
Other
The Company utilizes a related party vendor to perform certain civil engineering services. For the three and six months ended June 30, 2025 and 2024, expenses of $0.1 million and zero , respectively, were recognized in the Condensed Consolidated Statements of Operations. The remaining balance outstanding as of June 30, 2025 and December 31, 2024 was a payable of less than $0.1 million and $0.1 million, respectively, and is presented within Due to related party, net on the Condensed Consolidated Balance Sheets.
The Company utilized a related party vendor for certain aviation services. For the three and six months ended June 30, 2025 and 2024, expenses recognized in the Condensed Consolidated Statements of Operations were de minimis.
Note 8 - Warranty reserves
The Company establishes warranty reserves to provide for estimated future costs as a result of construction and product defects. Estimates are determined based on management’s judgment considering factors such as historical spend and projected cost of corrective action.
The following table provides a summary of the activity related to warranty reserves, which are included in Other accrued expenses and liabilities on the accompanying Condensed Consolidated Balance Sheets as follows (in thousands):
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| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Warranty reserves at beginning of the period | $ | $ | $ | $ | |||||||||||||||||||
| Reserves provided | |||||||||||||||||||||||
| Payments for warranty costs | ( | ( | ( | ( | |||||||||||||||||||
| Warranty reserves at end of the period | $ | $ | $ | $ | |||||||||||||||||||
Note 9 - Commitments and contingencies
Leases
The Company leases several office spaces in South Carolina under operating lease agreements with related parties, and one office space in North Carolina with a third party. In addition, the Company leases certain model homes from related parties and third parties. The leases have a remaining lease term of up to four years , some of which include options to extend on a month-to-month basis, and some of which include options to terminate the lease. These options are excluded from the calculation of the right-of-use asset (“ROU asset”) and lease liability until it is reasonably certain that the option will be exercised. The Company recognized an operating lease expense of $0.3 million and $0.4 million within Selling, general, and administrative expense on the Condensed Consolidated Statements of Operations for the three months ended June 30, 2025 and 2024, respectively, which includes operating lease expense of $0.2 million and $0.4 million for the three months ended June 30, 2025 and 2024, respectively, associated with related party leases. For the six months ended June 30, 2025 and 2024, the Company recognized an operating lease expense of $0.6 million and $0.8 million, which includes operating lease expense of $0.4 million and $0.7 million associated with related party leases.
Variable lease expense included within operating lease expense was de minimis for the three and six months ended June 30, 2025 and 2024. The weighted-average discount rate for the operating leases was 9.19 % and 9.37 % during the six months ended June 30, 2025 and 2024, respectively. The weighted-average remaining lease term was 2.78 years and 3.92 years for the six months ended June 30, 2025 and 2024, respectively.
The maturity of the contractual, undiscounted operating lease liabilities as of June 30, 2025 are as follows (in thousands):
| Lease payment | |||||
| 2025 | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 and thereafter | |||||
| Total undiscounted operating lease liabilities | $ | ||||
| Interest on operating lease liabilities | ( | ||||
| Total present value of operating lease liabilities | $ | ||||
The Company has certain leases which have initial lease terms of twelve months or less (“short-term leases”). The Company elected to exclude these leases from recognition, and these leases have not been included in the recognized operating ROU assets and operating lease liabilities. The Company recorded $0.1 million and less than $0.1 million of rent expense related to the short-term leases within Selling, general and administrative expense on the Condensed Consolidated Statements of Operations for the three months ended June 30, 2025 and 2024, respectively, and $0.2 million and $0.1 million for the six months ended June 30, 2025 and 2024, respectively. Short term lease expense associated with related party leases was de minimis for the three months ended June 30, 2025 and 2024.
Surety bonds and letters of credit
During the ordinary course of business, certain regulatory agencies and municipalities require the Company to post surety bonds or letters of credit related to development projects. As of June 30, 2025, the Company had outstanding surety bonds and letters of credit totaling $9.2 million and $1.3 million, respectively. The Company believes it will fulfill its obligations under the related contracts and does not anticipate any material losses under these surety bonds or letters of credit.
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Litigation
The Company is subject to various claims and lawsuits that may arise primarily in the ordinary course of business, which consist mainly of construction defect claims. In the opinion of management, the disposition of these matters will not have a material adverse effect on the Company’s Condensed Consolidated Financial Statements. When the Company believes that a loss is probable and reasonably estimable, the Company will record an expense and corresponding contingent liability. As of the date of these Condensed Consolidated Financial Statements, management believes that the Company has not incurred a liability as a result of any claims, with the exception of the following:
Rosewood proceedings
Rosewood has been named as a co-defendant in a lawsuit alleging negligence/recklessness and breach of certain implied warranties arising out of Rosewood’s construction of homes in a subdivision prior to the Company’s acquisition of Rosewood. As of June 30, 2025, the Company and the plaintiffs have agreed in principle to settle this matter, the terms of which are being negotiated. As a result, the Company concluded that a loss is probable and reasonably estimable. Accordingly, the Company recorded an accrual in anticipation of the settlement of $0.2 million, which is included in Other accrued expenses and liabilities in the Condensed Consolidated Balance Sheet as of June 30, 2025.
Note 10 - Convertible Notes payable
The Company had previously issued Convertible Notes with an original principal amount of $80.0 million. On December 11, 2024 (“Redemption Date”), the Company redeemed the Convertible Notes and paid to the Convertible Note Investors (a) an aggregate of $70.0 million, plus accrued and unpaid interest through the Redemption Date, and (b) an aggregate of 10,168,850 shares of Class A Common Stock with a fair value of $4.41 per share. The Company financed the transaction, in part, by entering into the Credit Agreement with Kennedy Lewis. See Note 6 - Debt for further details. The Company accounted for the redemption as an extinguishment of debt in accordance with ASC 405. As a result, on December 11, 2024 the Company recognized a loss on extinguishment of $45.6 million based on the difference between the total reacquisition price of the extinguished debt, including the make-whole amount of $37.1 million, and the net carrying amount of the Convertible Notes on the Redemption Date. There is no remaining debt balance associated with the Convertible Notes as of June 30, 2025 and December 31, 2024.
Interest expense previously capitalized and included within Cost of sales on the Condensed Consolidated Statements of Operations was $0.6 million and $1.4 million for the Convertible Notes for the three and six months ended June 30, 2025, respectively.
Interest expense included within Other expense, net on the Condensed Consolidated Statements of Operations was $2.3 million and $4.4 million for the Convertible Notes for the three and six months ended June 30, 2024, respectively. Interest expense included within Cost of sales on the Condensed Consolidated Statements of Operations was $1.1 million and $3.2 million for the Convertible Notes for the three and six months ended June 30, 2024, respectively.
Note 11 - Stock-based compensation
Stock options
The following table summarizes the activity relating to the Company’s stock options:
| Stock options | Weighted-average per share exercise price | ||||||||||
| Outstanding, December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Exercised | |||||||||||
| Forfeited | ( | ||||||||||
| Outstanding, June 30, 2025 | $ | ||||||||||
| Options exercisable at June 30, 2025 | $ | ||||||||||
Stock-based compensation expense, net of forfeitures, included in Selling, general and administrative expense in the Condensed Consolidated Statements of Operations for stock options for the three months ended June 30, 2025 and 2024 was $1.1 million and $1.6 million, respectively, and $2.8 million and $2.9 million for the six months ended June 30, 2025
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and 2024, respectively. As of June 30, 2025, total unrecognized stock compensation expense related to unvested stock option arrangements was $12.6 million which is expected to be recognized over a weighted-average period of 2.39 years.
Certain stock options issued under the 2023 Plan are issued to individuals who are not employees of the Company and who are not providing goods or services to the Company. These options are recognized in accordance with ASC 815, as a derivative liability and marked to market at each reporting period end. As of June 30, 2025, and December 31, 2024, the derivative liability of stock options amounts to $0.1 million and $0.3 million, respectively, and is included within Derivative liability on the Condensed Consolidated Balance Sheets.
Restricted stock units (“RSUs”)
The following table summarizes the activity relating to the Company’s RSUs:
| Shares | Weighted-average grant date fair value per unit | ||||||||||
| Outstanding, December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Outstanding, June 30, 2025 | $ | ||||||||||
Stock-based compensation expense, net of forfeitures, included in Selling, general and administrative expense in the Condensed Consolidated Statements of Operations for time-based restricted stock units was $0.1 million and less than $0.1 million for the three months ended June 30, 2025 and 2024, respectively, and $0.2 million and $0.2 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, total unrecognized pre-tax compensation expense was $0.6 million related to time-based restricted stock units which is expected to be recognized over a weighted-average period of 2.72 years.
Performance-based restricted stock units (“PSUs”)
The following table summarizes the activity relating to the Company’s PSUs:
| Shares | Weighted-average grant date fair value per unit | ||||||||||
| Outstanding, December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Vested | |||||||||||
| Forfeited | ( | ||||||||||
| Outstanding, June 30, 2025 | $ | ||||||||||
Stock compensation expense for the PSUs is recorded based on the estimated fair value of the equity-based award on the grant date using the Monte Carlo simulation method. Stock-based compensation expense, net of forfeitures, included in Selling, general and administrative expense in the Condensed Consolidated Statements of Operations for PSUs was $0.2 million and $0.2 million for the three months ended June 30, 2025 and 2024, respectively, and $0.4 million and $0.3 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, total unrecognized pre-tax compensation expense was $1.1 million related to the PSUs which is expected to be recognized over a weighted-average period of 1.47 years.
Stock warrants
The Company previously granted an option to non-employee directors to purchase 1,867,368 stock warrants for $0.2 million. Each warrant represents one non-voting common share. The warrants are exercisable at $4.05 per warrant, and can be exercised for 10 years starting from July 1, 2022. As of June 30, 2025, there are 746,947 stock warrants outstanding. There were no no
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Note 12 - Earnout shares
As of June 30, 2025, the fair value of the earnout shares was $0.81 per share issuable upon Triggering Event I, $0.63 per share issuable upon Triggering Event II and $0.50 per share issuable upon Triggering Event III.
As of December 31, 2024, the fair value of the earnout shares was $1.59 per share issuable upon Triggering Event I, $1.25 per share issuable upon Triggering Event II and $0.99 per share issuable upon Triggering Event III.
The estimated fair value of the earnout shares was determined using a Monte Carlo simulation using a distribution of potential outcomes on a daily basis over the earnout period. The assumptions used in the valuation of these instruments, using the most reliable information available, include:
| June 30, 2025 | December 31, 2024 | ||||||||||
| Current stock price | $ | $ | |||||||||
| Stock price targets | $ | $ | |||||||||
| Expected life (in years) | |||||||||||
| Earnout period (in years) | |||||||||||
| Risk-free interest rate | % | % | |||||||||
| Expected volatility | % | % | |||||||||
| Expected dividend yield | % | % | |||||||||
For the three and six months ended June 30, 2025, the change in fair value of the earnout shares resulted in a loss of $4.1 million and a gain of $13.9 million, respectively, primarily resulting from changes in the company's stock price. For the three and six months ended June 30, 2024, the change in fair value of the earnout shares resulted in gains of $27.6 million and $54.0 million, respectively, primarily resulting from changes in the company's stock price.
As none of the earnout triggering events have occurred as of June 30, 2025, no shares have been distributed.
Note 13 - Warrant liability
The private placement warrant liability is recognized in accordance with ASC 815 as a derivative liability and marked to market at each reporting period end. The change in fair value of the private placement warrant liability for the three and six months ended June 30, 2025, resulted in a loss of $0.6 million and gain $0.3 million, respectively. For the three and six months ended June 30, 2024, the change in fair value resulted in a gains of $1.2
The Private Placement Warrants were valued using the following assumptions under the Monte Carlo method:
| June 30, 2025 | December 31, 2024 | ||||||||||
| Current stock price | $ | $ | |||||||||
| Exercise price | $ | $ | |||||||||
| Expected life (in years) | |||||||||||
| Risk-free interest rate | % | % | |||||||||
| Expected volatility | % | % | |||||||||
| Expected dividend yield | |||||||||||
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Note 14 - Income taxes
Note 15 - Earnings per share
The Company computes basic net earnings per share using net income attributable to Company common stockholders and the weighted average number of common shares outstanding during each period.
The following table sets forth the computation of the Company’s basic and diluted net earnings per share (in thousands, except shares and earnings per share):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net (loss) income | $ | ( | $ | $ | $ | ||||||||||||||||||
| Basic (loss) income available to common shareholders | $ | ( | $ | $ | $ | ||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Add back: | |||||||||||||||||||||||
| Interest on Convertible Notes payable, net of tax | |||||||||||||||||||||||
| Change in fair value of stock options - liability classified, net of tax | ( | ( | ( | ||||||||||||||||||||
| Diluted income available to common shareholders | $ | ( | $ | $ | $ | ||||||||||||||||||
| Weighted-average number of common shares outstanding - basic | |||||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Convertible Notes | |||||||||||||||||||||||
| Stock options - equity classified | |||||||||||||||||||||||
| Stock options - liability classified | |||||||||||||||||||||||
| Stock warrants | |||||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
| Weighted-average number of common shares outstanding - diluted | |||||||||||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | ( | $ | $ | $ | ||||||||||||||||||
| Diluted | $ | ( | $ | $ | $ | ||||||||||||||||||
The following table summarizes potentially dilutive outstanding securities that were excluded from the calculation of diluted EPS, because their effect would have been anti-dilutive:
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| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Stock warrants | |||||||||||||||||||||||
| Private placement warrants | |||||||||||||||||||||||
| Public warrants | |||||||||||||||||||||||
| Stock options - equity classified | |||||||||||||||||||||||
| Stock options - liability classified | |||||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
| Total anti-dilutive features | |||||||||||||||||||||||
The Company’s 21,886,379 752,000 PSUs are excluded from the anti-dilutive table above for the three and six months ended June 30, 2025, as the underlying shares remain contingently issuable as the earnout triggering events and performance-based conditions, respectively, have not been satisfied. The Company excluded 21,886,379 469,500 PSUs for the three and six months ended June 30, 2024.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References to the “Company,” “UHG,” “our,” “us” or “we” refer to United Homes Group, Inc. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.”
Overview
UHG designs, builds and sells homes in South Carolina, North Carolina and Georgia. The geographical markets in which UHG presently operates its homebuilding business are high-growth markets, with substantial in-migrations and employment growth. The Company employs a land-light lot operating strategy, with a focus on the design, construction and sale of entry-level, first, second and third move-up single-family houses. UHG principally builds detached single-family houses, and, to a lesser extent, attached single-family houses, including duplex houses and town houses.
UHG’s pipeline as of June 30, 2025 consists of approximately 7,300 lots, which includes lots that UHG may acquire from third party lot option contracts or land bank option contracts, in addition to lots that are owned or controlled by related parties and which UHG expects to obtain the contractual right to acquire.
Since its founding in 2004, UHG has delivered approximately 16,000 homes and currently builds in 53 active subdivisions at prices that generally range from approximately $200,000 to approximately $600,000. For the three months ended June 30, 2025 and 2024, UHG had 304 and 323 net new orders, and generated approximately $105.5 million and $109.4 million in revenue on 303 and 337 closings, respectively. For the six months ended June 30, 2025 and 2024, UHG had 600 and 707 net new orders, and generated approximately $192.5 million and $210.3 million in revenue on 555 and 648 closings, respectively.
UHG intends to grow organically, both arising out of its historical operations which may include entry into new markets and growth in community count, and through expansion of its mortgage joint venture Homeowners Mortgage, LLC (the “Joint Venture”). UHG expects that continued operation of the Joint Venture will add to UHG’s revenue and EBITDA growth, improve buyer traffic conversion, and reduce backlog cancellation rates. In the second quarter of 2025, UHG announced that it had initiated a review of strategic alternatives in order to explore ways to maximize shareholder value. There is not a set deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any transaction or particular outcome.
In the second quarter of 2025, market conditions in the homebuilding industry continued to be impacted by persistently elevated mortgage rates, macro-economic and geopolitical uncertainty, and housing affordability concerns that have negatively affected consumer confidence. As a result of these challenging conditions, demand remained subdued as net new orders for the three and six months ended June 30, 2025 decreased by 5.9% and 15.1%, respectively, when compared to the respective prior year periods. However, the undersupply of homes in the United States continues to drive demand for affordable housing. In response to the current environment, the Company continues to provide discounts on base home prices, when necessary, and utilize various sales incentives, primarily in the form of buyer financing incentives such as mortgage rate buy downs, mortgage forward commitments, or cash incentives applied against closing costs.
Despite the softening demand and slower sales pace, the Company has seen improvement in gross margin for the three and six months ended June 30, 2025 of 100 basis points and 70 basis points, respectively, as compared to the respective prior periods. This is largely the result of continued, focused, execution of several key operational improvements targeted at accelerating sales and improving gross margins. These operational improvements included refreshing the Company’s portfolio of house plans, expanding customization options for buyers, and a strategic rebidding of supplier contracts to reduce direct construction costs. Management believes that the Company’s proactive approach, position within high growth markets, and adaptable land-light business model will enable the Company to effectively navigate these multifaceted macroeconomic conditions. However, the Company cannot provide any assurance that its strategies will continue to be successful in future quarters.
UHG revenues decreased from approximately $109.4 million for the three months ended June 30, 2024 to $105.5 million for the three months ended June 30, 2025. For the three months ended June 30, 2025, UHG generated a net loss of approximately $6.3 million, which included $6.2 million related to the change in fair value of derivative liabilities, gross margin of 18.9%, adjusted gross margin of 21.3%, and adjusted EBITDA margin of 6.9%, representing a decrease of $34.9 million, and percentage changes of an increase of 1.0%, an increase of 0.4%, and a decrease of 0.1%, respectively, from the three months ended June 30, 2024.
UHG revenues decreased from approximately $210.3 million for the six months ended June 30, 2024 to $192.5 million for the six months ended June 30, 2025. For the six months ended June 30, 2025, UHG generated net income of
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approximately $11.8 million, which included $15.0 million related to the change in fair value of derivative liabilities, gross margin of 17.7%, adjusted gross margin of 20.2%, and adjusted EBITDA margin of 5.3%, representing a decrease of $41.7 million, and percentage changes of an increase of 0.7%, a decrease of 0.5%, and a decrease of 1.8%, respectively, from the six months ended June 30, 2024.
Adjusted gross profit, EBITDA, adjusted EBITDA, and EBITDA margin are not financial measures under generally accepted accounting principles in the United States of America (“GAAP”). See “Non-GAAP Financial Measures” for an explanation of how UHG computes these non-GAAP financial measures and for reconciliations to the most directly comparable GAAP financial measure.
Results of Operations
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
The following table presents summary results of operations for the periods indicated (dollar amounts in thousands except average sales price):
| Three Months Ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | Change ($) | Change (%) | ||||||||||||||||||||
| Statements of Operations | |||||||||||||||||||||||
| Revenue, net of sales discounts | $ | 105,506 | $ | 109,420 | $ | (3,914) | (3.6) | % | |||||||||||||||
| Cost of sales | 85,587 | 89,842 | (4,255) | (4.7) | % | ||||||||||||||||||
| Selling, general and administrative expense | 18,016 | 19,614 | (1,598) | (8.2) | % | ||||||||||||||||||
| Other expense, net | (2,617) | (3,582) | 965 | (26.9) | % | ||||||||||||||||||
| Equity in net earnings from investment in joint venture | 275 | 339 | (64) | (18.9) | % | ||||||||||||||||||
| Change in fair value of derivative liabilities | (6,171) | 32,055 | (38,226) | (119.3) | % | ||||||||||||||||||
| (Loss) income before taxes | (6,610) | 28,776 | (35,386) | (122.9) | % | ||||||||||||||||||
| Income tax (benefit) expense | (269) | 136 | (405) | (297.8) | % | ||||||||||||||||||
| Net (loss) income | $ | (6,341) | $ | 28,640 | $ | (34,981) | (122.0) | % | |||||||||||||||
| Other Financial and Operating Data: | |||||||||||||||||||||||
Active communities at end of period(a) | 53 | 59 | (6) | (10.2) | % | ||||||||||||||||||
| Home closings | 303 | 337 | (34) | (10.1) | % | ||||||||||||||||||
Average sales price of homes closed(b) | $ | 349,265 | $ | 340,803 | $ | 8,462 | 2.5 | % | |||||||||||||||
| Net new orders | 304 | 323 | (19) | (5.9) | % | ||||||||||||||||||
| Cancellation rate | 11.4 | % | 12.7 | % | (1.3) | % | (10.2) | % | |||||||||||||||
| Backlog | 202 | 248 | (46) | (18.5) | % | ||||||||||||||||||
| Gross profit | $ | 19,919 | $ | 19,578 | $ | 341 | 1.5 | % | |||||||||||||||
Gross margin(c) | 18.9 | % | 17.9 | % | 1.0 | % | 5.6 | % | |||||||||||||||
Adjusted gross profit(d) | $ | 22,436 | $ | 22,845 | $ | (409) | (1.8) | % | |||||||||||||||
Adjusted gross margin(c) | 21.3 | % | 20.9 | % | 0.4 | % | 1.9 | % | |||||||||||||||
EBITDA(d) | $ | (2,062) | $ | 34,571 | $ | (36,633) | (106.0) | % | |||||||||||||||
EBITDA margin(c) | (2.0) | % | 31.6 | % | (33.6) | % | (106.3) | % | |||||||||||||||
Adjusted EBITDA(d) | $ | 7,237 | $ | 7,660 | $ | (423) | (5.5) | % | |||||||||||||||
Adjusted EBITDA margin(c) | 6.9 | % | 7.0 | % | (0.1) | % | (1.4) | % | |||||||||||||||
______________________________
(a)UHG had seven and eight communities in closeout for the three months ended June 30, 2025 and 2024, respectively. These communities are not included in the count of “Active communities at end of period.”
(b)Average sales price of homes closed, excluding the impact of percentage of completion revenues and build to rent revenues.
(c)Calculated as a percentage of revenue.
(d)Adjusted gross profit, EBITDA and adjusted EBITDA are non-GAAP financial measures. For definitions of adjusted gross profit, EBITDA and adjusted EBITDA and a reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP, see “Non-GAAP Financial Measures.”
Revenues: Revenues for the three months ended June 30, 2025 were $105.5 million, a decrease of $3.9 million, or 3.6%, from $109.4 million for the three months ended June 30, 2024. The decrease in revenues was primarily attributable
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to a decrease in home closings of 10.1%, partially offset by an increase in average sales price (“ASP”) of production-built homes of 2.5%. Additionally, for the three months ended June 30, 2024 closings included thirty-six build to rent units with significantly lower ASPs, compared to no build to rent closings for the three months ended June 30, 2025. When factoring in these build to rent unit closings, total ASP increased 7.2% compared to the prior year period. The decline in the number of homes closed as compared to the three months ended June 30, 2024 was primarily due to a decrease of 13.4% in the GSH South Carolina segment, partially offset by increases of 100.0% and 12.5% in the Rosewood reporting segment and Other segment related to the Raleigh market, respectively.
The following table provides a summary of the Company’s revenues, home closings, and ASP in each of the reportable segments (revenues in thousands):
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Period over period change | |||||||||||||||||||||||||||||||||
| Revenues | Closings | ASP1 | Revenues | Closings | ASP1 | Revenues | Closings | ASP1 | |||||||||||||||||||||||||||
| GSH South Carolina | $ | 90,924 | 278 | $ | 328,144 | $ | 98,207 | 321 | $ | 321,060 | (7.4) | % | (13.4) | % | 2.2 | % | |||||||||||||||||||
| Rosewood | 10,797 | 16 | 674,813 | 6,085 | 8 | 798,571 | 77.4 | % | 100.0 | % | (15.5) | % | |||||||||||||||||||||||
Other2 | 3,785 | 9 | 420,556 | 5,128 | 8 | 641,000 | (26.2) | % | 12.5 | % | (34.4) | % | |||||||||||||||||||||||
| Total | $ | 105,506 | 303 | $ | 349,265 | $ | 109,420 | 337 | $ | 340,803 | (3.6) | % | (10.1) | % | 2.5 | % | |||||||||||||||||||
___________________
1 Average sales price of homes closed, excluding the impact of percentage of completion revenues and build to rent revenues.
2 Other consists of UHG’s homebuilding operations in Raleigh, NC.
Cost of sales and Gross profit: Cost of sales for the three months ended June 30, 2025 was $85.6 million, a decrease of $4.2 million, or 4.7%, from $89.8 million for the three months ended June 30, 2024. The decrease in Cost of sales was largely attributable to a decrease in home closings of 10.1% compared to the same period in 2024.
Gross profit for the three months ended June 30, 2025 was $19.9 million, an increase of $0.3 million, or 1.5%, from $19.6 million for the three months ended June 30, 2024. Gross margin for the three months ended June 30, 2025 was 18.9%, an increase of 1.0%, as compared 17.9% for the three months ended June 30, 2024. Gross margins improved in the second quarter of 2025, driven by closing a large number of homes featuring redesigned floor plans, direct construction cost savings as a result of the rebid initiative, and less non-recurring expenses compared to the same quarter in 2024.
Adjusted gross profit: Adjusted gross profit for the three months ended June 30, 2025 was $22.4 million, a decrease of $0.4 million, or 1.8%, as compared to $22.8 million for the three months ended June 30, 2024. Adjusted gross margin for the three months ended June 30, 2025 was 21.3%, an increase of 0.4%, as compared to 20.9% for the three months ended June 30, 2024. The increase in adjusted gross margin was attributable to the closings associated with redesigned floor plans, which generate stronger margins, and direct construction cost savings. Adjusted gross profit is a non-GAAP financial measure. For the definition of adjusted gross profit and a reconciliation to UHG’s most directly comparable financial measure calculated and presented in accordance with GAAP, see “Non-GAAP Financial Measures.”
Selling, general and administrative expense: Selling, general and administrative expense for the three months ended June 30, 2025 was $18.0 million, a decrease of $1.6 million, or 8.2%, from $19.6 million for the three months ended June 30, 2024. The decrease is primarily due to a $1.0 million decrease in commission expense due to less broker incentives and fewer closings and a $1.0 million reduction in severance expense related to the June 2024 reduction in force (“RIF”), partially offset by an increase of $0.2 million in ERP implementation costs.
Other expense, net: Total other expense, net for the three months ended June 30, 2025 was $2.6 million, a decrease of $1.0 million, from $3.6 million for the three months ended June 30, 2024. The decrease was primarily driven by a $1.2 million reduction in interest expense due to the Company’s refinance of corporate debt in December 2024.
Equity in net earnings from investment in joint venture: Equity in net earnings from investment in joint venture for the three months ended June 30, 2025 was $0.3 million, remaining consistent with the prior period.
Change in fair value of derivative liabilities: Change in fair value of derivative liabilities for the three months ended June 30, 2025 was a loss of $6.2 million as compared to a gain of $32.1 million for the three months ended June 30, 2024. Under ASC 815, derivative liabilities are marked to market each reporting period with changes recognized as gains or losses on the Condensed Consolidated Statements of Operations. The overall decrease is primarily attributable to changes in the fair value of the earnout shares, which fluctuates each period due to changes in the Company's stock price.
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Income before taxes: The following table provides a summary of the Company’s income (loss) before taxes by reportable segment (in thousands, except percentage change):
| Three Months Ended June 30, | Period over period | ||||||||||||||||||||||
| 2025 | 2024 | Change ($) | Change (%) | ||||||||||||||||||||
| GSH South Carolina | $ | 5,017 | $ | 6,615 | $ | (1,598) | (24.2) | % | |||||||||||||||
| Rosewood | (173) | (549) | 376 | (68.5) | % | ||||||||||||||||||
Other1 | (12) | (1,443) | 1,431 | (99.2) | % | ||||||||||||||||||
| Segment total | $ | 4,832 | $ | 4,623 | $ | 209 | 4.5 | % | |||||||||||||||
Corporate2 | (5,546) | (8,241) | 2,695 | (32.7) | % | ||||||||||||||||||
| Equity in net earnings from investment in joint venture | 275 | 339 | (64) | (18.9) | % | ||||||||||||||||||
| Change in fair value of derivative liabilities | (6,171) | 32,055 | (38,226) | (119.3) | % | ||||||||||||||||||
| Consolidated (loss) income before taxes | $ | (6,610) | $ | 28,776 | $ | (35,386) | (123.0) | % | |||||||||||||||
___________________
1 Other consists of UHG’s homebuilding operations in Raleigh, NC.
2 Corporate items included within consolidated income before taxes includes unallocated corporate overhead, stock-based compensation, corporate interest income and expense, and other corporate level items not allocated to the segments.
Income before taxes for the three months ended June 30, 2025 decreased $35.4 million, or 122.9%, from the three months ended June 30, 2024. The decrease was primarily due to a decrease in the change in fair value of derivative liabilities of $38.3 million, partially offset by an decrease in other expense, net of $1.0 million and a decrease in selling, general, and administrative expense of $1.6 million.
GSH South Carolina: The $1.6 million decrease in income before taxes for the three months ended June 30, 2025 compared to the same period in the prior year was primarily due to a decrease in closings of 13.4%, which resulted in lower gross profit, higher operating costs as a percentage of revenue and higher interest costs as a percentage of revenue, partially offset by an increase in gross margin.
Rosewood: The $0.4 million decrease in loss before taxes for the three months ended June 30, 2025 compared to the same period in the prior year was primarily attributable to doubling the number of closings from 8 to 16 coupled with a 5.4% increase in gross margin, partially offset by an increase in commission expense due to additional closings and higher interest costs.
Other: The $1.4 million decrease in loss before taxes for Raleigh for the three months ended June 30, 2025 compared to the same period in the prior year was primarily due to a reduction in severance expense in the prior period of $1.1 million and a decrease in selling, general, and administrative expense of $0.4 million.
Income tax (benefit) expense: Income tax (benefit) expense for the three months ended June 30, 2025 was a benefit of $0.3 million compared to an expense of $0.1 million for the three months ended June 30, 2024. The Company estimates the effective tax rate expected to be applicable for the full fiscal year and this rate is applied to the results for the year-to-date period, and then adjusted for any discrete period items. The Company's estimated annual effective tax rate for the June 30, 2025 is 33.1% as compared to 15.3% as of June 30, 2024.
Net new orders: Net new orders for a period is gross sales of homes less any customer cancellations received during the same period. Sales are recognized when a customer signs a contract and UHG approves such contract. Net new orders for the three months ended June 30, 2025 were 304 units, a decrease of 19 units, or 5.9%, from 323 units for the three months ended June 30, 2024.
Cancellation rate: The cancellation rate is the total cancellations during the period divided by the total number of new sales for homes during the period. The cancellation rate for the three months ended June 30, 2025 was 11.4%, a decrease of 1.3%, from 12.7% for the three months ended June 30, 2024.
Backlog: Backlog consists of homes sold but not yet closed with customers. Backlog represents the number of homes in backlog from the previous period plus sales of homes during the current period less cancellations of existing sales contracts and home closings during the current period. A portion of the homes in backlog will not result in homes delivered due to cancellations.
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Backlog as of June 30, 2025 was 202 units, a decrease of 46 units, or 18.5%, from 248 units as of June 30, 2024. The following table provides a summary of the Company’s backlog inventory, backlog value, and average sales price of backlog inventory in each of the reportable segments (backlog value in thousands):
As of June 30, 2025 | As of June 30, 2024 | Period over period change | |||||||||||||||||||||||||||||||||
| Backlog inventory | Backlog value1 | Backlog ASP2 | Backlog inventory | Backlog value1 | Backlog ASP2 | Backlog inventory | Backlog value1 | Backlog ASP2 | |||||||||||||||||||||||||||
| GSH South Carolina | 184 | $ | 64,471 | $ | 350,386 | 232 | $ | 75,932 | $ | 327,293 | (20.7) | % | (15.1) | % | 7.1 | % | |||||||||||||||||||
| Rosewood | 14 | 8,660 | 618,571 | 11 | 7,874 | 715,818 | 27.3 | % | 10.0 | % | (13.6) | % | |||||||||||||||||||||||
Other3 | 4 | 1,742 | 435,500 | 5 | 1,879 | 375,800 | (20.0) | % | (7.3) | % | 15.9 | % | |||||||||||||||||||||||
| Total | 202 | $ | 74,873 | $ | 370,658 | 248 | $ | 85,685 | $ | 345,504 | (18.5) | % | (12.6) | % | 7.3 | % | |||||||||||||||||||
1 Backlog value is calculated as the total contract value of homes in backlog.
2 ASP of backlog is calculated as backlog value divided by backlog inventory.
3 Other consists of UHG’s homebuilding operations in Raleigh, NC.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
The following table presents summary results of operations for the periods indicated:
| Six Months Ended June 30, | |||||||||||||||||||||||
| 2025 | 2024 | Amount Change | % Change | ||||||||||||||||||||
| Statements of Operations | |||||||||||||||||||||||
| Revenue, net of sales discounts | $ | 192,507 | $ | 210,258 | $ | (17,751) | (8.4) | % | |||||||||||||||
| Cost of sales | 158,460 | 174,586 | (16,126) | (9.2) | % | ||||||||||||||||||
| Selling, general and administrative expense | 34,176 | 36,668 | (2,492) | (6.8) | % | ||||||||||||||||||
| Other expense, net | (5,127) | (5,545) | 418 | (7.3) | % | ||||||||||||||||||
| Equity in net earnings from investment in joint venture | 497 | 657 | (160) | (24.4) | % | ||||||||||||||||||
| Change in fair value of derivative liabilities | 15,038 | 58,435 | (43,397) | (74.3) | % | ||||||||||||||||||
| Income before taxes | $ | 10,279 | $ | 52,551 | $ | (42,272) | (80.4) | % | |||||||||||||||
| Income tax benefit | (1,560) | (1,027) | (533) | 51.9 | % | ||||||||||||||||||
| Net income | $ | 11,839 | $ | 53,578 | $ | (41,739) | (78.0) | % | |||||||||||||||
| Other Financial and Operating Data: | |||||||||||||||||||||||
Active communities at end of period(a) | 53 | 59 | (6) | (10.2) | % | ||||||||||||||||||
| Home closings | 555 | 648 | (93) | (14.4) | % | ||||||||||||||||||
Average sales price of homes closed(b) | $ | 347,231 | $ | 337,994 | $ | 9,237 | 2.7 | % | |||||||||||||||
| Net new orders | 600 | 707 | (107) | (15.1) | % | ||||||||||||||||||
| Cancellation rate | 12.0 | % | 11.1 | % | 0.9 | % | 8.1 | % | |||||||||||||||
| Backlog | 202 | 248 | (46) | (18.5) | % | ||||||||||||||||||
| Gross profit | $ | 34,047 | $ | 35,672 | $ | (1,625) | (4.6) | % | |||||||||||||||
Gross margin(c) | 17.7 | % | 17.0 | % | 0.7 | % | 4.1 | % | |||||||||||||||
Adjusted gross profit(d) | $ | 38,801 | $ | 43,459 | $ | (4,658) | (10.7) | % | |||||||||||||||
Adjusted gross margin(c) | 20.2 | % | 20.7 | % | (0.5) | % | (2.4) | % | |||||||||||||||
EBITDA(d) | $ | 19,327 | $ | 64,493 | $ | (45,166) | (70.0) | % | |||||||||||||||
EBITDA margin(c) | 10.0 | % | 30.7 | % | (20.7) | % | (67.4) | % | |||||||||||||||
Adjusted EBITDA(d) | $ | 10,110 | $ | 14,944 | $ | (4,834) | (32.3) | % | |||||||||||||||
Adjusted EBITDA margin(c) | 5.3 | % | 7.1 | % | (1.8) | % | (25.4) | % | |||||||||||||||
______________________________
(a)UHG had seven and eight communities in closeout for the six months ended June 30, 2025 and 2024, respectively. These communities are not included in the count of “Active communities at end of period.”
(b)Average sales price of homes closed, excluding the impact of percentage of completion revenues and build to rent revenues.
(c)Calculated as a percentage of revenue.
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(d)Adjusted gross profit, EBITDA and adjusted EBITDA are non-GAAP financial measures. For definitions of adjusted gross profit, EBITDA and adjusted EBITDA and a reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP, see “ UHG’s Management’s Discussion and Analysis of Financial Condition and Result of Operations—Non-GAAP Financial Measures.”
Revenues: Revenues for the six months ended June 30, 2025 were $192.5 million, a decrease of $17.8 million, or 8.5%, from $210.3 million for the six months ended June 30, 2024. The decrease in revenues was primarily attributable to the decrease in production-built home closings, partially offset by an increase in average sales price of production-built homes. Additionally, for the six months ended June 30, 2024 closings included 60 build to rent units with significantly lower ASPs, compared to no build to rent closings for the six months ended June 30, 2025. When factoring in these build to rent unit closings, total ASP increased 6.9% compared to the prior year period. The decline in the number of homes closed as compared to the six months ended June 30, 2024 reflected a decrease of 18.2% in the GSH South Carolina segment, partially offset by an increase of 31.8% and 100.0% in the Rosewood reporting segment and Other segment related to the Raleigh market, respectively.
The following table provides a summary of the Company’s revenues, home closings, and ASP in each of the reportable segments (revenues in thousands):
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Period over period change | |||||||||||||||||||||||||||||||||
| Revenues | Closings | ASP1 | Revenues | Closings | ASP1 | Revenues | Closings | ASP1 | |||||||||||||||||||||||||||
| GSH South Carolina | $ | 162,957 | 502 | $ | 324,788 | $ | 187,965 | 614 | $ | 319,179 | (13.3) | % | (18.2) | % | 1.8 | % | |||||||||||||||||||
| Rosewood | 18,459 | 29 | 650,321 | 14,189 | 22 | 644,524 | 30.1 | % | 31.8 | % | 0.9 | % | |||||||||||||||||||||||
Other2 | 11,091 | 24 | 462,125 | 8,104 | 12 | 667,000 | 36.9 | % | 100.0 | % | (30.7) | % | |||||||||||||||||||||||
| Total | $ | 192,507 | 555 | $ | 347,231 | $ | 210,258 | 648 | $ | 337,994 | (8.4) | % | (14.4) | % | 2.7 | % | |||||||||||||||||||
___________________
1 Average sales price of homes closed, excluding the impact of percentage of completion revenues and build to rent revenues.
2 Other consists of UHG’s homebuilding operations in Raleigh, NC.
Cost of Sales and Gross Profit: Cost of sales for the six months ended June 30, 2025 was $158.5 million, a decrease of $16.1 million, or 9.2%, from $174.6 million for the six months ended June 30, 2024. The decrease in Cost of sales was largely attributable to a decrease in home closings of 14.4% compared to the same period in 2024.
Gross profit for the six months ended June 30, 2025 was $34.0 million, a decrease of $1.6 million, or 4.8%, from $35.7 million for the six months ended June 30, 2024. Gross margin for the six months ended June 30, 2025 was 17.7%, an increase of 0.7%, as compared 17.0% for the six months ended June 30, 2024. Gross margin increased primarily due to a large number of home closings featuring redesigned floor plans, which carry higher margins, coupled with lower interest expense as a percentage of revenue within cost of sales, partially offset by higher incentive costs.
Adjusted Gross Profit: Adjusted gross profit for the six months ended June 30, 2025 was $38.8 million, a decrease of $4.7 million, or 10.8%, as compared to $43.5 million for the six months ended June 30, 2024. Adjusted gross margin for the six months ended June 30, 2025 was 20.2%, a decrease of 0.5%, as compared to 20.7% for the six months ended June 30, 2024. Adjusted gross margin declined, primarily due to increased incentive costs, partially offset by home closings with redesigned floor plans in 2025, which generate stronger margins. Adjusted gross profit is a non-GAAP financial measure. For the definition of adjusted gross profit and a reconciliation to UHG’s most directly comparable financial measure calculated and presented in accordance with GAAP, see “Non-GAAP Financial Measures.”
Selling, General and Administrative Expense: Selling, general and administrative expense for the six months ended June 30, 2025 was $34.2 million, a decrease of $2.5 million, or 6.8%, from $36.7 million for the six months ended June 30, 2024. The decrease in selling, general and administrative expense was primarily attributable to a $2.3 million decrease in commission expense due to less broker incentives and fewer closings and a $1.1 million reduction in severance expense related to the June 2024 RIF, partially offset by a decrease in the change in fair value of contingent consideration related to the acquisition of Rosewood Communities, Inc. in 2023 of $0.9 million.
Other Expense, Net: Total other expense, net for the six months ended June 30, 2025 was $5.1 million, a decrease of $0.4 million, or 7.3%, from $5.5 million for the six months ended June 30, 2024. The decrease was primarily driven by a $0.9 million reduction in interest expense due to the refinance of the Company’s corporate debt, partially offset by a decrease in investment income.
Equity in Net Earnings from Investment in Joint Venture: Equity in net earnings from investment in joint venture for the six months ended June 30, 2025 was $0.5 million, a decrease of $0.2 million, from $0.7 million for the six months ended June 30, 2024.
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Change in Fair Value of Derivative Liabilities: Change in fair value of derivative liabilities for the six months ended June 30, 2025 was a gain of $15.0 million as compared to a gain of $58.4 million for the six months ended June 30, 2024. Under ASC 815, derivative liabilities are marked to market each reporting period with changes recognized on the Condensed Consolidated Statements of Operations. The overall increase is primarily attributable to changes in the fair value of the earnout shares, which fluctuates each period due to changes in the Company's stock price.
Income Tax Benefit: Income tax benefit for the six months ended June 30, 2025 was $1.6 million as compared to $1.0 million for the six months ended June 30, 2024. The Company estimates the effective tax rate expected to be applicable for the full fiscal year and this rate is applied to the results for the year-to-date period, and then adjusted for any discrete period items. The Company's estimated annual effective tax rate for the June 30, 2025 is 33.1% as compared to 15.3% as of June 30, 2024.
Income before taxes: The following table provides a summary of the Company’s income (loss) before taxes by reportable segment (in thousands, except percentage change):
| Six Months Ended June 30, | Period over period | ||||||||||||||||||||||
| 2025 | 2024 | Change ($) | Change (%) | ||||||||||||||||||||
| GSH South Carolina | $ | 6,840 | $ | 13,366 | $ | (6,526) | (48.8) | % | |||||||||||||||
| Rosewood | (547) | 19 | (566) | (2978.9) | % | ||||||||||||||||||
Other1 | (146) | (1,871) | 1,725 | (92.2) | % | ||||||||||||||||||
| Segment total | $ | 6,147 | $ | 11,514 | $ | (5,367) | (46.6) | % | |||||||||||||||
Corporate2 | (11,403) | (18,055) | 6,652 | (36.8) | % | ||||||||||||||||||
| Equity in net earnings from investment in joint venture | 497 | 657 | (160) | (24.4) | % | ||||||||||||||||||
| Change in fair value of derivative liabilities | 15,038 | 58,435 | (43,397) | (74.3) | % | ||||||||||||||||||
| Consolidated income before taxes | $ | 10,279 | $ | 52,551 | $ | (42,272) | (80.4) | % | |||||||||||||||
___________________
1 Other consists of UHG’s homebuilding operations in Raleigh, NC.
2 Corporate items included within consolidated income before taxes includes unallocated corporate overhead, stock-based compensation, corporate interest income and expense, and other corporate level items not allocated to the segments.
Income before taxes for the six months ended June 30, 2025 decreased $42.3 million, or 80.4%, from the six months ended June 30, 2024. The decrease was primarily due to a decrease in change in fair value of derivative liabilities of $43.4 million and a decrease in gross profit of $1.6 million, partially offset by a decrease in selling, general, and administrative expense of $2.5 million.
GSH South Carolina: The $6.5 million decrease in income before taxes for the six months ended June 30, 2025 compared to the same period in the prior year was primarily due to a decrease in the number of homes closed of 18.2%, which resulted in lower gross profit and higher operating costs as a percentage of revenue coupled with increased interest expense.
Rosewood: The $0.6 million decrease in pre-tax profitability for the six months ended June 30, 2025 compared to the same period in the prior year was primarily due to a decrease in the change in fair value of contingent consideration related to the acquisition of Rosewood Communities, Inc. in 2023 of $0.9 million, partially offset by an increase in home closings of 30.1%.
Other: The $1.7 million decrease in loss before taxes for Raleigh for the six months ended June 30, 2025 compared to the same period in the prior year was primarily due to a decrease in severance expense of $1.1 million and a decrease in selling, general, and administrative expense of $0.5 million due to reductions in salaries and wages and advertising and marketing costs, partially offset by increased commissions as a result of increased closings.
Net New Orders: Net new orders for the six months ended June 30, 2025 was 600 units, a decrease of 107 units, or 15.1%, from 707 units for the six months ended June 30, 2024.
Cancellation Rate: The cancellation rate for the six months ended June 30, 2025 was 12.0%, an increase of 0.9%, from 11.1% for the six months ended June 30, 2024.
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Non-GAAP Financial Measures
Adjusted Gross Profit
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, severance expense in cost of sales, and non-recurring remediation costs. 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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue, net of sales discounts | $ | 105,506 | $ | 109,420 | $ | 192,507 | $ | 210,258 | |||||||||||||||
| Cost of sales | 85,587 | 89,842 | 158,460 | 174,586 | |||||||||||||||||||
| Gross profit | $ | 19,919 | $ | 19,578 | $ | 34,047 | $ | 35,672 | |||||||||||||||
| Interest expense in cost of sales | 1,632 | 1,659 | 3,133 | 5,172 | |||||||||||||||||||
Amortization in homebuilding cost of sales(a) | 882 | 913 | 1,563 | 1,861 | |||||||||||||||||||
| Abandoned project costs | 3 | 320 | 58 | 320 | |||||||||||||||||||
| Severance expense in cost of sales | — | 325 | — | 325 | |||||||||||||||||||
| Non-recurring remediation costs | — | 50 | — | 109 | |||||||||||||||||||
| Adjusted gross profit | $ | 22,436 | $ | 22,845 | $ | 38,801 | $ | 43,459 | |||||||||||||||
Gross margin(b) | 18.9 | % | 17.9 | % | 17.7 | % | 17.0 | % | |||||||||||||||
Adjusted gross margin(b) | 21.3 | % | 20.9 | % | 20.2 | % | 20.7 | % | |||||||||||||||
______________________________
(a) Represents expense recognized resulting from purchase accounting adjustments.
(b) Calculated as a percentage of revenue.
EBITDA and Adjusted EBITDA
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, transaction cost expense, amortization included in homebuilding cost of sales, severance expense, abandoned project costs, change in fair value of derivative liabilities, non-recurring remediation costs, and loss on extinguishment of Convertible Notes. 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).
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| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net (loss) income | $ | (6,341) | $ | 28,640 | $ | 11,839 | $ | 53,578 | |||||||||||||||
| Interest expense in cost of sales | 1,632 | 1,659 | 3,133 | 5,172 | |||||||||||||||||||
| Interest expense in other expense, net | 2,383 | 3,578 | 4,844 | 5,720 | |||||||||||||||||||
| Depreciation and amortization | 515 | 476 | 1,007 | 926 | |||||||||||||||||||
| Taxes | (251) | 218 | (1,496) | (903) | |||||||||||||||||||
| EBITDA | $ | (2,062) | $ | 34,571 | $ | 19,327 | $ | 64,493 | |||||||||||||||
| Stock-based compensation expense | 1,411 | 1,840 | 3,368 | 3,350 | |||||||||||||||||||
| Transaction cost expense | 707 | 517 | 707 | 1,742 | |||||||||||||||||||
Amortization in homebuilding cost of sales(b) | 882 | 913 | 1,563 | 1,861 | |||||||||||||||||||
| Severance expense | 125 | 1,504 | 125 | 1,504 | |||||||||||||||||||
| Abandoned project costs | 3 | 320 | 58 | 320 | |||||||||||||||||||
| Change in fair value of derivative liabilities | 6,171 | (32,055) | (15,038) | (58,435) | |||||||||||||||||||
| Non-recurring remediation costs | — | 50 | — | 109 | |||||||||||||||||||
| Adjusted EBITDA | $ | 7,237 | $ | 7,660 | $ | 10,110 | $ | 14,944 | |||||||||||||||
EBITDA margin(a) | (2.0) | % | 31.6 | % | 10.0 | % | 30.7 | % | |||||||||||||||
Adjusted EBITDA margin(a) | 6.9 | % | 7.0 | % | 5.3 | % | 7.1 | % | |||||||||||||||
______________________________
(a) Calculated as a percentage of revenue
(b) Represents expense recognized resulting from purchase accounting adjustment
Liquidity and Capital Resources
Overview
UHG funds its operations from its current cash holdings and cash flows generated by operating activities, as well as borrowings under the revolving credit facility (“Syndicated Line”), as further described below. As of June 30, 2025, UHG had approximately $36.5 million in cash and cash equivalents, an increase of $13.9 million, from $22.6 million as of December 31, 2024. As of June 30, 2025 and December 31, 2024, UHG had approximately $58.7 million and $96.4 million, respectively, in unused committed capacity, calculated in accordance with the Syndicated Line.
UHG believes that its current cash holdings including cash generated from continuing operations and cash available under the Syndicated Line will be sufficient to satisfy its short term and long term cash requirements for working capital to support its daily operations and meet current commitments under its contractual obligations.
Cash flows used in and generated by UHG’s projects can differ materially in timing from its results of operations, as these depend upon the stage in the life cycle of each project. UHG generally relies upon its syndicated line of credit to fund building costs, and timing of draws is such that UHG may from time to time be in receipt of funds from the Syndicated Line in advance of such funds being utilized. UHG is generally required to make significant cash outlays at the beginning of a project related to lot purchases, permitting, and construction of homes, as well as ongoing property taxes. These costs are capitalized within UHG’s real estate inventory and are not recognized in its operating income until a home sale closes. As a result, UHG incurs significant cash outflows prior to the recognition of associated earnings. In later stages of projects, cash inflows could exceed UHG’s results of operations, as the cash outflows associated with land purchase and home construction and other expenses were previously incurred.
The Company’s strategy is to acquire developed lots through third party and related party land developers and land bank partners pursuant to lot purchase agreements and land banking arrangements. When entering into these contracts, the Company agrees to purchase finished lots at predetermined prices, time frames, and quantities that match expected selling pace in the community. Most lot purchase agreements require the Company to pay a nonrefundable cash deposit of approximately 15% - 20% of the agreed-upon fixed purchase price of the developed lots. As of June 30, 2025, the Company had lot deposits of $44.9 million related to option contracts with an aggregate remaining purchase price of $340.9 million. Refer to Note 2 - Variable interest entities of the Notes to the Condensed Consolidated Financial Statements and “Off-Balance Sheet Arrangements” for additional information.
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Capital Resources
Syndicated line of credit
The Syndicated Line provides for an aggregate commitment of up to $220.0 million, subject to borrowing base limitations, of which the Company had outstanding borrowings of $64.2 million as of June 30, 2025. The Syndicated Line also includes a $2.0 million letter of credit sub-facility under the same terms and conditions. The Company had $58.7 million of availability under the Syndicated Line, based on its borrowing base of $124.8 million. The borrowing base up to the aggregate commitment generates availability in accordance with the value of the collateral at a given point. The availability under the Syndicated Line, which impacts total liquidity, is reduced by outstanding letters of credit that are not fully cash collateralized. As of June 30, 2025, the Syndicated Line had a weighted average interest rate of 7.61% and will mature on August 2, 2027 except with respect to two non-extending lenders which represent $73.3 million of the committed amount and will mature August 10, 2026.
The Syndicated Line contains various customary representations, warranties by the Company and covenants that are described in Note 6 - Debt of the Notes to the Condensed Consolidated Financial Statements contained in this report. As of June 30, 2025, the Company was in compliance with all covenants set forth in the Syndicated Line.
Term loan
In 2024, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, GSH, Kennedy Lewis Agency Partners, LLC, as administrative agent, and the lenders party thereto (the “Lenders”) pursuant to which the Lenders thereunder funded a $70.0 million subordinated term loan, the proceeds of which were used to redeem the outstanding convertible promissory notes from the Selling Stockholders.
The term loan has an outstanding balance of $67.3 million as of June 30, 2025, and matures on the earlier of December 11, 2030, the maturity date under the Company’s Second Amended and Restated Credit Agreement, or the acceleration of indebtedness under the Syndicated Line. The weighted average interest rate of the loan was 11.59% as of June 30, 2025. Refer to Note 6 - Debt of the Notes to the Condensed Consolidated Financial Statements contained in this report for additional information.
The Credit Agreement contains various customary representations, warranties by the Company and covenants that are described in Note 6 - Debt of the Notes to the Condensed Consolidated Financial Statements contained in this report. As of June 30, 2025, the Company was in compliance with all covenants set forth in the Credit Agreement.
Leases
The Company leases several office spaces in South Carolina under operating lease agreements with related parties, and one office space in North Carolina with a third party. The office leases have a remaining lease term of up to four years, some of which include options to extend on a month-to-month basis, and some of which include options to terminate the lease. These options are excluded from the calculation of the ROU asset and lease liability until it is reasonably certain that the option will be exercised. As of June 30, 2025, the future minimum lease payments required under these leases totaled $2.9 million, with $1.2 million payable within the next twelve months. Further information regarding Company’s leases is provided in Note 9 - Commitments and contingencies of the Notes to the Condensed Consolidated Financial Statements.
Cash Flows
The following table summarizes UHG’s cash flows for the periods indicated (in thousands):
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net cash flows provided by (used in) operating activities | $ | 2,780 | $ | (19,143) | |||||||
| Net cash flows used in investing activities | (176) | (12,733) | |||||||||
| Net cash flows provided by financing activities | 9,937 | 120 | |||||||||
Operating activities
Net cash flows provided by operating activities during the six months ended June 30, 2025 was $2.8 million, as compared to net cash flows used in operating activities of $19.1 million for the six months ended June 30, 2024. The difference in cash flows period over period is an increase of $21.9 million. This change is primarily attributable to an increase in cash provided by accounts payable of $20.2 million, and an increase in cash provided by net income adjusted
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for non-cash transactions of $2.5 million, partially offset by an increase in cash used in prepaid expenses and other assets of $1.1 million.
Investing activities
Net cash used in investing activities for the six months ended June 30, 2025 was primarily attributable to purchases of property and equipment of $0.3 million. Net cash used in investing activities for the six months ended June 30, 2024 was attributable to cash paid to acquire the homebuilding assets of Creekside Custom Homes of $12.7 million.
Financing activities
Net cash provided by financing activities for the six months ended June 30, 2025 was $9.9 million compared to $0.1 million for the six months ended June 30, 2024. The difference in cash flows period over period is $9.8 million. During the six months ended June 30, 2025 cash flows provided by financing activities was primarily attributable to proceeds from the Syndicated Line of $41.0 million, partially offset by repayments of the Syndicated Line and land banking arrangements of $31.0 million. During the six months ended June 30, 2024 cash flows provided by financing activities was primarily attributable to proceeds from the Syndicated Line and land banking arrangements, net of debt issuance costs, of $56.5 million, partially offset by a repayment of homebuilding debt of $56.4 million.
Critical Accounting Policies and Estimates
There have been no significant changes to the Company’s critical accounting policies and estimates during the six months ended June 30, 2025 as compared to those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Off-Balance Sheet Arrangements
Land-light acquisition strategy
The Company’s land-light strategy is accomplished in two ways - lot option contracts with third party and related party land developers and land bank option contracts. These option contracts grant the right, but not the obligation, to purchase land or lots at a future point in time at predetermined prices from various land developers and land bank partners. The Company has the right to cancel or terminate the option contracts at any time for any reason. The legal obligation and economic loss resulting from a cancellation or termination is limited to the amount of the deposits paid pursuant to such option contracts as well as capitalized pre-acquisition costs such as lot option fees paid to the land bank partner. In certain circumstances, the Company may have a completion obligation under development agreements with land bankers where the Company may be at-risk for certain cost overruns.
UHG’s pipeline as of June 30, 2025 consists of approximately 7,300 lots, which includes lots that UHG may acquire from third party lot option contracts or land bank option contracts, in addition to lots that are owned or controlled by related parties, and which UHG expects to obtain the contractual right to acquire. The risk of loss pertaining to the aggregate purchase price of contractual commitments resulting from non-performance under finished lot purchase agreements is limited to approximately $44.9 million in lot deposits and $8.5 million of capitalized pre-acquisition costs as of June 30, 2025.
Surety bonds and letters of credit
During the ordinary course of business, the Company enters into surety bonds and letters of credit arrangements with local municipalities, government agencies, and land developers. These arrangements relate to certain performance-related obligations and serve as security for certain land option agreements.
As of June 30, 2025, the Company had outstanding surety bonds and letters of credit totaling $9.2 million and $1.3 million, respectively. The Company believes it will fulfill its obligations under the related contracts and does not anticipate any material losses under these surety bonds or letters of credit.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
UHG’s operations are interest rate sensitive. As overall housing demand is adversely affected by increases in interest rates, a significant increase in interest rates may negatively affect the ability of homebuyers to secure adequate financing. Higher interest rates could adversely affect UHG’s revenues, gross profits and net income.
UHG is subject to market risk on its debt instruments primarily due to fluctuations in interest rates. The Company currently utilizes variable-rate debt. For variable-rate debt, changes in interest rates generally do not impact the fair value
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of the debt instrument, but may affect the Company’s future earnings and cash flows. UHG has not entered into, nor does it intend to enter into in the future, derivative financial instruments for trading or speculative purposes or to hedge against interest rate fluctuations.
The interest rate on the borrowings under the syndicated line of credit is based upon adjusted daily simple SOFR plus an applicable margin ranging between 275 basis points and 350 basis points, based upon UHG’s leverage ratio. In addition, the interest rate on the borrowings under the term loan is based upon adjusted simple SOFR plus an applicable margin ranging between 675 basis points and 775 basis points, based upon UHG’s leverage ratio. Therefore, UHG is exposed to market risks related to fluctuations in interest rates on its outstanding debt under the syndicated line of credit and the term loan. As of June 30, 2025, UHG had $64.2 million and $67.3 million outstanding under the syndicated line of credit and the term loan, respectively, which carried weighted average interest rates of 7.61% and 11.59%, respectively. A 100 basis point increase in overall interest rates would negatively affect the Company’s net income by approximately $1.3 million.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
UHG’s management, including the Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2025. Based on this evaluation, management has concluded that the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934 are recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to Note 9 - Commitments and contingencies, incorporated herein by reference, to the Company’s Condensed Consolidated Financial Statements included elsewhere in this report.
Item 1A. Risk Factors
Our operations and financial results are subject to various risks and uncertainties, including the factors discussed in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024, which could adversely affect our business, financial conditions and future results. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. Other than the risk factors set forth below, there have been no material changes from the risk factors discussed in our most recent Form 10-K.
The homebuilding industry is cyclical and affected by changes in general economic, real estate or other conditions that could adversely affect UHG’s business or financial results.
The residential homebuilding industry is highly cyclical and can be significantly affected by changes in local and general economic conditions that are outside of UHG’s control, including changes in:
•the availability of construction and permanent mortgages;
•the supply of developable land in markets in which UHG operates;
•the supply of building materials and appliances;
•consumer confidence, income and spending generally and the confidence, income and spending of potential homebuyers in particular;
•levels of employment, job and personal income growth, and household debt-to-income levels;
•the availability and costs of financing for homebuyers;
•private and federal mortgage financing programs and federal, state, and local regulation of lending practices related to the purchase of homes;
•short- and long-term interest rates;
•federal and state income tax provisions, including provisions for the deduction of mortgage interest payments;
•real estate taxes;
•inflation;
•the ability of existing homeowners to sell their existing homes at prices that are acceptable to them;
•housing demand from population growth and other demographic changes (including immigration levels and trends in urban and suburban migration);
•the supply of new or existing homes and other housing alternatives to new homes, such as apartments, foreclosed homes, homes held for sale by investors, and other existing residential and rental property;
•inclement weather, natural disasters, other calamities and other environmental conditions that can impact buyer traffic, delay the delivery of UHG’s homes, and/or increase its costs;
•demographic trends; and
•U.S. and global financial system and credit markets, including stock market and credit market volatility.
Adverse changes in these general and local economic conditions or a downturn in the broader economy would have a negative impact on UHG’s business and financial results. Changes in these economic conditions may affect some of UHG’s regions or markets more than others. If adverse conditions affect the larger markets that UHG serves, they could have a disproportionately greater impact on UHG than on other homebuilding companies. In addition, an important segment of UHG’s customer base consists of first-time and second-time move-up buyers, who often purchase homes subject to contingencies related to the sale of their existing homes, and therefore will be affected by downturn in the resale market. Further, declines in consumer confidence and spending could negatively impact new home demand. To counter potential decreases in demand, UHG has implemented various sales incentives, primarily in the form of buyer financing incentives such as mortgage rate buy downs, mortgage forward commitments, or cash incentives applied against closing costs. Use of these and other incentives could negatively impact UHG’s margins. Further, UHG also competes with the resale, or “previously owned,” home market. The difficulties facing these buyers in selling their homes during periods of economic downturn may adversely affect UHG’s sales, and moreover, during such periods UHG may need to reduce its sale prices and offer greater incentives to buyers to compete for sales, which may reduce its margins.
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In the past, the federal government’s fiscal and trade policies and economic stimulus actions have created uncertainty in the financial markets and caused volatility in interest rates, which impacted business and consumer behavior, particularly in the real estate industry. Monetary policy actions affecting interest rates or fiscal policy actions and new legislation related to taxation, spending levels or borrowing limits, along with the related political debates, conflicts and compromises associated with such actions, may negatively impact the financial markets and consumer confidence. Such events could hurt the U.S. economy and the housing market and, in turn, could adversely affect the operating results of UHG’s businesses.
Weather conditions and natural disasters, such as hurricanes, tornadoes, floods, earthquakes, and heavy or prolonged precipitation, can harm UHG’s business. The occurrence of a weather event can decrease buyer traffic in impacted neighborhoods, particularly if the event or its impacts continue for a sustained period of time, as seen with abnormal snow events in certain of UHG’s South Carolina markets in early 2025. Weather conditions and events can also delay UHG’s home construction and home closings, adversely affect the cost or availability of materials or labor or damage homes under construction. The climate and geology of the states in which UHG operates have experienced recent natural disasters and present increased risks of adverse weather or natural disasters.
Any of the foregoing adverse changes in general economic, real estate or other conditions may cause potential customers to be less willing or able to buy UHG’s homes. In the future, UHG’s pricing and product strategies may also be limited by market conditions. UHG may be unable to change the mix of its home offerings, reduce the costs of the homes it builds, offer homes at lower prices or satisfactorily address changing market conditions in other ways without adversely affecting its profits and returns. In addition, cancellations of home sales contracts in backlog may increase if homebuyers do not honor their contracts due to any of the factors discussed above.
Changes in U.S. trade policies and retaliatory responses from other countries may significantly increase the costs or limit supplies of building materials and products used in UHG’s homes, and UHG may not be able to raise home prices sufficiently to offset increased costs.
The state of relationships between other countries and the U.S. with respect to trade policies, taxes, government relations and tariffs may impact UHG’s business. The federal government has in the past imposed new or increased tariffs or duties on certain imported materials and goods that are used in connection with the construction and delivery of UHG’s homes, including steel, aluminum, lumber, and components of appliances and fixtures, raising UHG’s costs for these items (or products made with them), and resulting in foreign governments responding by imposing or increasing tariffs, duties and/or trade restrictions on U.S. goods. In early 2025, the current U.S. administration implemented tariffs on many countries and territories, a number of which were subsequently paused in part. It can be difficult to predict whether and to what extent these tariffs may become effective again. Significant tariffs or other restrictions placed on raw materials that UHG uses in its homebuilding operation, such as lumber or steel, could cause the cost of home construction to increase, and UHG may not be able to pass these increased costs along to homebuyers, which could adversely impact the number of homes sold by UHG and UHG’s margins. Trading conflicts could also cause disruptions or shortages in UHG’s supply chains and/or negatively impact the U.S., regional or local economies, and, individually or in the aggregate, materially and adversely affect UHG’s business, margins, and operating results.
The exploration and pursuit of strategic alternatives may not be successful.
On May 19, 2025, UHG announced that the Board of Directors initiated a process to explore strategic alternatives to maximize shareholder value. The Company’s exploration of strategic alternatives, including a sale, merger, or similar transaction, may not result in the identification or consummation of any transaction. In addition, the process of exploring strategic alternatives may be disruptive to UHG’s operations and employee base, and the Company may incur substantial expenses associated with identifying and evaluating potential strategic alternatives. Any potential transaction and the related valuation would be dependent upon a number of factors that may be beyond the Company’s control, including, among other factors, market conditions and industry trends. Further, speculation regarding any developments related to the strategic alternatives process could cause UHG’s stock price to fluctuate significantly.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a)During the quarter ended June 30, 2025, there were no unregistered sales of the Company’s securities that were not reported in a Current Report on Form 8-K.
(b)None.
(c)None.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a)None.
(b)None.
(c)None
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Item 6. Exhibits
The exhibits required to be filed with this report are set forth on the Exhibit Index hereto and incorporated by reference herein.
EXHIBIT INDEX
The following exhibits are included in this report on Form 10-Q for the period ended June 30, 2025 (and are numbered in accordance with Item 601 of Regulation S-K).
| Exhibit No. | Description | |||||||
| 2.1† | Business Combination Agreement, dated September 10, 2022, by and between DiamondHead Holdings Corp., Merger Sub and Great Southern Homes, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-4 filed on February 9, 2023) | |||||||
| 3.1 | Amended and Restated Certificate of Incorporation of United Homes Group, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed on April 5, 2023) | |||||||
| 3.2 | Amended and Restated Bylaws of United Homes Group, Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on April 5, 2023) | |||||||
| 4.1 | Warrant Agreement, dated January 25, 2021, by and between American Stock Transfer & Trust Company and DiamondHead Holdings Corp. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 25, 2021) | |||||||
| 10.1*+ | Interim CEO Transition Letter, dated May 19, 2025, by and between United Homes Group, Inc. and James M. Pirrello | |||||||
| 10.2*+ | CEO Promotion Letter, dated May 19, 2025, by and between United Homes Group, Inc. and John G. (Jack) Micenko, Jr. | |||||||
| 31.1* | Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
| 31.2* | Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
| 32.1* | Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 32.2* | Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104* | Cover page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
| * | Filed or furnished herewith. | ||||
| † | Certain of the exhibits and schedules to the Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. | ||||
| + | Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-Q. | ||||
Certain instruments defining rights of holders of long-term debt of the company and its consolidated subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. Upon request, the company agrees to furnish to the SEC copies of such instruments.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| UNITED HOMES GROUP, INC. | ||||||||
| (Registrant) | ||||||||
Dated: August 8, 2025 | By: | /s/ Keith Feldman | ||||||
| Keith Feldman | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||
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FAQ
How did UHG's Q2 2025 revenue compare with the prior year?
Net revenue was $105.5 million, down 3.6 % from $109.4 million in Q2 2024.
What caused the net loss for United Homes Group in Q2 2025?
A $6.2 million non-cash loss on derivative liabilities plus $2.6 million of other expense offset operating profit, resulting in a $6.3 million net loss.
How much cash does UHG have on hand?
As of 30 Jun 2025, cash and cash equivalents totaled $36.5 million.
What is UHG’s current debt level?
The syndicated line of credit balance is $64.2 million and the term loan is $67.3 million, bringing total debt to roughly $131 million.
Did operating cash flow improve?
Yes. Year-to-date operating cash flow swung to +$2.8 million from a -$19.1 million outflow in the 2024 period.
What were the gross and net margins for Q2 2025?
Gross margin was 18.9%; net margin was -6.0% due to derivative losses.
UNITED HOMES GROUP INC
NASDAQ:UHG
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UHG Stock Data
237.34M
9.18M
57.55%
42.65%
0.16%
Residential Construction
Operative Builders
United States
CHAPIN