Core Insights - Century Communities, Inc. is expanding its presence in DeFuniak Springs, Florida, with the launch of two new communities: South Orange Crest, which is currently selling, and The Enclave at Cat Island Estates, set to open in November [1][3]. Group 1: New Developments - South Orange Crest features cottage-style homes starting from the low $200s, while The Enclave at Cat Island Estates will offer single-family homes [5]. - Both communities are designed with modern, open-concept layouts and include high-quality finishes such as quartz countertops, luxury wood-look plank flooring, and stainless-steel appliances [3][4]. Group 2: Location and Accessibility - The new communities are strategically located in DeFuniak Springs, providing easy access to major destinations like Panama City and Pensacola, as well as proximity to Emerald Coast beaches and local amenities [4]. Group 3: Online Homebuying Experience - Century Complete offers an industry-first online homebuying experience, allowing buyers to find and purchase homes easily while still working with their local real estate agents [5][8]. - The online process includes financing options through Century Complete's affiliate lender, Inspire Home Loans [5]. Group 4: Company Overview - Century Communities is recognized as one of the largest homebuilders in the U.S. and has been named one of America's and the World's Most Trustworthy Companies by Newsweek [8]. - The company operates in 16 states and over 45 markets, providing a range of services including mortgage, title, and insurance brokerage through its subsidiaries [8].

Core Insights - Century Communities reported revenue of $980.28 million for Q3 2025, a year-over-year decline of 13.8%, with EPS of $1.52 compared to $2.72 a year ago, indicating a significant drop in profitability [1] - The revenue exceeded the Zacks Consensus Estimate of $972.9 million by 0.76%, while the EPS surprised positively by 76.74% against the consensus estimate of $0.86 [1] Financial Performance Metrics - Net New Home Contracts were reported at 2,386, slightly above the estimated 2,378 [4] - Average Sales Price for Home Deliveries was $384.20, exceeding the estimate of $377.50 [4] - Backlog of Homes stood at 1,117, below the average estimate of 1,194 [4] - Home Deliveries totaled 2,486, surpassing the estimated 2,400 [4] - Financial services revenues were $19.36 million, above the estimate of $18.38 million, but represented a 3.7% decline year-over-year [4] - Total homebuilding revenues were $960.93 million, slightly above the average estimate of $954.53 million, reflecting a 14% year-over-year decline [4] - Home sales revenues were reported at $955.16 million, below the estimated $977.7 million, marking a 14.4% decrease compared to the previous year [4] Stock Performance - Shares of Century Communities have returned -3.8% over the past month, contrasting with the Zacks S&P 500 composite's +1.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

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Financial Performance - For the three and nine months ended September 30, 2025, the company generated total revenues of $980.3 million and $2.9 billion, respectively, compared to $1.1 billion and $3.1 billion in the prior year periods[110]. - The company reported net income of $37.4 million, or $1.25 per diluted share, for the three months ended September 30, 2025, down from $83.0 million, or $2.59 per diluted share, in the prior year[109]. - Total revenues for Q3 2025 were $980.3 million, a decrease of 13.8% from $1,136.9 million in Q3 2024[113]. - Net income for Q3 2025 was $37.4 million, a decline of 55.1% compared to $83.0 million in Q3 2024[113]. - For the nine months ended September 30, 2025, total revenue was $2,884.2 million, a decrease from $3,124.9 million in the same period of 2024, representing a decline of 7.7%[118]. - Net income for the nine months ended September 30, 2025, was $98.4 million, a decline from $307.5 million in 2024[154]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $238.6 million, down from $381.3 million in the same period of 2024[113]. - Adjusted net income for Q3 2025 was $45,711, down 48.2% from $88,572 in Q3 2024[197]. - Adjusted diluted earnings per share (EPS) for Q3 2025 was $1.52, a decline of 45.1% from $2.77 in Q3 2024[197]. Home Deliveries and Sales - The company delivered 2,486 and 7,357 homes during the three and nine months ended September 30, 2025, with average sales prices of $384.2 thousand and $382.7 thousand, respectively, reflecting a decrease in home deliveries by 12.3% and 5.8% compared to the prior year[110]. - The number of homes delivered in Q3 2025 was 2,486, a decrease of 12.3% from 2,834 homes in Q3 2024[113]. - Home sales revenues in Q3 2025 were $955.2 million, down 14.4% from $1,116.1 million in Q3 2024[113]. - The average sales price of homes delivered in Q3 2025 was $384.2 thousand, down from $393.8 thousand in Q3 2024[113]. - The average sales price of new homes delivered decreased to $382.7 thousand in 2025 from $391.3 thousand in 2024, a reduction of 1.5%[118]. - The backlog at the end of Q3 2025 included 1,117 homes with an aggregate sales value of $416.9 million, compared to 1,580 homes valued at $671.4 million at the end of Q3 2024[113]. - The average sales price of backlog units decreased by 12.1% to $373.3 thousand, influenced by higher incentives and a change in community mix[146]. Contracts and Market Conditions - Net new home contracts decreased by 6.9% and 7.1% for the three and nine months ended September 30, 2025, totaling 2,386 and 7,624 contracts, respectively[110]. - Net new home contracts in Q3 2025 were 2,386, a decrease from 2,563 contracts in Q3 2024[113]. - The company anticipates that homebuilding markets will continue to be influenced by macro-economic conditions, including interest rates and consumer confidence, which may impact future demand for homes[106]. - The average monthly absorption rate decreased by 13.8% to 2.5 in Q3 2025 compared to Q3 2024, and by 20.6% to 2.7 for the nine months ended September 30, 2025, primarily due to slowing demand and elevated mortgage rates[143]. Financial Services and Assets - The Financial Services segment generated income before income tax expense of $3.0 million and $11.6 million for the three and nine months ended September 30, 2025, representing decreases of 2.7% and 38.4% from the prior year[112]. - The number of mortgages originated decreased by 6.3% for the nine months ended September 30, 2025, totaling 4,796 loans compared to 5,118 in 2024[125]. - The company recorded a decrease in Financial Services assets by 31.9% to $326.2 million as of September 30, 2025, due to a reduction in mortgage loans held for sale[140]. Debt and Liquidity - The company ended the third quarter of 2025 with $130.1 million in cash and cash equivalents and $44.7 million in cash held in escrow, with a homebuilding debt to capital ratio of 34.5%[111]. - The total debt as of September 30, 2025, was $1.66 billion, compared to $1.48 billion as of December 31, 2024[170]. - The company had $1.0 billion in total principal amount of Senior Notes outstanding as of September 30, 2025[147]. - The company believes it can fund its current liquidity needs for at least the next twelve months with cash on hand and cash generated from operations[161]. - The company has a senior unsecured revolving credit facility of up to $1.0 billion, with $339.0 million outstanding as of September 30, 2025, at an interest rate of 5.7%[180]. Operational Adjustments - The company strategically managed its lot pipeline, resulting in 62,239 lots owned and controlled as of September 30, 2025, while selectively reducing land acquisition activities[111]. - The total owned and controlled lot inventory as of September 30, 2025, was 62,239 lots, down from 80,121 lots in the previous year[113]. - The company reduced its land acquisition and development activities by terminating certain contracts that no longer met investment criteria, reflecting current market conditions[158]. - The company is exploring opportunities to acquire other homebuilders to enhance its land portfolio and support organic expansion[167]. Expenses and Margins - Homebuilding gross margin percentage for Q3 2025 was 17.9%, compared to 21.7% in Q3 2024[113]. - Homebuilding gross margin percentage decreased to 18.4% for the nine months ended September 30, 2025, down from 21.9% in the same period of 2024[128]. - Selling, general and administrative expenses decreased by $13.1 million (9.8%) in Q3 2025 compared to Q3 2024, but as a percentage of home sales revenue increased to 12.6% from 11.9%[134]. - Adjusted homebuilding gross margin excluding inventory impairment for Q3 2025 was 20.1%, down from 23.6% in Q3 2024[132]. Tax and Regulatory - The estimated annual effective tax rate for 2025 is 25.0%, influenced by federal and state statutory rates and certain permanent differences[135]. - Income tax expense for Q3 2025 was $10.4 million, significantly lower than $26.9 million in Q3 2024[138]. - The effective tax rate for adjusted net income was 24.3% for both Q3 2025 and Q3 2024[198]. Market Outlook - The company anticipates that inflation may continue to adversely impact homebuilding operations due to rising costs in land, labor, and materials[203].

Core Insights - Century Communities (CCS) reported quarterly earnings of $1.52 per share, exceeding the Zacks Consensus Estimate of $0.86 per share, but down from $2.72 per share a year ago, representing an earnings surprise of +76.74% [1] - The company posted revenues of $980.28 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.76%, but down from $1.14 billion year-over-year [2] - The stock has underperformed the market, losing about 16.7% since the beginning of the year compared to the S&P 500's gain of 14.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.77 on revenues of $1.18 billion, and for the current fiscal year, it is $5.36 on revenues of $4.04 billion [7] - The estimate revisions trend for Century Communities was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Building Products - Home Builders industry, to which Century Communities belongs, is currently in the bottom 17% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another competitor in the same industry, D.R. Horton (DHI), is expected to report quarterly earnings of $3.29 per share, reflecting a year-over-year decline of -16.1%, with revenues anticipated to be $9.45 billion, down 5.5% from the previous year [9][10]

Financial Data and Key Metrics Changes - In Q3 2025, pre-tax income was $48 million, net income was $37 million, and adjusted net income was $46 million, reflecting increases of 7% and 10% sequentially [13] - Home sales revenues were $955 million, down 2% sequentially, while deliveries of homes declined by 4% [13] - Adjusted home building gross margin improved to 20.1% from 20% in Q2, driven by lower direct costs offsetting higher incentives [14] Business Line Data and Key Metrics Changes - The company delivered 2,486 homes, hitting the high end of guidance, with an average sales price of $384,000, up 2% quarter-over-quarter [4][13] - Net new contracts for Q3 were 2,386 homes, a decline of 6% sequentially, but better than the historical average decline of 9% [8] - The ending community count increased by 5% year-over-year to 321 communities [10] Market Data and Key Metrics Changes - The company holds top 10 positions in 13 of the 50 largest U.S. markets, with expectations for mid-single-digit percentage growth in community count by year-end 2025 [6] - The average cycle time for home deliveries improved to 115 calendar days, with one-third of divisions achieving 100 days or less [7] Company Strategy and Development Direction - The company aims to deepen its market share in existing markets while controlling costs and maintaining an adequate supply of land [18] - The strategy includes investing in people, processes, and systems to drive operational improvements, with expectations for growth to be realized once the market normalizes [6][18] Management's Comments on Operating Environment and Future Outlook - Management noted that while home buyer demand has been muted due to economic uncertainty, there is pent-up demand for affordable homes supported by demographic trends [5] - The company expects that any interest rate relief and improvement in consumer confidence will unlock buyer demand [5] Other Important Information - The company repurchased $20 million of its shares in Q3, totaling 6% of shares outstanding year-to-date [4][17] - The company completed a private offering of $500 million in senior notes, providing flexibility with leverage management [17] Q&A Session Summary Question: Adjusted gross margin performance - Management attributed the adjusted gross margin exceeding guidance to successful cost controls and lower direct costs, despite increased incentives [20] Question: Impact of adjustable-rate mortgages (ARMs) - Management noted a significant increase in ARMs usage among buyers, which helps address affordability challenges, and expects this trend to continue [21] Question: Community count guidance - Management confirmed a mid-single-digit increase in community count by year-end, indicating a significant ramp-up in Q4 [25][26] Question: Consumer behavior and incentives - Management observed cautious consumer behavior, particularly at entry-level price points, and anticipates increased incentives in Q4 due to competition [28] Question: SG&A cost reductions - Management highlighted operational efficiencies and headcount adjustments as key drivers for lower SG&A costs, with a focus on maintaining efficiency going forward [32][33] Question: Lot abandonment and future projects - Management explained that they are underwriting to current market conditions, leading to the exit from certain projects, while maintaining a steady owned lot count [35] Question: Average sales price dynamics - Management clarified that the sequential lift in average sales price was primarily driven by a favorable mix of deliveries rather than incentives [38] Question: Tariff impact for next year - Management stated it is too early to estimate the impact of tariffs for next year, as the situation remains fluid [41]

Financial Data and Key Metrics Changes - In Q3 2025, pre-tax income was $48 million and net income was $37 million, representing increases of 7% and 10% sequentially respectively [15] - Adjusted net income was $46 million or $1.52 per diluted share, while EBITDA for the quarter was $70 million and adjusted EBITDA was $82 million [15] - Home sales revenues were $955 million, down 2% sequentially, with deliveries of 2,486 homes declining by 4% [15][17] - The average sales price increased by 2% to $384,000, benefiting from a higher percentage of deliveries from the West and Mountain regions [15] Business Line Data and Key Metrics Changes - Adjusted home building gross margin was 20.1%, up from 20% in Q2, driven by lower direct costs offsetting higher incentives [17] - The company started 2,440 homes in Q3 and maintained a focus on matching starts with sales [11] - The ending community count increased by 5% year-over-year to 321 communities, with expectations for mid-single-digit growth by year-end 2025 [12][21] Market Data and Key Metrics Changes - Net new contracts for Q3 were 2,386 homes, a decline of 6% sequentially, but better than the historical average decline of 9% [10] - Customer satisfaction scores reached all-time highs, leading to more referrals and lower warranty costs [10] - The company observed a shift in mortgage types, with adjustable-rate mortgages (ARMs) accounting for close to 20% of originated mortgages in Q3, up from less than 5% in Q1 [13] Company Strategy and Development Direction - The company aims to deepen its market share in existing markets, with a goal of increasing community count and controlling costs [5][21] - Investments in people, processes, and systems are expected to drive future improvements, with confidence that the value of these investments will be realized once the market normalizes [6] - The company remains disciplined in land acquisitions, adjusting to current market conditions and seeing reductions in raw land and development costs [13] Management's Comments on Operating Environment and Future Outlook - Management noted that home buyer demand has been muted due to weaker consumer confidence, but there is pent-up demand for affordable homes [5] - The company expects that any interest rate relief and improvement in consumer confidence will unlock buyer demand [5] - Management anticipates that incentives will be the largest driver of changes to gross margins in the near term, with expectations for an increase in incentives in Q4 [11][21] Other Important Information - The company completed a private offering of $500 million of 2033 notes, using the proceeds to redeem $500 million of 2027 senior notes, providing flexibility with leverage management [20] - The company maintained a quarterly cash dividend of $0.29 per share and repurchased 297,000 shares for $20 million [20] Q&A Session Summary Question: Regarding adjusted gross margin performance - Management attributed the better-than-expected adjusted gross margin to successful cost controls and lower direct costs, despite some pressures from increased incentives [24] Question: Impact of adjustable-rate mortgages on business - Management noted that ARMs have gained wider acceptance, particularly among first-time home buyers, and expect this trend to continue into Q4 [26] Question: Community count guidance and ramp-up in Q4 - Management confirmed the community count is expected to increase by around 5% year-over-year, with consistent monitoring of community developments [30] Question: Consumer behavior and incentives - Management observed a cautious consumer environment, particularly at entry-level price points, and anticipates increased incentives in Q4 due to competition among builders [34] Question: SG&A cost reductions - Management highlighted various cost control activities contributing to lower SG&A costs, including operational efficiencies and headcount adjustments [38] Question: Lots walked away from during the quarter - Management explained that they are underwriting to current market conditions and have exited certain near-term projects that did not fit current underwriting standards [40]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported a pretax income of $48 million and a net income of $37 million, representing a 710% increase sequentially [15] - Adjusted net income was $46 million or $1.52 per diluted share, while EBITDA for the quarter was $70 million and adjusted EBITDA was $82 million [16] - Home sales revenues for Q3 were $955 million, down 2% sequentially, with deliveries of 2,486 homes declining by 4% [16] - The average sales price increased by 2% quarter over quarter to $384,000, benefiting from a higher percentage of deliveries from the West and Mountain regions [16] Business Line Data and Key Metrics Changes - The adjusted homebuilding gross margin was 20.1%, up from 20% in Q2, while GAAP homebuilding gross margin increased to 17.9% from 17.6% [17] - Direct construction costs decreased by 3% year to date, contributing to improved margins despite higher incentives [10][15] - Net new contracts of 2,386 homes declined by 6% sequentially, which was better than the historical average decline of 9% [11] Market Data and Key Metrics Changes - The company ended Q3 with a community count of 321, which increased by 5% year over year [12] - The finished lot costs increased in the mid-single digit range year over year and sequentially, but are expected to remain flat in Q4 [13] - Adjustable rate mortgages (ARMs) accounted for close to 20% of the mortgages originated in Q3, up from less than 5% in Q1 [14] Company Strategy and Development Direction - The company aims to increase its community count by mid-single digits by year-end 2025, focusing on increasing market share in existing markets [6][7] - The strategy includes maintaining cost controls, improving operational efficiencies, and investing in processes and systems for future growth [7][10] - The company plans to continue repurchasing shares and maintaining dividends while navigating current market headwinds [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted that homebuyer demand has been muted due to weaker consumer confidence, but there is pent-up demand for affordable homes [6] - The expectation is that any relief in interest rates and improvement in consumer confidence will unlock buyer demand [6] - The company anticipates that incentives will be the largest driver of changes to gross margins in the near term, with an expected increase in incentives for Q4 [12][19] Other Important Information - The company completed a private offering of $500 million of senior notes due 2033, using proceeds to redeem existing senior notes due 2027 [20] - The tax rate for Q3 was 21.8%, driven by 45L tax credits received in excess of previous estimates, with a full-year tax rate expected between 24.5% and 25.5% [20] Q&A Session Summary Question: Regarding the adjusted gross margin exceeding guidance, was this due to cost controls or reduced incentives? - Management indicated that the margin improvement was due to a combination of prudent cost controls and moderated incentives, with direct costs down 3% year to date [25][26] Question: How will the shift in buyers' use of adjustable rate mortgages impact the business? - Management noted that ARMs have gained acceptance, particularly among first-time homebuyers, allowing for lower initial rates without needing to buy down a fixed rate for 30 years [27][28] Question: Can you clarify the community count guidance and the expected ramp-up in Q4? - Management confirmed that the community count is expected to increase by around 5% year over year, with consistent monitoring throughout the year [30][32] Question: What is the outlook for SG&A costs and the factors driving lower costs year over year? - Management highlighted operational efficiencies and headcount adjustments as key factors, with a focus on maintaining efficiency in the competitive market [37][39] Question: Can you provide more details on the lots the company walked away from this quarter? - Management explained that they are underwriting to current market conditions and have exited near-term projects that did not fit current underwriting criteria [40][41]

Company Overview - Century Communities operates in 16 states and over 45 markets across the U S [9] - The company reported revenues of $4 2 billion for the last twelve months ending in Q3 2025 [14] - As of September 30, 2025, the company has 62,239 lots [14] Financial Performance & Growth - Total revenues increased by 64% from $2 5 billion in 2019 to $4 2 billion in LTM Q3 2025 [25] - EBITDA increased by 78% from $207 million in 2019 to $369 million in LTM Q3 2025 [25] - Book Value Per Share increased by 173% from $32 11 in 2019 to $87 74 in Q3 2025 [25] - Net Income increased by 90% from $113 million in 2019 to $214 million in LTM Q3 2025 [25] - Home sale deliveries increased by 32% from 8,000 in 2019 to 10,555 in LTM Q3 2025 [25] - The company repurchased approximately 6 2% of shares outstanding at the beginning of the year [23] Business Strategy & Operations - 94% of total company home deliveries are priced below FHA limits [30] - 99% of total company home deliveries are spec builds [32] - The company maintains a significant liquidity position of $836 million [43] - Financial Services revenues were $88 million with pretax income of $20 million in LTM 3Q 2025 [47]

Financial Performance - Deliveries totaled 2,486 homes, generating total revenues of $980.3 million, with home sales revenues of $955.2 million [3]. - Net income for the third quarter 2025 was $37.4 million, or $1.25 per diluted share, while adjusted net income was $45.7 million, or $1.52 per diluted share [4]. - Adjusted net income for the three months ended September 30, 2025, was $45.7 million, down 48.2% from $88.6 million in 2024, with adjusted diluted earnings per share of $1.52 compared to $2.77 [27]. - Net income for Q3 2025 was $37,403, a decrease of 54.9% compared to $83,020 in Q3 2024 [34]. - EBITDA for Q3 2025 was $69,724, down 47.3% from $132,307 in Q3 2024 [34]. - Adjusted EBITDA for Q3 2025 was $82,254, reflecting a 40.9% decline from $139,250 in Q3 2024 [34]. Home Deliveries and Sales - Home deliveries for the three months ended September 30, 2025, totaled 2,486 homes, a decrease of 12.3% compared to 2,834 homes in 2024, with an average sales price of $384.2 thousand, down 2.4% [21]. - Full year 2025 home delivery guidance was narrowed to a range of 10,000 to 10,250 homes, with home sales revenues expected to be between $3.8 billion and $3.9 billion [10]. - Total net new home contracts decreased by 6.9% year-over-year to 2,386 for the three months ended September 30, 2025, and by 7.1% to 7,624 for the nine months ended September 30, 2025 [20]. - The backlog as of September 30, 2025, was 1,117 homes valued at $416.9 million, representing a 29.3% decrease in homes and a 37.9% decrease in dollar value compared to 1,580 homes valued at $671.4 million in 2024 [23]. Financial Position and Equity - The company ended the quarter with $2.6 billion of stockholders' equity and $836 million of liquidity, including $174.8 million in cash [8]. - The book value per share reached a company record of $87.74 as of September 30, 2025 [8]. - Total stockholders' equity decreased to $2,578,022 as of September 30, 2025, down from $2,620,856 at the end of 2024 [38]. Debt and Margins - The adjusted homebuilding gross margin was 20.1%, consistent with the second quarter 2025 levels, while the overall homebuilding gross margin was 17.9% [6]. - The company reported a homebuilding gross margin of $171.4 million for the three months ended September 30, 2025, which is 17.9% of home sales revenues, down from 21.7% in 2024 [31]. - Homebuilding debt to capital ratio was 34.5%, and net homebuilding debt to net capital ratio was 31.4% [9]. - The ratio of net homebuilding debt to net capital increased to 31.4% as of September 30, 2025, compared to 27.4% at the end of 2024 [38]. - Total homebuilding debt rose to $1,355,219 as of September 30, 2025, up from $1,140,973 at the end of 2024 [38]. Inventory and Community Development - Lot inventory as of September 30, 2025, totaled 62,239 lots, a decrease of 22.3% from 80,121 lots in 2024, with owned lots increasing by 2.2% [24]. - The number of selling communities increased by 5.2% to 321 as of September 30, 2025, compared to 305 in 2024, with the West region seeing a 40.7% increase [22]. Other Financial Metrics - Financial services revenues were $19.4 million, with pre-tax income of $3.0 million for the third quarter [7]. - The company repurchased 296,903 shares of common stock for $20.0 million, reducing shares outstanding by 6% from the beginning of the year [4]. - Inventory impairment for Q3 2025 was $3,180, a significant increase of 131.6% from $1,373 in Q3 2024 [34]. - The company reported a loss on debt extinguishment of $1,361 in Q3 2025, with no comparable figure in Q3 2024 [34]. - Interest expense for Q3 2025 was $876, compared to an income of $(369) in Q3 2024, marking a 337.4% change [34]. - The company incurred restructuring costs of $1,505 during the nine months ended September 30, 2025, with no such costs reported in the prior period [34].