Homebuilding Performance - Homebuilding revenues for Q3 2025 were $916.7 million, a decrease of $69.6 million or 7% compared to Q3 2024 [127]. - The average sales price (ASP) of homes closed decreased by 8% to $476,962 in Q3 2025 from $518,553 in Q3 2024 [131]. - Home closings increased by 1% to 1,915 in Q3 2025 compared to 1,889 in Q3 2024 [127]. - Homebuilding revenues for the nine months ended September 30, 2025, were $2,986.4 million, an increase of $122.6 million, or 4%, from $2,863.7 million for the same period in 2024 [141]. - Home closings increased by 497 homes, or 9%, totaling 6,072 for the nine months ended September 30, 2025, compared to 5,575 in 2024 [141]. - The average sales price (ASP) of homes closed decreased by $24,988, or 5%, to $485,216 for the nine months ended September 30, 2025 [141]. - The cancellation rate improved to 12.5% in Q3 2025 from 13.8% in Q3 2024, a reduction of 1.3% [127]. - The cancellation rate improved to 12.7% for the nine months ended September 30, 2025, down from 15.8% in 2024, representing a decrease of 3.1 percentage points [141]. Financial Performance - Net income attributable to Dream Finders Homes, Inc. for the nine months ended September 30, 2025, was $158.5 million, down from $206.1 million in the same period of 2024, representing a decline of 23% [123]. - The EBITDA margin for Q3 2025 was 11.0%, down from 13.2% in Q3 2024 [123]. - Selling, general and administrative expenses (SG&A) increased by $79.4 million, or 29%, to $357.3 million, representing 12.0% of homebuilding revenues for the nine months ended September 30, 2025 [149]. - Homebuilding gross margin percentage decreased to 17.7% for the nine months ended September 30, 2025, down 1.0 percentage points from 18.7% in 2024 [141]. Segment Performance - The Southeast segment reported homebuilding revenues of $317 million, an increase of 8% from $293 million in Q3 2024, driven by a 20% increase in home closings [134]. - The Mid-Atlantic segment experienced a 15% decline in homebuilding revenues to $242 million, attributed to a 9% decrease in ASP and lower home closings [135]. - The Midwest segment homebuilding revenues increased by $48 million, or 4%, to $1,239 million for the nine months ended September 30, 2025 [148]. - The Southeast segment homebuilding revenues increased by $78 million, or 9%, to $992 million for the nine months ended September 30, 2025 [146]. Backlog and Inventory - Backlog units as of September 30, 2025, decreased by 34% to 2,619 from 3,996 units in 2024 [130]. - The backlog of sold homes decreased to 2,619 homes valued at approximately $1.2 billion, down 34% in volume and 42% in value from 3,996 homes valued at approximately $2.0 billion as of September 30, 2024 [169]. - The backlog for the Southeast segment as of September 30, 2025, was 1,143 homes, a decrease of 502 from 1,645 homes as of September 30, 2024 [170]. - The Midwest segment backlog fell to 578 homes, a decrease of 664 from 1,242 homes as of September 30, 2024, primarily due to higher closings relative to net sales [172]. Cash and Liquidity - The company's cash and cash equivalents increased to $251.0 million as of September 30, 2025, compared to $204.9 million in 2024 [123]. - As of September 30, 2025, the company's cash and total liquidity were $624.7 million, down from $816.0 million as of December 31, 2024, reflecting a decrease of approximately 23.5% [199]. - The company reported net cash used in operating activities of $244.2 million for the nine months ended September 30, 2025, a significant improvement compared to $563.1 million for the same period in 2024, representing a reduction of 56.6% [205]. - Net cash provided by financing activities was $396.5 million for the nine months ended September 30, 2025, down from $445.0 million for the same period in 2024, a decrease of approximately 10.9% [207]. Debt and Financing - The net homebuilding debt to net capitalization ratio was 47.3% as of September 30, 2025, compared to 45.6% in 2024 [191]. - Total debt increased to $1,766,134 million as of September 30, 2025, from $1,456,088 million in 2024 [191]. - The company issued $300 million in senior unsecured notes with a 6.875% interest rate, due September 15, 2030, to repay a portion of the outstanding balance under the Credit Agreement [202]. - The company amended its Credit Agreement to increase aggregate commitments to $1.5 billion and extended the maturity date to August 21, 2028 [201]. Mortgage and Financial Services - Mortgage revenues for the three months ended September 30, 2025, were $16,306, a 1% increase from $16,079 in 2024 [176]. - Total financial services revenues surged to $53,133, marking a 163% increase from $20,168 in the same period of 2024 [176]. - Mortgage revenues increased by $32,770 million, or 204%, for the nine months ended September 30, 2025, compared to the same period in 2024 [177]. - Title and other services revenues rose by $64,793 million, or 637%, for the nine months ended September 30, 2025, compared to the same period in 2024 [177]. - Total financial services revenues reached $123,821 million, a 372% increase for the nine months ended September 30, 2025, compared to the same period in 2024 [177]. - The number of mortgage loans originated increased by 644, or 20%, totaling 3,926 loans for the nine months ended September 30, 2025 [177]. - The capture rate for mortgage originations improved to 78.3%, up 5% from 73.6% in the previous year [177]. - The acquisition of Alliant Title in April 2025 contributed $32 million to the increase in title and other services revenues for the three months ended September 30, 2025 [178]. Lot Deposits and Land Bank - Lot deposits for finished lot option and land bank option contracts increased to $551 million as of September 30, 2025, up from $458 million as of December 31, 2024 [154]. - As of September 30, 2025, the total controlled lots increased to 64,341, a rise of 18% from 54,698 as of December 31, 2024 [156]. - The number of active communities rose to 283, reflecting an increase of 48 communities or 20% compared to 235 active communities as of September 30, 2024 [158]. - The company plans to allocate additional liquidity to land bank deposits to mitigate risks associated with holding undeveloped land [198]. Interest Rate Risk - Jet HomeLoans is exposed to interest rate risk related to its lending activities, underwriting and originating mortgage loans sold through forward mortgage commitments [228]. - The loan portfolio of Jet HomeLoans is held for sale and is subject to forward sale commitments, with interest rate lock commitments used to hedge mortgage-related interest rate exposure [228].

Homebuilding Performance - Homebuilding revenues for Q3 2025 were $917 million, a decrease of 7% compared to $986 million in Q3 2024[3] - Home closings rose by 1% to 1,915 in Q3 2025, up from 1,889 in Q3 2024, also a company record[3] - Net new orders increased by 20% to 2,021 in Q3 2025 from 1,680 in Q3 2024, marking a record for the company[12] - Home closings totaled 1,915 in Q3 2025, slightly up from 1,889 in Q3 2024, indicating a 1.4% increase[24] - The average sales price of homes closed decreased to $476,962 in Q3 2025 from $518,553 in Q3 2024, a decline of 8.0%[24] Financial Performance - Total revenues for Q3 2025 were $969.8 million, a decrease of 3.5% from $1,006.4 million in Q3 2024[22] - Pre-tax income decreased to $61 million in Q3 2025 from $92 million in Q3 2024[3] - Financial services pre-tax income increased by 11% to $9 million in Q3 2025 from $8 million in Q3 2024[3] - Net income attributable to Dream Finders Homes, Inc. was $47.0 million in Q3 2025, compared to $70.7 million in Q3 2024, reflecting a decline of 33.9%[22] - Adjusted homebuilding gross margin for Q3 2025 was $245.1 million, down from $272.1 million in Q3 2024, a decrease of 9.9%[29] Liquidity and Debt - The company issued $300 million in senior unsecured notes at a rate of 6.875% to repay part of its revolving credit facility[3] - Total liquidity as of September 30, 2025, was $625 million, consisting of cash and cash equivalents and availability under the revolving credit facility[3] - Net homebuilding debt to net capitalization ratio increased to 47.3% as of September 30, 2025, compared to 45.6% as of September 30, 2024[33] Backlog and Guidance - The backlog as of September 30, 2025, included 2,619 homes valued at $1.2 billion, with an average sales price of $447,133[13] - The backlog as of September 30, 2025, was valued at $1.17 billion, down from $2.00 billion as of September 30, 2024[24] - The company revised its full-year 2025 guidance to approximately 8,500 home closings, down from a previous estimate of 9,250[16] Expenses and Cancellation Rate - Selling, general and administrative expenses increased by 8% to $110 million in Q3 2025, representing 11.9% of homebuilding revenues[10] - The cancellation rate improved to 12.5% in Q3 2025 from 13.8% in Q3 2024[24]

Core Viewpoint - Dream Finders Homes Inc. reported quarterly earnings of $0.47 per share, matching the Zacks Consensus Estimate, but down from $0.70 per share a year ago [1] - The company posted revenues of $969.8 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 14.96% and down from $1.01 billion year-over-year [2] Financial Performance - Earnings per share (EPS) for the latest quarter was $0.47, compared to $0.70 in the same quarter last year [1] - The company had a surprise of -13.85% in the previous quarter, with actual earnings of $0.56 against an expected $0.65 [1] - Revenues for the quarter were $969.8 million, missing estimates and down from $1.01 billion year-over-year [2] Market Performance - Dream Finders Homes shares have declined approximately 7.1% since the beginning of the year, contrasting with the S&P 500's gain of 17.2% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.82 on revenues of $1.38 billion, and for the current fiscal year, it is $2.39 on revenues of $4.66 billion [7] - The outlook for the Building Products - Home Builders industry is currently in the bottom 20% of Zacks industries, which may negatively impact stock performance [8]

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Company Performance - Dream Finders Homes Inc. (DFH) closed at $23.36, reflecting a decrease of 2.91% from the previous day, underperforming compared to the S&P 500's loss of 0.63% [1] - Over the last month, DFH shares have decreased by 14.53%, contrasting with the Construction sector's loss of 0.63% and the S&P 500's gain of 0.92% [1] Upcoming Earnings - The company is expected to report an EPS of $0.47, which is a decline of 32.86% from the prior-year quarter [2] - The Zacks Consensus Estimate for revenue is projecting net sales of $1.14 billion, an increase of 13.26% from the year-ago period [2] Fiscal Year Estimates - For the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.39 per share and revenue of $4.66 billion, indicating changes of -28.44% and +4.63%, respectively, from the previous year [3] Analyst Forecasts - Recent revisions to analyst forecasts for DFH are important as they reflect changing near-term business trends, with positive changes indicating a favorable outlook on business health and profitability [4] Zacks Rank and Valuation - DFH currently holds a Zacks Rank of 5 (Strong Sell), with no changes in the Zacks Consensus EPS estimate over the past month [6] - The company is trading at a Forward P/E ratio of 10.07, which is a discount compared to the industry average Forward P/E of 11.74 [7] PEG Ratio - DFH has a PEG ratio of 6.54, compared to the average PEG ratio of 3.22 for the Building Products - Home Builders industry [8] Industry Context - The Building Products - Home Builders industry is part of the Construction sector and has a Zacks Industry Rank of 208, placing it in the bottom 16% of all industries [9]

Company Performance - Dream Finders Homes Inc. (DFH) ended the recent trading session at $24.58, showing a -4.17% change from the previous day's closing price, which is worse than the S&P 500's daily loss of 0.38% [1] - Shares of Dream Finders Homes Inc. have lost 17.23% in the past month, while the Construction sector lost 1.68% and the S&P 500 gained 4.06% during the same period [1] Earnings Forecast - Dream Finders Homes Inc. is projected to report earnings of $0.47 per share, representing a year-over-year decline of 32.86%, with a revenue estimate of $1.14 billion, reflecting a 13.26% rise from the same quarter last year [2] - For the entire year, the Zacks Consensus Estimates forecast earnings of $2.39 per share and revenue of $4.66 billion, indicating changes of -28.44% and +4.63%, respectively, compared to the previous year [3] Analyst Estimates and Rankings - The Zacks Consensus EPS estimate has moved 30.73% lower over the past month, and Dream Finders Homes Inc. currently holds a Zacks Rank of 5 (Strong Sell) [5] - Research indicates that estimate revisions are correlated with near-term share price momentum, and the Zacks Rank system provides a rating based on these changes [4] Valuation Metrics - Dream Finders Homes Inc. has a Forward P/E ratio of 10.73, which is a discount compared to the industry average Forward P/E of 11.95 [6] - The company's PEG ratio is currently 6.97, while the average PEG ratio for Building Products - Home Builders stocks is 2.62 [7] Industry Context - The Building Products - Home Builders industry is part of the Construction sector and currently holds a Zacks Industry Rank of 214, placing it in the bottom 14% of all industries [8]

Group 1 - Dream Finders Homes, Inc. (NYSE:DFH) announced a private offering of $300 million in senior unsecured notes with a 6.875% interest rate due in 2030, expecting net proceeds of approximately $295 million after expenses [1] - The company plans to utilize the net proceeds to repay part of its existing revolving credit facility and for general corporate purposes [1] - In Q2 2025, Dream Finders Homes reported homebuilding revenues of $1.1 billion, consistent with the previous year, with home closings increasing by 10% and net sales rising by 13% [2] Group 2 - The acquisition of Alliant Title is believed to enhance Dream Finders Homes' vertical integration and expand its financial services capabilities [2]

PART I [ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20DREAM%20FINDERS%20HOMES%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents Dream Finders Homes' unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, cash flows, and comprehensive notes for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS%20(unaudited)) - Total Assets increased to **$3,650,054 thousand** as of June 30, 2025, from **$3,328,651 thousand** as of December 31, 2024[9](index=9&type=chunk) - Inventories increased to **$1,990,807 thousand** as of June 30, 2025, from **$1,715,357 thousand** as of December 31, 2024[9](index=9&type=chunk) - Revolving credit facility and other borrowings increased to **$1,140,353 thousand** as of June 30, 2025, from **$701,386 thousand** as of December 31, 2024[9](index=9&type=chunk) **Key Balance Sheet Items (in thousands):** | Item | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :-------------- | :---------------- | :----- | | Cash and cash equivalents | $210,320 | $274,384 | $(64,064) | | Inventories | $1,990,807 | $1,715,357 | $275,450 | | Lot deposits | $531,193 | $458,303 | $72,890 | | Mortgage loans held for sale | $152,261 | $303,393 | $(151,132) | | Goodwill | $377,772 | $300,313 | $77,459 | | Total assets | $3,650,054 | $3,328,651 | $321,403 | | Revolving credit facility and other borrowings | $1,140,353 | $701,386 | $438,967 | | Mortgage warehouse facilities | $144,287 | $289,617 | $(145,330) | | Total liabilities | $2,136,329 | $1,908,291 | $228,038 | | Total equity | $1,335,686 | $1,250,409 | $85,277 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20(unaudited)) - Total Revenues increased to **$1,150,505 thousand** for Q2 2025 (from **$1,055,747 thousand** in Q2 2024) and **$2,140,376 thousand** for H1 2025 (from **$1,883,547 thousand** in H1 2024)[12](index=12&type=chunk) - Net Income Attributable to Dream Finders Homes, Inc. decreased to **$56,580 thousand** for Q2 2025 (from **$80,943 thousand** in Q2 2024) and **$111,483 thousand** for H1 2025 (from **$135,437 thousand** in H1 2024)[12](index=12&type=chunk) - Diluted EPS decreased to **$0.56** for Q2 2025 (from **$0.81** in Q2 2024) and **$1.10** for H1 2025 (from **$1.35** in H1 2024)[12](index=12&type=chunk) **Key Operating Results (in thousands, except per share amounts):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Homebuilding Revenues | $1,099,580 | $1,052,236 | $2,069,688 | $1,877,457 | | Financial Services Revenues | $50,925 | $3,511 | $70,688 | $6,090 | | Total Revenues | $1,150,505 | $1,055,747 | $2,140,376 | $1,883,547 | | Homebuilding Cost of Sales | $917,871 | $852,837 | $1,701,407 | $1,531,477 | | Financial Services Expense | $40,058 | $2,072 | $52,924 | $3,756 | | Selling, General and Administrative Expense | $134,699 | $96,854 | $251,393 | $176,963 | | Income before taxes | $74,064 | $106,008 | $145,229 | $176,832 | | Net income attributable to Dream Finders Homes, Inc. | $56,580 | $80,943 | $111,483 | $135,437 | | Basic EPS | $0.57 | $0.83 | $1.12 | $1.38 | | Diluted EPS | $0.56 | $0.81 | $1.10 | $1.35 | [Condensed Consolidated Statements of Equity](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20EQUITY%20(unaudited)) - Total Equity increased to **$1,335,686 thousand** as of June 30, 2025, from **$1,250,409 thousand** as of December 31, 2024[15](index=15&type=chunk)[18](index=18&type=chunk) - Retained Earnings increased to **$1,074,986 thousand** as of June 30, 2025, from **$970,253 thousand** as of December 31, 2024[15](index=15&type=chunk)[18](index=18&type=chunk) - Treasury Stock increased to **$(30,847) thousand** as of June 30, 2025, from **$(7,827) thousand** as of December 31, 2024, reflecting share repurchases[15](index=15&type=chunk)[18](index=18&type=chunk) - Stock-based compensation was **$14,760 thousand** for the six months ended June 30, 2025, up from **$8,525 thousand** for the same period in 2024[18](index=18&type=chunk)[24](index=24&type=chunk) - Repurchases of common stock totaled **$23,020 thousand** for the six months ended June 30, 2025, up from **$1,846 thousand** for the same period in 2024[18](index=18&type=chunk)[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20(unaudited)) - Net cash used in operating activities decreased to **$(113,199) thousand** for H1 2025, from **$(358,128) thousand** for H1 2024, primarily due to a decrease in mortgage loans held for sale and lower inventory increases[27](index=27&type=chunk)[202](index=202&type=chunk) - Net cash used in investing activities increased slightly to **$(197,255) thousand** for H1 2025, from **$(189,710) thousand** for H1 2024, mainly due to higher property and equipment purchases[27](index=27&type=chunk)[203](index=203&type=chunk) - Net cash provided by financing activities decreased to **$229,032 thousand** for H1 2025, from **$296,013 thousand** for H1 2024, primarily due to net repayments of mortgage warehouse facilities[27](index=27&type=chunk)[204](index=204&type=chunk) **Cash Flow Summary (in thousands):** | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net income | $111,549 | $138,446 | | Net cash used in operating activities | $(113,199) | $(358,128) | | Net cash used in investing activities | $(197,255) | $(189,710) | | Net cash provided by financing activities | $229,032 | $296,013 | | Net decrease in cash, cash equivalents and restricted cash | $(81,422) | $(251,825) | | Cash, cash equivalents and restricted cash at end of period | $258,403 | $296,631 | [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(unaudited)) [1. Nature of Business and Significant Accounting Policies](index=12&type=section&id=1.%20Nature%20of%20Business%20and%20Significant%20Accounting%20Policies) - Dream Finders Homes, Inc. designs, builds, and sells homes across three regional segments (Southeast, Mid-Atlantic, Midwest) and operates a Financial Services segment offering mortgage banking, title insurance, and homeowners insurance[34](index=34&type=chunk) - On April 18, 2025, the Company acquired Alliant Title, a title insurance underwriter, expanding its Financial Services segment[37](index=37&type=chunk) - The Company is evaluating ASU 2024-03 (Expense Disaggregation Disclosures, effective FY2027/Q1 2028) and does not expect ASU 2023-09 (Income Tax Disclosures, effective FY2025) to have a material effect[47](index=47&type=chunk)[48](index=48&type=chunk) [2. Acquisitions](index=14&type=section&id=2.%20Acquisitions) - Alliant Title Acquisition (April 18, 2025): Acquired for **$40.2 million** to expand financial services, resulting in **$24.3 million** goodwill assigned to the Financial Services segment[49](index=49&type=chunk)[50](index=50&type=chunk) - Green River Builders Acquisition (May 2, 2025): Acquired an Atlanta-based homebuilder for **$32.8 million**, resulting in **$7.6 million** goodwill assigned to the Southeast segment[51](index=51&type=chunk) - Liberty Communities Acquisition (January 23, 2025): Acquired for **$112.7 million** cash, plus a redeemable noncontrolling interest, to enter the Atlanta market and expand in Greenville, SC, resulting in **$45.6 million** goodwill[52](index=52&type=chunk)[54](index=54&type=chunk)[56](index=56&type=chunk) - Jet HomeLoans Acquisition (July 1, 2024): Acquired the remaining **40%** equity interest for **$9.3 million**, consolidating it into financial statements[61](index=61&type=chunk) - Crescent Homes Acquisition (February 1, 2024): Acquired for **$210.4 million** cash, plus a redeemable noncontrolling interest, expanding into Charleston, Greenville (SC), and Nashville (TN), resulting in **$128.1 million** goodwill[62](index=62&type=chunk)[64](index=64&type=chunk)[67](index=67&type=chunk) - Pro Forma Revenues (H1 2025): Total revenues would have been **$2,188,471 thousand** if acquisitions occurred on Jan 1, 2024, compared to reported **$2,140,376 thousand**[57](index=57&type=chunk) [3. Debt](index=17&type=section&id=3.%20Debt) - Senior Unsecured Notes (2028 Notes): **$300.0 million** aggregate principal at **8.25%** due August 15, 2028. Unamortized debt issuance costs were **$4.3 million** as of June 30, 2025[69](index=69&type=chunk)[70](index=70&type=chunk) - Revolving Credit Facility (Credit Agreement): Aggregate commitments increased to **$1.4 billion** (extendable to **$2.0 billion**) with maturity extended to June 4, 2027. Outstanding balance was **$1.1 billion** as of June 30, 2025, up from **$700.0 million** as of December 31, 2024[73](index=73&type=chunk)[75](index=75&type=chunk) - Mortgage Warehouse Facilities: Total outstanding balance decreased to **$144,287 thousand** as of June 30, 2025, from **$289,617 thousand** as of December 31, 2024[78](index=78&type=chunk) - Debt Covenants: The Company was in compliance with all debt covenants for the 2028 Notes, Credit Agreement, and mortgage warehouse facilities as of June 30, 2025 and December 31, 2024, and expects to remain compliant[78](index=78&type=chunk) [4. Inventories](index=18&type=section&id=4.%20Inventories) - Total Inventories increased to **$1,990,807 thousand** as of June 30, 2025, from **$1,715,357 thousand** as of December 31, 2024[80](index=80&type=chunk) - Construction in process and finished homes increased to **$1,684,263 thousand** as of June 30, 2025, from **$1,487,478 thousand** as of December 31, 2024[80](index=80&type=chunk) - Capitalized Interest: Ending balance was **$43,634 thousand** as of June 30, 2025, up from **$36,598 thousand** as of June 30, 2024. Interest incurred for H1 2025 was **$55,478 thousand**, up from **$47,176 thousand** for H1 2024[80](index=80&type=chunk) - Impairment Charges: Recorded **$1.6 million** of impairments for lot deposits for the six months ended June 30, 2025, compared to **$0.2 million** for the same period in 2024. No inventory impairment charges were recorded[80](index=80&type=chunk) [5. Commitments and Contingencies](index=19&type=section&id=5.%20Commitments%20and%20Contingencies) - Legal Proceedings: The Company is involved in legal matters, including a breach of contract claim related to the Crescent Homes acquisition, with a mediation date set for October 2025. The Company does not anticipate a material adverse effect on financial statements[81](index=81&type=chunk)[82](index=82&type=chunk) - Surety Bonds: Outstanding surety bonds increased to **$338.9 million** as of June 30, 2025, from **$297.8 million** as of December 31, 2024[83](index=83&type=chunk) - Letters of Credit: Outstanding letters of credit increased to **$25.6 million** as of June 30, 2025, from **$20.9 million** as of December 31, 2024[83](index=83&type=chunk) [6. Variable Interest Entities](index=20&type=section&id=6.%20Variable%20Interest%20Entities) - Investments in unconsolidated VIEs: Carrying amounts were **$12.1 million** as of June 30, 2025, up from **$11.5 million** as of December 31, 2024[85](index=85&type=chunk) - Lot Option Contracts: Risk of loss related to finished lot option and land bank option deposits was **$650.4 million** as of June 30, 2025, up from **$551.9 million** as of December 31, 2024[86](index=86&type=chunk) - Jet HomeLoans: Previously an unconsolidated VIE, it was consolidated starting July 1, 2024, after the remaining **40%** interest was acquired[61](index=61&type=chunk)[85](index=85&type=chunk) [7. Income Taxes](index=20&type=section&id=7.%20Income%20Taxes) - Effective Tax Rate: Increased to **23.2%** for H1 2025, from **21.7%** for H1 2024, primarily due to decreased tax benefits from stock-based compensation[87](index=87&type=chunk) - One Big Beautiful Bill Act (OBBBA): Enacted July 4, 2025, it will eliminate Section 45L tax credits for new energy-efficient homes delivered after June 30, 2026, potentially increasing future income tax expense[88](index=88&type=chunk) [8. Segment Reporting](index=21&type=section&id=8.%20Segment%20Reporting) - Reportable Segments: The Company operates in three homebuilding segments (Southeast, Mid-Atlantic, Midwest) and a Financial Services segment[89](index=89&type=chunk)[92](index=92&type=chunk) **Q2 2025 Total Revenues by Segment (in thousands):** | Segment | Total Revenues | | :-------------- | :------------- | | Southeast | $367,572 | | Mid-Atlantic | $274,811 | | Midwest | $457,197 | | Financial Services | $50,925 | | Total | $1,150,505 | **H1 2025 Total Revenues by Segment (in thousands):** | Segment | Total Revenues | | :-------------- | :------------- | | Southeast | $675,205 | | Mid-Atlantic | $512,886 | | Midwest | $881,597 | | Financial Services | $70,688 | | Total | $2,140,376 | **Goodwill by Segment (June 30, 2025, in thousands):** | Segment | Goodwill | | :-------------- | :------- | | Southeast | $67,169 | | Mid-Atlantic | $144,959 | | Midwest | $141,071 | | Financial Services | $24,573 | | Total | $377,772 | [9. Title Insurance](index=23&type=section&id=9.%20Title%20Insurance) - Alliant Title Regulation: Subject to state regulation, requiring statutory financial statements and compliance with capital and surplus requirements[98](index=98&type=chunk)[99](index=99&type=chunk) - Statutory Capital and Surplus: Alliant Title's statutory capital and surplus was **$17.7 million** as of June 30, 2025, exceeding the regulatory requirement of **$7.0 million**[99](index=99&type=chunk) - Reserve for Title Claim Losses: Total reserve was **$31.6 million** as of June 30, 2025, with **86.8%** representing incurred but not reported (IBNR) claims[100](index=100&type=chunk) [10. Fair Value Disclosures](index=24&type=section&id=10.%20Fair%20Value%20Disclosures) - Fair Value Hierarchy: The Company uses Level 1, 2, and 3 inputs for fair value measurements, including mortgage loans held for sale (Level 2), derivative assets/liabilities (Level 3), AFS debt securities (Level 2), senior unsecured notes (Level 2), and contingent consideration (Level 3)[101](index=101&type=chunk)[107](index=107&type=chunk) - Mortgage Loans Held for Sale: Fair value of **$152,261 thousand** as of June 30, 2025. Total notional amount of IRLCs was approximately **$104.0 million** with a weighted average interest rate of **5.6%**[102](index=102&type=chunk)[107](index=107&type=chunk) - Contingent Consideration: Ending balance was **$13,891 thousand** as of June 30, 2025, significantly down from **$68,030 thousand** as of December 31, 2024. Fair value adjustments related to the MHI acquisition resulted in income of **$11.6 million** for H1 2025[107](index=107&type=chunk) - AFS Debt Securities: Total fair value of **$30,613 thousand** as of June 30, 2025, with amortized cost of **$30,067 thousand**[107](index=107&type=chunk) [11. Related Party Transactions](index=26&type=section&id=11.%20Related%20Party%20Transactions) - DF Capital Funds: The Company holds a **49.0%** interest in DF Capital Management, LLC, which organizes real estate investment funds for land acquisition and development[110](index=110&type=chunk) - Lot Deposits with Fund II: Outstanding lot deposits related to DF Residential II, LP were **$20.9 million** as of June 30, 2025, controlling **2,371** lots[111](index=111&type=chunk) - Lot Deposits with Fund III: Outstanding lot deposits related to DF Residential III, LP were **$47.1 million** as of June 30, 2025, controlling **3,540** lots[112](index=112&type=chunk) [12. Equity](index=26&type=section&id=12.%20Equity) - Share Buyback Program: Board approved an increase in the buyback limit to **$50.0 million** during Q2 2025. Approximately **$19.2 million** remained available as of June 30, 2025[113](index=113&type=chunk)[115](index=115&type=chunk) - Shares Repurchased (H1 2025): Repurchased **989,968** shares of Class A common stock for **$23.0 million**[115](index=115&type=chunk) [13. Earnings Per Share](index=27&type=section&id=13.%20Earnings%20Per%20Share) - Diluted EPS (H1 2025): **$1.10**, based on **101,635,185** weighted-average diluted shares[116](index=116&type=chunk) - Net Income Available to Common Stockholders (H1 2025): **$104,733 thousand**, after deducting **$6,750 thousand** in preferred dividends[116](index=116&type=chunk) - Antidilutive Shares: **0.9 million** common stock equivalent shares were excluded from diluted EPS calculation for H1 2025[116](index=116&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS](index=28&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Dream Finders Homes' financial condition and operational results for H1 2025, highlighting revenue growth, margin pressures, and strategic acquisitions [Business Overview and Outlook](index=28&type=section&id=Business%20Overview%20and%20Outlook) - Core Business: Designs, builds, and sells single-family homes across various markets (entry-level, move-up, active adult, built-for-rent) using an asset-light lot acquisition strategy[118](index=118&type=chunk) - Financial Services: Offers mortgage banking, title insurance (agency and underwriting), and homeowners insurance[118](index=118&type=chunk) - Macroeconomic Outlook: Persistent macroeconomic uncertainty due to home affordability challenges and high mortgage interest rates, leading to subdued market conditions expected to continue through year-end 2025, despite sustained housing demand[119](index=119&type=chunk) [Recent Developments](index=28&type=section&id=Recent%20Developments) - Phoenix, Arizona Expansion: Sold **7** homes and closed **4** homes in the Phoenix, Arizona division during Q2 2025, expanding presence within the Midwest segment[120](index=120&type=chunk) [Results of Consolidated Operations](index=29&type=section&id=Results%20of%20Consolidated%20Operations) - Income Before Taxes (Q2 2025): **$74,064 thousand**, down from **$106,008 thousand** in Q2 2024[121](index=121&type=chunk) - Net Income Attributable to Dream Finders Homes, Inc. (Q2 2025): **$56,580 thousand**, down from **$80,943 thousand** in Q2 2024[121](index=121&type=chunk) - Diluted EPS (Q2 2025): **$0.56**, down from **$0.81** in Q2 2024[121](index=121&type=chunk) - EBITDA (H1 2025): **$250,290 thousand**, down from **$255,178 thousand** in H1 2024. EBITDA margin decreased to **11.7%** from **13.5%**[121](index=121&type=chunk) - Return on Participating Equity (H1 2025): **25.0%**, down from **33.5%** in H1 2024[121](index=121&type=chunk) **Consolidated Financial Highlights (in thousands, except per share amounts):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income before taxes | $74,064 | $106,008 | $145,229 | $176,832 | | Net income attributable to DFH | $56,580 | $80,943 | $111,483 | $135,437 | | Basic EPS | $0.57 | $0.83 | $1.12 | $1.38 | | Diluted EPS | $0.56 | $0.81 | $1.10 | $1.35 | | EBITDA | $133,745 | $149,584 | $250,290 | $255,178 | | EBITDA margin % | 11.6% | 14.2% | 11.7% | 13.5% | [Results of Homebuilding Operations](index=30&type=section&id=Results%20of%20Homebuilding%20Operations) [Q2 2025 Homebuilding Performance](index=30&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024) - Homebuilding Revenues: Increased **4%** to **$1,099,580 thousand**, driven by a **10%** increase in home closings (**2,232** homes), partially offset by a **7%** decrease in Average Sales Price (ASP) to **$481,027**[125](index=125&type=chunk)[129](index=129&type=chunk) - Homebuilding Gross Margin %: Decreased to **16.5%** from **19.0%**, primarily due to lower ASP from increased sales incentives and product mix changes, along with higher land and financing costs[125](index=125&type=chunk)[130](index=130&type=chunk) - Selling, General and Administrative Expense (SG&A): Increased **39%** to **$133,853 thousand**, or **12.2%** of revenues (up from **9.2%**), mainly due to a **$25 million** increase in forward mortgage commitment programs and higher compensation/marketing costs from growth and acquisitions[125](index=125&type=chunk)[135](index=135&type=chunk) - Contingent Consideration Revaluation: Shifted to income of **$12,962 thousand** from an expense of **$4,046 thousand**, due to lower actual results and revised forecasts for the MHI acquisition[125](index=125&type=chunk)[136](index=136&type=chunk) **Q2 Homebuilding Key Metrics (in thousands, except units and percentages):** | Metric | June 30, 2025 | June 30, 2024 | Change | % Change | | :--------------------------------- | :------------ | :------------ | :----- | :------- | | Homebuilding revenues | $1,099,580 | $1,052,236 | $47,344 | 4% | | Home closings | 2,232 | 2,031 | 201 | 10% | | Average sales price of homes closed | $481,027 | $514,833 | $(33,806) | (7)% | | Net sales | 1,938 | 1,712 | 226 | 13% | | Cancellation rate | 14.0% | 13.2% | 0.8% | 6% | | Homebuilding gross margin % | 16.5% | 19.0% | (2.4)% | (13)% | | SG&A expense | $133,853 | $96,557 | $37,296 | 39% | | Income before taxes | $61,352 | $98,881 | $(37,529) | (38)% | [H1 2025 Homebuilding Performance](index=33&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024) - Homebuilding Revenues: Increased **10%** to **$2,069,688 thousand**, driven by a **13%** increase in home closings (**4,157** homes), partially offset by a **3%** decrease in ASP to **$489,018**[138](index=138&type=chunk)[140](index=140&type=chunk) - Homebuilding Gross Margin %: Decreased to **17.8%** from **18.4%**, primarily due to higher land and financing costs and increased sales incentives, partially offset by direct cost reductions[138](index=138&type=chunk)[141](index=141&type=chunk) - Selling, General and Administrative Expense (SG&A): Increased **42%** to **$250,149 thousand**, or **12.1%** of revenues (up from **9.4%**), mainly due to **$52 million** spent on forward mortgage commitment programs and higher compensation costs from growth and acquisitions[138](index=138&type=chunk)[146](index=146&type=chunk) - Contingent Consideration Revaluation: Shifted to income of **$11,940 thousand** from an expense of **$6,951 thousand**, due to lower actual results and revised forecasts for the MHI acquisition[138](index=138&type=chunk)[147](index=147&type=chunk) **H1 Homebuilding Key Metrics (in thousands, except units and percentages):** | Metric | June 30, 2025 | June 30, 2024 | Change | % Change | | :--------------------------------- | :------------ | :------------ | :----- | :------- | | Homebuilding revenues | $2,069,688 | $1,877,457 | $192,231 | 10% | | Home closings | 4,157 | 3,686 | 471 | 13% | | Average sales price of homes closed | $489,018 | $505,926 | $(16,908) | (3)% | | Net sales | 3,970 | 3,436 | 534 | 16% | | Cancellation rate | 12.8% | 16.8% | (4.0%) | (24)% | | Homebuilding gross margin % | 17.8% | 18.4% | (0.6)% | (3)% | | SG&A expense | $250,149 | $176,423 | $73,726 | 42% | | Income before taxes | $124,134 | $162,992 | $(38,858) | (24)% | [Land Acquisition and Development Process](index=36&type=section&id=Land%20Acquisition%20and%20Development%20Process) - Asset-Light Strategy: Employs finished lot option contracts and land bank option contracts, limiting risk to deposits paid[151](index=151&type=chunk) - Lot Deposits: Total lot deposits were **$531 million** as of June 30, 2025, up from **$458 million** as of December 31, 2024[152](index=152&type=chunk) - Controlled Lots: Controlled **63,180** lots as of June 30, 2025, an increase of **16%** from **54,698** lots as of December 31, 2024[152](index=152&type=chunk)[154](index=154&type=chunk) [Controlled Lots Pipeline](index=36&type=section&id=Controlled%20Lots%20Pipeline) - Total Controlled Lots: **63,180** as of June 30, 2025, a **16%** increase from **54,698** as of December 31, 2024[154](index=154&type=chunk) **Controlled Lots by Segment (June 30, 2025):** | Segment | Controlled Lots | % Change (vs Dec 31, 2024) | | :-------------- | :-------------- | :------------------------- | | Southeast | 23,869 | 12% | | Mid-Atlantic | 22,744 | 33% | | Midwest | 16,567 | 2% | - Built-for-Rent Contracts: **734** controlled lots under built-for-rent contracts as of June 30, 2025, up from **603** as of December 31, 2024[155](index=155&type=chunk) [Our Active Communities](index=36&type=section&id=Our%20Active%20Communities) - Active Community Count: **271** active communities as of June 30, 2025, a **22%** increase from **222** as of June 30, 2024[156](index=156&type=chunk) - Built-for-Rent Communities: **7** communities delivering closings under built-for-rent contracts as of June 30, 2025, down from **16** as of June 30, 2024[157](index=157&type=chunk) [Costs of Building Materials and Labor](index=36&type=section&id=Costs%20of%20Building%20Materials%20and%20Labor) - Cost Breakdown: Homesite costs (**30-35%**), building materials (**30-35%**), labor (**20-25%**), and interest/commissions/closing costs (**5-10%**) of average home cost[158](index=158&type=chunk) - Price Fluctuations: Materials are subject to price fluctuations due to seasonal variation, supply chain disruptions, trade disputes, and demand changes, which can impact homebuilding cost of sales[159](index=159&type=chunk) [Net Sales, Backlog and Closings](index=37&type=section&id=Net%20Sales,%20Backlog%20and%20Closings) - Net Sales (Q2 2025): **1,938** units, up **13%** from **1,712** units in Q2 2024[162](index=162&type=chunk) - Net Sales (H1 2025): **3,970** units, up **16%** from **3,436** units in H1 2024[163](index=163&type=chunk) - Backlog (June 30, 2025): **2,513** homes valued at **$1.2 billion**, a decrease of **40%** in units and **43%** in value from **4,205** homes valued at **$2.1 billion** as of June 30, 2024[165](index=165&type=chunk)[166](index=166&type=chunk) - Backlog Trend: Decrease reflects a shift towards move-in ready spec homes (quicker closings) and a reduction in built-for-rent contracts[166](index=166&type=chunk) - Cancellation Rate (Q2 2025): **14.0%**, an increase of **80 bps** from **13.2%** in Q2 2024[170](index=170&type=chunk)[171](index=171&type=chunk) - Cancellation Rate (H1 2025): **12.8%**, an improvement from **16.8%** in H1 2024, partly due to a large built-for-rent contract termination in Q1 2024[170](index=170&type=chunk)[171](index=171&type=chunk) [Financial Services](index=39&type=section&id=Financial%20Services) [Q2 2025 Financial Services Performance](index=39&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024%20(Financial%20Services)) - Total Financial Services Revenues: Increased to **$50,925 thousand** from **$3,511 thousand**, primarily due to the consolidation of Jet HomeLoans and the acquisition of Alliant Title[173](index=173&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - Mortgage Revenues: **$17,635 thousand** (Q2 2025), up from **$0** (Q2 2024), due to Jet HomeLoans consolidation[173](index=173&type=chunk)[175](index=175&type=chunk) - Title and Other Services Revenues: **$33,290 thousand** (Q2 2025), up from **$3,511 thousand** (Q2 2024), due to Alliant Title acquisition and DF Title's expansion into Texas[173](index=173&type=chunk)[176](index=176&type=chunk) - Financial Services Income Before Taxes: Increased to **$12,241 thousand** from **$6,586 thousand**[173](index=173&type=chunk) - Mortgage Originations (Q2 2025): **1,538** loans totaling **$641 million** in principal, with a capture rate of **79.7%**[174](index=174&type=chunk) [H1 2025 Financial Services Performance](index=40&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024%20(Financial%20Services)) - Total Financial Services Revenues: Increased to **$70,688 thousand** from **$6,090 thousand**, primarily due to the consolidation of Jet HomeLoans and the acquisition of Alliant Title[173](index=173&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) - Mortgage Revenues: **$32,543 thousand** (H1 2025), up from **$0** (H1 2024), due to Jet HomeLoans consolidation[173](index=173&type=chunk)[178](index=178&type=chunk) - Title and Other Services Revenues: **$38,145 thousand** (H1 2025), up from **$6,090 thousand** (H1 2024), due to Alliant Title acquisition and DF Title's expansion into Texas[173](index=173&type=chunk)[179](index=179&type=chunk) - Financial Services Income Before Taxes: Increased to **$19,066 thousand** from **$11,885 thousand**[173](index=173&type=chunk) - Mortgage Originations (H1 2025): **2,725** loans totaling **$1,154 million** in principal, with a capture rate of **79.3%**[174](index=174&type=chunk) [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) [Adjusted Homebuilding Gross Margin](index=41&type=section&id=Adjusted%20Homebuilding%20Gross%20Margin) - Definition: Homebuilding gross margin excluding capitalized interest, lot option fees, purchase accounting amortization, and commission expense[182](index=182&type=chunk) - Adjusted Homebuilding Gross Margin % (Q2 2025): **25.9%**, down from **27.0%** in Q2 2024[184](index=184&type=chunk) - Adjusted Homebuilding Gross Margin % (H1 2025): **26.8%**, up slightly from **26.7%** in H1 2024[184](index=184&type=chunk) **Adjusted Homebuilding Gross Margin Reconciliation (in thousands, except percentages):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Homebuilding gross margin | $181,709 | $199,399 | $368,281 | $345,980 | | Interest expense in homebuilding cost of sales | $56,197 | $41,662 | $98,002 | $72,404 | | Amortization in homebuilding cost of sales | $396 | $2,518 | $1,725 | $7,100 | | Commission expense | $46,860 | $40,992 | $87,254 | $76,300 | | Adjusted homebuilding gross margin | $285,162 | $284,571 | $555,262 | $501,784 | | Homebuilding gross margin % | 16.5% | 19.0% | 17.8% | 18.4% | | Adjusted homebuilding gross margin % | 25.9% | 27.0% | 26.8% | 26.7% | [EBITDA](index=42&type=section&id=EBITDA) - Definition: Net income before interest income, capitalized interest charged in homebuilding cost of sales, interest expense, income tax expense, and depreciation and amortization[186](index=186&type=chunk) - EBITDA (Q2 2025): **$133,745 thousand**, down from **$149,584 thousand** in Q2 2024[187](index=187&type=chunk) - EBITDA (H1 2025): **$250,290 thousand**, down from **$255,178 thousand** in H1 2024[187](index=187&type=chunk) - EBITDA Margin % (Q2 2025): **11.6%**, down from **14.2%** in Q2 2024[187](index=187&type=chunk) - EBITDA Margin % (H1 2025): **11.7%**, down from **13.5%** in H1 2024[187](index=187&type=chunk) [Net Homebuilding Debt to Net Capitalization](index=43&type=section&id=Net%20Homebuilding%20Debt%20to%20Net%20Capitalization) - Definition: Homebuilding debt less cash and cash equivalents, divided by the sum of net homebuilding debt, total mezzanine equity, and total equity[189](index=189&type=chunk) - Net Homebuilding Debt to Net Capitalization: Increased to **44.5%** as of June 30, 2025, from **42.7%** as of December 31, 2024[190](index=190&type=chunk) **Net Homebuilding Debt to Net Capitalization Reconciliation (in thousands, except percentages):** | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Total debt | $1,580,352 | $1,185,440 | | Total mezzanine equity | $178,039 | $169,951 | | Total equity | $1,335,686 | $1,051,581 | | Total capitalization | $3,094,077 | $2,406,972 | | Total debt to total capitalization | 51.1% | 49.3% | | Net homebuilding debt | $1,211,991 | $910,643 | | Net capitalization | $2,725,716 | $2,132,175 | | Net homebuilding debt to net capitalization | 44.5% | 42.7% | [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) [Overview](index=43&type=section&id=Overview%20(Liquidity%20and%20Capital%20Resources)) - Funding Sources: Cash, revolving credit facility, senior unsecured notes, and mortgage warehouse facilities[191](index=191&type=chunk) - Capital Uses: Lot deposits, lot purchases, home construction, operating expenses, business acquisitions, and mortgage loan origination[192](index=192&type=chunk) - Business Acquisitions: Total cash consideration for acquisitions was **$190 million** for H1 2025, compared to **$210 million** for H1 2024[192](index=192&type=chunk) - Lot Deposits: **$531 million** as of June 30, 2025, up from **$458 million** as of December 31, 2024, reflecting commitment to land bank deposits for adequate lot supply[197](index=197&type=chunk) - Total Liquidity: **$432,871 thousand** as of June 30, 2025, down from **$816,029 thousand** as of December 31, 2024[198](index=198&type=chunk) - Availability under Credit Agreement: **$222,551 thousand** as of June 30, 2025, down from **$541,645 thousand** as of December 31, 2024[198](index=198&type=chunk) [Cash Flows](index=45&type=section&id=Cash%20Flows) - Net Cash Used in Operating Activities: Decreased to **$(113) million** for H1 2025 from **$(358) million** for H1 2024, driven by a **$151 million** decrease in mortgage loans held for sale and lower inventory increases[202](index=202&type=chunk) - Net Cash Used in Investing Activities: Increased to **$(197) million** for H1 2025 from **$(190) million** for H1 2024, mainly due to **$13 million** in furniture and fixture purchases for model homes[203](index=203&type=chunk) - Net Cash Provided by Financing Activities: Decreased to **$229 million** for H1 2025 from **$296 million** for H1 2024, primarily due to **$145 million** in net repayments of mortgage warehouse facilities, partially offset by higher net proceeds from homebuilding debt[204](index=204&type=chunk) [Redeemable Noncontrolling Interests](index=45&type=section&id=Redeemable%20Noncontrolling%20Interests) - Balance: Totaled **$30 million** as of June 30, 2025[205](index=205&type=chunk) - Redeemability: No amount was redeemable within **12 months** as of June 30, 2025[205](index=205&type=chunk) - Reporting: Reported within mezzanine equity on the Condensed Consolidated Balance Sheets at the greater of initial carrying amount (fair value at acquisition) adjusted for net income/loss less distributions, or redemption value[205](index=205&type=chunk) [Redeemable Preferred Stock](index=46&type=section&id=Redeemable%20Preferred%20Stock) - Issuance: **150,000** shares sold on September 29, 2021, for **$150 million**, with an initial liquidation preference of **$1,000** per share[207](index=207&type=chunk) - Ranking: Ranks senior to Class A and B common stock with respect to dividends and liquidation distributions[207](index=207&type=chunk) [Contractual Obligations](index=46&type=section&id=Contractual%20Obligations) - No Material Changes: No material changes to contractual obligations for the three and six months ended June 30, 2025, except for amendments to the revolving credit facility[210](index=210&type=chunk) [Critical Accounting Policies](index=46&type=section&id=Critical%20Accounting%20Policies) - No Significant Changes: No significant changes to critical accounting policies during H1 2025 compared to the Annual Report on Form 10-K for FY2024[211](index=211&type=chunk) [Recent Accounting Pronouncements](index=46&type=section&id=Recent%20Accounting%20Pronouncements%20(Liquidity%20and%20Capital%20Resources)) - Refer to Note 1: For details on recent accounting pronouncements[212](index=212&type=chunk) [Off-Balance Sheet Arrangements](index=46&type=section&id=Off-Balance%20Sheet%20Arrangements) - Asset-Light Strategy: Utilizes finished lot option contracts and land bank option contracts[213](index=213&type=chunk) - Surety Bonds and Letters of Credit: Outstanding surety bonds of **$338.9 million** and letters of credit of **$25.6 million** as of June 30, 2025, used for land development performance obligations[214](index=214&type=chunk)[215](index=215&type=chunk) [Cautionary Statement about Forward-Looking Statements](index=47&type=section&id=Cautionary%20Statement%20about%20Forward-Looking%20Statements) - Nature of Statements: The report contains forward-looking statements subject to risks and uncertainties, which may cause actual results to differ materially from expectations[216](index=216&type=chunk)[217](index=217&type=chunk) - Key Areas: Include market opportunity, interest rate trends, demand for housing, strategy, profitability, liquidity, and integration of acquisitions[221](index=221&type=chunk) - Risk Factors: Refer to Item 1A in the Annual Report on Form 10-K for FY2024 and this 10-Q for detailed risks[218](index=218&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=48&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details the Company's market risk exposure, primarily interest rate risk, impacting housing demand, mortgage financing, and financial instruments, with hedging strategies in place [Quantitative and Qualitative Disclosures About Interest Rate Risk](index=48&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Interest%20Rate%20Risk) - Interest Rate Sensitivity: Operations are sensitive to interest rates, which impact housing demand and mortgage financing[222](index=222&type=chunk)[223](index=223&type=chunk) - Credit Agreement: Borrowings bear interest based on Term SOFR or Daily Simple SOFR rates plus an applicable rate margin (**2.00%** to **2.95%**) tied to the Company's net debt to capitalization ratio[224](index=224&type=chunk) - Mortgage Banking Risk: Jet HomeLoans is exposed to interest rate risk from lending activities, using investor commitments and forward sales of MBS contracts to hedge interest rate lock commitments (IRLCs)[227](index=227&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=49&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management affirmed the effectiveness of disclosure controls as of June 30, 2025, excluding recently acquired businesses from the internal controls over financial reporting assessment due to ongoing integration [Disclosure Controls and Procedures](index=49&type=section&id=Disclosure%20Controls%20and%20Procedures) - Effectiveness: CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance for timely and accurate SEC reporting[229](index=229&type=chunk) [Changes in Internal Controls](index=49&type=section&id=Changes%20in%20Internal%20Controls) - Acquisition Exclusions: Internal controls over financial reporting for Alliant Title (acquired April 2025), Liberty Communities (acquired January 2025), and Jet HomeLoans (acquired July 2024) were excluded from the assessment, per SEC guidance[230](index=230&type=chunk)[232](index=232&type=chunk)[234](index=234&type=chunk) - Integration Status: Implementation of internal controls for Alliant Title and Liberty Communities is ongoing, with continuous evaluation and integration planned within one year of acquisition[231](index=231&type=chunk)[233](index=233&type=chunk) - Jet HomeLoans Integration: Implementation of internal controls commenced as of July 1, 2025, with design and operating effectiveness not yet assessed as of July 31, 2025[234](index=234&type=chunk) - No Material Changes: Other than ongoing integrations, no material changes to internal control over financial reporting occurred during the most recent fiscal quarter[235](index=235&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=51&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The Company is involved in ordinary course legal proceedings, including a breach of contract claim related to the Crescent Homes acquisition, detailed in Note 5 - Ongoing Legal Matters: The Company is party to legal matters primarily related to home construction and sales[81](index=81&type=chunk)[238](index=238&type=chunk) - Crescent Homes Lawsuit: A complaint was filed on April 28, 2025, by the former owner of Crescent Homes for alleged breach of contract, with mediation set for October 2025. The Company intends to defend the lawsuit and does not believe it will have a material adverse effect[82](index=82&type=chunk) [ITEM 1A. RISK FACTORS](index=51&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section outlines additional risks, including those related to financial services (title claims, hedging), mortgage banking, changes in homeownership tax benefits, and federal energy tax credit termination [Additional Risks Related to Our Financial Services Businesses](index=51&type=section&id=Additional%20Risks%20Related%20to%20Our%20Financial%20Services%20Businesses) - Title Claim Reserve Risks: Reserves are based on actuarial estimates, and deviations from assumptions could require increased reserves, impacting profitability[240](index=240&type=chunk) - Reinsurance Credit Risk: The Company remains liable to policyholders even if reinsurers fail to meet obligations, exposing it to credit risk from counterparties[242](index=242&type=chunk) - Independent Agent Risks: Reliance on independent agents for title services may increase the frequency and severity of title claims due to potential errors or omissions[243](index=243&type=chunk) - Hedging Strategy Risks: Limited hedging strategies for interest rate risk may not fully offset losses from unexpected interest rate volatility[244](index=244&type=chunk) [Mortgage Banking Risks](index=52&type=section&id=Our%20mortgage%20banking%20business%20is%20subject%20to%20risks%20related%20to%20mortgage%20sales%20and%20loan%20repurchase%20obligations.) - Secondary Market Dependence: Inability to sell originated mortgage loans into the secondary market could lead to holding loans long-term, increasing borrower credit risk, reducing liquidity, and raising capital requirements[245](index=245&type=chunk) - Warehouse Facility Default: Default by lenders under mortgage warehouse facilities could require the Company to fund loans, potentially exceeding its revolving credit facility and operating cash flow[245](index=245&type=chunk) [Tax Benefit Risks for Homeownership](index=52&type=section&id=Any%20limitation%20on,%20or%20reduction%20or%20elimination%20of,%20tax%20benefits%20associated%20with%20homeownership%20would%20have%20an%20adverse%20ef%20ect%20upon%20the%20demand%20for%20homes,%20which%20could%20be%20material%20to%20our%20business.) - Impact of Tax Law Changes: Changes to federal or state income tax laws, such as limitations on mortgage interest and real estate tax deductions (e.g., Tax Cuts and Jobs Act, OBBBA), could increase the after-tax cost of homeownership and adversely affect demand and sales prices[246](index=246&type=chunk) [Federal Energy Tax Credit Risks](index=52&type=section&id=Federal%20income%20tax%20credits%20currently%20available%20to%20certain%20builders%20of%20energy-ef%20icient%20new%20homes%20may%20not%20be%20extended%20by%20future%20legislation.) - Section 45L Credit Termination: The One Big Beautiful Bill Act (OBBBA) terminated the Code Section 45L credit for homes purchased after June 30, 2026, which could materially increase future effective income tax rates[249](index=249&type=chunk) - Estimated Credits: Estimated **$12 million** in Federal Energy Credits for FY2024, up from **$3 million** in FY2023, due to more qualifying homes[248](index=248&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=53&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The Board increased the share buyback program limit in Q2 2025, with details on repurchased shares and remaining availability [Share Buyback Program](index=53&type=section&id=Share%20Buyback%20Program) - Program Increase: Limit increased to **$50.0 million** during Q2 2025, from **$25.0 million**[250](index=250&type=chunk) - Shares Repurchased (Q2 2025): **705,404** shares of Class A common stock for an aggregate purchase price of **$16.1 million**[252](index=252&type=chunk) - Remaining Availability: Approximately **$19.2 million** remained available for purchase as of June 30, 2025[115](index=115&type=chunk) [ITEM 5. OTHER INFORMATION](index=54&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section details the Company's policy on Rule 10b5-1 Trading Plans for directors and executive officers, with no changes reported in Q2 2025 [Rule 10b5-1 Trading Plans](index=54&type=section&id=Rule%2010b5-1%20Trading%20Plans) - Policy: Directors and executive officers may use Rule 10b5-1 Trading Plans to buy or sell common stock, established when not in possession of material non-public information[253](index=253&type=chunk) - Q2 2025 Activity: No Rule 10b5-1 Trading Plans were adopted, terminated, or modified by directors and executive officers during the three months ended June 30, 2025[253](index=253&type=chunk) [ITEM 6. EXHIBITS](index=54&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL documents - Certifications: Includes CEO and CFO Certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[254](index=254&type=chunk) - XBRL Documents: Various Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase) are filed[254](index=254&type=chunk) [SIGNATURES](index=55&type=section&id=SIGNATURES) The report is duly signed by Dream Finders Homes, Inc.'s President, CEO, Chairman, and Senior Vice President and CFO on July 31, 2025 - Signatories: Patrick O. Zalupski (President, CEO, and Chairman) and L. Anabel Ramsay (Senior Vice President and CFO) signed the report on July 31, 2025[260](index=260&type=chunk)

[Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) The company achieved increased homebuilding revenues and closings, significant growth in financial services income, but experienced a decline in overall pre-tax income and EPS Second Quarter 2025 Key Financial and Operational Highlights (YoY) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :---------- | :---------- | :----- | | Homebuilding revenues | $1.1 billion | $1.05 billion | +4% | | Home closings | 2,232 | 2,031 | +10% | | Net new orders | 1,938 | 1,712 | +13% | | Homebuilding gross margin | 16.5% | 19.0% | -2.5 pp | | Adjusted homebuilding gross margin (non-GAAP) | 25.9% | 27.0% | -1.1 pp | | Pre-tax income | $74 million | $106 million | -30.2% | | Net income attributable to DFH | $57 million | $81 million | -29.7% | | Basic EPS | $0.57 | $0.83 | -31.3% | | Financial services pre-tax income | $12 million | $7 million | +86% | | Controlled lot pipeline (as of June 30, 2025 vs Dec 31, 2024) | 63,180 | 54,698 | +15.5% | | Total liquidity (as of June 30, 2025) | $433 million | N/A | N/A | | Return on participating equity | 25.0% | 33.5% | -8.5 pp | | Class A common shares repurchased | 705,404 | N/A | N/A | | Value of shares repurchased | $16 million | N/A | N/A | [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Patrick Zalupski noted **solid performance** with increased home closings and net sales despite market challenges, completed strategic acquisitions, and reaffirmed full-year 2025 guidance - CEO notes **solid performance** despite challenging environment (elevated interest rates, weakening consumer confidence), growing home closings by **10%** and net sales by **13%**[3](index=3&type=chunk) - Completed acquisitions of Alliant National Title Insurance Company, Inc. and Green River Builders, Inc. to enhance **vertical integration** and expand presence in the Atlanta region[4](index=4&type=chunk) - Reiterated full-year 2025 guidance of approximately **9,250 home closings** and repurchased over **700,000 shares** of common stock, demonstrating confidence in **long-term business strength**[5](index=5&type=chunk) [Strategic Acquisitions](index=2&type=section&id=Acquisitions) Dream Finders Homes completed two strategic acquisitions in Q2 2025: Alliant National Title Insurance Company, Inc. to expand financial services and **vertical integration**, and Green River Builders, Inc. to strengthen its presence in the greater Atlanta housing market [Alliant Title Acquisition](index=2&type=section&id=Alliant%20Title) On April 18, 2025, Dream Finders Homes acquired Alliant National Title Insurance Company, Inc., integrating its operations into the Financial Services segment to enhance **vertical integration** and expand financial services capabilities - Acquired Colorado-based title insurance underwriter, Alliant National Title Insurance Company, Inc. on April **18**, **2025**[6](index=6&type=chunk) - Operations included in the Financial Services segment, enhancing **vertical integration** and expanding financial services capabilities[4](index=4&type=chunk)[6](index=6&type=chunk) [Green River Builders Acquisition](index=2&type=section&id=Green%20River%20Builders) On May 2, 2025, the Company acquired the majority of homebuilding assets of Green River Builders, Inc., expanding its operations in the northern Atlanta, Georgia market, complementing previous acquisitions in the region - Acquired majority of homebuilding assets of Green River Builders, Inc. on May **2**, **2025**[7](index=7&type=chunk) - Expands operations in the greater Atlanta region, specifically northern Atlanta, complementing the Liberty Communities acquisition[4](index=4&type=chunk)[7](index=7&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) The company's performance is analyzed across its Homebuilding and Financial Services segments, detailing revenue, margin, and order trends [Homebuilding Segment](index=2&type=section&id=Homebuilding) The Homebuilding segment saw a **4%** increase in revenues and a **10%** rise in home closings, primarily driven by the Liberty Communities acquisition. However, average sales price decreased by **7%**, and gross margin declined due to increased incentives, higher costs, and product mix changes. SG&A expenses also rose significantly [Revenues and Closings](index=2&type=section&id=Homebuilding%20Revenues%20and%20Closings) Homebuilding revenues increased **4%** to **$1.1 billion**, with home closings up **10%** to **2,232**. The average sales price decreased **7%** to **$481,027**, partly due to lower ASP from the Liberty Communities acquisition and increased sales incentives Homebuilding Revenues and Closings (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------- | :---------- | :---------- | :----- | | Homebuilding Revenues | $1.1 billion | $1.05 billion | +4% | | Home Closings | 2,232 | 2,031 | +10% | | Average Sales Price | $481,027 | $514,833 | -7% | - Growth in homebuilding revenues primarily due to increased home closings, largely attributable to the January **2025** Liberty Communities acquisition (**179** closings with ASP of **$355,550**)[8](index=8&type=chunk) - Increased use of sales incentives partially offset homebuilding revenue growth and contributed to lower ASP[8](index=8&type=chunk) [Gross Margin Analysis](index=2&type=section&id=Homebuilding%20Gross%20Margin%20Analysis) Homebuilding gross margin decreased by **250 basis points** to **16.5%** (**19.0%** in Q2 **2024**), primarily due to increased incentives, higher land and financing costs, and changes in product mix. Adjusted homebuilding gross margin also saw a slight decrease Homebuilding Gross Margin (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (bps) | | :-------------------------- | :------ | :------ | :----------- | | Homebuilding Gross Margin % | 16.5% | 19.0% | -250 bps | | Adjusted Homebuilding Gross Margin % | 25.9% | 27.0% | -110 bps | - Decrease in gross margin primarily resulted from increased incentives, higher land and financing costs, and changes in product mix[9](index=9&type=chunk) - Partially offset by direct cost reductions and continued cycle time improvements[9](index=9&type=chunk) [Selling, General & Administrative (SG&A) Expenses](index=3&type=section&id=Selling,%20General%20and%20Administrative%20Expense) SG&A expenses increased **39%** to **$135 million**, rising to **12.3%** of homebuilding revenues (from **9.2%** in Q2 **2024**). This increase was mainly due to costs from forward mortgage commitment programs, higher compensation, and other marketing/general expenses from recent acquisitions and organic expansion SG&A Expenses (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :---------- | :---------- | :----- | | SG&A Expense | $135 million | $97 million | +39% | | SG&A as % of Homebuilding Revenues | 12.3% | 9.2% | +310 bps | - Increases primarily attributable to costs of forward mortgage commitment programs, higher compensation, and other marketing/general expenses from recent acquisitions and organic expansion[11](index=11&type=chunk) [Net New Orders and Cancellation Rate](index=3&type=section&id=Net%20new%20orders) Net new orders increased **13%** to **1,938**, while the cancellation rate slightly rose to **14.0%**. The company attributes the increase in orders and low cancellation rate to successful sales incentives and the availability of quick, move-in-ready homes Net New Orders and Cancellation Rate (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :---------------- | :------ | :------ | :----- |\ | Net New Orders | 1,938 | 1,712 | +13% | | Cancellation Rate | 14.0% | 13.2% | +80 bps | - Increase in net new orders and low cancellation rate reflect successful sales incentives and availability of quick, move-in-ready homes[14](index=14&type=chunk) [Backlog](index=3&type=section&id=Second%20Quarter%202025%20Backlog) As of June **30**, **2025**, backlog decreased to **2,513 homes** valued at **$1.2 billion**, down from **2,802 homes** valued at **$1.4 billion** as of March **31**, **2025**. The average sales price in backlog also decreased to **$477,865** Backlog (June 30, 2025 vs March 31, 2025) | Metric | June 30, 2025 | March 31, 2025 | Change | | :-------------------- | :-------------- | :--------------- | :----- | | Backlog Homes | 2,513 | 2,802 | -10.3% | | Backlog Value | $1.2 billion | $1.4 billion | -14.3% | | ASP in Backlog | $477,865 | $494,987 | -3.5% | - Approximately **1,997 homes** in backlog expected to be delivered in **2025**, with **516** in **2026** and beyond[15](index=15&type=chunk) Backlog by Homebuilding Segment (June 30, 2025) | Segment | Units | Average Sales Price | | :---------- | :---- | :------------------ | | Southeast | 998 | $438,465 | | Mid-Atlantic | 812 | $399,863 | | Midwest | 703 | $623,893 | | **Total** | **2,513** | **$477,865** | [Financial Services Segment](index=3&type=section&id=Financial%20Services) Financial services revenues and income before taxes significantly increased by **$47 million** and **$6 million**, respectively, for Q2 **2025** compared to Q2 **2024**. This growth was primarily driven by the acquisition of Alliant Title and the consolidation of Jet HomeLoans, along with DF Title's expansion into Texas markets Financial Services Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 vs Q2 2024 Change | | :-------------------------- | :------------------------ | | Financial Services Revenues | +$47 million | | Financial Services Income Before Taxes | +$6 million | - Primary drivers for growth include the April **2025** acquisition of Alliant Title and July **2024** consolidation of Jet HomeLoans[17](index=17&type=chunk) - DF Title's expansion into Texas markets also contributed to increased revenues and income[17](index=17&type=chunk) [Full Year 2025 Outlook](index=3&type=section&id=Full%20Year%202025%20Outlook) Dream Finders Homes maintains its full-year **2025** guidance of approximately **9,250 home closings**, which includes contributions from the Liberty Communities and Green River Builders acquisitions - Maintains full-year **2025** guidance of approximately **9,250 home closings**[5](index=5&type=chunk)[18](index=18&type=chunk) - Guidance is inclusive of closings from Liberty Communities and Green River Builders acquisitions[18](index=18&type=chunk) [Company Overview](index=3&type=section&id=About%20Dream%20Finders%20Homes) Dream Finders Homes (NYSE: DFH) is a Jacksonville, Florida-based homebuilder operating across the Southeast, Mid-Atlantic, and Midwest regions. The company utilizes an **asset-light homebuilding model** and provides mortgage financing, title agency, and underwriting services through its subsidiaries - Headquartered in Jacksonville, Florida, building single-family homes across Southeast, Mid-Atlantic, and Midwest regions (e.g., Florida, Texas, Tennessee, North Carolina, South Carolina, Georgia, Colorado, Arizona, Washington, D.C. metropolitan area)[19](index=19&type=chunk) - Operates an **asset-light homebuilding model** to achieve **industry-leading growth and returns**[19](index=19&type=chunk) - Provides mortgage financing, title agency, and underwriting services through wholly-owned subsidiaries[19](index=19&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding future events, market conditions, operational results, acquisition benefits, and company strategies. These statements are based on current beliefs and assumptions and are subject to various risks and uncertainties detailed in the company's SEC filings. Dream Finders Homes disclaims any obligation to update these statements, except as required by law - Includes forward-looking statements on projected **2025** home closings, market conditions, future results, acquisition benefits, and strategies[20](index=20&type=chunk) - Statements are based on current beliefs and assumptions and are subject to risks and uncertainties discussed in SEC filings (**10-K**, **10-Q**)[20](index=20&type=chunk) - Company undertakes no obligation to update or revise forward-looking statements, except as required by applicable law[20](index=20&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated balance sheets and statements of operations, highlighting key financial changes and performance metrics [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June **30**, **2025**, total assets increased to **$3.65 billion** from **$3.33 billion** at December **31**, **2024**, primarily driven by increases in inventories, lot deposits, and goodwill. Total liabilities also rose to **$2.14 billion** from **$1.91 billion**, mainly due to an increase in revolving credit facility and other borrowings Consolidated Balance Sheet Summary (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :-------------------------------- | :-------------- | :----------- | :----- | | Total Assets | $3,650,054 | $3,328,651 | +9.66% | | Total Liabilities | $2,136,329 | $1,908,291 | +11.95% | | Total Equity | $1,335,686 | $1,250,409 | +6.82% | - Significant increases in Inventories (**$1.99B** from **$1.72B**) and Lot deposits (**$531M** from **$458M**) contributed to asset growth[22](index=22&type=chunk) - Revolving credit facility and other borrowings increased substantially to **$1.14B** from **$701M**[22](index=22&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 **2025**, total revenues increased **9%** to **$1.15 billion**, driven by growth in both homebuilding and financial services. However, net income attributable to DFH decreased **30%** to **$56.6 million**, or **$0.57** per basic share, compared to **$80.9 million**, or **$0.83** per basic share in Q2 **2024**, primarily due to higher costs of sales and increased SG&A expenses Consolidated Statements of Operations Summary (Q2 2025 vs Q2 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :---------- | :---------- | :----- | | Total Revenues | $1,150,505 | $1,055,747 | +9.0% | | Homebuilding Revenues | $1,099,580 | $1,052,236 | +4.5% | | Financial Services Revenues | $50,925 | $3,511 | +1349% | | Income Before Taxes | $74,064 | $106,008 | -30.1% | | Net Income Attributable to DFH | $56,580 | $80,943 | -30.1% | | Basic EPS | $0.57 | $0.83 | -31.3% | - Significant increase in financial services revenue due to acquisitions and expansion[17](index=17&type=chunk)[24](index=24&type=chunk) - Income before taxes and net income decreased due to higher homebuilding cost of sales and increased selling, general and administrative expense[9](index=9&type=chunk)[11](index=11&type=chunk)[24](index=24&type=chunk) [Other Financial and Operating Data](index=8&type=section&id=Other%20Financial%20and%20Operating%20Data) This section provides a detailed breakdown of key operational metrics for the homebuilding segment, including home closings, average sales price, net new orders, and financial ratios Key Operating Data (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Home Closings | 2,232 | 2,031 | +10% | | Average Sales Price of Homes Closed | $481,027 | $514,833 | -7% | | Net New Orders | 1,938 | 1,712 | +13% | | Cancellation Rate | 14.0% | 13.2% | +0.8 pp | | Homebuilding Gross Margin % | 16.5% | 19.0% | -2.5 pp | | Adjusted Homebuilding Gross Margin % | 25.9% | 27.0% | -1.1 pp | Key Operating Data (Six Months Ended June 30, 2025 vs 2024) | Metric | 6M 2025 | 6M 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Home Closings | 4,157 | 3,686 | +12.8% | | Average Sales Price of Homes Closed | $489,018 | $505,926 | -3.3% | | Net New Orders | 3,970 | 3,436 | +15.5% | | Cancellation Rate | 12.8% | 16.8% | -4.0 pp | | Homebuilding Gross Margin % | 17.8% | 18.4% | -0.6 pp | | Adjusted Homebuilding Gross Margin % | 26.8% | 26.7% | +0.1 pp | Key Ratios and Backlog (as of June 30) | Metric | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Active Communities | 271 | 222 | | Backlog - Units | 2,513 | 4,205 | | Backlog - Value (in thousands) | $1,200,875 | $2,123,618 | | Net Homebuilding Debt to Net Capitalization | 44.7% | 42.7% | | Return on Participating Equity | 25.0% | 33.5% | Home Closings by Segment (Q2 2025 vs Q2 2024) | Segment | Q2 2025 Units | Q2 2025 ASP | Q2 2024 Units | Q2 2024 ASP | | :---------- | :------------ | :------------ | :------------ | :------------ | | Southeast | 842 | $438,549 | 668 | $508,511 | | Mid-Atlantic | 600 | $444,571 | 610 | $433,941 | | Midwest | 790 | $553,989 | 753 | $585,971 | | **Total** | **2,232** | **$481,027** | **2,031** | **$514,833** | [Reconciliation of Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles non-GAAP financial measures like adjusted homebuilding gross margin and net homebuilding debt to net capitalization with their GAAP equivalents [Adjusted Homebuilding Gross Margin](index=9&type=section&id=Adjusted%20Homebuilding%20Gross%20Margin) This section provides a reconciliation of adjusted homebuilding gross margin, a non-GAAP measure, to the GAAP homebuilding gross margin. Adjusted gross margin excludes capitalized interest, lot option fees, amortization from purchase accounting, and commission expense to offer a comparable view to other public homebuilders - Adjusted homebuilding gross margin is a non-GAAP measure used by management to evaluate operating performance, excluding capitalized interest, lot option fees, amortization, and commission expense[30](index=30&type=chunk)[32](index=32&type=chunk) Adjusted Homebuilding Gross Margin Reconciliation (Q2 2025 vs Q2 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :---------- | :---------- | | Homebuilding gross margin | $181,709 | $199,399 | | Interest expense in homebuilding cost of sales | $56,197 | $41,662 | | Amortization in homebuilding cost of sales | $396 | $2,518 | | Commission expense | $46,860 | $40,992 | | **Adjusted homebuilding gross margin** | **$285,162** | **$284,571** | | Homebuilding gross margin % | 16.5% | 19.0% | | Adjusted homebuilding gross margin % | 25.9% | 27.0% | [Net Homebuilding Debt to Net Capitalization](index=11&type=section&id=Net%20Homebuilding%20Debt%20to%20Net%20Capitalization) This section reconciles net homebuilding debt to net capitalization, a non-GAAP measure, to total debt to total capitalization. This ratio is used by management to assess homebuilding segment performance, set compensation targets, and measure overall leverage, by excluding mortgage warehouse facilities and cash from debt - Net homebuilding debt to net capitalization is a non-GAAP measure used to assess homebuilding segment performance, set compensation targets, and measure overall leverage[35](index=35&type=chunk) - It excludes borrowings under mortgage warehouse facilities and other non-homebuilding borrowings, as well as cash and cash equivalents[35](index=35&type=chunk) Net Homebuilding Debt to Net Capitalization Reconciliation (as of June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------------- | :---------- | :---------- | | Total debt | $1,580,352 | $1,185,440 | | Total mezzanine equity | $178,039 | $169,951 | | Total equity | $1,335,686 | $1,051,581 | | **Total capitalization** | **$3,094,077** | **$2,406,972** | | **Total debt to total capitalization** | **51.1%** | **49.3%** | | Net homebuilding debt | $1,211,991 | $910,643 | | Net capitalization | $2,725,716 | $2,132,175 | | **Net homebuilding debt to net capitalization** | **44.5%** | **42.7%** | [Contacts](index=11&type=section&id=Contacts) This section provides contact information for investor relations

分组1 - Dream Finders Homes Inc. reported quarterly earnings of $0.56 per share, missing the Zacks Consensus Estimate of $0.65 per share, and down from $0.81 per share a year ago, representing an earnings surprise of -13.85% [1] - The company posted revenues of $1.15 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 13.18%, compared to year-ago revenues of $1.06 billion [2] - Dream Finders Homes shares have increased approximately 13.4% since the beginning of the year, outperforming the S&P 500's gain of 8.2% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $0.94 on revenues of $1.25 billion, and for the current fiscal year, it is $3.45 on revenues of $4.76 billion [7] - The Zacks Industry Rank for Building Products - Home Builders is currently in the bottom 14% of over 250 Zacks industries, indicating potential challenges for the sector [8]