Group 1 - Green Brick Partners reported quarterly earnings of $2.31 per share, exceeding the Zacks Consensus Estimate of $2.24 per share, and showing an increase from $1.58 per share a year ago, representing an earnings surprise of 3.12% [1] - The company posted revenues of $567.31 million for the quarter ended December 2024, which was 4.25% below the Zacks Consensus Estimate, compared to $450.38 million in revenues a year ago [2] - Green Brick Partners has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates two times during the same period [2] Group 2 - The stock has gained approximately 6% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is $1.60 on revenues of $463.4 million, and for the current fiscal year, it is $8.53 on revenues of $2.26 billion [7] Group 3 - The Real Estate - Development industry, to which Green Brick Partners belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - The estimate revisions trend for Green Brick Partners is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6]

Home Deliveries and Sales - Home deliveries increased by 21.1% to 3,783 units, while home closings revenue rose by 17.1% to $2,069,756,000 compared to the previous year[147] - Average sales price of homes delivered decreased by 3.4% to $547,100 due to product mix and high mortgage rates[147] - Net new home orders increased by 9.7% to 3,681, with revenue from these orders rising by 2.9% to $2,010,439,000[151] - Backlog revenue decreased by 10.7% to $495,883,000, driven by a 13.2% decrease in backlog units[153] Financial Performance - Total revenues for 2024 reached $2,098,943, a 18.1% increase from $1,777,710 in 2023[228] - Net income attributable to Green Brick Partners, Inc. for 2024 was $381,583, representing a 34.1% increase compared to $284,626 in 2023[228] - Gross profit for 2024 was $703,521, up 28.3% from $548,182 in 2023[228] - Basic earnings per share increased to $8.51 in 2024, compared to $6.20 in 2023, reflecting a 37.2% growth[228] - The company reported a total gross profit margin of approximately 33.5% for 2024, compared to 30.8% in 2023[228] Assets and Liabilities - Total assets as of December 31, 2024, were $2,249,994, a 18.2% increase from $1,902,832 in 2023[225] - Total liabilities remained relatively stable at $551,831 in 2024, compared to $548,684 in 2023[225] - The company’s investments in unconsolidated entities decreased to $60,582 in 2024 from $84,654 in 2023, a reduction of 28.5%[225] - The company’s total liabilities for unconsolidated entities decreased to $30,843,000 in 2024 from $67,117,000 in 2023, a decline of 54.0%[340] Cash Flow and Capital Structure - Unrestricted cash and cash equivalents decreased to $141.5 million in 2024 from $179.8 million in 2023[171] - Net cash provided by operating activities significantly dropped to $25.9 million in 2024, compared to $213.3 million in 2023[180] - Cash and cash equivalents decreased to $141,543 in 2024 from $179,756 in 2023, a decline of 21.2%[225] - The debt to total capitalization ratio was approximately 17.2% as of December 31, 2024, indicating a stable financial structure[175] - Net debt to total capitalization ratio remained low at 10.7% as of December 31, 2024, with a target of approximately 20% for growth capital[176] Inventory and Development - Total inventory increased to $1,937.7 million as of December 31, 2024, compared to $1,533.2 million as of December 31, 2023[320] - The company’s inventory, including homes completed or under construction and land and lots inventory, was valued at $1,938 million as of December 31, 2024[220] - The increase in inventory was significant at $403,312 in 2024, compared to $109,243 in 2023[234] Expenses and Costs - Selling, general and administrative expenses as a percentage of revenue remained stable at 10.8% for the year[159] - Income tax expense rose to $94,700,000 from $84,600,000, attributed to higher taxable income[164] - Depreciation expense for the year ended December 31, 2024, totaled $4,800,000, up from $3,500,000 in 2023, representing a 37.1% increase[341] Shareholder Equity and Dividends - The company paid dividends of $2.9 million on the Series A Preferred Stock for both 2024 and 2023[189] - Total stockholders' equity is projected to reach $1,625,415,000 by December 31, 2024[231] - The company repurchased 860,659 shares of treasury stock for $48,035,000 during the reporting period[231] Other Income and Expenses - Other income increased to $29,800,000, up from $19,400,000, mainly due to a gain from the sale of an investment[163] - The company recognized a gain of $10,700,000 from the sale of its 49.9% ownership interest in GB Challenger, LLC, receiving approximately $64,000,000 in cash[338] Risk Factors - The company’s operations are sensitive to interest rate changes, which could adversely affect revenues, gross margins, and net income[209] - The Company performs ongoing reassessments to determine if it is the primary beneficiary of any Variable Interest Entities (VIEs) it may have[263]

Financial Performance - Record Q4 home closings revenue of $557 million, up 24.2% year-over-year[1] - Diluted EPS of $2.31 for Q4, a record for any fourth quarter, up 46.2% year-over-year[1] - Full-year total revenues reached $2.1 billion, up 18.1% year-over-year[2] - Residential units revenue for Q4 2024 was $556,855,000, a 24.2% increase from $448,525,000 in Q4 2023[14] - Revenue from net new home orders increased to $470,890,000 in Q4 2024, up 23.6% from $381,044,000 in Q4 2023[14] Homebuilding Metrics - Homebuilding gross margin for the year was 33.8%, an increase of 290 basis points year-over-year[3] - Average sales price of homes delivered in Q4 was $546.5 thousand, a slight increase of 0.6% year-over-year[5] - New homes delivered increased to 1,019 units in Q4 2024, up 23.5% from 825 units in Q4 2023[14] - Average sales price of homes delivered decreased to $546,500 in Q4 2024, down 0.6% from $543,500 in Q4 2023[14] - The average sales price of backlog units increased to $742,300 in Q4 2024, up 3.0% from $721,000 in Q4 2023[14] Orders and Backlog - Net new home orders for Q4 were 878, a record for any fourth quarter, up 29.3% year-over-year[1] - Net new home orders rose to 878 in Q4 2024, a 29.3% increase compared to 679 in Q4 2023[14] - Backlog revenue decreased to $495,883,000 as of December 31, 2024, down 10.7% from $555,200,000 in 2023[14] Land and Inventory - Total lots owned and controlled increased by 31.9% year-over-year[3] - Total lots owned increased to 32,716 as of December 31, 2024, compared to 23,801 in 2023, representing a 37.5% growth[19] - The company is focusing on self-development of inventory and successfully implementing its growth strategy, particularly for the Trophy brand in the Houston market[25] Financial Strategy and Capital Allocation - Debt to total capital ratio was 17.2%, down 390 basis points year-over-year, the lowest since 2015[3] - Share repurchase authorization increased to $100 million as part of the capital allocation strategy[3] - The company reported a net debt to total capitalization ratio of 10.7% as of December 31, 2024[22] - There is a focus on maintaining a strong balance sheet and financial flexibility to navigate potential economic uncertainties[25] Market and Economic Outlook - Expectations regarding demographic trends and demand in the markets are being closely monitored to align with business priorities[25] - The company plans significant investments in land, lots, and development in 2025, which are expected to positively impact growth[25] - There is flexibility in adjusting home prices to meet market demand and capitalize on home ownership trends[25] Risks and Challenges - Risks include general economic conditions, increasing interest rates, and inflation that could adversely impact demand for new homes[25] - The company faces challenges such as shortages of raw materials, labor costs, and the ability to acquire land at anticipated prices[25] - Geographic concentration of operations poses risks, along with government regulation and mortgage financing volatility[25] Human Resources - The company emphasizes the importance of recruiting and retaining skilled employees to execute its strategies successfully[25] - The company is committed to delivering efficient and cost-effective growth while managing costs and cycle times[25]

Company Overview - Green Brick Partners (NYSE: GRBK) has a market capitalization of approximately $2.5 billion, positioning it as one of the smaller publicly traded homebuilders in the U.S. [1] Performance Insights - The company has delivered nearly a 100% return over the past three years, indicating strong performance in the market [1]

Financial Data and Key Metrics Changes - Green Brick Partners reported a record third quarter with home closings revenue increasing by 26% year-over-year to $523 million, driven by a 26.8% increase in home closings to 956 units [8][18] - Year-to-date diluted EPS reached $6.12, up 34.5% year-over-year, marking another record for the company [9][21] - The net income attributable to Green Brick grew 23.5% to $89 million, also a record for any third quarter [9][21] - Homebuilding gross margins for the year-to-date stood at 33.6%, reflecting a 290 basis point increase year-over-year [9][21] Business Line Data and Key Metrics Changes - The company completed its best third quarter in history with 956 new home closings, contributing to a revenue increase of 26% year-over-year [8][18] - Homebuilding gross margins moderated to 32.7% during the third quarter, down 60 basis points year-over-year, but remained the highest among public homebuilding peers [19] - Net new home orders increased by 11.3% year-over-year to 877 orders in the third quarter, with a year-to-date total of 2,803 orders, up 4.7% year-over-year [22] Market Data and Key Metrics Changes - Existing home inventory remains near historic lows, with approximately 75% of outstanding mortgages having an interest rate below 5% [14] - The company noted that many prospective homebuyers remain cautious due to affordability concerns, despite the ability to qualify for current mortgage rates [15] - The housing market has been underbuilt for years, creating a significant shortage estimated between four million and seven million units, presenting a substantial opportunity for new home construction [16] Company Strategy and Development Direction - Green Brick's strategy focuses on acquiring high-quality land and self-developing lots, which allows the company to control costs and manage the land development life cycle effectively [10][11] - The company aims to expand its presence in existing markets, with a community count increase of 23% to 106 communities [24] - Green Brick plans to continue leveraging its strong balance sheet to identify and acquire land that meets its stringent underwriting requirements [41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business environment, noting a rebound in sales volume and a positive outlook for the future [28][57] - The company anticipates that favorable demographic shifts will support long-term demand for homebuilding [15][16] - Management highlighted the importance of their land strategy in sustaining growth and maximizing the value of land assets [35][41] Other Important Information - The company repurchased approximately 97,700 shares for $5.4 million during the third quarter [26] - Green Brick's total debt to total capital ratio was 16.4%, with 100% of outstanding debt at a fixed rate of 3.4% [27] - The company is actively working on launching its wholly-owned mortgage company, expected to provide a comprehensive financial solution for customers [33] Q&A Session Summary Question: Community count growth into 2025 - Management indicated that community count growth is tied to the pace of starts, with larger Trophy communities expected to generate greater sales [48][50] Question: SG&A leverage - Management noted that SG&A is expected to remain constant, with potential benefits from top-line growth [51] Question: October trends with rising rates - Management stated that business remains good, but refrained from providing month-to-month comparisons [56][57] Question: Cash flow expectations for Q4 - Management discussed the unpredictability of land deals and the potential for borrowing on lines of credit, indicating a cautious outlook for cash flow [63] Question: Base pricing adjustments versus incentives - Management confirmed that adjustments have primarily been incentive-driven, with a focus on maintaining base prices [67] Question: New market opportunities - Management expressed interest in finding good deals in existing markets, particularly in Dallas, Houston, and Atlanta, while maintaining a strong land position [69]

Financial Performance - Q3 2024 - Home closings increased by 26.8% year-over-year, reaching 956 units[21] - Residential units revenue increased by 25.7% year-over-year, reaching $523 million[21] - Net income increased by 23.5% to $89 million, and diluted EPS increased by 26.9% to $1.98[23] - Homebuilding gross margin was 32.7%[23] Financial Performance - YTD 2024 - Home closings increased by 20.3% year-over-year to 2,764 units[26] - Residential units revenue increased by 14.6% year-over-year to $1.5 billion[27] - Net income increased by 31.3% to $278 million, and diluted EPS increased by 34.5% to $6.12[28] - Homebuilding gross margin was 33.6%[28] Strategic Positioning - Approximately 80% of revenues YTD24 were from supply constrained infill and infill-adjacent communities[42] - The company has over 37,000 lots owned and controlled as of 9/30/24, an increase of 41% year-over-year, with 67% allocated to Trophy[43] - Debt to total capital ratio is 16.4%, and net debt to total capital ratio is 12.5% as of 9/30/2024[45]

Core Insights - Green Brick Partners (GRBK) reported revenue of $523.66 million for the quarter ended September 2024, reflecting a 25% increase year-over-year, but fell short of the Zacks Consensus Estimate of $540.01 million by 3.03% [1] - The company's EPS was $1.98, up from $1.56 in the same quarter last year, but also missed the consensus estimate of $2.08 by 4.81% [1] Performance Metrics - New homes delivered: 956, exceeding the average estimate of 900 based on two analysts [3] - Backlog units: 809, compared to the estimated 777 [3] - Active selling communities at the end of the period: 106, slightly above the estimate of 105 [3] - Net new home orders: 877, surpassing the average estimate of 853 [3] - Land and lots revenue: $0.80 million, significantly below the average estimate of $3.50 million, representing a year-over-year decline of 73.8% [3] - Residential units revenue: $522.86 million, compared to the average estimate of $536.51 million, showing a year-over-year increase of 25.7% [3] Stock Performance - Green Brick Partners' shares have decreased by 8.9% over the past month, while the Zacks S&P 500 composite has increased by 1.8% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [4]

Core Viewpoint - Green Brick Partners reported quarterly earnings of $1.98 per share, missing the Zacks Consensus Estimate of $2.08 per share, but showing an increase from $1.56 per share a year ago, indicating a -4.81% earnings surprise [1][2] Financial Performance - The company posted revenues of $523.66 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 3.03%, compared to $418.98 million in the same quarter last year [2] - Over the last four quarters, Green Brick Partners has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Green Brick Partners shares have increased approximately 45.3% since the beginning of the year, outperforming the S&P 500's gain of 22.3% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.13 on revenues of $552.54 million, and for the current fiscal year, it is $8.35 on revenues of $2.1 billion [7] - The estimate revisions trend for Green Brick Partners is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Real Estate - Development industry, to which Green Brick Partners belongs, is currently in the top 20% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Home Deliveries and Sales - Home deliveries increased by 26.8% for the three months ended September 30, 2024, and by 20.3% for the nine months ended September 30, 2024[114]. - Home closings revenue rose by 25.7% for the three months ended September 30, 2024, and by 14.7% for the nine months ended September 30, 2024[115]. - Average sales price of homes delivered decreased by 0.8% for the three months ended September 30, 2024, and by 4.7% for the nine months ended September 30, 2024[114]. - Net new home orders increased by 11.3% for the three months ended September 30, 2024, and by 4.7% for the nine months ended September 30, 2024[117]. - Residential units revenue increased by $192.6 million, or 14.6%, driven by a 20.3% increase in home deliveries[133]. Backlog and Cancellations - Backlog revenue decreased by 6.5% due to an 11.7% decrease in backlog units, despite a 5.8% increase in the average sales price of backlog units[119]. - The cancellation rate for the three months ended September 30, 2024, was 8.5%, compared to 6.1% for the same period in 2023[119]. - Cancellation rate rose to 7.1% for the nine months ended September 30, 2024, compared to 6.5% in the prior year[131]. Financial Performance - Residential units gross margin decreased by 60 basis points to 32.7% for the three months ended September 30, 2024[121]. - Selling, general and administrative expenses as a percentage of revenue decreased by 0.2% for the three months ended September 30, 2024[122]. - Revenue from net new home orders decreased by $33.3 million, or 2.1%, to $1,539.5 million for the nine months ended September 30, 2024[130]. - Average selling price of net new home orders declined by 6.5% to $549.3 thousand[130]. - Residential units gross margin improved by 290 basis points to 33.6% for the nine months ended September 30, 2024[134]. Land and Lots - Land and lots revenue increased by 178.1% to $18.3 million for the nine months ended September 30, 2024[135]. - Total lots owned increased to 31,425 as of September 30, 2024, from 23,801 at the end of 2023[144]. - The company had earnest money deposits of $10.2 million at risk associated with contracts to purchase raw land and finished lots, representing 3,380 total lots[167]. Cash and Debt Management - Unrestricted cash and cash equivalents decreased to $80.1 million as of September 30, 2024, from $179.8 million at the end of 2023[145]. - Debt to total capitalization ratio was approximately 16.4% as of September 30, 2024[149]. - As of September 30, 2024, the net debt to total capitalization ratio was 12.5%, indicating a low leverage position[150]. - Total debt, net of debt issuance costs, was $297.3 million, with a net debt figure of $217.2 million after accounting for cash and cash equivalents of $80.1 million[152]. - For the nine months ended September 30, 2024, net cash used for operating activities was $3.0 million, a significant decrease from $232.7 million provided during the same period in 2023[154]. - The company generated $34.6 million from investing activities in the nine months ended September 30, 2024, compared to a net cash outflow of $10.0 million in the prior year[155]. - Net cash used in financing activities was $126.4 million for the nine months ended September 30, 2024, up from $69.8 million in the same period in 2023[156]. - As of September 30, 2024, the company maintained an interest coverage ratio of 33.16 to 1.0, well above the required minimum of 2.0 to 1.0[161]. - The Consolidated Tangible Net Worth was reported at $1,519.8 million as of September 30, 2024, exceeding the minimum requirement of approximately $960.0 million[161]. Market Trends - The homebuilding industry experiences seasonal fluctuations, with the highest new home order activity typically occurring in spring and summer[169]. - The company plans to prudently employ leverage to continue investing in land acquisition, development, and homebuilding activities[150].

Green Brick Partners, Inc. (GRBK) has been gearing up to announce its third-quarter 2024 earnings on Oct. 30, after the closing bell. The quarterly results are likely to reflect year-over-year growth in revenues and earnings per share (EPS).Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, this Plano, TX-based development real estate company reported an EPS of $2.32, which beat the Zacks Consensus Estimate by 31.82%. Results reflected a rise in total reve ...