Dream Finders Homes(DFH) - 2025 Q1 - Quarterly Report

Homebuilding Performance - Homebuilding revenues for Q1 2025 reached $970.1 million, an increase of $144.9 million or 18% compared to $825.2 million in Q1 2024[102]. - Home closings increased to 1,925 in Q1 2025, up by 270 homes or 16% from 1,655 in Q1 2024[103]. - The average sales price (ASP) of homes closed in Q1 2025 was $498,284, reflecting a slight increase of $3,289 or 1% from $494,995 in Q1 2024[103]. - The cancellation rate improved to 11.7% in Q1 2025, down from 21.0% in Q1 2024, representing a decrease of 9.3 percentage points or 44%[103]. - The homebuilding gross margin percentage improved to 19.2% in Q1 2025, up from 17.8% in Q1 2024, an increase of 1.4 percentage points or 8%[103]. - The backlog of sold homes as of March 31, 2025, was 2,802 homes valued at approximately $1.4 billion, a decrease of 1,722 homes and $0.9 billion in value, or 38% and 40%, respectively, from the previous year[131]. - The company completed the acquisition of Liberty Communities in Q1 2025, contributing 107 home closings with an ASP of $358,314[106]. Financial Performance - The company reported a net and comprehensive income of $54.9 million in Q1 2025, compared to $54.5 million in Q1 2024[101]. - EBITDA for Q1 2025 was $116.5 million, an increase of $10.9 million or 10.3% from $105.6 million in Q1 2024[101]. - Selling, general and administrative expenses (SG&A) as a percentage of homebuilding revenues increased to 12.0% in Q1 2025 from 9.7% in Q1 2024, resulting in a $36 million increase, largely due to higher compensation costs[111]. - Total equity as of the end of Q1 2025 was $1.29 billion, compared to $974 million at the end of Q1 2024, reflecting a significant increase[101]. - Total debt increased to $1.476 billion as of March 31, 2025, compared to $1.005 billion in 2024, resulting in a total debt to total capitalization ratio of 50.1%[148]. - Net homebuilding debt to net capitalization ratio was 40.4% as of March 31, 2025, slightly up from 39.9% in the previous year[148]. - Total liquidity as of March 31, 2025, was $677.019 million, down from $816.029 million as of December 31, 2024[151]. Segment Performance - The Southeast segment reported homebuilding revenues of $308 million in Q1 2025, a 10% increase from $280 million in Q1 2024[107]. - Mid-Atlantic segment homebuilding revenues for Q1 2025 were $238 million, a 13% increase from $210 million in Q1 2024, driven by a 7% increase in average selling price (ASP) and a 6% increase in home closings[109]. - Midwest segment homebuilding revenues for Q1 2025 were $424 million, a 27% increase from $335 million in Q1 2024, primarily due to a 22% increase in home closings[110]. - Homebuilding gross margin percentage for the Mid-Atlantic segment increased by 360 basis points to 21.6% in Q1 2025, attributed to direct cost reductions[109]. Cash Flow and Investments - Net cash used in operating activities for the three months ended March 31, 2025, was $45 million, a significant decrease from $248 million for the same period in 2024, primarily due to a $114 million decrease in mortgage loans held for sale[160]. - Net cash used in investing activities was $116 million for the three months ended March 31, 2025, compared to $186 million for the same period in 2024, mainly due to $111 million paid for the Liberty acquisition[161]. - Net cash provided by financing activities was $169 million for the three months ended March 31, 2025, compared to $153 million for the same period in 2024, driven by net proceeds from homebuilding debt of $298 million[162]. Market Position and Strategy - The company continues to operate in regions with increasing demand for new homes and constrained lot supply, focusing on reinvesting earnings to support growth[158]. - The company is committed to an asset-light and capital-efficient lot acquisition strategy, primarily through finished lot option contracts and land bank option contracts[170]. - The company plans to explore options to strengthen its balance sheet while remaining opportunistic in assessing available capital in debt and equity markets[159]. - The company’s mortgage banking business, Jet HomeLoans, is exposed to interest rate risk, which may affect its lending activities and overall financial performance[184].