United Homes Group, Inc. Reports 2025 First Quarter Results First Quarter 2025 Operating Results and Highlights Q1 2025 saw United Homes Group's revenue at $87.0 million and net income at $18.2 million, boosted by a $21.2 million non-cash gain Q1 2025 vs. Q1 2024 Key Performance Indicators | Metric | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue, net | $87.0 million | $100.8 million | -14% | | Net Income | $18.2 million | $24.9 million | -26.9% | | Diluted EPS | $0.31 | $0.44 | -29.5% | | Home Closings | 252 | 311 | -19% | | Net New Home Orders | 296 | 384 | -23% | | ASP (Production-built) | ~$345,000 | ~$335,000 | +2.9% | | Gross Profit % | 16.2% | 16.0% | +0.2 p.p. | | Adjusted Gross Profit % | 18.8% | 20.4% | -1.6 p.p. | | Adjusted EBITDA | $2.9 million | $7.3 million | -60.5% | - Net income for Q1 2025 included a significant non-cash income of $21.2 million from the change in fair value of derivative liabilities, related to potential earn-out consideration tied to stock price hurdles3 - The company is strategically shifting from building all-spec inventory to offering pre-sales, which are achieving higher gross margins4 - Gross margins improved sequentially by 400 basis points between January and March, largely due to closings of newly redesigned home plans which average gross margins of approximately 24%7 - A direct cost reduction initiative has identified over $3.5 million in savings for the year, with the financial impact expected to be more meaningful in the second half of 20257 - As of March 31, 2025, the company had available liquidity of $86.9 million, consisting of $25.0 million in cash and $61.9 million in unused credit facility capacity6 Company Overview and Strategy United Homes Group is a South Carolina-based residential builder in high-growth southeastern markets, employing a 'land-light' strategy - The company is a residential builder focused on high-growth southeastern markets: South Carolina, North Carolina, and Georgia9 - UHG primarily builds detached and attached single-family houses for the entry-level, first, second, and third move-up segments10 - The company employs a 'land-light' operating strategy, using lot option contracts to control its supply of finished lots, reducing financial risks associated with acquiring and developing raw land11 - Future expansion will target markets with positive population and employment growth, housing affordability, low taxes, and desirable lifestyle characteristics12 Forward-Looking Statements Forward-looking statements are subject to risks like market disruptions, industry slowdowns, supply chain issues, and interest rate increases - The report contains forward-looking statements that are not guarantees of future performance and are subject to risks and uncertainties1415 - Key risk factors include: - Disruption in mortgage financing availability - A slowdown in the homebuilding industry - Shortages or price increases for labor, land, or raw materials - Increases in interest rates or inflationary pressures - Ability to execute business model and integrate acquisitions18 Financial Statements Condensed Consolidated Balance Sheets As of March 31, 2025, total assets were $266.2 million, liabilities $179.1 million, and equity $87.1 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $266,227 | $265,381 | | Cash and cash equivalents | $25,016 | $22,629 | | Inventories | $138,449 | $139,270 | | Total Liabilities | $179,126 | $198,514 | | Derivative liabilities | $17,836 | $39,158 | | Syndicated line of credit | $53,196 | $50,196 | | Total Stockholders' equity | $87,101 | $66,867 | Condensed Consolidated Statements of Operations Q1 2025 revenue was $87.0 million, gross profit $14.1 million, and net income $18.2 million, boosted by a $21.2 million non-cash gain Statement of Operations Summary (in thousands, except per share data) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue, net of sales discounts | $87,001 | $100,838 | | Gross profit | $14,128 | $16,094 | | Net loss from operations | $(2,032) | $(960) | | Change in fair value of derivative liabilities | $21,209 | $26,380 | | Net income | $18,180 | $24,938 | | Diluted EPS | $0.31 | $0.44 | GAAP to Non-GAAP Reconciliations Adjusted Gross Profit Q1 2025 Adjusted Gross Profit was $16.4 million (18.8% margin), adjusted from GAAP by adding back interest and amortization Adjusted Gross Profit Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross profit (GAAP) | $14,128 | $16,094 | | Interest expense in cost of sales | 1,501 | 3,513 | | Amortization in homebuilding cost of sales | 681 | 948 | | Adjusted gross profit (Non-GAAP) | $16,365 | $20,614 | | Gross profit % (GAAP) | 16.2% | 16.0% | | Adjusted gross profit % (Non-GAAP) | 18.8% | 20.4% | EBITDA and Adjusted EBITDA Q1 2025 Adjusted EBITDA was $2.9 million (3.3% margin), a decline from Q1 2024, after subtracting a $21.2 million non-cash gain Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (GAAP) | $18,180 | $24,938 | | EBITDA (Non-GAAP) | $21,389 | $29,921 | | Change in fair value of derivative liabilities | (21,209) | (26,380) | | Stock-based compensation expense | 1,957 | 1,510 | | Adjusted EBITDA (Non-GAAP) | $2,873 | $7,283 | | Adjusted EBITDA margin % | 3.3% | 7.2% | Adjusted SG&A Q1 2025 Adjusted SG&A was $14.2 million (16.3% of revenue), excluding stock-based compensation from GAAP SG&A Adjusted SG&A Reconciliation - Q1 2025 (in thousands) | Line Item | Amount | | :--- | :--- | | Selling, general and administrative expense (GAAP) | $16,160 | | Stock-based compensation expense | 1,957 | | Adjusted SG&A (Non-GAAP) | $14,203 | | SG&A % (GAAP) | 18.6% | | Adjusted SG&A % (Non-GAAP) | 16.3% | Adjusted Book Value As of March 31, 2025, Adjusted Book Value was $95.7 million, adjusting equity for derivative liabilities and goodwill Adjusted Book Value Reconciliation - March 31, 2025 (in thousands) | Line Item | Amount | | :--- | :--- | | Total Stockholders' equity (GAAP) | $87,101 | | Add: Derivative liabilities | 17,836 | | Less: Goodwill | (9,280) | | Adjusted book value (Non-GAAP) | $95,657 | Operational Metrics Operational Metrics by Market Q1 2025 saw total net new orders and closings decrease year-over-year, with Raleigh showing significant growth despite declines elsewhere Q1 2025 Net New Orders & Closings by Market (vs. Q1 2024) | Market | Net New Orders (YoY %) | Closings (YoY %) | | :--- | :--- | :--- | | Coastal | -43% | 0% | | Midlands | -28% | -17% | | Upstate | -24% | -44% | | Rosewood | +113% | -7% | | Raleigh | +325% | +275% | | Total | -23% | -19% | Backlog as of March 31, 2025 (vs. March 31, 2024) | Market | Backlog Inventory (YoY %) | Backlog Value (YoY %) | | :--- | :--- | :--- | | Coastal | +14% | +31% | | Midlands | -29% | -25% | | Upstate | -44% | -29% | | Rosewood | +40% | +67% | | Raleigh | +100% | +32% |
United Homes (UHG) - 2025 Q1 - Quarterly Results