Green Brick Partners(US:GRBK)2025-10-29 20:12Home Deliveries and Closings - Home deliveries decreased by 0.3% to 953 units in Q3 2025 compared to Q3 2024, while new homes delivered increased by 5.1% to 2,905 units for the nine months ended September 30, 2025 [99][112]. - Home closings revenue for Q3 2025 was $499.1 million, a decrease of 4.6% from $522.9 million in Q3 2024, while for the nine months it increased by 1.9% to $1.54 billion [100][112]. - Net new home orders increased by 2.4% to 898 in Q3 2025 and by 3.9% to 2,912 for the nine months ended September 30, 2025 [101][113]. - The cancellation rate improved to 6.7% in Q3 2025 from 8.5% in Q3 2024, maintaining a historically low range under 10% since December 31, 2022 [104][114]. Sales Prices and Revenue - The average sales price of homes delivered decreased by 4.2% to $523.7 thousand in Q3 2025, and by 3.1% to $530.6 thousand for the nine months ended September 30, 2025 [100][112]. - Lots revenue decreased by $1.3 million to $4.342 million for the nine months ended September 30, 2025, a decline of 23.1% compared to $5.644 million in 2024 [117]. - Land revenue dropped to $0 from $12.704 million in the prior year, marking a 100% decrease [117]. - Total land and lots revenue fell to $4.342 million, down 76.3% from $18.348 million in 2024 [117]. - The average sales price of lots closed increased by 44.8% to $103.4 thousand from $71.4 thousand in the previous year [117]. Expenses and Income - Selling, general and administrative expenses increased to $58.1 million in Q3 2025, with a percentage of revenue rising to 11.6% from 11.0% in Q3 2024 [106][107]. - Selling, general and administrative expenses rose to $172.807 million, an increase of 4.3% from $165.912 million in 2024, with a percentage of revenue increase from 10.8% to 11.2% [118]. - Other income increased to $8.9 million in Q3 2025, up from $4.2 million in Q3 2024, driven by higher loan origination volume [110]. - Other income, net, decreased to $17.7 million from $25.4 million, primarily due to a $10.7 million gain on the sale of an investment in 2024 [122]. - Income tax expense for Q3 2025 was $23.2 million, slightly up from $23.1 million in Q3 2024 [111]. - Income tax expense decreased to $68.4 million from $71.8 million, reflecting lower taxable income [123]. Financial Position and Ratios - Backlog revenue decreased by 20.0% year-over-year to $465.6 million as of September 30, 2025, with backlog units down 16.6% to 675 [101][103]. - Residential units gross margin for Q3 2025 decreased by 160 basis points to 31.1%, primarily due to higher incentives and closing costs [105][116]. - The debt to total capitalization ratio was approximately 15.8% as of September 30, 2025, with a net debt to total capitalization ratio of 9.8% [131][132]. - As of September 30, 2025, the company had a Consolidated Tangible Net Worth of $1,803.3 million, exceeding the minimum requirement of approximately $1,129.4 million [30]. - The company's interest coverage ratio was 32.32 to 1.0 as of September 30, 2025, significantly above the minimum requirement of 2.0 to 1.0 [30]. - The maximum debt to total capitalization rolling average ratio was 15.3% as of September 30, 2025, well below the maximum limit of 40.0% [30]. - The net debt to total capitalization ratio was 9.8% as of September 30, 2025, compared to a debt to total capitalization ratio of 15.8% [149]. Assets and Liabilities - The company issued $75.0 million of senior unsecured notes in August 2019, with a principal payment schedule of $12.5 million due in 2024 and 2025, and a final payment of $50.0 million due in 2026 [30]. - As of September 30, 2025, the company had an outstanding balance of $14,557 thousand under its warehouse facilities, which have a maximum aggregate commitment of $80.0 million [142]. - The company had earnest money deposits of $10.2 million at risk associated with contracts to purchase 2,879 total lots, with an aggregate purchase price of approximately $206.3 million [153]. - The company has warehouse facilities secured by underlying mortgage loans, with interest rates based on SOFR plus a margin of 1.75% to 2% [143]. - Total lots owned increased to 36,699 as of September 30, 2025, from 32,716 at the end of 2024, representing an increase of 12.1% [127]. Industry Trends - The homebuilding industry experiences seasonal fluctuations, with the highest new home order activity typically occurring in spring and summer [154].