Smith Douglas Homes(SDHC) - 2025 Q3 - Quarterly Results

Revenue and Income - Q3 2025 home closing revenue decreased by 6% to $262.0 million, with 788 home closings, down 3% from the previous year[5]. - Pretax income for Q3 2025 was $17.2 million, down from $39.6 million in Q3 2024, resulting in earnings of $0.24 per diluted share compared to $0.58[5][4]. - Home closing revenue for the three months ended September 30, 2025, was $262,041, a decrease of 6% compared to $277,835 in 2024[22]. - Net income for the three months ended September 30, 2025, was $16,215, down 21,609 from $37,824 in 2024[25]. - Adjusted net income for the nine months ended September 30, 2025, was $40,702, compared to $65,552 in 2024[32]. Orders and Backlog - Net new home orders increased by 15% to 690, with a contract value of $231.8 million, compared to $205.2 million in Q3 2024[5][17]. - The backlog of homes as of September 30, 2025, was valued at $258,732, a decrease of 21% from $332,035 in 2024[23]. - The cancellation rate for new home orders was 11.2%, slightly improved from 11.4% in Q3 2024[17]. Market Presence and Expansion - Active community count rose by 32% to 98 at the end of Q3 2025, indicating growth in market presence[5]. - Total controlled lots increased by 36% to 24,300, reflecting expansion in land acquisition[5][17]. - The total number of controlled lots increased by 36% to 24,300, with optioned lots in the Central region rising by 87%[24]. - Smith Douglas Homes aims to increase market share while maintaining financial discipline as it expands into new markets[4]. Financial Stability - The company's net debt-to-net book capitalization was 8.4% at the end of Q3 2025, demonstrating financial stability[4]. - The net debt-to-net book capitalization ratio as of September 30, 2025, was 8.4%, compared to -5.0% in 2024[29]. - Cash and cash equivalents decreased to $14.8 million from $22.4 million at the end of 2024[13]. Regional Performance - Home closings in the Southeast region decreased by 12% to 493 units, while the Central region saw an increase of 8% to 295 units[22]. - The average selling price (ASP) of homes closed in the Southeast region was $345, a decrease of 2% from $352 in 2024[22]. Capitalization - The company reported a total capitalization of $480,081 as of September 30, 2025, compared to $404,787 in 2024[29].