Revenue and Profitability - UHG's revenue for the three months ended September 30, 2025, was approximately $90.8 million, a decrease of 23.5% from $118.6 million in the same period of 2024[118][125]. - For the nine months ended September 30, 2025, UHG generated revenue of approximately $283.3 million, down from $328.9 million in the same period of 2024, reflecting a decrease of 13.9%[119][120]. - Revenue for the nine months ended September 30, 2025 was $283.3 million, a decrease of $45.6 million, or 13.9%, from $328.9 million for the same period in 2024[145]. - Gross profit for the three months ended September 30, 2025 was $16.0 million, a decrease of $6.4 million, or 28.6%, from $22.4 million for the same period in 2024[128]. - Gross profit for the nine months ended September 30, 2025, was $50.1 million, down 13.8% from $58.1 million in 2024, with a gross margin of 17.7%[150]. - Adjusted gross profit for the three months ended September 30, 2025 was $17.8 million, a decrease of $6.7 million, or 27.4%, compared to $24.5 million for the same period in 2024[129]. - Adjusted gross profit decreased to $56.6 million for the nine months ended September 30, 2025, down 16.6% from $67.9 million in 2024, with an adjusted gross margin of 20.0%[151]. - The company reported a net loss of approximately $31.3 million for the three months ended September 30, 2025, compared to a net loss of $7.3 million in the prior year, representing an increase in net loss of 326.4%[118][124]. - Net (loss) income for the nine months ended September 30, 2025 was $(19.5) million, compared to $46.2 million for the same period in 2024, representing a decrease of $65.7 million, or 142.1%[145]. Orders and Closings - The company had 324 net new orders for the three months ended September 30, 2025, a decrease of 5.0% compared to 341 net new orders in the same period of 2024[113][115]. - Net new orders for the three months ended September 30, 2025 were 324 units, a decrease of 17 units, or 5.0%, from 341 units for the same period in 2024[140]. - Net new orders for the nine months ended September 30, 2025, were 924 units, a decrease of 124 units from 1,048 units in the same period of 2024[161]. - The cancellation rate for the three months ended September 30, 2025 was 14.3%, an increase of 1.5%, from 12.8% for the same period in 2024[141]. - The cancellation rate increased to 12.8% for the nine months ended September 30, 2025, up from 11.6% in the prior year[162]. - The company experienced a 29.0% decrease in home closings, with 262 closings in the three months ended September 30, 2025, down from 369 closings in the prior year[118][125]. - Home closings decreased by 19.7% to 817 units in the nine months ended September 30, 2025, compared to 1,017 units in the prior year[148]. Backlog and Sales Price - UHG's backlog increased by 20.0% to 264 homes as of September 30, 2025, compared to 220 homes in the prior year[124]. - Backlog as of September 30, 2025 was 264 units, an increase of 44 units, or 20.0%, from 220 units as of September 30, 2024[143]. - The average sales price of homes closed increased by 8.0% to $345,920 for the three months ended September 30, 2025, compared to $320,199 in the same period of 2024[124][126]. Operational Improvements and Strategy - UHG's operational improvements include refreshing the portfolio of house plans and expanding customization options for buyers to enhance sales and gross margins[117]. - The company plans to grow organically and through the expansion of its mortgage joint venture, Homeowners Mortgage, LLC, to improve revenue and EBITDA growth[114]. Expenses and Cash Flow - Selling, general and administrative expense for the three months ended September 30, 2025 was $17.6 million, a decrease of $1.1 million, or 5.9%, from $18.7 million for the same period in 2024[129]. - Selling, general and administrative expenses decreased to $51.7 million for the nine months ended September 30, 2025, down from $55.4 million in 2024[151]. - Net cash flows used in operating activities for the nine months ended September 30, 2025, were $21.0 million, an increase of $9.0 million compared to $12.0 million for the same period in 2024[181]. Financial Position and Liquidity - As of September 30, 2025, UHG had approximately $25.6 million in cash and cash equivalents, an increase of $3.0 million from $22.6 million as of December 31, 2024[170]. - The Syndicated Line of credit had outstanding borrowings of $79.7 million as of September 30, 2025, with $57.5 million available under the facility[174]. - The term loan had an outstanding balance of $67.4 million as of September 30, 2025, with a weighted average interest rate of 11.59%[177]. - UHG's liquidity and profitability could be adversely impacted by continued operational headwinds[171]. Tax and Derivative Liabilities - The effective tax rate for the full fiscal year as of September 30, 2025 is estimated at 11.7%, compared to 17.0% as of September 30, 2024[139]. - The estimated annual effective tax rate for the Company as of September 30, 2025, is 11.7%, compared to 17.0% as of September 30, 2024[155]. - Change in fair value of derivative liabilities for the three months ended September 30, 2025 was a loss of $27.2 million, compared to a loss of $7.8 million for the same period in 2024, representing an increase in loss of $19.4 million, or 249.5%[132]. - The change in fair value of derivative liabilities resulted in a loss of $12.2 million for the nine months ended September 30, 2025, compared to a gain of $50.7 million in the prior year[154]. Interest Rate Impact - A 100 basis point increase in overall interest rates would negatively affect the Company's net income by approximately $1.5 million[191].
United Homes (UHG) - 2025 Q3 - Quarterly Report