LGI Homes, Inc. Reports First Quarter 2025 Results

Core Viewpoint - LGI Homes reported solid financial results for Q1 2025 despite challenges in affordability and rate volatility affecting homebuyers' confidence [2][3]. Financial Performance - The company delivered 996 homes with an average sales price of $352,831, resulting in total revenue of $351.4 million for the first quarter [3][9]. - A one-time expense of $8.6 million related to a forward commitment incentive program was included in the financial results [3]. - Net income for the quarter was $4.0 million, translating to earnings per share of $0.17 [9][20]. Guidance and Outlook - LGI Homes maintains its full-year 2025 guidance, expecting to close between 6,200 and 7,000 homes at an average sales price between $360,000 and $370,000 [4][14]. - The company has adjusted its gross margin guidance down by 150 basis points at the low end and 100 basis points at the high end due to anticipated higher costs from tariffs [5][10]. Market Conditions - The company noted strong demand for new homes but highlighted affordability as a significant challenge for buyers [2]. - The persistent shortage of entry-level homes is seen as a societal challenge, emphasizing the need for affordable residential construction [5]. Balance Sheet Highlights - As of March 31, 2025, total liquidity was $360.0 million, including cash and cash equivalents of $57.6 million [9]. - The company had total owned and controlled lots of 67,792, with an ending backlog of 1,040 homes valued at $406.2 million [9][29]. Segment Performance - Home sales revenues by reportable segment showed the following for Q1 2025: Central ($101.1 million), Southeast ($101.7 million), Northwest ($34.2 million), West ($67.0 million), and Florida ($47.4 million) [25]. - The average sales price per home closed was $352,831, with an average community count of 148 [25]. Backlog Data - Net orders for the quarter were 1,437, with a cancellation rate of 16.3% [29]. - The ending backlog consisted of 1,040 homes, down from 1,335 homes in the same period last year [29].