Century munities(CCS) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company delivered 3,435 residential units in Q4 2025, exceeding guidance, with a total of 10,792 units delivered for the full year [4] - Net income for Q4 was $36 million, or $1.21 per diluted share, with adjusted net income at $47 million, or $1.59 per diluted share [19] - Home sales revenues for Q4 reached $1.1 billion, up 16% sequentially, while average sales price decreased by 5% to $367,000 [19] Business Line Data and Key Metrics Changes - The Century Living segment contributed to revenues with the sale of a 300-unit multifamily community for $97 million [20] - The company repurchased over 7% of its shares outstanding at the beginning of the year, totaling 2.3 million shares for $178 million [5][25] Market Data and Key Metrics Changes - The average community count increased by 13% to 318 communities in 2025, with expectations for low- to mid-single-digit percentage growth in 2026 [12][14] - The mortgage capture rate was 84% for both Q4 2025 and the full year, representing records for the company [23] Company Strategy and Development Direction - The company plans to maintain a disciplined approach to growth, focusing on existing lot counts and not expanding for the sake of growth alone [7] - The land acquisition and development expense is expected to remain flat in 2026, with the ability to adjust based on market conditions [15][16] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the spring selling season, noting improved order activity and potential consumer interest [29][31] - The company anticipates that any interest rate relief or governmental support for homebuyers could unlock buyer demand [7] Other Important Information - The company maintained a quarterly cash dividend of $0.29 per share and ended the year with $2.6 billion in stockholders' equity [24] - The company achieved a record book value per share of $89 at the end of Q4 2025 [5][25] Q&A Session Summary Question: Insights on the spring selling season - Management noted that while January sales pace has been slower compared to the previous year, order activity has improved sequentially, and they are hopeful for a better spring selling season [29][30] Question: Expectations for gross margin - Management indicated that gross margins may see a slight pullback due to incentives but expect to revert to a more balanced approach in the future [41][42] Question: Community count growth - Management expects community count to grow steadily throughout the year, particularly in the middle and back half of the year [33] Question: Stock repurchase authorization - Approximately 1.5 million shares remain under the stock repurchase program [45] Question: SG&A as a percentage of sales - SG&A is expected to be 14.5% in Q1 2026, higher than previous levels due to typical seasonal trends [51][52]