Green Brick Partners(US:GRBK)2026-02-26 18:02Financial Data and Key Metrics Changes - Net income attributable to Green Brick for Q4 was $78 million, or $1.78 per diluted share, a decrease of 24.5% year-over-year [10] - Home closings revenue of $550 million declined 1.3% compared to the same period last year [9] - Home building gross margin decreased 490 basis points year-over-year to 29.4% [5][10] - For the full year, net income attributable to Green Brick decreased 18% to $313 million, and diluted earnings per share declined 16.3% to $7.07 [11] Business Line Data and Key Metrics Changes - Delivered 1,038 homes in Q4, a 1.9% increase year-over-year, and a record for any fourth quarter [4] - Net new home orders during Q4 were 883, up slightly year-over-year [11] - Average sales price was $530,000, down 3.1% year-over-year [10] - Average active selling communities decreased by 5% year-over-year to 101 [11] Market Data and Key Metrics Changes - Discounts and incentives increased year-over-year as a percentage of residential unit revenue to 9.2% from 5.2% [9] - Incentives for net new orders during Q4 increased to 10.2%, an increase of 380 basis points year-over-year [18] - Backlog value at the end of Q4 was $354 million, a decrease of 28.5% year-over-year [12] Company Strategy and Development Direction - The company is focused on maintaining an investment-grade balance sheet to support targeted expansion in high-volume markets [7] - Plans to grow the Trophy brand, with significant opportunities in DFW, Austin, and Houston [7][8] - The company aims to balance price and pace to maximize returns in each community [4] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing affordability challenges and a volatile housing market but expressed confidence in the company's ability to navigate these challenges [4][5] - The company is strategically positioned to adjust pricing as needed to meet market demand while maintaining sales pace [18] - Management remains optimistic about long-term prospects, citing a strong land position and diverse product offerings [24] Other Important Information - The company repurchased 359,000 shares for approximately $23 million in Q4, with a total of 1.4 million shares repurchased for approximately $83 million in 2025 [13] - The company maintained a robust cash position of $155 million and total liquidity of $520 million at the end of the quarter [16] - The total lots owned and under contract increased by 10% year-over-year to approximately 48,800 [22] Q&A Session Summary Question: Can you provide insights on gross margin decline drivers? - Management indicated that the decline was primarily driven by higher incentives and discounts across all regions [26] Question: What are the current rate buy-downs? - Current buy-downs are at $499, with entry-level rates at 321 [28] Question: How is the spring selling season progressing? - February has shown a strong start, with improved sales following a challenging January due to severe weather [40] Question: What is the inventory level compared to competitors? - The company is carrying higher inventory levels, particularly for finished specs, and is keeping pace with competitors [43][44] Question: What is the outlook for community count growth in 2026? - While specific guidance is not provided, the company aims to increase community count and expects meaningful acceleration in the coming years [50][52] Question: How is pricing power trending? - Very few communities have been able to raise prices, and the market remains competitive with ongoing inventory challenges [68][69] Question: What is the incentive load on higher-priced homes? - Higher design center incentives are being offered for $1 million-plus homes, with increased closing cost incentives for $600,000-$700,000 homes [74][75]