• Revenue: $118.6 million for Q3 2024, up from $87.7 million in Q3 2023.
• Net Loss: $7.3 million for Q3 2024.
• Net Income (9 months): $46.2 million, including a $50.7 million change in fair value.
• Home Closings: 369 homes in Q3 2024, up from 283 homes in Q3 2023.
• Average Sales Price: $320,000 for Q3 2024, compared to $316,000 in Q3 2023.
• Net New Orders: 341 homes in Q3 2024, up from 272 homes in Q3 2023.
• Backlog: 220 homes valued at approximately $79.9 million at the end of Q3 2024.
• Gross Profit: $22.4 million for Q3 2024, with a gross profit margin of 18.9%.
• Adjusted Gross Profit Margin: 20.6% for Q3 2024, down from 22.1% in Q3 2023.
• SG&A Expense: $18.7 million for Q3 2024; adjusted SG&A was $16.4 million or 13.9% of revenues.
• Active Communities: 55 as of Q3 2024, up from 53 in Q3 2023.
• Cash and Liquidity: $25.8 million in cash and $63.2 million available on credit facility, totaling $89 million in liquidity as of September 30, 2024.

• Warning! GuruFocus has detected 9 Warning Signs with UHG.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• United Homes Group Inc (NASDAQ:UHG) reported a 35% year-over-year increase in home sales revenue for the third quarter of 2024.
• The company achieved a 30% increase in new home deliveries compared to the previous year.
• UHG successfully integrated acquisitions of Rosewood and Creekside homes, expanding its market presence in Raleigh, North Carolina.
• The company maintained a steady cadence of orders through mortgage rate buydowns and other incentives, resulting in a 25% increase in homes sold over the prior year period.
• UHG's focus on affordable housing segments is aligned with market demand, with an average sales price of $320,000, one of the lowest among publicly traded homebuilders.

Negative Points

• United Homes Group Inc (NASDAQ:UHG) reported a net loss of $7.3 million for the third quarter of 2024.
• The company's gross profit margin decreased to 18.9% from 19.8% in the third quarter of 2023, primarily due to higher sales incentives.
• Adjusted gross profit margin also decreased to 20.6% from 22.1% in the same period last year.
• SG&A expenses increased, with adjusted SG&A at 13.9% of revenues for the third quarter.
• The company continues to face challenges with higher costs of sales and the need to offer attractive sales incentives to homebuyers.

Q & A Highlights

Q: Can you provide an overview of United Homes Group's performance in the third quarter of 2024? A: John Micenko, President, highlighted that United Homes Group delivered strong results with a 35% year-over-year growth in home sales revenue and a 30% increase in new home deliveries. The company sold 341 homes, marking a 25% increase over the prior year period, despite challenges posed by mortgage rate fluctuations.

Q: What strategic initiatives is United Homes Group focusing on to drive growth and profitability? A: James Pirrello, CEO, mentioned initiatives aimed at driving growth, lowering direct costs, and managing overhead. The company is updating its product offerings, rebidding direct costs, and managing overhead to improve gross margins. They are also focusing on leveraging relationships with land bankers and developers to keep land off the balance sheet, enhancing capital efficiency.

Q: How is United Homes Group addressing the demand for affordable housing? A: CEO James Pirrello emphasized the company's focus on the affordable housing segment, which is undersupplied and in high demand. The average sales price of their production-built homes in the third quarter was $320,000, one of the lowest among publicly traded homebuilders, reflecting their commitment to affordability.

Q: What were the financial highlights for United Homes Group in the third quarter of 2024? A: Keith Feldman, CFO, reported a net loss of $7.3 million, influenced by a $7.8 million change in fair value related to potential earn-out liabilities. Revenue increased to $118.6 million from $87.7 million in the same quarter of 2023. The gross profit margin decreased to 18.9% from 19.8% due to sales incentives.

Q: What is the outlook for United Homes Group for the remainder of 2024? A: CEO James Pirrello expressed confidence in the company's ability to capitalize on positive housing fundamentals and internal initiatives to drive profitability. The focus remains on maintaining sales momentum and competitive positioning in the market to achieve higher inventory returns.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.