Landsea Homes (LSEA) investor relations material

Executive summary

• Home sales revenue rose 2.3% year-over-year to $299.4M, with total revenue up 6% to $310.8M, driven by a 27% increase in home deliveries, offset by a 20% drop in average selling price.

• Net loss was $7.1M ($0.20 per share) for Q1 2025, compared to net income of $0.7M in Q1 2024, reflecting higher incentives, increased interest costs, and lower gross margins.

• Net new home orders increased 11% to 679 homes, but backlog fell 32% in units and 39% in value year-over-year.

• The company expanded in Texas through the Antares acquisition and signed a merger agreement in May 2025 for a cash tender offer at $11.30 per share.

• Strategic shift toward a balanced mix of spec and build-to-order homes, targeting a 50/50 split to improve margins and reduce inventory risk.

Financial highlights

• Total revenue: $310.8M, up from $294.0M year-over-year.

• Gross margin: 13.0% (down 190 bps), or 13.5% excluding a $1.5M inventory impairment; adjusted home sales gross margin improved to 20.0% from 19.4% year-over-year.

• Adjusted EBITDA: $13.5M, down from $17.0M in Q1 2024.

• Book value per share stood at $18.14 at quarter end.

• SG&A was 17% of home sales revenue, up 180 bps due to higher sales and marketing costs.

Outlook and guidance

• Management expects continued challenges from high mortgage rates and affordability concerns, with stabilization in absorption and cancellation rates.

• Incentive levels expected to remain elevated through 2025, fluctuating with mortgage rates; Q2 incentives anticipated in the 7%-9% range.

• Focus remains on managing inventory, expanding in Texas, and leveraging incentives to drive sales.

• The company anticipates increasing backlog in coming quarters as quick move-in homes convert faster.

• Optimism for long-term industry outlook due to housing supply needs and homeownership demand, despite near-term macro uncertainty.