Beazer Homes USA (BZH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose to $595.7M, up 4.0% year-over-year, but net income declined to $27.2M due to lower gross margins and higher SG&A expenses.

• Adjusted EBITDA was $53.5M and diluted EPS was $0.88, both down year-over-year; book value per share exceeded $38.

• Active community count increased 17.2% to 146, with a 24.9% year-over-year rise in controlled lot position.

• Over 90% of starts met Zero Energy Ready standards, with the company leading in DOE certifications and advancing ESG goals.

• Recognized for workplace excellence and product quality, and published a 2023 Sustainability Report.

Financial highlights

• Q3 2024 homebuilding revenue was $595.7M (+4.0% YoY); net income was $27.2M (down from $43.8M YoY); EPS was $0.88 (down from $1.44 YoY).

• Adjusted EBITDA for Q3 was $53.5M, down from $72.8M YoY; homebuilding gross margin was 17.3%, or 20.3% excluding impairments and interest.

• SG&A as a percentage of revenue increased to 11.9% from 11.5% YoY.

• Backlog dollar value grew 3.6% to $1.05B; backlog units were flat at 1,949.

• Repurchased over 450,000 shares (~1.5% of company) for $12.9M at an average price just above $28.

Outlook and guidance

• Management expects continued uncertainty due to mortgage rate volatility but remains optimistic about long-term housing demand and profitability expansion.

• Strategic goals include expanding to over 200 active communities by FYE26, reducing net debt to net capitalization below 30%, and achieving 100% Zero Energy Ready home starts by end of 2025.

• Q4 guidance: similar sales pace, community count above 155, about 1,100 orders, 1,500 closings, ASP projected at $520,000, adjusted gross margin around 20%, SG&A to drop to 10% of revenue, adjusted EBITDA above $80M, and diluted EPS about $1.35.

• Full-year adjusted EBITDA now expected at $230M–$260M, down from prior guidance due to weaker sales.

• Fiscal 2025 revenue growth projected at ~20%, with optimism for profitability expansion and full transition to Zero Energy Ready homes.