LGI Homes (LGIH) Q1 2025 earnings summary

Executive summary

• Delivered 996 homes in Q1 2025 with revenue of $351.4 million and an average sales price of $352,831, reflecting a 10.1% year-over-year decrease due to lower closings and ASP.

• Net income was $4.0 million ($0.17 EPS), down 76.6% year-over-year, including a one-time $8.6 million expense for a forward commitment incentive program.

• Ended Q1 with a backlog of 1,040 homes valued at $406 million and 67,792 owned or controlled lots.

• Affordability and mortgage rate volatility remain key challenges, but demand is supported by low existing inventory and effective incentives.

• Company is investing in sales training, community growth, and inventory management.

Financial highlights

• Gross margin was 21.0% (down from 23.4%); adjusted gross margin was 23.6% (down from 25.3%).

• Net income before taxes was $5.7 million, down from $23.1 million year-over-year.

• SG&A expenses rose to $73.5 million (20.9% of revenue), with selling expenses at $42.3 million and G&A at $31.2 million.

• Operating income for Q1 2025 was $0.2 million, down 99.1% from Q1 2024.

• Wholesale closings represented 18% of total, up from 9.4% last year.

Outlook and guidance

• Full-year closing target maintained at 6,200–7,000 homes and 160–170 active communities by year-end.

• Average selling price expected between $360,000 and $370,000.

• Gross margin guidance trimmed to 21.7%–23.2%; adjusted gross margin to 24%–25.5% due to tariffs and market uncertainty.

• Full-year tax rate expected at approximately 24.5%.

• Company expects to fund liquidity needs for at least the next twelve months through cash, operations, and credit.