United Homes Group (UHG) Q1 2025 earnings summary

Executive summary

• Delivered 252 homes in Q1 2025, generating $87 million in home sales revenue, with an average sales price of $345,000; home closings fell 19% year-over-year and net new orders declined 23% to 296 units.

• Revenue decreased 13.7% year-over-year, with net income of $18.2 million, including a $21.2 million fair value adjustment related to contingent earn-out liability.

• Operational momentum improved in March and April, with April orders up 6% year-over-year and sequential gross margin gains.

• Product refresh and cost reduction initiatives are underway, with newly designed homes and $3.5 million in identified savings expected to improve margins in the second half of 2025.

• Active communities decreased to 50 from 63 year-over-year, and backlog units fell 23.3% to 201, valued at $75.3 million.

Financial highlights

• Net income for Q1 2025 was $18.2 million, down 26.9% from $24.9 million in Q1 2024.

• Gross profit was $14.1 million, down 12.4% year-over-year; gross margin improved slightly to 16.2%, while adjusted gross margin declined to 18.8% from 20.4%.

• Adjusted EBITDA was $2.9 million (3.3% margin), down from $7.3 million (7.2% margin) in Q1 2024.

• Average sales price increased 2.9% to $345,000.

• Available liquidity stood at $86.9 million as of March 31, 2025.

Outlook and guidance

• Sequential improvement in sales and gross margins expected to continue, with higher-margin refreshed home plans and pre-sales in backlog.

• Majority of direct cost savings anticipated to benefit earnings in the second half of 2025.

• Planned opening of 10 new communities in Q2 and 18 in Q3, most featuring refreshed products.

• Optimistic about long-term growth in the Carolinas, Georgia, and the Southeast due to favorable housing fundamentals.

• Management expects continued use of sales incentives and operational improvements to drive sales and profitability.