United Homes Group (UHG) Q2 2024 earnings summary

Executive summary

• Delivered 337 homes in Q2 2024, generating $109.4 million in revenue, with the Midlands leading in deliveries and an 8.9% increase in average sales price to $341,000.

• Net income for Q2 2024 was $28.6 million, including a $32.1 million non-cash gain/expense from fair value changes in earn-out or derivative liabilities.

• The company continues a land-light strategy, controlling about 9,300 lots primarily through options and land banking, and expanding via acquisitions and organic growth in high-growth Southeastern markets.

• Q2 marked a transition period with consolidation of acquisitions, workforce rationalization, and product repositioning, impacting short-term results but expected to benefit long-term growth.

• Liquidity at quarter-end was $80.4 million, with $24.9 million in cash and $55.5 million in undrawn revolver capacity.

Financial highlights

• Q2 2024 revenue was $109.4 million, down from $122.1 million in Q2 2023; six-month revenue was $210.3 million, down from $216.9 million year-over-year.

• Gross profit margin for Q2 2024 was 17.9% (GAAP), down from 19.6% in Q2 2023; adjusted gross margin was 20.9%.

• Adjusted EBITDA for Q2 2024 was $7.7 million (7.0% margin), down from $13.1 million in Q2 2023.

• Average sales price for Q2 2024 was $341,000, up from $313,000 in Q2 2023.

• Backlog at quarter-end: 248 homes valued at $81.2 million, up 41% from December 31, 2023.

Outlook and guidance

• Expects margin improvement in coming quarters due to lower lumber costs and proactive rebidding of construction projects.

• Focus remains on affordable product and first-time move-up buyers, with ongoing use of rate buydowns and sales incentives.

• Confident in lot pipeline to support deliveries through 2025 and into 2026.

• Management anticipates ongoing headwinds from higher mortgage rates and affordability concerns but believes its strategy positions it well for market volatility.

• Continued organic and acquisition-driven growth expected, leveraging a land-light model and expansion into new markets.