United Homes Group (UHG) Q2 2024 earnings summary

Executive summary

• Delivered 337 homes in Q2 2024, generating $109.4 million in revenue, with an 8.9% increase in average sales price to $341,000 and a focus on affordable segments in high-growth Southeastern markets.

• Net income for Q2 2024 was $28.6 million, including a $32.1 million non-cash gain/expense from changes in fair value of derivative liabilities tied to earnout consideration.

• Maintains a land-light strategy, controlling about 9,300 lots, 95% via options or land banking, to reduce risk and upfront costs.

• Recent acquisitions, including Creekside Custom Homes and Rosewood Communities, expanded presence in South Carolina and North Carolina.

• Strong financial condition at quarter-end, with continued commitment to M&A and organic growth in the Southeast.

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.

• SG&A expense for Q2 2024 was $19.6 million; adjusted SG&A was $16.1 million or 14.7% of revenue.

• Liquidity at June 30, 2024, was $80.4 million, including $24.9 million in cash and $55.5 million in undrawn revolver capacity.

Outlook and guidance

• Focus remains on starting and selling homes to meet 2024 delivery goals and closing backlog homes.

• Confident in lot pipeline to support 2025 and part of 2026 deliveries, with ongoing efforts to add high-quality deals.

• Expects margin improvement in upcoming quarters due to lower lumber costs and proactive cost management.

• 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.