Smith Douglas Homes Reports First Quarter 2025 Results

Smith Douglas Homes Corp. (NYSE: SDHC) (“Smith Douglas” or the “Company”) today announced first quarter results for the three months ended March 31, 2025.

Q1 2025 Results as compared to Q1 2024:

Home closings increased 19% to 671
Home closing revenue increased 19% to $224.7 million
Home closing gross margin of 23.8% compared to 26.1%
Net new home orders of 768 compared to 765
Pretax income of $19.6 million compared to $21.4 million
Earnings of $0.30 per diluted share compared to $0.33
Debt-to-book capitalization of 9.5% compared to 0.8% at December 31, 2024
Active community count increased 24% to 87 at quarter end
Total controlled lots increased 45% to 20,442

Greg Bennett, Vice Chairman and Chief Executive Officer, commented, “Smith Douglas Homes turned in another quarter of strong profitability to start 2025, generating pretax income of $19.6 million, or earnings of $0.30 per diluted share. Home closing revenue grew 19% year-over-year on a similar increase in new home closings, while home closing gross margin came in at 23.8%, which was above our expectations for the quarter. I want to thank our entire team for once again executing with efficiency and precision.”

Russ Devendorf, Executive Vice President and Chief Financial Officer added, “Order activity improved as the quarter progressed, though I would characterize overall demand as somewhat inconsistent and still dependent on incentives. While affordability remains an issue in our markets, we continue to see good traffic to our website and our communities. We feel this is a reflection on the appeal of our homes and the value proposition we provide to buyers.”

Mr. Devendorf continued, “Despite much of the noise surrounding macroeconomic uncertainty, we remain confident in our ability to execute on our strategic plans and achieve our long-term growth goals. Active community count at quarter-end increased 24% compared to last year, while total controlled lots were up 45%, giving us a great opportunity to grow our market share and increase our size and scale. We believe our asset light strategy, solid operational execution and strong balance sheet has us well-positioned to successfully navigate today’s changing homebuilding landscape.”

Conference Call & Webcast Information

Management will host a conference call to discuss the Company’s results at 8:30 a.m. Eastern Time on May 14, 2025. Interested parties can dial in using the numbers below or access the call via a webcast link provided in the investor relations section of the company’s website.

Dial-in Numbers:

Toll Free - North America (+1) 800-715-9871

International: (+1) 646-307-1963

Conference ID: 8459388

Replay Numbers:

Toll Free - North America: (+1) 800-770-2030

Playback Passcode: 8459388

Replay will expire 7 days following the event

About Smith Douglas Homes

Headquartered in Woodstock, Georgia, Smith Douglas Homes completed its initial public offering in January 2024. Since its inception, Smith Douglas has been entrusted by over 17,500 families to fulfill their new home dreams. Ranked a top 50 builder nationally for several years and with 2,867 closings in 2024, Smith Douglas currently holds the #32 position on the Builder Magazine Top 100 list. The Smith Douglas communities are primarily targeted to entry-level and empty-nest homebuyers looking to purchase a new home priced below the Federal Housing Administration loan limit in the metro areas of Atlanta, Birmingham, Central Georgia, Charlotte, Chattanooga, Greenville, Houston, Huntsville, Nashville, and Raleigh. Smith Douglas offers its homebuyers a personalized, affordable-luxury buying experience at attractive prices.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the Company’s performance, growth, strategic plans and opportunities, financial position, ability to navigate the changing homebuilding landscape in the macroeconomic environment, and the timing of any of the foregoing. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. These forward-looking statements are based on management’s current estimates and expectations. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

Smith Douglas Homes Condensed Consolidated Statements of Income (Unaudited, in thousands, except share and per share amounts)


	Three months ended March 31,
		2025			2024
Home closing revenue	$	224,722		$	189,209
Cost of home closings		171,192			139,749
Home closing gross profit		53,530			49,460

Selling, general, and administrative costs		32,999			27,541
Equity in income from unconsolidated entities		(219	)		(184	)
Interest expense		666			698
Other expense (income), net		517			(2	)
Income before income taxes		19,567			21,407
Provision for income taxes		857			921
Net income		18,710			20,486
Net income attributable to non-controlling interests and LLC members prior to IPO		16,027			17,514
Net income attributable to Smith Douglas Homes Corp.	$	2,683		$	2,972

	Three months ended March 31, 2025		Period from January 11, 2024 to March 31, 2024
Earnings per share:
Basic	$	0.30	$	0.34
Diluted	$	0.30	$	0.33
Weighted average shares of common stock outstanding:
Basic		8,966,734		8,846,154
Diluted		9,133,263		51,410,397

Smith Douglas Homes Condensed Consolidated Balance Sheets (In thousands, except share and per share amounts)

	March 31, 2025		December 31, 2024
	(unaudited)
Assets
Cash and cash equivalents	$	12,651	$	22,363
Real estate inventory		294,991		277,834
Deposits on real estate under option or contract		119,339		103,026
Real estate not owned		7,502		5,830
Property and equipment, net		4,317		3,775
Goodwill		25,726		25,726
Deferred tax asset, net		10,767		10,906
Other assets		38,626		26,441
Total assets	$	513,919	$	475,901
Liabilities and Equity
Liabilities:
Accounts payable	$	19,912	$	17,234
Customer deposits		5,585		5,301
Notes payable		42,648		3,060
Liabilities related to real estate not owned		7,502		5,830
Accrued expenses and other liabilities		20,708		32,348
Tax receivable agreement liability		10,401		10,401
Total liabilities		106,756		74,174
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.0001 par value – 10,000,000 shares authorized; none issued and outstanding as of March 31, 2025 and December 31, 2024		—		—
Class A common stock, $0.0001 par value – 250,000,000 shares authorized; 8,991,378 and 8,846,154 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		1		1
Class B common stock, $0.0001 par value – 100,000,000 shares authorized; 42,435,897 shares issued and outstanding as of March 31, 2025 and December 31, 2024		4		4
Additional paid-in capital		58,820		58,208
Retained earnings		18,040		15,419
Total stockholders’ equity attributable to Smith Douglas Homes Corp.		76,865		73,632
Non-controlling interests attributable to Smith Douglas Holdings LLC		330,298		328,095
Total equity		407,163		401,727
Total liabilities and equity	$	513,919	$	475,901

Smith Douglas Homes Summary Cash Flow Information (Unaudited, dollars in thousands)

Three months ended March 31,		2025			2024
Net cash used in operating activities	$	(34,905	)	$	(9,273	)
Net cash used in investing activities		(2,106	)		(430	)
Net cash provided by financing activities		27,299			22,704
Net (decrease) increase in cash and cash equivalents		(9,712	)		13,001
Cash and cash equivalents, beginning of period		22,363			19,777
Cash and cash equivalents, end of period	$	12,651		$	32,778

Smith Douglas Homes Selected Other Operating Data (Unaudited, dollars in thousands)

	Three months ended March 31,
		2025			2024
Home closings		671			566
ASP of homes closed	$	335		$	334
Net new home orders		768			765
Contract value of net new home orders	$	258,718		$	259,440
ASP of net new home orders	$	337		$	339
Cancellation rate⁽¹⁾		8.1	%		10.6	%
Backlog homes (period end)⁽²⁾		791			1,110
Contract value of backlog homes (period end)	$	270,082		$	381,155
ASP of backlog homes (period end)	$	341		$	343
Active communities (period end)⁽³⁾		87			70
Controlled lots (period end):
Homes under construction		995			896
Owned lots		888			693
Optioned lots		18,559			12,528
Total controlled lots		20,442			14,117

(1)		The cancellation rate is the total number of cancellations during the period divided by the total gross new home orders during the period.
(2)		Backlog homes (period end) is the number of homes in backlog from the previous period plus the number of net new home orders generated during the current period minus the number of homes closed during the current period.
(3)		A community becomes active once the model is completed or the community has its first sale. A community becomes inactive when it has fewer than two homes remaining to sell.

Smith Douglas Homes Selected Financial Information by Segment (Unaudited, dollars in thousands)

Home Closing Revenue

Three months ended March 31,	2025					2024					Period over period change
	Home closing revenue		Home closings	ASP of homes closed		Home closing revenue		Home closings	ASP of homes closed		Home closing revenue		Home closings		ASP of homes closed
Southeast	$	138,218	392	$	353	$	103,494	297	$	348	34	%	32	%	1	%
Central		86,504	279		310		85,715	269		319	1	%	4	%	(3	)%
Total	$	224,722	671	$	335	$	189,209	566	$	334	19	%	19	%	—	%

Backlog

As of March 31,	2025					2024					Period over period change
	Backlog homes	Contract value of backlog homes		ASP of backlog homes		Backlog homes	Contract value of backlog homes		ASP of backlog homes		Backlog homes		Contract value of backlog homes		ASP of backlog homes
Southeast	486	$	169,967	$	350	673	$	239,587	$	356	(28	)%	(29	)%	(2	)%
Central	305		100,115		328	437		141,568		324	(30	)%	(29	)%	1	%
Total	791	$	270,082	$	341	1,110	$	381,155	$	343	(29	)%	(29	)%	(1	)%

Controlled Lots

As of March 31,	2025			2024			Period over period change
	Owned⁽¹⁾	Optioned	Total Controlled	Owned⁽¹⁾	Optioned	Total Controlled	Owned⁽¹⁾		Optioned		Total Controlled
Southeast	948	12,980	13,928	726	8,593	9,319	31	%	51	%	49	%
Central	935	5,579	6,514	863	3,935	4,798	8	%	42	%	36	%
Total	1,883	18,559	20,442	1,589	12,528	14,117	19	%	48	%	45	%

(1)

Includes homes under construction and owned lots.

Net Income

	Three months ended March 31,
		2025			2024		Period over period change
Southeast	$	23,855		$	21,005		$	2,850
Central		7,010			10,283			(3,273	)
Segment total		30,865			31,288			(423	)
Other⁽¹⁾		(12,155	)		(10,802	)		(1,353	)
Total	$	18,710		$	20,486		$	(1,776	)

(1)

Other primarily includes homebuilding operations in non-reportable segments, corporate overhead costs, such as payroll and benefits, business insurance, information technology, office costs, outside professional services and travel costs, and certain other amounts that are not allocated to the reportable segments.

Non-GAAP Financial Measures

In addition to our results determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”), this press release includes net debt-to-net book capitalization and adjusted net income.

Net debt-to-net book capitalization

Net debt-to-net book capitalization is a supplemental measure of our leverage that is not required by, or presented in accordance with, GAAP and should not be considered as an alternative to debt-to-book capitalization or any other measure derived in accordance with GAAP. We caution investors that amounts presented in accordance with our definition of net debt-to-net book capitalization may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate this non-GAAP financial measure in the same manner. We present this non-GAAP financial measure because we consider it to be an important supplemental measure of our leverage and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry.

We define net debt-to-net book capitalization as:

Total debt, less cash and cash equivalents, divided by
Total debt, less cash and cash equivalents, plus equity.

This non-GAAP financial measure has limitations as an analytical tool in that it subtracts cash and cash equivalents and therefore may imply that the Company has less debt than the most comparable measure determined in accordance with GAAP. Because of this limitation, this non-GAAP financial measure should be considered along with other financial measures presented in accordance with GAAP. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. We have reconciled this non-GAAP financial measure with the most directly comparable GAAP financial measure in the following table:

As of (in thousands, except percentages)	March 31, 2025			December 31, 2024
Notes payable	$	42,648		$	3,060
Equity		407,163			401,727
Total capitalization	$	449,811		$	404,787
Debt-to-book capitalization		9.5	%		0.8	%
Notes payable	$	42,648		$	3,060
Less: cash and cash equivalents		12,651			22,363
Net debt		29,997			(19,303	)
Equity		407,163			401,727
Total net capitalization	$	437,160		$	382,424
Net debt-to-net book capitalization		6.9	%		(5.0	)%

Adjusted net income

Adjusted net income is not a measure of net income or net income margin as determined by GAAP. Adjusted net income is a supplemental non-GAAP financial measure used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies. We define adjusted net income as net income adjusted for the tax impact using a 24.9% federal and state blended tax rate (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented).

Management believes adjusted net income is useful because it allows management to more effectively evaluate our operating performance and comparability to industry peers who record income tax expense on their income before tax as opposed to the income of Smith Douglas Holdings LLC not being taxed at the entity level and, therefore, not reflecting a charge against earnings for income tax expense. Adjusted net income should not be considered as an alternative to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. Our computation of adjusted net income may not be comparable to adjusted net income of other companies. We present adjusted net income because we believe it provides useful information regarding our comparability to peers.

The following table presents a reconciliation of adjusted net income to the GAAP financial measure of net income for each of the periods indicated:

	Three months ended March 31,
	2025		2024
Net income	$	18,710	$	20,486
Provision for income taxes		857		921
Income before income taxes		19,567		21,407
Tax-effected adjustments⁽¹⁾		4,872		5,352
Adjusted net income	$	14,695	$	16,055

(1)

For the three months ended March 31, 2025 and 2024, our tax expenses assumes a 24.9% and 25.0% federal and state blended tax rate, respectively, (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented).

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Contacts

Investor Relations

Joe Thomas

investors@smithdouglas.com