Dream Finders Homes Inc
For the period ended Mar 31, 2025. Filed May 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 6, 2025
DFH$12.40-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0001825088-24-000066
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0001825088-25-000031
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 166 previous paragraphs and 146 current paragraphs.
64 unchanged; 60 reworded; 19 added; 38 removed; 4 previous and 3 current paragraphs rearranged.
Tables are not compared: 19 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Homebuyers in our markets continue to grapple with home affordability challenges and we face intense competition from our peers, which resulted in net sales growth for the first quarter of 2025 that fell short of expectations despite an increase from the prior year. Elevated mortgage rates and inflationary pressures, combined with market uncertainty, are keeping homebuyers hesitant. To maintain demand, we have used incentives, including mortgage buydowns, and focused on building affordable speculative inventory. Our asset-light strategy has kept us flexible, allowing us to renegotiate lot option takedowns to match our sales pace.
Current report
Despite these challenges, our commitment to growth—through both organic initiatives and acquisitions, including the first quarter of 2025 Liberty Communities acquisition—has driven positive results, reflected in increased homebuilding revenues and closings, which grew by 18% and 16%, respectively.
Current report
Looking ahead, we remain optimistic due to the limited supply of affordable homes and favorable demographic trends in the areas we build homes. We believe these factors will continue to support demand and inventory turnover, and we are positioning ourselves for long-term growth through strategic acquisitions and organic expansion.
Current report
Alliant Title Acquisition
Current report
On April 18, 2025, the Company acquired Colorado-based title insurance underwriter, Alliant National Title Insurance Company, Inc. and a related affiliate.
Current report
Green River Builders
Current report
On May 2, 2025, the Company acquired the majority of the homebuilding assets of Green River Builders, Inc. (“Green River Builders”) allowing us to further expand our operations in the Atlanta, Georgia market. Assets acquired include approximately 140 lots and home sites in different stages of construction. Additionally, the Company expects to control over 520 lots as a result of the transaction. The operations of Green River Builders will be included in the Southeast segment as of the date of acquisition.
Current report
Expanded Mortgage Capabilities
Current report
On March 4, 2025, expanded Jet HomeLoans’ future mortgage servicing capabilities through an acquired mortgage licensing platform with a Federal Home Loan Mortgage Corporation and Government National Mortgage Association-approved lender.
Current report
Homebuilding Revenues. The increase in homebuilding revenues was primarily attributable to 1,925 home closings for the three months ended March 31, 2025, an increase of 270 homes, or 16%, from 1,655 home closings for the three months ended March 31, 2024. The increase was primarily attributable to the Midwest segment, which had an increase of 131 closings with an ASP of $580,221, which is the highest ASP of our homebuilding segments. 107 home closings with an ASP of $358,314 were contributed by the Liberty Communities acquisition, 90 of which were included in the Southeast segment, which had a total increase in home closings of 109. The consolidated ASP of homes closed increased 1% when comparing the three months ended March 31, 2025 to the three months ended March 31, 2024.
Current report
Midwest. Our Midwest segment homebuilding revenues for the three months ended March 31, 2025 were $424 million, an increase of $89 million, or 27%, from $335 million for the three months ended March 31, 2024. This increase was primarily due to higher home closings of 131, or 22% and, to a lesser extent, an increase of 1% in the ASP of homes closed. Homebuilding gross margin percentage was 17.7% for the three months ended March 31, 2025, representing an increase of 20 bps, or 1% from 17.5% when compared to the three months ended March 31, 2024. The increase in homebuilding gross margin percentage was due to direct cost reductions, mostly offset by an increase in land and financing costs.
Current report
Other Expense (Income), Net.$7 million of the increase in other expense, net for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 was due to purchase price adjustments related to the Crescent acquisition, which were recognized outside of the measurement period. Refer to Note 2, Acquisitions to the condensed consolidated financial statements for additional information.
Current report
In the past, we have supplemented our lot option acquisition strategies by entering into joint venture agreements with external investors to acquire, develop and control lots. Due to the profit sharing requirements of the joint venture agreements, we have transitioned from these joint venture arrangements in favor of the option contract strategies described above.
Current report
Controlled Lots Pipeline
Current report
(2)As of March 31, 2025 and December 31, 2024, the Company had 593 and 603 controlled lots under built-for-rent contracts, respectively.
Current report
(2)On January 23, 2025, backlog increased by 76 due to our Liberty Communities acquisition. 106 of the homes in backlog as of March 31, 2025 were attributable to Liberty Communities.
Current report
(3)On January 23, 2025, backlog increased by 20 due to our Liberty Communities acquisition. 26 of the homes in backlog as of March 31, 2025 were attributable to Liberty Communities.
Current report
Redeemable Noncontrolling Interests
Current report
Based on the terms of the purchase agreement, at the time of an acquisition, we may issue redeemable noncontrolling interest. Redeemable noncontrolling interest is reported within mezzanine equity on the Company’s Condensed Consolidated Balance Sheets at the greater of the initial carrying amount (its fair value on the acquisition date) adjusted for the noncontrolling interest’s share of net income (loss) less distributions or its redemption value. After achieving the minimum earnings threshold, the amount of net and comprehensive income that is attributable to the redeemable noncontrolling interest will be presented within net and comprehensive income attributable to noncontrolling interests on the Condensed Consolidated Statements of Comprehensive Income. As of March 31, 2025, the redeemable noncontrolling interests totaled$29 million, of which no amount was redeemable within 12 months. Refer to Note 2, Acquisitionsto our condensed consolidated financial statements for more information on redeemable noncontrolling interests related to current period business combinations.
Removed paragraphs (38)
Previous report
Although ticking down since earlier this year, mortgage rates and inflationary pressures remain elevated. In September, the Federal Reserve made its first cut to the Federal Funds Rate in 2024. Despite the easing of certain economic conditions, variability in demand for homes and affordability challenges persist. Our asset-light strategy positions us to remain agile in any market conditions, allowing us to strategically renegotiate lot option takedowns to align with our sales pace.
Previous report
We continued to see the positive effects of our commitment to future growth, whether through organic efforts, acquisitions, or a combination of both, all while keeping an asset-light approach. This strategy is reflected in our homebuilding revenues and closings, which grew by 10% and 8%, respectively, when comparing the first nine months of 2024 and 2023. Notably, our acquisition of Crescent Homes played a significant role in these improvements. We believe this success, coupled with our increased investments in our lot pipeline, inventories and construction starts, positions us well for the future. We remain optimistic and believe that the current environment will continue to support faster inventory turnover and reinforce our shift towards spec sales for the foreseeable future. Our strategy has also allowed us to continue to pursue opportunities that contribute to our long-term outlook, including acquiring Jet HomeLoans, discussed below.
Previous report
On July 1, 2024, we acquired the remaining equity interest in our mortgage joint venture Jet HomeLoans, which is consolidated on the Company’s condensed consolidated financial statements as of that date. Jet HomeLoans continues to be included in the Company’s Financial Services segment.
Previous report
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
Previous report
(1)Selling, general and administrative expense, which is comprised of expense from the homebuilding segments and Corporate, (“SG&A”) includes $9 million and $7 million of Corporate SG&A for the three months ended September 30, 2024 and 2023, respectively. Corporate amounts are included as they primarily relate to our homebuilding business.
Previous report
(5)Calculated as a percentage of homebuilding revenues.
Previous report
Homebuilding Revenues. The increase in homebuilding revenues was primarily attributable to 1,889 home closings for the three months ended September 30, 2024, an increase of 91 homes, or 5%, from 1,798 home closings for the three months ended September 30, 2023. 223 home closings with an ASP of $554,231 were contributed by the Crescent Homes acquisition. The consolidated ASP of homes closed increased 3% when comparing the three months ended September 30, 2024 to the three months ended September 30, 2023. Excluding Crescent Homes, 42% of our closings were in the Midwest segment with an ASP of $589,087, which is higher relative to our other homebuilding segments. The increased use of sales incentives during the third quarter of 2024 had a partially offsetting impact on the increase in homebuilding revenues.
Previous report
Southeast. Our Southeast segment total revenues for the three months ended September 30, 2024 were $293 million, a decrease of $78 million, or 21%, from $371 million for the three months ended September 30, 2023. This decline in revenue was primarily driven by a decrease in home closings of 236, or 29%, which was partially offset by a 6% increase in the ASP of homes closed from changes in the geographic mix of closings within the segment. The reduction in home closings in part stems from temporary delays in the timing of expected active communities opening for sales. There were also fewer closings under built-for-rent contracts during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Homebuilding gross margin percentage was 19.6% for the three months ended September 30, 2024, representing a decrease of 60 bps, or 3%, when compared to the three months ended September 30, 2023. The decrease in homebuilding gross margin percentage was mostly due to higher land and financing costs, partially offset by direct cost reductions and, to a lesser extent, cycle time improvements.
Previous report
Midwest. Our Midwest segment total revenues for the three months ended September 30, 2024 were $409 million, an increase of $50 million, or 14%, from $359 million for the three months ended September 30, 2023. The additional revenue was due to higher home closings of 112, or 19%, partially offset by a decrease of 4% in the ASP of homes closed from changes in the geographic mix of closings within the segment. Homebuilding gross margin percentage was 18.1% for the three months ended September 30, 2024, representing a decrease of 370 bps, or 17%, from 21.8% for the three months ended September 30, 2023. The reduction in homebuilding gross margin percentage was due to an increase in land costs and, to a lesser extent, higher financing costs.
Previous report
Income Before Taxes Related to Homebuilding Operations. The decrease in income before taxes related to homebuilding operations during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 was primarily attributable to the increase in SG&A and decrease in homebuilding gross margin percentage explanations above.
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Results of Homebuilding Operations
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Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
(1)Selling, general and administrative expense, which is comprised of expense from the homebuilding segments and Corporate, (“SG&A”) includes $23 million and $10 million of Corporate SG&A for the nine months ended September 30, 2024 and 2023, respectively. Corporate amounts are included as they primarily relate to our homebuilding business.
Previous report
(2)Contingent consideration revaluation, which is comprised of amounts from the homebuilding segments and Corporate, (“contingent consideration”) includes $2 million and $6 million of Corporate contingent consideration for the nine months ended September 30, 2024 and 2023, respectively. Corporate amounts are included as they relate to our homebuilding business.
Previous report
See notes (3) to (7) under results of homebuilding operations for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Previous report
The following table summarizes home closings and ASP of homes closed by homebuilding segment for the nine months ended September 30, 2024 and 2023:
Previous report
Homebuilding Revenues. The higher homebuilding revenues were primarily attributable to 5,575 home closings for the nine months ended September 30, 2024, an increase of 414 homes, or 8%, from the 5,161 home closings for the nine months ended September 30, 2023. The consolidated ASP of homes closed increased 2% when comparing the nine months ended September 30, 2024 to the nine months ended September 30, 2023. 496 homes with an ASP of $506,079 were contributed by the Crescent Homes acquisition. Excluding Crescent Homes, 40% of our closings were in the Midwest segment with an ASP of $583,688, which is higher relative to our other homebuilding segments.
Previous report
Homebuilding Cost of Sales and Homebuilding Gross Margin. The increased homebuilding cost of sales and homebuilding gross margin were primarily due to the increase in home closings for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The decrease in homebuilding gross margin as a percentage of homebuilding revenues was primarily attributable to higher land and financing costs, partially offset by direct
Previous report
cost reductions. Additionally, amortization of purchase accounting adjustments associated with home closings contributed from the Crescent Homes acquisition negatively impacted the nine months ended September 30, 2024 homebuilding gross margin percentage by approximately 21 bps.
Previous report
Mid-Atlantic. Our Mid-Atlantic segment total revenues for the nine months ended September 30, 2024 were $758 million, an increase of $311 million, or 70%, from $447 million for the nine months ended September 30, 2023. This revenue growth was primarily driven by an increase in home closings of 560, or 49%, for the nine months ended September 30, 2024 compared to the nine months September 30, 2023. Crescent Homes contributed $252 million in revenue and 496 home closings with an ASP of $506,079 for the nine months ended September 30, 2024.
Previous report
Excluding Crescent, Mid-Atlantic total revenues increased by 13% when comparing the nine months ended September 30, 2024 and 2023 primarily due to more home closings and, to a lesser degree, a higher ASP of $414,538, an increase of $28,424, or 7%, when compared to the nine months ended September 30, 2023. Without Crescent, homebuilding gross margin percentage was 18.6% for the nine months ended September 30, 2024, representing an increase of 210 bps, or 13%, when compared to the nine months ended September 30, 2023. The improvement in this homebuilding gross margin percentage was primarily a result of direct cost reductions and, to a lesser extent, cycle time improvements, partially offset by higher land and financing costs.
Previous report
Midwest. Our Midwest segment total revenues for the nine months ended September 30, 2024 were $1,191 million, an increase of $86 million, or 8%, from $1,106 million for the nine months ended September 30, 2023. This increase was due to higher home closings of 277, or 16%, partially offset by a decrease of 6% in the ASP of homes closed. The decrease in ASP of homes closed was due to changes in the geographic mix of closings within the segment. Homebuilding gross margin percentage was 17.9% for the nine months ended September 30, 2024, representing a decrease of 280 bps, or 14%, when compared to nine months ended September 30, 2023. The reduction in homebuilding gross margin percentage was due to an increase in land costs and, to a lesser extent, higher financing costs, partially offset by direct cost reductions.
Previous report
Selling, General and Administrative Expense. The increases in SG&A and in SG&A as a percentage of homebuilding revenues were primarily due to higher compensation costs of $41 million attributable to our growth, including the recent acquisition of Crescent Homes and our operational expansions in Florida and Arizona. Additionally, for the nine months ended September 30, 2024, SG&A included $30 million of spend on forward commitment programs to allow our homebuyers to access lower interest rates on home loans at the point of sale, which was $13 million higher when compared to the nine months ended September 30, 2023.
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Owned and Controlled Lots
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(2)As of September 30, 2024, the Company had 8,481 owned lots, of which 5,884 were included in construction in process (“CIP”) and finished homes on the Condensed Consolidated Balance Sheet. Of the 5,884 owned lots included in CIP and finished homes, 5,224 were under construction, 493 were completed spec homes and 167 were model homes. The remaining owned lots were purchased just-in-time to start construction through existing lot option contracts.
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(3)As of September 30, 2024, the Company had 1,403 owned lots and 834 controlled lots under built-for-rent contracts (see “—Net Sales, Backlog and Closings for a definition of built-for-rent contracts).
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(4)As of September 30, 2024, the Crescent Homes acquisition contributed 709 and 4,944 owned and controlled lots, respectively.
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(1)Closings under built-for-rent contracts decreased 52% when comparing the three months ended September 30, 2024 to the three months ended September 30, 2023.
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(2)Closings under built-for-rent contracts decreased 23% when compared to the nine months ended September 30, 2023.
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Homes in backlog are generally closed within one to nine months. The present shift towards spec home sales versus pre-order sales has led to a decrease in the number of homes remaining in backlog when compared to previous quarters. In addition, certain circumstances may impact our backlog conversion, such as built-for-rent contracts, which are customarily delivered over a longer period of time, as well as pre-order sales in new communities. The Company’s backlog may be impacted by customer cancellations for various reasons that are beyond our control, and, in light of our minimal required deposit, there is little negative impact to the potential homebuyer from the cancellation of the sales contract.
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(1)Backlog as of September 30, 2024 includes 433 homes from our Crescent Homes acquisition.
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DFH
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Series B Preferred Units
Previous report
On August 31, 2023, the Company redeemed all of its previously outstanding Series B Preferred Units. Refer to Note 11, Equity to the condensed consolidated financial statements for information regarding the redemption.
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Redeemable Noncontrolling Interest
Previous report
On February 1, 2024, as part of the consideration for the Crescent Homes acquisition, the former owner of Crescent Homes received all of the series B units of DFH Crescent, representing a redeemable noncontrolling interest with contractual rights to a portion of DFH Crescent’s future earnings upon exceeding a minimum earnings threshold (Note 2, Acquisitions). In accordance with DFH Crescent’s limited liability company agreement, with the exception of certain acceleration clauses, the holder of the series B units and the Company are entitled to a series of put and call options beginning on February 1, 2032. The series B units have no liquidation preference, are not entitled to any dividends and have no voting rights.
Previous report
In June 2023, the Company’s Board of Directors (the “Board”) approved a share buyback program under which the Company can repurchase up to $25.0 million of its Class A common stock through June 30, 2026 in open market purchases, privately negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Refer to Part II, Item 2, below, for further details on share repurchases under our share buyback program.
Previous report
•our ability to create synergies from the expansion into industries related to homebuilding, such as mortgage lending and title insurance;
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Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying financial statements and related notes thereto. Unless the context otherwise requires, “Dream Finders,” ”DFH,” the “Company,” “we,” “our” and “us” refer collectively to Dream Finders Homes, Inc. and its subsidiaries.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying financial statements and related notes thereto. Unless the context otherwise requires, the terms “Dream Finders,” ”DFH,” the “Company,” “we,” “us” and “our” refer to Dream Finders Homes, Inc. and its subsidiaries.
Previous wording
We design, build and sell homes in high-growth markets using our asset-light lot acquisition strategy. Our primary focus is on constructing and selling single-family homes across entry-level, first-time move-up, second-time move-up, and active adult markets. To fully serve our homebuyers and capture ancillary business opportunities, we have financial services operations that offer title insurance and mortgage banking solutions.
Current wording
We design, build and sell homes primarily in high-growth markets using our asset-light lot acquisition strategy. Our primary focus is on constructing and selling single-family homes across entry-level, first-time move-up, second-time move-up, and active adult markets as well as homes under built-for-rent contracts. To fully serve our homebuyers and capture ancillary business opportunities, we have financial services operations that offer title insurance and mortgage banking solutions.
Previous wording
(3)EBITDA is a non-GAAP financial measure. For definition of this non-GAAP financial measure and a reconciliation to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”
Current wording
(3)EBITDA is a non-GAAP financial measure. For a definition of this non-GAAP financial measure and a reconciliation to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”
Previous wording
(5)Return on participating equity is calculated as net income attributable to DFH, less redeemable preferred stock distributions, divided by average beginning and ending total Dream Finders Homes, Inc. stockholders’ equity (“participating equity”) for the trailing twelve months.
Current wording
(5)Return on participating equity is calculated as net and comprehensive income attributable to DFH, less redeemable preferred stock distributions, divided by average beginning and ending total Dream Finders Homes, Inc. stockholders’ equity (“participating equity”) for the trailing twelve months.
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The following table sets forth our results of homebuilding operations and balance sheet data (in thousands) for the periods indicated:
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The following table sets forth our results of homebuilding operationsand other financial data (in thousands) for the periods indicated:
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(2)Contingent consideration revaluation, which is comprised of amounts from the homebuilding segments and Corporate, (“contingent consideration”) includes $1 million and $4 million of Corporate contingent consideration expense for the three months ended September 30, 2024 and 2023, respectively. Corporate amounts are included as they relate to our homebuilding business.
Current wording
(1)Contingent consideration revaluation, which is comprised of amounts from the homebuilding segments (“contingent consideration”), excludes $0.1 million and $0.3 million of Corporate contingent consideration expenses for the three months ended March 31, 2025 and 2024, respectively. Corporate amounts represent contingent consideration relating to our homebuilding business that the Company does not charge to the segments.
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(3)Average sales price of homes closed is calculated based on homebuilding revenues, adjusted for the impact of percentage of completion revenues, and excluding deposit forfeitures and land sales, over homes closed.
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(2)Average sales price of homes closed is calculated based on homebuilding revenues, adjusted for the impact of percentage of completion revenues, and excluding deposit forfeitures and land sales, over homes closed.
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(4)Gross margin is homebuilding revenues less homebuilding cost of sales.
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(3)Homebuilding gross margin is homebuilding revenues less homebuilding cost of sales.
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(6)Adjusted gross margin and net homebuilding debt to net capitalization are non-GAAP financial measures. For definitions of these non-GAAP financial measures and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”
Current wording
(5)Adjusted homebuilding gross margin and net homebuilding debt to net capitalization are non-GAAP financial measures. For definitions of these non-GAAP financial measures and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”
Previous wording
(7)A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five homesites remaining to sell.
Current wording
(6)A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five homesites remaining to sell.
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The following table presents income before taxes (in thousands) and homebuilding gross margin (or “gross margin”) percentage by segment for the nine months ended September 30, 2024 and 2023:
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The following table presents income before taxes (in thousands) and homebuilding gross margin (or “gross margin”) percentage by segment for the three months ended March 31, 2025 and 2024:
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Homebuilding Cost of Sales and Homebuilding Gross Margin. The higher homebuilding cost of sales and homebuilding gross margin were primarily due to the increase in home closings for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The decrease in homebuilding gross margin as a percentage of homebuilding revenues when comparing the three months ended September 30, 2024 and 2023 was primarily attributable to higher land and financing costs, partially offset by direct cost reductions and, to a lesser extent, continued improvements in cycle times.
Current wording
Homebuilding Cost of Sales and Homebuilding Gross Margin. The higher homebuilding cost of sales was primarily due to the increase in home closings for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase in homebuilding gross margin as a percentage of homebuilding revenues when comparing the three months ended March 31, 2025 and 2024 was primarily attributable to direct cost reductions and changes in product mix, partially offset by higher land and financing costs. In addition, the Liberty Communities homebuilding gross margin for the quarter ended March 31, 2025 included amortization of purchase accounting adjustments associated with home closings that negatively impacted the homebuilding gross margin percentage by 19 basis points (“bps”).
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Southeast. Our Southeast segment total revenues for the nine months ended September 30, 2024 were $914 million, a decrease of $137 million, or 13%, from $1,051 million for the nine months ended September 30, 2023. This decline in revenue was primarily driven by a decrease in home closings of 423, or 19%, partially offset by a 7% increase in the ASP of homes closed. Homebuilding gross margin percentage was 19.5% for the nine months ended September 30, 2024, representing an increase of 130 bps, or 7%, when compared to the nine months ended September 30, 2023. The increase in homebuilding gross margin percentage was mostly the result of direct cost reductions and, to a lesser extent, cycle time improvements, partially offset by higher land and financing costs.
Current wording
Southeast. Our Southeast segment total homebuilding revenues for the three months ended March 31, 2025 were $308 million, an increase of $28 million, or 10%, from $280 million for the three months ended March 31, 2024. This increase in revenue was primarily driven by an increase in home closings of 109, or 19%, which was partially offset by a 6% decrease in the ASP of homes closed. Homebuilding gross margin percentage was 19.5% for the three months ended March 31, 2025, representing an increase of 160 bps, or 9%, when compared to the three months ended March 31, 2024. The increase in homebuilding gross margin percentage was mostly the result of direct cost reductions, partially offset by higher land and financing costs and, to a lesser extent, a gross margin of 12.4% for the Liberty Communities operations. Liberty Communities contributed $33 million in homebuilding revenues and 90 home closings with an ASP of $365,447 for the three months ended March 31, 2025.
Previous wording
Excluding Crescent, Mid-Atlantic total revenues decreased by 2% when comparing the three months ended September 30, 2024 and 2023, mostly due to slightly fewer home closings and homebuilding gross margin percentage was 17.8% for the three months ended September 30, 2024, representing a decrease of 120 bps, or 6%, when compared to the three months ended September 30, 2023. The decline in this homebuilding gross margin percentage was primarily a result of higher land and financing costs.
Current wording
Excluding Liberty, homebuilding revenues in the Southeast segment decreased by 2% when comparing the three months ended March 31, 2025 and 2024 mostly due to a lower ASP of $458,030, a decrease of $15,578, or 3%, slightly offset by 19, or 3%, more home closings. Without Liberty, homebuilding gross margin percentage was 20.4% for the three months ended March 31, 2025, representing an increase of 250 bps, or 14%, when compared to the three months ended March 31, 2024. The increase in this homebuilding gross margin percentage was primarily the result of direct cost reductions and, to a lesser extent, cycle time improvements, partially offset by higher land and financing costs.
Previous wording
Mid-Atlantic. Our Mid-Atlantic segment total revenues for the three months ended September 30, 2024 were $284 million, an increase of $120 million, or 73%, from $164 million for the three months ended September 30, 2023. This revenue growth was primarily driven by an increase in home closings of 215, or 55%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Crescent Homes contributed $124 million in homebuilding revenues and 223 home closings with an ASP of $554,231 for the three months ended September 30, 2024.
Current wording
Mid-Atlantic. Our Mid-Atlantic segment total homebuilding revenues for the three months ended March 31, 2025 were $238 million, an increase of $28 million, or 13%, from $210 million for the three months ended March 31, 2024. This revenue growth was primarily driven by an increase in ASP and home closings of $29,129, or 7%, and 30, or 6%, respectively, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Homebuilding gross margin percentage was 21.6% for the three months ended March 31, 2025, representing an increase of 360 bps, or 20%, when compared to the three months ended March 31, 2024. The increase in homebuilding gross margin percentage was mostly the result of direct cost reductions, particularly from the Crescent Ventures, LLC (“Crescent Homes” or “Crescent”) operations which had a gross margin of 24.8%, partially offset by other changes in product mix as well as higher land and financing costs.
Previous wording
Selling, General and Administrative Expense. The increases in SG&A and in SG&A as a percentage of homebuilding revenues were primarily attributable to higher compensation costs of $12 million due to our growth from continued expansion, including the recent acquisition of Crescent Homes. Additionally, for the three months ended September 30, 2024, SG&A also included $14 million of spend on forward commitment programs to allow our homebuyers to access lower interest rates on home loans at the point of sale, which was $5 million higher when compared to the three months ended September 30, 2023.
Current wording
Selling, General and Administrative Expense. Selling, general and administrative expense for the homebuilding segments (“SG&A”) as a percentage of homebuilding revenues was 12.0% for the three months ended March 31, 2025, an increase of 230 bps from 9.7% for the three months ended March 31, 2024, which resulted in an increase of $36 million. The dollar and percentage increase in SG&A was primarily attributable to higher compensation costs of $13 million, largely due to our growth from continued expansion, including the February 2024 acquisition of Crescent, the January 2025 acquisition of Liberty Communities and our operational expansions in Florida and Arizona. Compensation costs for the three months ended March 31, 2025 also included a one-time stock acceleration expense of approximately $4 million. Additionally, for the three months ended March 31, 2025, SG&A included $18 million of spend on forward commitment programs to allow our homebuyers to access lower mortgage interest rates on home loans, representing an $11 million increase when compared to the three months ended March 31, 2024. As a result of the Crescent and Liberty acquisitions described above, there was SG&A of $8 million in the first quarter of 2025 that was not included in the first quarter of 2024.
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Contingent Consideration Revaluation.$2 million of the decrease in contingent consideration expense for the three months ended September 30, 2024 was attributable to lower fair value adjustments of future expected earnout payments related to the MHI acquisition, as actual results remained more in line with forecasts when compared to the three months ended September 30, 2023.
Current wording
Contingent Consideration Revaluation.$1 million of the decrease in contingent consideration expense for the three months ended March 31, 2025 was attributable to lower fair value adjustments of future expected earnout payments related to the MHI acquisition, as the earnout period for the MHI acquisition is nearing its completion in the third quarter of 2025, and it is less susceptible to changes in long-term underlying projections. Additionally, the earnout period related to the 2020 acquisition of H&H Constructors of Fayetteville, LLC concluded in the third quarter of 2024.
Previous wording
Income Before Taxes Related to Homebuilding Operations. The decrease in income before taxes related to homebuilding operations during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was primarily attributable to the decrease in homebuilding gross margin percentage and the increase in SG&A, partially offset by the decrease in contingent consideration explained above.
Current wording
Income Before Taxes of Homebuilding Operations. The decrease in income before taxes of homebuilding operations during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 was primarily attributable to the increases in SG&A and in other expense, net, mostly offset by higher home closings volume and homebuilding gross margin and, to a lesser extent, the reduction in contingent consideration expense, all explained above.
Previous wording
As of September 30, 2024 and December 31, 2023, our lot deposits for finished lot option and land bank option contracts were $368 million and $247 million, respectively. As of September 30, 2024 and December 31, 2023, we controlled 44,825 and 29,748 lots, respectively, under finished lot option and land bank option contracts.
Current wording
As of March 31, 2025 and December 31, 2024, our lot deposits for finished lot option and land bank option contracts were $518 million and $458 million, respectively. As of March 31, 2025 and December 31, 2024, we controlled 60,538 and 54,698 lots, respectively, under finished lot option and land bank option contracts.
Previous wording
The following table presents our owned finished lots purchased just-in-time for production and controlled lots through option contracts by homebuilding segment as of September 30, 2024 and December 31, 2023:
Current wording
The following table presents our controlled lots through option contracts by homebuilding segment as of March 31, 2025 and December 31, 2024:
Previous wording
A community becomes active once the model is completed or the community has its fifth net new order. A community becomes inactive when it has fewer than five units remaining to sell. Active community count is an important metric to forecast future net new orders for our business. As of September 30, 2024, we had 235 active communities, an increase of 16 communities, or 7%, as compared to 219 active communities as of September 30, 2023.
Current wording
A community becomes active once the model is completed or the community has its fifth net new order. A community becomes inactive when it has fewer than five units remaining to sell. Active community count is an important metric to forecast future net new orders for our business. As of March 31, 2025, we had 258 active communities, an increase of 26 communities, or 11%, as compared to 232 active communities as of March 31, 2024.
Previous wording
Our active community count excludes communities under the Company's built-for-rent contracts, as all sales to third-party investors occur at one point in time and these communities would have no homesites remaining to sell. As of September 30, 2024, the Company had 13 communities delivering closings under built-for-rent contracts, as compared to 20 communities as of September 30, 2023.
Current wording
Our active community count excludes communities under the built-for-rent contracts, as all sales to third-party investors occur at one point in time and these communities would have no homesites remaining to sell. As of March 31, 2025, the Company had 5 communities delivering closings under built-for-rent contracts, as compared to 15 communities as of March 31, 2024.
Previous wording
Our cost of sales includes the acquisition and finance costs of homesites or lots, municipality fees, the costs associated with obtaining building permits, materials and labor to construct the home, interest costs for construction loans, internal and external realtor commissions and other miscellaneous closing costs. Homesite costs range from 20-30% of the average cost of a home. Building materials range from 35-45% of the average cost to build the home, labor ranges from 25-30% of the average cost to build the home, and interest, commissions and closing costs range from 5-10% of the average cost to build the home.
Current wording
Our homebuilding cost of sales includes the acquisition and finance costs of homesites or lots, municipality fees, the costs associated with obtaining building permits, materials and labor to construct the home, interest costs for construction loans, internal and external realtor commissions and other miscellaneous closing costs. Homesite costs range from 30-35% of the average cost of a home. Building materials range from 30-35% of the average cost to build the home, labor ranges from 20-25% of the average cost to build the home, and interest, commissions and closing costs range from 5-10% of the average cost to build the home.
Previous wording
Our materials are subject to price fluctuations. Once construction of a home begins, prices for the materials utilized in the construction of that particular home are generally locked via purchase orders, but fluctuations may occur as a result of market conditions. Price fluctuations may be caused by several factors, including seasonal variation in availability of materials, labor and supply chain disruptions, trade disputes and changes in demand for materials as a result of the housing market conditions where we operate. The price changes that most significantly influence our operations are price increases in commodities or the cost of labor. Significant price increases of these materials and the cost of labor may negatively impact our cost of sales and, in turn, our net income.
Current wording
Our materials are subject to price fluctuations. Once construction of a home begins, prices for the materials utilized in the construction of that particular home are generally locked via purchase orders, but fluctuations may occur as a result of market conditions. Price fluctuations may be caused by several factors, including seasonal variation in availability of materials, labor and supply chain disruptions, international trade disputes and resulting tariffs, and changes in demand for materials as a result of the housing market conditions where we operate. The price changes that most significantly influence our operations are price increases in commodities. Significant price increases of these materials may negatively impact our homebuilding cost of sales and, in turn, our net income.
Previous wording
The following tables present our net sales, starts and closings in each of our homebuilding segments for the three and nine months ended September 30, 2024 and 2023:
Current wording
The following table presents information concerning our net sales, starts and closings in each of our homebuilding segments for the three months ended March 31, 2025 and 2024:
Previous wording
(1)Excluding net sales under built-for-rent contracts, net sales for the nine months ended September 30, 2024 in the Southeast segment increased 3% when compared to the nine months ended September 30, 2023. The nine months ended September 30, 2024 also included a built-for-rent contract termination discussed further below.
Current wording
(1)The quarter ended March 31, 2024 included a built-for-rent contract termination discussed further below. Excluding net sales under built-for-rent contracts, net sales in the Southeast segment increased 36% during the quarter ended March 31, 2025 when compared to the quarter ended March 31, 2024. 24% of the increase was due to net sales from the Liberty Communities acquisition on January 23, 2025.
Previous wording
Our backlog of sold homes (“backlog”) consists of homes under contract that have not yet been delivered to a homebuyer or third-party investor. Backlog represents the number of homes in backlog from the previous period, plus net sales, minus the number of home closings during the period. Our backlog at any given time will be affected by cancellations and the number of our active communities.
Current wording
Our backlog of sold homes (“backlog”) consists of homes under contract that have not yet been delivered to a homebuyer or third-party investor. Backlog represents the number of homes in backlog from the previous period, plus net sales, minus the number of home closings during the period. Our backlog at any given time will be affected by cancellations, the number of our active communities, and changes in the percentage of spec home sales versus pre-order sales and built-for-rent contracts, which are customarily delivered over a longer period of time. Homes in backlog are generally closed within one to nine months.
Previous wording
The following table presents our backlog in number of homes, ASP and aggregate value (in thousands) for our homebuilding segments as of the dates set forth below:
Current wording
The following table presents information concerning our backlog in number of homes, ASP and aggregate value (in thousands) for our homebuilding segments as of the dates set forth below:
Previous wording
Backlog of sold homes as of September 30, 2024 was 3,996 homes valued at approximately $2.0 billion based on ASP, a decrease of 1,029 homes and $0.4 billion in value, or 20% and 17%, respectively, from 5,025 homes valued at approximately $2.4 billion as of September 30, 2023. The overall decrease in backlog was mostly reflective of a continued trend toward move-in-ready spec homes relative to pre-order sales and, to a lesser extent, a reduction in built-for-rent contracts in backlog. Spec homes typically result in quicker closings and turnover of the backlog. Approximately 1,858 of the homes in our backlog are expected to be delivered in 2025 and beyond.
Current wording
Backlog of sold homes as of March 31, 2025 was 2,802 homes valued at approximately $1.4 billion based on ASP, a decrease of 1,722 homes and $0.9 billion in value, or 38% and 40%, respectively, from 4,524 homes valued at approximately $2.3 billion as of March 31, 2024. The overall decrease in backlog was mostly reflective of a continued trend toward move-in ready spec homes relative to pre-order sales and, to a lesser extent, a reduction in built-for-rent contracts in backlog. Spec homes typically result in quicker closings and turnover of the backlog within the same reporting period. Approximately 370 of the homes in our backlog are expected to be delivered in 2026 and beyond.
Previous wording
Southeast. Backlog for the Southeast segment as of September 30, 2024 was 1,645 homes, a decrease of 1,121 from 2,766 homes as of September 30, 2023. The decrease from prior year was primarily attributable to a continued trend toward more sales of move-in-ready spec homes relative to pre-order sales and a reduction in net sales under built-for-rent contracts.
Current wording
Southeast. Backlog for the Southeast segment as of March 31, 2025 was 1,230 homes, a decrease of 703 from 1,933 homes as of March 31, 2024. The decrease from prior year was primarily attributable to a continued trend toward more sales of move-in-ready spec homes relative to pre-order sales, partially offset by the backlog acquired from the Liberty Communities acquisition.
Previous wording
Mid-Atlantic. Backlog for the Mid-Atlantic segment as of September 30, 2024 was 1,109 homes, an increase of 294 from 815 homes as of September 30, 2023. The increase in backlog from prior year was attributable to the Crescent Homes acquisition and, to a lesser extent, higher net sales relative to closings, partially offset by lower net sales relative to closings under built-for-rent contracts.
Current wording
Mid-Atlantic. Backlog for the Mid-Atlantic segment as of March 31, 2025 was 718 homes, a decrease of 484 from 1,202 homes as of March 31, 2024. The decrease in backlog from prior year was attributable to the lower net sales relative to closings, especially under built-for-rent contracts, in addition to the continued trend toward more sales of move-in-ready spec homes relative to pre-order sales.
Previous wording
Midwest. Backlog for the Midwest segment as of September 30, 2024 was 1,242 homes, a decrease of 202 from 1,444 homes as of September 30, 2023. The decrease from prior year was mostly a result of higher closings relative to net sales, as well as the continued trend toward more sales of move-in-ready spec homes relative to pre-order sales.
Current wording
Midwest. Backlog for the Midwest segment as of March 31, 2025 was 854 homes, a decrease of 535 from 1,389 homes as of March 31, 2024. The decrease from prior year was mostly a result of higher closings relative to net sales, as well as the continued trend toward more sales of move-in-ready spec homes relative to pre-order sales.
Previous wording
The following table presents our cancellation rates for each of our homebuilding segments for the periods set forth below:
Current wording
The following table presents information concerning our cancellation rates for each of our homebuilding segments for the periods set forth below:
Previous wording
Our cancellation rate for the three months ended September 30, 2024 was 13.8%, an improvement when compared to the 14.9% cancellation rate for the three months ended September 30, 2023. Our cancellation rate for the nine months ended September 30, 2024 was 15.8%, an improvement when compared to the 17.1% cancellation rate for the nine months ended September 30, 2023. The overall improvement in cancellation rate was mostly a result of the trend toward higher spec sales relative to pre-order sales. The cancellation rate in the Southeast segment for the nine months ended September 30, 2024 was primarily attributable to a built-for-rent contract of 229 units that was terminated during the first quarter of 2024 based on a strategic decision to convert the controlled lots underlying the deal into future retail sales. The total cancellation rate and the Southeast cancellation rate excluding built-for-rent activity were 12.2% and 12.8%, respectively, for the nine months ended September 30, 2024.
Current wording
Our cancellation rate for the three months ended March 31, 2025 was 11.7%, an improvement of 930 basis points when compared to the 21.0% cancellation rate for the three months ended March 31, 2024. In the first quarter of 2024, the Company had one built-for-rent contract of 229 units that was terminated based on a strategic decision to convert the controlled lots into future retail sales. This termination contributed to the elevated cancellation rate in the Southeast segment and at the consolidated level in the prior year. The overall improvement in the cancellation rate in the Southeast segment for the three months ended March 31, 2025 was primarily attributable to the built-for-rent contract previously described. Excluding the impact of all built-for-rent activity, the cancellation rate still represents one of the lowest in the Company’s history, despite a 190 bps increase from the prior year quarter.
Previous wording
Our Financial Services segment provides mortgage financing and title services primarily through our wholly owned subsidiaries, Jet HomeLoans and DF Title, respectively. The following table presents selected financial information and supplemental data for our Financial Services segment for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands, unless otherwise indicated):
Current wording
Our Financial Services segment provides mortgage financing and title services primarily through our wholly owned subsidiaries, Jet HomeLoans and DF Title, respectively. The following table presents selected financial information and supplemental data for our Financial Services segment for the three months ended March 31, 2025 and 2024 (dollars in thousands, unless otherwise indicated):
Previous wording
(1) Supplemental data reflects operations of Jet HomeLoans prior to its consolidation in the Company’s financial statements beginning on that date. Refer to Note 2, Acquisitions to the condensed consolidated financial statements for additional information.
Current wording
(1) Supplemental data includes the operations of Jet HomeLoans prior to its consolidation in the Company’s financial statements beginning on July 1, 2024. Refer to Note 2, Acquisitions to the condensed consolidated financial statements for additional information.
Previous wording
The $16 million, or 100% increase, in mortgage revenues for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, respectively, was due to the consolidation of Jet HomeLoans beginning July 1, 2024.
Current wording
The $15 million, or 100%, increase in mortgage revenues, $10 million of the increase in financial services expense and $1 million of the increase in the financial services income before taxes for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, respectively, were all primarily due to the consolidation of Jet HomeLoans beginning July 1, 2024. The income before taxes of Jet HomeLoans prior to July 1, 2024 was included in income from unconsolidated entities in the Condensed Consolidated Statements of Comprehensive Income.
Previous wording
The $2 million, or 95%, and $4 million, or 64%, increases in title services revenues for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, respectively, were primarily a result of DF Title’s expansion of operations into the Texas market. Our Texas market was previously serviced by our unconsolidated title joint ventures.
Current wording
The $2 million, or 88%, increase in title services revenues, $1 million of the increase in financial services expense and $1 million of the increase in financial services income before taxes for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, respectively, were primarily the result of DF Title’s expansion of operations into the Texas market. Our Texas market was previously serviced by our unconsolidated title joint ventures, which resulted in a partially offsetting impact to financial services income before taxes.
Previous wording
(3)Represents amortization of purchase accounting adjustments from the Crescent Homes acquisition.
Current wording
(3)Represents amortization of purchase accounting adjustments from our acquisitions.
Previous wording
(2) Includes amortization of purchase accounting adjustments from the Crescent Homes acquisition.
Current wording
(2) Includes amortization of purchase accounting adjustments from our acquisitions.
Showing the first 40 of 60 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
(1)Represents the number of homes in backlog from the previous period, plus net sales during the period, minus the number of home closings during the current period.
Current report — wording carried from elsewhere
(1)Our cancellation rate for a given period is calculated as the total number of new sales contracts cancelled during the period, divided by the total number of new home sales contracts entered into during the period.
Current report — wording carried from elsewhere
(4)Calculated as a percentage of homebuilding revenues.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The following tables present income before taxes (in thousands) and homebuilding gross margin (or “gross margin”) percentage by segment for the three months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
The following table sets forth our results of homebuilding operations and balance sheet data (in thousands) for the periods indicated:
Previous report — wording carried elsewhere
Contingent Consideration Revaluation.$15 million of the decrease in contingent consideration expense for the nine months ended September 30, 2024 was attributable to lower fair value adjustments of future expected earnout payments related to the MHI acquisition, as actual results remained more in line with forecasts when compared to the nine months ended September 30, 2023.
Previous report — wording carried elsewhere
Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “projection,” “should” or “will” or the negative thereof or other comparable terminology. These forward-looking statements include, but are not limited to, statements about: