Smith Douglas Homes Reports Third Quarter 2025 Results

Smith Douglas Homes Reports Third Quarter 2025 Results 11/05/2025 Smith Douglas Homes Corp. (NYSE: SDHC) (“Smith Douglas” or the “Company”) today announced third quarter results for the three and nine months ended September 30, 2025. Q3 2025 Results as compared to Q3 2024: Home closings decreased 3% to 788Home closing revenue decreased 6% to $262.0 millionHome closing gross margin of 21.0% compared to 26.5%Net new home orders increased 15.0% to 690Pretax income of $17.2 million compared to $39.6 millionEarnings of $0.24 per diluted share compared to $0.58Debt-to-book capitalization of 11.2% compared to 0.8% at December 31, 2024Active community count increased 32% to 98 at quarter endTotal controlled lots increased 36% to 24,300 Greg Bennett, Vice Chairman and Chief Executive Officer, commented, “In the third quarter of 2025, Smith Douglas Homes continued to execute on its long-term goal of becoming a large-scale builder of choice in key markets throughout the South. We made further progress in establishing our presence in newer markets, while continuing to invest and expand our homebuilding footprint in our existing markets. We also remained true to our operating philosophy, which focuses on being asset-light and having efficient construction cycle times. We believe this consistent and disciplined approach to the business has served us well since our inception and will lead to better shareholder returns over time.” Russ Devendorf, Executive Vice President and Chief Financial Officer, added, “Smith Douglas posted pretax income of $17.2 million in the third quarter, or earnings of $0.24 per diluted share. Home closing revenue came in at $262.0 million on 788 home closings, while home closing gross margin averaged 21.0%. These results were in line with the guidance we gave last quarter and demonstrate the consistency of our operations and the reliability of our homebuilding model.” Mr. Devendorf continued, “We feel our Company is in great shape as we head into the end of 2025. Our net debt-to-net book capitalization stood at 8.4% at the end of the third quarter, while our active community count was up 32% compared to last year. This combination of financial strength and opportunistic growth gives Smith Douglas the ability to achieve its long-term goals of increasing its market share while staying financially disciplined.” Conference Call & Webcast Information Management will host a conference call to discuss the Company’s results at 8:30 a.m. Eastern Time on November 5, 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 18,000 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, Dallas-Fort Worth, Greenville, Houston, Huntsville, Nashville, Raleigh, and the Alabama Gulf Coast. 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, market share, strategic plans and opportunities, financial position, shareholder returns, increasing market share, 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Home closing revenue $ 262,041 $ 277,835 $ 710,687 $ 687,977 Cost of home closings 207,071 204,140 550,248 505,764 Home closing gross profit 54,970 73,695 160,439 182,213 Selling, general, and administrative costs 36,088 34,137 103,789 93,487 Equity in income from unconsolidated entities (640 ) (396 ) (1,457 ) (800 ) Interest expense 898 614 2,336 1,903 Other expense (income), net 1,388 (245 ) 1,789 765 Income before income taxes 17,236 39,585 53,982 86,858 Provision for income taxes 1,021 1,761 2,622 3,814 Net income 16,215 37,824 51,360 83,044 Net income attributable to non-controlling interests and LLC members prior to IPO 14,089 32,477 44,186 71,079 Net income attributable to Smith Douglas Homes Corp. $ 2,126 $ 5,347 $ 7,174 $ 11,965 Three months ended September 30, Nine months ended September 30, 2025 Period from January 11, 2024 to September 30, 2024 2025 2024 Earnings per share: Basic $ 0.24 $ 0.60 $ 0.80 $ 1.35 Diluted $ 0.24 $ 0.58 $ 0.78 $ 1.30 Weighted average shares of common stock outstanding: Basic 9,017,398 8,846,154 8,994,810 8,846,154 Diluted 9,056,364 51,533,407 9,192,482 51,502,413 Smith Douglas Homes Condensed Consolidated Balance Sheets (In thousands, except share and per share amounts) September 30, 2025 December 31, 2024 (unaudited) Assets Cash and cash equivalents $ 14,775 $ 22,363 Real estate inventory 314,524 277,834 Deposits on real estate under option or contract 135,756 103,026 Real estate not owned 28,828 5,830 Property and equipment, net 9,507 3,775 Goodwill 25,726 25,726 Deferred tax asset, net 10,472 10,906 Other assets 31,971 26,441 Total assets $ 571,559 $ 475,901 Liabilities and Equity Liabilities: Accounts payable $ 21,101 $ 17,234 Customer deposits 5,156 5,301 Notes payable 53,637 3,060 Liabilities related to real estate not owned 28,828 5,830 Accrued expenses and other liabilities 25,992 32,348 Tax receivable agreement liability 10,401 10,401 Total liabilities 145,115 74,174 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.0001 par value – 10,000,000 shares authorized; none issued and outstanding as of September 30, 2025 and December 31, 2024 — — Class A common stock, $0.0001 par value – 250,000,000 shares authorized; 9,017,638 and 8,846,154 shares issued and outstanding as of September 30, 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 September 30, 2025 and December 31, 2024 4 4 Additional paid-in capital 59,581 58,208 Retained earnings 22,593 15,419 Total stockholders’ equity attributable to Smith Douglas Homes Corp. 82,179 73,632 Non-controlling interests attributable to Smith Douglas Holdings LLC 344,265 328,095 Total equity 426,444 401,727 Total liabilities and equity $ 571,559 $ 475,901 Smith Douglas Homes Summary Cash Flow Information (Unaudited, dollars in thousands) Nine months ended September 30, 2025 2024 Net cash (used in) provided by operating activities $ (41,094 ) $ 13,655 Net cash used in investing activities (5,573 ) (3,780 ) Net cash provided by (used in) financing activities 39,079 (5,936 ) Net (decrease) increase in cash and cash equivalents (7,588 ) 3,939 Cash and cash equivalents, beginning of period 22,363 19,777 Cash and cash equivalents, end of period $ 14,775 $ 23,716 Smith Douglas Homes Selected Other Operating Data (Unaudited, dollars in thousands) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Home closings 788 812 2,128 2,031 ASP of homes closed $ 333 $ 342 $ 334 $ 339 Net new home orders 690 600 2,194 2,080 Contract value of net new home orders $ 231,818 $ 205,164 $ 737,957 $ 708,446 ASP of net new home orders $ 336 $ 342 $ 336 $ 341 Cancellation rate(1) 11.2 % 11.4 % 9.7 % 11.3 % Backlog homes (period end)(2) 760 961 760 961 Contract value of backlog homes (period end) $ 258,732 $ 332,035 $ 258,732 $ 332,035 ASP of backlog homes (period end) $ 340 $ 346 $ 340 $ 346 Active communities (period end)(3) 98 74 98 74 Controlled lots (period end): Homes under construction 1,098 1,135 1,098 1,135 Owned lots 641 611 641 611 Optioned lots 22,561 16,132 22,561 16,132 Total controlled lots 24,300 17,878 24,300 17,878 (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 September 30, 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 $ 166,625 493 $ 338 $ 189,128 534 $ 354 (12 )% (8 )% (5 )% Central 95,416 295 323 88,707 278 319 8 % 6 % 1 % Total $ 262,041 788 $ 333 $ 277,835 812 $ 342 (6 )% (3 )% (3 )% Nine months ended September 30, 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 $ 446,110 1,292 $ 345 $ 417,015 1,186 $ 352 7 % 9 % (2 )% Central 264,577 836 316 270,962 845 321 (2 )% (1 )% (2 )% Total $ 710,687 2,128 $ 334 $ 687,977 2,031 $ 339 3 % 5 % (1 )% Backlog As of September 30, 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 430 $ 151,463 $ 352 584 $ 211,339 $ 362 (26 )% (28 )% (3 )% Central 330 107,269 325 377 120,696 320 (12 )% (11 )% 2 % Total 760 $ 258,732 $ 340 961 $ 332,035 $ 346 (21 )% (22 )% (2 )% Controlled Lots As of September 30, 2025 2024 Period over period change Owned(1) Optioned Total Controlled Owned(1) Optioned Total Controlled Owned(1) Optioned Total Controlled Southeast 961 15,039 16,000 908 12,118 13,026 6 % 24 % 23 % Central 778 7,522 8,300 838 4,014 4,852 (7 %) 87 % 71 % Total 1,739 22,561 24,300 1,746 16,132 17,878 — % 40 % 36 % (1) Includes homes under construction and owned lots. Net Income Three months ended September 30, Nine months ended September 30, 2025 2024 Period over period change 2025 2024 Period over period change Southeast $ 20,854 $ 39,765 $ (18,911 ) $ 66,700 $ 86,368 $ (19,668 ) Central 5,393 9,762 (4,369 ) 18,748 33,381 (14,633 ) Segment total 26,247 49,527 (23,280 ) 85,448 119,749 (34,301 ) Other(1) (10,032 ) (11,703 ) 1,671 (34,088 ) (36,705 ) 2,617 Total $ 16,215 $ 37,824 $ (21,609 ) $ 51,360 $ 83,044 $ (31,684 ) (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 byTotal 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) September 30, 2025 December 31, 2024 Notes payable $ 53,637 $ 3,060 Equity 426,444 401,727 Total capitalization $ 480,081 $ 404,787 Debt-to-book capitalization 11.2 % 0.8 % Notes payable $ 53,637 $ 3,060 Less: cash and cash equivalents 14,775 22,363 Net debt 38,862 (19,303 ) Equity 426,444 401,727 Total net capitalization $ 465,306 $ 382,424 Net debt-to-net book capitalization 8.4 % (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 24.6% 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 (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Net income $ 16,215 $ 37,824 $ 51,360 $ 83,044 Provision for income taxes 1,021 1,761 2,622 3,814 Income before income taxes 17,236 39,585 53,982 86,858 Tax-effected adjustments(1) 4,240 9,710 13,280 21,306 Adjusted net income $ 12,996 $ 29,875 $ 40,702 $ 65,552 (1) For the three and nine months ended September 30, 2025 and 2024, our tax expenses assume a 24.6% and 24.5% 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). Source: Smith Douglas Homes Corp.