SDHC Smith Douglas Homes Corp

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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Investor Relations Joe Thomas investors@smithdouglas.com