United Homes Group, Inc. Q2 FY2024 earnings call

• United Homes Group pursues capital-efficient land acquisition in high-growth SE markets, with 9,300 lots owned/controlled, over 95% via option/land banking. - Second quarter was a transition period with consolidation, workforce rationalization, and product reorientation. - Positive homebuilding fundamentals in SE markets with steady job growth, low inventory, and in-migration. - Focus on building/selling homes vs. land development. - Improvements in construction materials/labor availability, with lumber costs trending down but lot costs a variable. - 59 active communities as of Q2 2024, and $80 million in total liquidity.

In the second quarter of 2024, United Homes Group delivered 337 homes, generating revenue of $109 million. The Midlands contributed the highest number of deliveries. Home sales gross margin was 17.9% on a GAAP basis and 20.9% on an adjusted basis, with adjusted EBITDA at $7.7 million. Net new home orders for the quarter were 323, and there were 59 active communities open for sale at the end. Year-over-year, coastal operations had a 59% order growth and upstate operations had a 44% order growth. Revenue for the second quarter of 2024 was $109.4 million compared to $122.1 million in 2023, and home closings were 337 in 2024 vs. 385 in 2023. Backlog at the end of the quarter was 248 homes with a value of approximately $81.2 million.

• Remain focused on starting and selling homes to meet delivery goals for 2024. - Continue to grow homebuilding presence in SE through M&A and organic growth. - Seek potential acquisition targets meeting underwriting criteria. - Monitor land acquisitions and underwriting to maintain margin and absorption pace.

• Uncertainties in forward-looking statements due to numerous assumptions, risks, and uncertainties. - Land acquisition risks including cost and availability. - Impact of sales incentives on gross margins. - Market fluctuations in interest rates and homebuyer behavior. - Competition in the land market affecting pricing.

Q: Can you talk about absorptions, product repositioning, lot count, and land/acquisition market?

A: Absorptions vary by community; focusing on slower-moving ones with tactical pricing/positioning. Lot count of 9,300 divided into ready, in process, and future. Land market is competitive, still acquiring land but tightening filters. Acquisition market is busy with robust volume but land pricing continues to increase.

Q: Where are you on acquisition integration and strategy change with rates?

A: Acquisitions like Coastal transaction are furthest along; Herring and Rosewood are in progress. With rates, still focus on affordable product, monitoring buy-downs and buyer preferences, seeing pivot to closing costs over rate buy-downs