United Homes Group, Inc ((UHG)) has held its Q2 earnings call. Read on for the main highlights of the call.
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United Homes Group, Inc. recently held its second quarter 2025 earnings call, where the sentiment was a mix of cautious optimism and acknowledgment of challenges. The company demonstrated improvements in gross margins and successful product refresh initiatives. However, it faced hurdles with declining revenue, home closings, and net new orders. The emphasis on affordability and strategic new community openings were positive developments, yet the current net loss and decreased community count highlight ongoing difficulties.
Improvement in Gross Margin
The company reported a home sales gross margin of 18.9% for the quarter, marking a 100 basis point improvement over the second quarter of 2024. Additionally, the adjusted gross margin increased from 20.9% to 21.3% compared to the prior year period, indicating a positive trend in profitability.
Successful Product Refresh Initiative
United Homes Group’s refreshed product line has significantly boosted sales pace and profitability. The gross margins on these refreshed homes are trending approximately 300 basis points higher than those of legacy products, showcasing the success of this initiative.
Affordability Focus
The average sales price of homes was reported at $349,000, which is significantly lower than the national average. This focus on affordability supports the company’s strategy to attract a broader range of buyers.
Strategic Growth in New Communities
The company plans to introduce new communities in the second half of the year. This strategic move is expected to enhance sales efforts and contribute positively to the company’s growth in the latter part of the year.
Controlled Lots for Future Growth
United Homes Group controls approximately 7,300 lots, positioning itself for future growth and market opportunities. This disciplined approach to land acquisition is a strategic asset for the company.
Decline in Revenue and Home Closings
The company faced a decline in revenue, reporting $105.5 million for the second quarter of 2025, a decrease of $3.9 million or 3.6% from the previous year. Home closings also fell from 337 to 303 homes compared to the prior year period.
Net Loss Reported
United Homes Group reported a net loss of $6.3 million for the second quarter. This includes a fair value adjustment of $6.2 million related to the contingent earn-out liability, reflecting financial challenges the company is navigating.
Decline in Net New Orders
Net new orders for the second quarter were 304 homes, down from 323 homes in the prior year period, indicating a decrease in demand or market challenges.
Reduction in Active Communities
The number of active communities decreased from 59 to 55 compared to the previous year, which may impact the company’s ability to generate new sales in the short term.
Forward-Looking Guidance
Looking ahead, United Homes Group remains focused on maintaining affordability with home prices below industry averages. The company is optimistic about its refreshed home designs, which have improved sales pace and profitability. With 7,300 controlled lots and $95.2 million in liquidity, the company is well-positioned for future growth despite current challenges.
In conclusion, United Homes Group’s earnings call reflected a balanced view of optimism and challenges. While improvements in gross margins and product initiatives are promising, the decline in revenue, net new orders, and active communities present hurdles. The company’s strategic focus on affordability and growth in new communities will be critical in navigating future market conditions.