Executive Summary

Q4 2024 delivered record scale and solid profitability: total revenues $1.27B, diluted EPS $3.20, adjusted EPS $3.49, and homebuilding gross margin 20.6% (adjusted 22.9%) as strong community count and spec strategy offset higher incentives .
Operational momentum continued: deliveries hit a quarterly record 3,198 homes; average sales price was $389.8K; net new contracts were 2,467; backlog ended at 850 homes ($351.2M) as orders held up seasonally despite rate volatility .
2025 outlook initiated: deliveries 11,700–12,400 (+~10% y/y at midpoint), home sales revenues $4.5–$4.8B; Q1 2025 deliveries seen seasonally lower and roughly similar to Q1 2024; SG&A % expected to decline y/y; tax rate 25–26% .
Catalysts/stock narrative: record scale, initial 2025 growth guide, disciplined incentives, and spec execution; watch purchase accounting (~30 bps gross margin headwind in 1H25), incentive levels (~900 bps), and affordability-driven ASP mix .

What Went Well and What Went Wrong

What Went Well

Record scale and mix: Q4 deliveries 3,198 and total revenues $1.27B, each a quarterly record; community count reached 322 (+28% y/y) underpinning growth into 2025 .
Cost control and leverage: adjusted gross margin improved y/y for FY24 (23.3% vs. 22.5% in FY23) as direct cost control and fixed cost leverage offset higher incentives; Q4 adjusted gross margin 22.9% .
Strategy execution: management emphasized spec model and affordability foundation—“We built nearly 100% of our homes on a spec basis... provide our homebuyers with certainty of financing at below market interest rates through buydowns and other rate incentives” .

What Went Wrong

Incentive pressure: incentives on Q4 new orders rose to ~900 bps (above Q3 levels), pressuring sequential adjusted gross margin (22.9% in Q4 vs. 23.6% in Q3) .
Backlog normalization: backlog declined to 850 homes ($351.2M) from 1,580 homes ($671.4M) in Q3, reflecting sell-through pace and spec-driven cycles .
Non-core headwinds/tailwinds mix: other income benefited from Century Living asset sale (~$20M gain) with offsets, netting $13.3M; also Q4 included $6.8M inventory impairment and purchase accounting reduced gross margin by ~30 bps .

Financial Results

Headline P&L vs. Prior Periods and (where available) Estimates

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenues ($USD Millions)	$1,205.6	$1,136.9	$1,273.4
Diluted EPS ($)	$2.83	$2.59	$3.20
Adjusted EPS ($)	$2.93	$2.72	$3.49
Homebuilding Gross Margin (%)	21.6%	21.7%	20.6%
Adjusted HB Gross Margin (%)	23.0%	23.6%	22.9%
SG&A as % of HB Revenue	N/A	11.9%	11.5%

Note: S&P Global consensus for Q4 2024 EPS and revenue was unavailable at time of analysis; beat/miss vs. consensus cannot be assessed.

Segment/Business Mix

Metric	Q4 2023	Q3 2024	Q4 2024
Home Sales Revenues ($USD Millions)	$1,185.4	$1,116.1	$1,246.7
Financial Services Revenues ($USD Millions)	$16.5	$20.1	$26.2
Financial Services Pre-tax Income ($USD Millions)	N/A	$3.1	$7.9

KPIs

KPI	Q4 2023	Q3 2024	Q4 2024
Deliveries (Homes)	3,157	2,834	3,198
Avg Sales Price of Deliveries ($K)	$375.5	$393.8	$389.8
Net New Home Contracts (Homes)	2,340	2,563	2,467
Backlog (Homes / $USD Millions)	1,070 / $400.8	1,580 / $671.4	850 / $351.2
Community Count (Period End)	251	305	322
Adjusted EBITDA ($USD Millions)	$147.1	$137.1	$172.6

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Home Deliveries	FY 2025	—	11,700–12,400	New guidance
Home Sales Revenues	FY 2025	—	$4.5–$4.8B	New guidance
SG&A as % of Home Sales	FY 2025	—	Decline y/y expected	Qualitative improvement
Tax Rate	FY 2025	—	25%–26%	New range
Purchase Accounting GM Impact	1H 2025	~30 bps in Q3–Q4 2024	Similar ~30 bps headwind expected	Maintained
Q1 Deliveries	Q1 2025	—	Seasonally lower q/q; similar to Q1 2024	Seasonal pattern
Community Count	YE 2025	—	Mid–high single-digit % increase	Growth targeted

Reference prior guidance for context: In Q3, management raised FY 2024 deliveries to 10,900–11,300 and home sales revenues to $4.3–$4.4B (achieved FY 2024 revenues $4.4B, deliveries 11,007) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Affordability & Incentives	Adjusted HB GM 24.0%; demand for affordable homes; incentives supporting sales	Adjusted HB GM 23.6%; incentives up q/q with rate volatility	Incentives on Q4 orders ~900 bps; Q1 margin to ease sequentially; affordability central	Slight pressure
Spec-build model	Emphasis on spec to provide quick move-in	Continued spec-driven pace	“Nearly 100% spec” in Q4/FY24; >60% of loans FHA/USDA/VA	Reinforced
Community count & land	CC 266 (+14% y/y); lots 78,097 (+35% y/y)	CC 305 (+21% y/y); lots 80,121 (+17% y/y)	CC 322 (+28% y/y); lots 80,632; ~56% controlled	Up
Regional dynamics	Broad growth across markets	Record deliveries across regions	West, Phoenix, Atlanta strong; TX/FL manageable exposure (~31% of FY24 deliveries)	Mixed but stable
Cost environment & cycle times	Direct costs trending favorable; margins up y/y	Adjusted GM stable; SG&A leverage improved	Direct costs flat q/q; lot costs +~2% q/q; cycle times ~4 months	Stable
Purchase accounting impact	Noted in Q2	~30 bps GM headwind	~30 bps GM headwind to persist in 1H25	Flat
Capital allocation	Buybacks; dividend maintained	Dividend maintained	$30.7M buybacks in Q4; dividend $0.26; liquidity $918M	Ongoing
Macro/labor/regulatory	—	—	No observed impacts yet from immigration enforcement headlines; monitoring; tariffs comments “wait and see”	Watchlist
M&A footprint	—	Anglia acquired (Q3)	2024 deals within footprint; 2025 M&A opportunistic under strict criteria	Opportunistic

Management Commentary

“We built nearly 100% of our homes on a spec basis in the fourth quarter and for the full year…provide our homebuyers with certainty of financing at below market interest rates through buydowns and other rate incentives.” — Dale Francescon .
“We ended the fourth quarter with a community count of 322…up 28% year-over-year…we currently expect our year-end 2025 community count to further increase in the mid- to high single-digit percentage range.” — Rob Francescon .
“For the first quarter of 2025, we expect our homebuilding gross margin to ease on a sequential basis…our first quarter homebuilding operating margin should see some impact from reduced operating leverage.” — Scott (J.) Dixon .
“Our fourth quarter net homebuilding debt to net capital ratio improved to 27.4%…we entered into a new credit agreement which increased the capacity of our unsecured credit facility to $900 million.” — Scott (J.) Dixon .
“Incentives on new orders in the fourth quarter increased to approximately 900 basis points as we look to maintain our sales pace…We expect mortgage rates and their impact on our incentive levels to be the largest driver of any changes to our gross margins in the near term.” — Rob Francescon .

Q&A Highlights

Incentives and pricing: Incentives running ~900 bps in Q1 to date, consistent with Q4; spec model steady with ~60% of homes sold and closed within the quarter .
ASP outlook: 2025 implied ASP flat to slightly down as the company prioritizes affordability and uses mortgage incentives; potential for ASP appreciation longer term as conditions normalize .
Regional strength: West and Phoenix strong; Atlanta strong; increased supply in TX/FL manageable at CCS price points (lower months of supply in CCS cohort) .
Non-core income: Q4 other income primarily from Century Living asset sale (~$20M gain), with offsets bringing net other income to $13.3M .
M&A stance: 2024 deals (Nashville/Houston) expanded within footprint; 2025 M&A opportunistic under stringent underwriting; 2025 delivery guidance excludes new acquisitions .

Estimates Context

S&P Global (Capital IQ) Wall Street consensus for Q4 2024 EPS and revenue was unavailable at time of analysis due to access limits; therefore, beat/miss vs. consensus cannot be determined from S&P data in this report. Management framed performance as record deliveries and revenue with margins managed through incentives and cost control .
Implication: In absence of consensus comparison, investors should anchor on y/y and q/q trends—EPS up y/y ($3.20 vs. $2.83), revenues up y/y ($1.27B vs. $1.21B), with sequential margin moderation tied to incentives .

Key Takeaways for Investors

Scale-driven growth with disciplined affordability: record deliveries, expanding community count (+28% y/y), and spec execution position CCS to grow deliveries ~10% in 2025 even without assuming higher absorptions .
Margin management levers intact: direct costs stable, cycle times ~4 months, SG&A leverage expected to improve in 2025; monitor incentives (~900 bps) and purchase accounting headwind (~30 bps in 1H25) .
Backlog reset but pipeline solid: backlog normalized to 850 homes as spec model prioritizes quick turn; robust community count and lot position (80,632 lots; 56% controlled) support 2025/26 growth .
Capital strength and returns: $918M liquidity, no senior maturities until June 2027, dividend maintained, opportunistic buybacks ($30.7M in Q4) .
Regional exposure balanced: diversified footprint with West/Phoenix/Atlanta strength; TX/FL exposure manageable at CCS price points; watch local inventory and affordability dynamics .
Near-term watch items: Q1 seasonal volume dip and sequential gross margin easing; trajectory of mortgage rates vs. incentive intensity; execution on community count and controlled-lot conversion .
Medium-term thesis: expanding platform with land-light mix and spec model can sustain mid-teens ROEs through cycle via scale, cost control, and affordability-led demand, with optionality from in-footprint M&A .

Appendix: Additional Detail

Select Q4 2024 non-GAAP items: inventory impairment $6.8M; purchase price accounting reduced GM by ~30 bps; adjusted EBITDA $172.6M .
Balance sheet: equity $2.62B; homebuilding debt to capital 30.3%; net homebuilding debt to net capital 27.4% .
Financial services: Q4 revenues $26.2M; pre-tax income $7.9M; >60% of mortgages FHA/USDA/VA supporting affordability .

Century Communities, Inc. (CCS)·Q4 2024 Earnings Summary