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Dream Finders Homes, Inc. (DFH) Q4 2024 Earnings Summary

Executive Summary

  • Record quarter: total revenues reached $1.56B and diluted EPS was $1.29, both beating external consensus (EPS +14–23% vs $1.10–$1.13; revenue +9–12% vs ~$1.39B). Strength was driven by 40% higher closings (3,008), net new orders +46%, and financial services consolidation, offset by margin compression .
  • Homebuilding gross margin fell 280 bps YoY to 17.7% on higher land/financing costs and mix; adjusted gross margin was 26.9% (-120 bps YoY). SG&A leverage improved to 7.6% of homebuilding revenue as seasonality boosted volumes .
  • Liquidity ended at $816M and net homebuilding debt to net capitalization was 33.7% after funding growth investments and acquisitions; backlog ended Q4 at 2,599 homes ($1.30B) with ~93% expected to deliver in 2025 .
  • 2025 outlook initiated: approximately 9,250 closings, aided by the Liberty Communities acquisition (closed Jan 2025) expanding into Atlanta and Greenville, plus pending Alliant Title Insurance acquisition to deepen vertical integration .

What Went Well and What Went Wrong

What Went Well

  • Record production and orders: “we closed 3,008 homes… pre-tax income was $169 million… record total revenues of $1.6 billion for the quarter,” with net new orders +46% and cancellations improving 410 bps YoY to 18.8% .
  • Accretive M&A: Crescent Homes added 381 Q4 closings (ASP ~$572K); Jet HomeLoans consolidation drove a 94% increase in financial services pretax income to $11M; Liberty Communities brings ~750 lots now and ~5,000 controlled lots, supporting 2025 closings guidance .
  • Segment momentum: Midwest delivered 1,118 homes with highest ASP ($582K), up 327 closings YoY, while Mid-Atlantic closings nearly doubled YoY; active communities rose to 242 at year-end .

What Went Wrong

  • Margin compression: homebuilding gross margin declined 280 bps YoY to 17.7%, impacted by higher land and financing costs and mix, partially offset by direct cost reductions; adjusted margin fell 120 bps to 26.9% .
  • ASP down modestly: Q4 ASP was $507,477 (-3% YoY) as higher incentives and mix weighed, despite Midwest strength .
  • Elevated leverage earlier in year: net homebuilding debt/capital rose to 45.6% in Q3 on inventory build and lot purchases before improving to 33.7% by year-end; SG&A dollars up 26% YoY in Q4 due to forward mortgage commitments and compensation .

Financial Results

Prior Period Comparison (Total company)

MetricQ2 2024Q3 2024Q4 2024
Total Revenues ($USD Billions)$1.056 $1.007 $1.561
Homebuilding Revenues ($USD Billions)$1.052 $0.986 $1.534
Net Income Attrib. to DFH ($USD Millions)$80.9 $70.7 $129.3
EPS (Basic, $)$0.83 $0.72 $1.35
EPS (Diluted, $)$0.81 $0.70 $1.29
Homebuilding Gross Margin %19.0% 19.2% 17.7%
Adjusted Homebuilding Gross Margin %27.0% 27.6% 26.9%
SG&A ($USD Millions)$98.9 $101.9 $116.8

Q4 2024 vs Estimates

MetricConsensusActual Q4 2024
Total Revenues ($USD Billions)~$1.39 $1.561
EPS (Diluted, $)$1.10–$1.13 $1.29
  • Note: S&P Global consensus was unavailable due to access limits; external consensus from MarketBeat/Zacks is used in lieu of SPGI .

Segment Breakdown (Q4 2024 vs Q4 2023)

SegmentClosings Q4 2023 (Units)ASP Q4 2023 ($)Closings Q4 2024 (Units)ASP Q4 2024 ($)
Southeast909 $494,983 1,000 $468,595
Mid-Atlantic453 $422,596 890 $457,164
Midwest791 $607,091 1,118 $582,309
Total2,153 $520,940 3,008 $507,477

KPIs

KPIQ2 2024Q3 2024Q4 2024
Home Closings (Units)2,031 1,889 3,008
Net New Orders (Units)1,712 1,680 1,611
Cancellation Rate (%)13.2% 13.8% 18.8%
Backlog (Units)4,205 3,996 2,599
Backlog (Value, $USD Millions)$2,124 $2,004 $1,304
Active Communities (Period End)222 235 242
Liquidity ($USD Millions)$475 $493 $816
Net Homebuilding Debt / Net Capitalization (%)42.7% 45.6% 33.7%
SG&A % of Homebuilding Revenues9.4% 10.3% 7.6%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Home Closings (Units)FY 2024~8,250 (Q2 reiterated; Q3 maintained) N/A (actual 8,583) Achieved above guidance
Home Closings (Units)FY 2025N/A~9,250 (initiated) Introduced (raised vs 2024 actual)

Earnings Call Themes & Trends

Note: A Q4 2024 earnings call transcript was not available via our document tools or public sources; themes are derived from Q2–Q4 press releases.

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Sales incentives & rate locksSales incentives supported stable orders and lower cancellations; SG&A up due to expansion Forward mortgage commitment programs increased SG&A and enabled rate locks Forward mortgage commitments cited as key SG&A driver; incentives aided orders/cancellations Continued utilization to drive demand; SG&A normalization with volume
Margins (gross/adjusted)Gross margin ~19.0%, adjusted 27.0%; Crescent amortization ~20 bps headwind Gross margin 19.2%, adjusted 27.6%; pressure from land/financing costs Gross margin 17.7%, adjusted 26.9%; pressure from costs and mix; cost reductions partially offset Sequential pressure into Q4; adjusted resilient vs reported
Acquisitions (Crescent, Jet HL, Liberty, Alliant)Jet HL acquisition announced (closed 7/1); Crescent integration underway Jet HL consolidated, contributed $16M revenue and $7M pretax in Q3 Liberty Communities closed Jan 2025; Alliant Title pending regulatory approval; Crescent contributed materially in Q4 M&A accretive; expanding footprint and vertical integration
Liquidity & LeverageLiquidity $475M; net debt/cap 42.7% amid inventory build Liquidity $493M; net HB debt/cap 45.6% on lot/inventory investments Liquidity $816M; net HB debt/cap improved to 33.7% by year-end Strengthened balance sheet exiting year
Backlog & pipelineBacklog 4,205; controlled lot pipeline 40,678 Backlog 3,996; controlled lots 44,825 Backlog 2,599 at $1.30B; controlled lots 54,698 Managing backlog lower with higher closings; robust lot control

Management Commentary

  • “Our fourth quarter was by far the best quarter of the year… pre-tax income was $169 million… record total revenues of $1.6 billion… closed 3,008 homes, up 40%” — Patrick Zalupski, Chairman & CEO .
  • “We completed acquisitions of Crescent Homes and Jet HomeLoans… purchase agreements of Liberty Communities (closed in January 2025) and Alliant Title Insurance (pending regulatory approval)… highly accretive and will contribute materially to DFH’s future earnings growth” .
  • “We initiate our 2025 full year guidance of approximately 9,250 expected home closings” .
  • Strategic commentary on Alliant Title: Acquisition further vertically integrates alongside DFH’s title agency business, facilitating growth in the title insurance marketplace .

Q&A Highlights

  • A Q4 2024 earnings call transcript could not be located in SEC filings or standard transcript repositories, and ListDocuments returned no Q4 earnings-call-transcript for DFH. As such, Q&A details and tone shifts are unavailable for this quarter [ListDocuments result above].

Estimates Context

  • Q4 2024 diluted EPS of $1.29 vs consensus of $1.10–$1.13, a clear beat; total revenue of $1.561B vs consensus ~$1.39B, also a beat. External sources (MarketBeat/Zacks) used due to S&P Global access limits for estimates. EPS/revenue surprises were +14–23% and +9–12%, respectively .
  • Drivers vs estimates: higher closings (+40% YoY) aided by Crescent Homes, Midwest volume, and incentives; lower contingent consideration expense (~$14M reduction YoY) and financial services consolidation supported net income .

Key Takeaways for Investors

  • DFH delivered a high-quality beat with diluted EPS $1.29 and total revenue $1.56B, driven by record closings and accretive M&A; margin pressure remains the watch item into 2025 .
  • Margin trajectory: homebuilding gross margin declined to 17.7% on land/financing costs and mix; adjusted margin resilience (26.9%) suggests underlying pricing/cost actions mitigating some headwinds .
  • Balance sheet improved by year-end: liquidity $816M and net homebuilding debt/cap at 33.7% after earlier-year inventory builds; supports 2025 closings ramp and M&A integration .
  • Demand indicators: net new orders +46% YoY, cancellation rate improved to 18.8%; incentives and quick move-in availability remain effective levers .
  • 2025 setup: guidance at ~9,250 closings, with Liberty Communities footprint expansion and pending Alliant Title integration potentially enhancing earnings mix and services profitability .
  • Segment mix: Midwest strength (highest ASP and unit delivery) and Mid-Atlantic acceleration could sustain revenue scale, but ASP sensitivity (Southeast decline) and incentives warrant continued monitoring .
  • Actionable: near term, the beat vs consensus and improved leverage are positive; medium term, watch gross margin recovery, SG&A rate sustainability, backlog conversion pace, and integration execution across Liberty/Alliant/Jet HL .

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