Green Brick Partners, Inc. (GRBK)·Q1 2025 Earnings Summary

Executive Summary

• Record Q1 home closings revenue of $495M (+11.8% YoY), total revenue $497.6M; diluted EPS $1.67; homebuilding gross margin 31.2% (down 220 bps YoY) . Street EPS $1.755 and revenue $505.5M; GRBK modestly missed both on incentives and mix; EPS −$0.085 (−4.8%), revenue −$7.8M (−1.6%)* (Values retrieved from S&P Global).
• Orders strong: record 1,106 net new orders (+26% QoQ, +3.3% YoY), absorption 10.6/quarter, cancellation 6.1% (management said lowest among public homebuilders); backlog up 29% QoQ to 864 homes/$594M .
• Balance sheet strength: debt-to-cap 14.5%, net debt-to-cap 9.8%; $103M cash; $330M revolver availability; 100% fixed-rate debt at 3.4% .
• Capital allocation and growth: ~$38.3M buybacks through April (668k shares); 40.5k lots owned/controlled with ~98% self-developed; Trophy expansion to Houston (lots in June; first community fall 2025) .
• Watch items/catalysts: incentive discipline (Q1 6.7% vs 6.4% in Q4), tariff impact monitoring, continued >30% gross margins, and accelerating Trophy mix; Street miss vs record demand could shape near-term stock narrative .

What Went Well and What Went Wrong

• What Went Well

  • Record Q1 demand and healthy selling season: “Net new orders… increased 26% sequentially and 3.3% YoY, reaching a record of 1,106 homes… absorption 10.6… cancellation 6.1%, the lowest among public homebuilders.”
  • Margin leadership intact: homebuilding gross margin 31.2% despite higher incentives; “continued to lead the homebuilding industry” with >30% margins; adjusted HBM 31.7% .
  • Balance sheet and liquidity: debt-to-cap 14.5% (net 9.8%); “investment grade balance sheet… $103M cash… $330M available on revolver,” and 100% fixed-rate debt at 3.4% .

• What Went Wrong

  • Modest miss vs Street on both EPS and revenue: $1.67 vs $1.755 EPS and $497.6M vs $505.5M revenue; drivers include incentives due to elevated mortgage rates and mix (Trophy skew) * (Values retrieved from S&P Global).
  • Margins compressed YoY: homebuilding gross margin −220 bps YoY to 31.2% on higher incentives amid macro uncertainty .
  • Backlog ASP down YoY and incentive rate up QoQ: backlog ASP $687.7k vs $742.3k in Q4; Q1 incentives 6.7% vs 6.4% in Q4 (though trended down through March) .

Financial Results

Note: *Values retrieved from S&P Global.

KPIs and Operating Metrics

Q1 2025 Segment/Mix Highlights

Additional non-GAAP metric

• Adjusted Homebuilding Gross Margin: 31.7% in Q1 2025 (reconciled) .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We maintained our leading position among our public peers with respect to homebuilding gross margins… only a modest year-over-year decline of 220 bps to 31.2%.” — Jim Brickman, CEO .
• “Diluted EPS… decreased… primarily due to the sale of our 49.9% interest in Challenger Homes in Q1 2024… Excluding this one-time benefit… underlying earnings grew 3.7%.” .
• “Backlog increased 29% from Q4 2024 to 864 homes in Q1 2025.” .
• “Our total deployable capital is currently over $430 million… Board authorized $100 million in share buybacks, and we repurchased $38.3 million through April.” .
• “We… are actively engaging with our suppliers… build times… averaged 5.2 months… down YoY from 5.5 months.” — Jed Dolson, President & COO .

Q&A Highlights

• Tariffs: Management has not seen material impact yet; magnitude could be around “a percent more or less,” but remains a wildcard .
• Incentives by product/location: Trophy incentives in line with company average; incentives vary by proximity to core/infill vs perimeter markets .
• Land market/liquidity: Some dropped/“C location” optioned deals surfacing; GRBK selective, prefers not to buy walked C-location lots; occasional opportunistic bulk finished-lot purchases .
• Buybacks vs land: Repurchases will be lumpy due to large, complex master-planned land deals that may temporarily preempt buybacks; intent to maximize shareholder value across cycles .

Estimates Context

• Q1 2025 actuals vs consensus: EPS $1.67 vs $1.755; revenue $497.6M vs $505.5M; both modest misses as incentives rose with elevated rates and mix leaned more to Trophy (entry/first move-up) *.
• Consensus depth: 2 estimates for EPS and revenue; Street may revisit H1 incentive assumptions and mix-related ASPs given management’s commentary on incentives and regional dynamics *.

Note: *Values retrieved from S&P Global.

Key Takeaways for Investors

• Demand resilient with record Q1 orders and improving intra-quarter incentives, supporting 2H closings and revenue trajectory despite a modest Q1 miss vs Street *.
• Margin leadership (>30% HBM) sustained; near-term margin path hinges on incentive discipline and tariff cost pass-throughs .
• Backlog rebuilt (units +29% QoQ), providing near-term revenue visibility; watch backlog ASP trend given higher Trophy mix .
• Balance sheet optionality (14.5% debt-to-cap, 100% fixed at 3.4%) positions GRBK to fund land development (~$300M in 2025) and pursue opportunistic buybacks .
• Trophy expansion to Houston adds a large TAM; execution milestones (lots in June; first community fall 2025) are tangible growth catalysts .
• Monitor macro/tariffs and regional affordability (Florida/Austin) vs strength in DFW/Atlanta; intra-quarter incentive declines are a positive sign .
• Non-GAAP adds context: adjusted HBM 31.7%; EPS ex-Challenger one-time shows +3.7% underlying YoY earnings in Q1 .

Additional Detail Citations

• Q1 earnings release and 8-K exhibit (financials, margins, orders, backlog, leverage): .
• Q4 and Q3 prior-quarter comps: .
• Call commentary on incentives, tariffs, mix, build times, buybacks: .
• Liquidity/revolver availability and buybacks: .

Note: Street consensus figures are from S&P Global and shown with an asterisk.