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United Homes Group, Inc. (UHG)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $105.5M on 303 closings; diluted EPS was -$0.11 due to a $6.2M non-cash earn-out derivative fair value loss; gross margin rose to 18.9% (up 270 bps q/q and 100 bps y/y) .
  • Adjusted EBITDA was $7.2M (flat y/y vs $7.7M) as incentive levels and lower closings offset margin gains; ASP increased to ~$349k (+2.5% y/y) .
  • Backlog at quarter-end was 202 homes valued at ~$74.9M; liquidity was $95.2M (cash $36.5M + $58.7M revolver availability); lot pipeline ~7,300 .
  • Strategic alternatives review launched May 19 and remains ongoing; management expects product refresh and rebid initiatives plus new community openings to benefit H2 2025 results .

What Went Well and What Went Wrong

What Went Well

  • Gross margin expanded to 18.9% (+270 bps q/q, +100 bps y/y), driven by redesigned floor plans and direct construction cost savings from the rebid initiative; adjusted gross margin reached 21.3% .
  • ASP rose to ~$349k (+2.5% y/y), and management saw resilient traffic and stable sales pace (1.9 homes/community/month) despite affordability pressures .
  • Liquidity strengthened to $95.2M; lot pipeline remains robust (~7,300 lots), positioning for H2 openings and growth .

Management quotes:

  • “Gross margins came in at 18.9% for the quarter, representing a 270 basis point improvement over the prior quarter” — CFO Keith Feldman .
  • “We continued to reap the benefits of the refreshed product initiative… We expect these initiatives… to have a more significant impact… in the second half of the year.” — CEO Jack Micenko .
  • “Gross margins will be higher in 2025 compared to 2024 as a result of this product transition.” — CEO Jack Micenko .

What Went Wrong

  • Closings fell 10% y/y (303 vs. 337), net new orders declined 6% y/y, and revenue decreased 4% y/y to $105.5M as higher incentives continued to weigh on profitability .
  • Reported net loss of $6.3M and diluted EPS -$0.11, largely due to non-cash derivative fair value change tied to earn-out; adjusted EBITDA was roughly flat y/y ($7.2M vs. $7.7M) .
  • Active communities declined to 55 (from 59 a year ago), contributing to lower order volume; macro affordability headwinds persisted amid high mortgage rates .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$134.8 $87.0 $105.5
Diluted EPS ($USD)$0.01 $0.31 -$0.11
Gross Margin %16.2% 16.2% 18.9%
Adjusted Gross Margin %18.1% 18.8% 21.3%
Adjusted EBITDA ($USD Millions)$7.7 $2.9 $7.2

Segment/market operational metrics (Q2 year-over-year):

MarketNet New Orders (Q2’24 → Q2’25)Closings (Q2’24 → Q2’25)
Coastal62 → 58 (-6%) 48 → 49 (+2%)
Midlands169 → 130 (-23%) 175 → 145 (-17%)
Upstate73 → 92 (+26%) 98 → 84 (-14%)
Rosewood9 → 16 (+78%) 8 → 16 (+100%)
Raleigh10 → 8 (-20%) 8 → 9 (+13%)
Total323 → 304 (-6%) 337 → 303 (-10%)

KPIs and balance-sheet snapshot:

KPIQ1 2025Q2 2025
Home Closings (#)252 303
Net New Orders (#)296 304
ASP ($USD)~$345,000 ~$349,000
Backlog Inventory (#)201 202
Backlog Value ($USD Millions)$75.3 $74.9
Available Liquidity ($USD Millions)$86.9 $95.2
Cash ($USD Millions)$25.0 $36.5
Revolver Availability ($USD Millions)$61.9 $58.7
Lot Pipeline (Owned/Controlled)~7,500 ~7,300
Active Communities (#)—55

Non-GAAP bridges (Q2 2025):

  • Adjusted gross margin: 21.3% after adding interest in cost of sales ($1.632M), amortization ($0.882M), abandoned projects ($3k), and other items .
  • Adjusted EBITDA: $7.237M after backing out stock comp ($1.411M), transaction costs ($0.707M), amortization, severance, abandoned projects, derivative FV change ($6.171M), etc. .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross MarginFY 2025Not provided“Gross margins will be higher in 2025 compared to 2024 as a result of this product transition.” Raised (qualitative)
Community OpeningsH2 2025Not provided“Several new communities set to be opened… to have a more significant impact… in the second half of the year.” Initiatives emphasized
Direct Cost SavingsFY 2025 / H2Not providedIdentified >$3.5M direct construction cost savings; “meaningful impact… in the second half of 2025” Programs progressing
Strategic Review2025N/AProcess initiated May 19; outcomes/timing uncertain New strategic process

No formal numerical ranges (revenue, EPS, margins, tax rate) were provided in Q2 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Product redesign & marginsRedesigned plans ~500 bps above trailing margins (Q4) ; Q1 refreshed plans ~24% gross margin, growing backlog of refreshed product Margin up 270 bps q/q; adjusted gross margin up y/y; continued benefit from refreshed portfolio Improving
Incentives & affordabilityQ4 mortgage buydown costs spiked to ~5% of revenue ; Q1 incentives pressured adjusted gross margin Buyers weigh high mortgage rates; continued use of buydowns and financing incentives Ongoing headwind
Cost rebid & efficiencyQ1: Identified >$3.5M savings; impact expected H2 “Direct construction cost savings” cited for margin expansion in Q2 Executing/benefiting
Community count & growthQ4/Q1 set-up for 2025; active communities 59 a year ago 55 active communities; new openings expected H2 Temporary dip; H2 ramp
Capital structure/interestQ4 refinancing to cut interest ~$4M/year and reduce dilution Liquidity $95.2M supports H2 execution Improved flexibility
Strategic alternativesNot in Q4; not in Q1Board launched review May 19; ongoing Potential catalyst

Management Commentary

  • CEO Jack Micenko: “We continued to reap the benefits of the refreshed product… We expect these initiatives… to have a more significant impact… in the second half of the year.”
  • CEO Jack Micenko: “Gross margins will be higher in 2025 compared to 2024 as a result of this product transition.”
  • CFO Keith Feldman: “Gross margins came in at 18.9%… a 270 basis point improvement over the prior quarter… testament to the appeal of our refreshed product and our rebid initiative.”
  • CEO Jack Micenko: “We continue to offer mortgage rate buy downs and other financing incentives as a way to address affordability.”

Q&A Highlights

  • The company did not field analyst questions on the Q2 call; the operator closed the call after prepared remarks due to no questions in queue .
  • No real-time guidance clarifications beyond prepared comments; emphasis remained on H2 margin trajectory and community openings .

Estimates Context

  • Consensus EPS and revenue for Q2 2025 and the prior two quarters were unavailable via S&P Global at time of writing; therefore, we cannot assess beats/misses versus Wall Street estimates. Values retrieved from S&P Global.
  • Where estimate data is unavailable, we anchor analysis on reported GAAP/non-GAAP results and management commentary .

Key Takeaways for Investors

  • Sequential margin inflection: Gross margin expanded to 18.9% (+270 bps q/q) on product refresh and rebid savings; adjusted gross margin rose to 21.3% .
  • Revenue softness but stabilizing KPIs: Closings -10% y/y; orders -6% y/y, yet ASP +2.5% and backlog value ~$74.9M indicate demand resiliency in core markets .
  • Strong liquidity and lot pipeline: $95.2M liquidity and ~7,300 lots support H2 community openings and volume recovery potential .
  • Non-cash volatility: EPS impacted by derivative fair value accounting on contingent earn-out; focus on adjusted EBITDA and margins for underlying performance .
  • Strategic review is a catalyst: Board-initiated exploration (sale, asset sale, refinancing) could re-rate the equity; timing and outcome uncertain .
  • H2 setup favorable: Management expects higher 2025 margins vs 2024 and benefits from new openings; watch conversion of refreshed backlog and incentive intensity .
  • Trading lens: Near term, stock likely reacts to margin trajectory, community openings pace, and any developments in the strategic process; absence of consensus estimates may dampen “beat/miss” headlines but margin prints should drive narrative .