Company: SDHC
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001982518-25-000064
Chunk: 60

Company: Smith Douglas Homes Corp.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 60
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 closings of 4% in both periods. 

Adjusted net income

Adjusted net income is not a measure of net income or net income margin as determined by GAAP. Adjusted net income is a supplemental non-GAAP financial measure used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies. We define adjusted net income as net income adjusted for the tax impact using a 24.9% federal and state blended tax rate (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented).

Management believes adjusted net income is useful because it allows management to more effectively evaluate our operating performance and comparability to industry peers who record income tax expense on their income before tax as opposed to the income of Smith Douglas Holdings LLC not being taxed at the entity level and, therefore, not reflecting a charge against earnings for income tax expense. Adjusted net income should not be considered as an alternative to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. Our computation of adjusted net income may not be comparable to adjusted net income of other companies. We present adjusted net income because we believe it provides useful information regarding our comparability to peers.

The following table presents a reconciliation of adjusted net income to the GAAP financial measure of net income for each of the periods indicated (in thousands):

Three months ended June 30,Six months ended June 30,2025202420252024Net income$16,435$24,734$35,145$45,220Provision for income taxes7441,1321,6012,053Income before income taxes17,17925,86636,74647,273Tax-effected adjustments(1)4,2786,4679,15011,818Adjusted net income$12,901$19,399$27,596$35,455

(1)For the three and six months ended June 30, 2025 and 2024, our tax expenses assumes a 24.9% and 25.0% federal and state blended tax rate, respectively (assuming 100% public ownership to adjust for the impact of taxes on 

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earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented).

EBITDA, EBITDA margin, adjusted EBITDA,