Company: SDHC
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001628280-25-049591
Chunk: 59

Company: Smith Douglas Homes Corp.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 59
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 adjusted home 

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closing gross profit and adjusted home closing gross margin information should be considered only as a supplement to home closing gross profit and home closing gross margin information as a measure of our performance.

The following table presents a reconciliation of adjusted home closing gross profit and adjusted home closing gross margin to the GAAP financial measure of home closing gross profit and home closing gross margin for each of the periods indicated (amounts in thousands):

Three months endedSeptember 30,Nine months endedSeptember 30,2025202420252024Home closing revenue$262,041$277,835$710,687$687,977Cost of home closings207,071204,140550,248505,764Home closing gross profit(1)$54,970$73,695$160,439$182,213Capitalized interest charged to cost of home closings6983511,2191,405Purchase accounting adjustments included in cost of home closings120(410)2(670)Impairment of real estate inventory——642—Adj. home closing gross profit$55,788$73,636$162,302$182,948Home closing gross margin(2)21.0%26.5%22.6%26.5%Adj. home closing gross margin(2)21.3%26.5%22.8%26.6%

(1)Home closing gross profit is home closing revenue less cost of home closings.

(2)Calculated as a percentage of home closing revenue.

Our adjusted home closing gross profit and adjusted home closing gross margin decreased from both the three and nine months ended September 30, 2024 to the same periods in 2025. The decreases in adjusted home closing gross profit and adjusted home closing gross margin were primarily due to increases in the average cost of home closings of 5% and 4%, respectively, for the three and nine months ended September 30, 2025. 

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 24.6% 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