Company: UHG
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001830188-25-000079
Chunk: 153

Company: United Homes Group, Inc.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 2
Chunk 153
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 that continued operation of the Joint Venture will add to UHG’s revenue and EBITDA growth, improve buyer traffic conversion, and reduce backlog cancellation rates.

The Company’s third quarter results reflect the market conditions and affordability concerns that continue to create challenges for the homebuilding industry. These challenges, coupled with delayed new community openings earlier in the year, negatively impacted net new orders for the three and nine months ended September 30, 2025 which decreased by 5.0% and 11.8%, respectively, versus the comparable prior year periods. 

In response to the current environment, the Company continues to provide discounts on base home prices, when necessary, and utilize various sales incentives, primarily in the form of buyer financing incentives such as mortgage rate buy downs, mortgage forward commitments, or cash incentives applied against closing costs. Increased discounting during the third quarter 2025 had a negative impact on the Company’s reported gross margin. For the three and nine months ended September 30, 2025, gross margin decreased by 1.2% and remained flat, respectively, compared to the respective prior year periods. 

Operationally, the Company remains focused on the execution of several key improvements targeted at accelerating sales and improving gross margins. These operational improvements included refreshing the Company’s portfolio of house plans, expanding customization options for buyers, and a strategic rebidding of supplier contracts to reduce direct construction costs. Despite underperforming in the third quarter, Management believes that the Company’s proactive approach, position within high growth markets, and adaptable land-light business model will enable the Company to effectively navigate these multifaceted macroeconomic conditions. However, the Company cannot provide any assurance that its strategies will continue to be successful in future quarters. 

UHG revenues decreased from approximately $118.6 million for the three months ended September 30, 2024 to $90.8 million for the three months ended September 30, 2025. For the three months ended September 30, 2025, UHG generated a net loss of approximately $31.3 million, which included a $27.2 million loss related to the change in fair value of derivative liabilities, gross margin of 17.7%, adjusted gross margin of 19.6%, and adjusted EBITDA margin of 4.2%, representing an increase in net loss of $24.0 million, and percentage decreases of 1.2%, 1.0%, and 3.4%, respectively, from the three months ended September 30,