Company: UHG
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001830188-25-000036
Chunk: 111

Company: United Homes Group, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 2
Chunk 111
---
 will allow it to expand into new markets and increase community count via targeted acquisitions of complementary private homebuilders and homebuilding operations.

In the first quarter of 2025, market conditions in the homebuilding industry were impacted by persistently elevated mortgage rates, macro-economic and geopolitical uncertainty, and housing affordability concerns that have negatively affected consumer confidence. As a result of this challenging environment, demand at the start of the Spring selling season was softer than most years. In addition to these industry-wide factors, the Company also experienced unusually bad weather in all three major South Carolina markets that led to reduced traffic and sales activity in several communities in January. UHG’s net new orders for the three months ended March 31, 2025 decreased 22.9% compared to the prior year period.

In response to this demand environment, the Company continues to 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. Furthermore, UHG is continuing to execute on key operational improvements that began in 2024, including revising its portfolio of house plans, offering more customization to buyers, and a strategic rebidding of supplier contracts to reduce direct construction costs and address inflationary pressures, including potential tariffs. This strategy is expected to accelerate sales activity and improve profitability. Management believes that the Company’s proactive approach, coupled with its adaptable land-light business model, will enable the Company to effectively navigate these multifaceted macroeconomic conditions.

UHG revenues decreased from approximately $100.8 million for the three months ended March 31, 2024 to $87.0 million for the three months ended March 31, 2025. For the three months ended March 31, 2025, UHG generated net income of approximately $18.2 million, which included $21.2 million related to the change in fair value of derivative liabilities, gross profit of 16.2%, adjusted gross profit of 18.8%, and adjusted EBITDA margin of 3.3%, representing a decrease of $6.7 million, and percentage changes of an increase of 0.2%, a decrease of 1.6%, and a decrease of 3.9%, respectively, from the three months ended March 31, 2024. 

Adjusted gross profit, EBITDA, adjusted EBITDA, and EBITDA margin are not financial measures under generally accepted accounting principles in the United States of America (“GAAP”). See “Non