Company: UHG
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001830188-25-000079
Chunk: 167

Company: United Homes Group, Inc.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 2
Chunk 167
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 23.1%, which resulted in lower gross profit and higher operating costs as a percentage of revenue coupled with increased interest expense.

Rosewood: The $0.1 million increase in pre-tax profitability for the nine months ended September 30, 2025 compared to the same period in the prior year was primarily due to higher gross profit as a result of more closings and better margins, partially offset by an increase in operating costs attributable to contingent consideration related to the 2023 acquisition of Rosewood Communities, Inc. and an increase in commission expense as a percentage of revenue.

Other: The $2.1 million increase in pre-tax profitability for the Raleigh market for the nine months ended September 30, 2025 compared to the same period in the prior year was primarily due to an increase in gross profit of $0.4 million and decreases in severance expense of $1.1 million and salaries and wages of $0.5 million.

Net New Orders: Net new orders for the nine months ended September 30, 2025 was 924 units, a decrease of 124 units, from 1,048 units for the nine months ended September 30, 2024.

Cancellation Rate: The cancellation rate for the nine months ended September 30, 2025 was 12.8%, an increase of 1.2%, from 11.6% for the nine months ended September 30, 2024.

34

Non-GAAP Financial Measures

Adjusted Gross Profit

Adjusted gross profit is a non-GAAP financial measure used by management of the Company as a supplemental measure in evaluating operating performance. The Company defines adjusted gross profit as gross profit excluding the effects of capitalized interest expensed in cost of sales, amortization included in homebuilding cost of sales, abandoned project costs, severance expense in cost of sales, and non-recurring remediation costs. The Company’s management believes this information is meaningful because it separates the impact that capitalized interest and non-recurring costs directly expensed in cost of sales have on gross profit to provide a more specific measurement of the Company’s gross profits. However, because adjusted gross profit information excludes certain balances expensed in cost of sales, which have real economic effects and could impact the Company’s results of operations, the utility of adjusted gross profit information as a measure of the Company’s operating performance may be limited. Other companies may not calculate adjusted gross profit information in the same manner that the Company does. Accordingly, adjusted gross profit information should be considered only