Company: UHG
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001830188-25-000012
Chunk: 83

Company: United Homes Group, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 7
Chunk 83
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s. UHG’s business verticals positioned to further drive the Company’s growth include its mortgage joint venture Homeowners Mortgage, LLC (the “Joint Venture”). UHG expects 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. In addition, UHG’s external growth strategy will allow it to expand into new markets and increase community count via targeted acquisitions of complementary private homebuilders and homebuilding operations.

UHG’s revenues increased from approximately $421.5 million for the year ended December 31, 2023 to $463.7 million for the year ended December 31, 2024. For the year ended December 31, 2024, UHG generated net income 

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of approximately $46.9 million, which included a gain of $88.7 million related to the change in fair value of derivative liabilities and a loss of $45.6 million related to the extinguishment of Convertible Notes, gross profit of 17.2%, adjusted gross profit of 19.9%, and adjusted EBITDA margin of 6.8%, representing a decrease of $78.2 million, and percentage decreases of 1.7%, 1.5%, and 2.8%, respectively, from the year ended December 31, 2023.

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-GAAP Financial Measures” for an explanation of how UHG computes these non-GAAP financial measures and for reconciliations to the most directly comparable GAAP financial measure.

In recent years the homebuilding industry has faced headwinds due to macro-economic factors, such as rising inflation and mortgage rates. While the Federal Reserve reduced its federal funds rate in September and December 2024, the 10-year Treasury Yield has increased, resulting in mortgage rates remaining elevated. As a result, new home demand has been negatively impacted as the combination of higher home prices and higher mortgage rates have resulted in mortgage payments increasing faster than buyer incomes. In response to softer demand for new homes, UHG and the industry have introduced additional sales incentives, mostly in the form of buyer financing incentives such as mortgage rate buy downs, mortgage forward commitments, or cash incentives applied against closing costs. In addition, the Company has made efforts to