Green Brick Partners, Inc. Reports Record Third Quarter 2024 Results

Rhea-AI Summary

Green Brick Partners (NYSE: GRBK) reported record third quarter 2024 results with home closings revenue of $523M, up 25.7% year-over-year. The company delivered 956 homes with an average selling price of $546,900. Diluted EPS increased 27% to $1.98, while year-to-date diluted EPS grew 34.5% to $6.12. Net new orders increased 11.3% to 877 units. The company maintained strong margins with a homebuilding gross margin of 32.7%. Trophy Signature Homes represented 52% of total sales in Q3, up from 41% in the previous year. Active selling communities and homes under construction increased 23% and 21% year-over-year, respectively.

Positive

• Record Q3 home closings revenue of $523M, up 25.7% YoY
• Diluted EPS increased 27% YoY to $1.98
• Net new orders grew 11.3% YoY to 877 units
• Strong homebuilding gross margin of 32.7%
• Year-to-date return on equity of 27.0%
• Low debt levels with net debt to total capital ratio of 12.5%

Negative

• Average sales price of homes delivered decreased 0.8% YoY
• Backlog revenue declined 6.5% to $581.8M
• Cancellation rate increased to 8.5% from 6.1% YoY
• Absorption rate decreased 8.7% to 8.4 homes per community

Insights

Financial Analyst

Green Brick Partners delivered outstanding Q3 2024 results with multiple record-breaking metrics. Home closings revenue reached $522.9M, up 25.7% YoY, while diluted EPS hit $1.98, increasing 26.9% YoY. The company maintained an impressive homebuilding gross margin of 32.7%, among the industry's best.

The company's financial health is remarkably strong with a net debt to total capital ratio of just 12.5% and weighted average pay rate of 3.4%. Net new orders grew 11.3% YoY to 877 units, demonstrating robust demand. Trophy Signature Homes' increased contribution to total sales (52% vs 41% last year) signals successful execution of growth initiatives.

Real Estate Market Analyst

The strategic focus on infill and infill-adjacent submarkets, accounting for 80% of year-to-date revenue, positions Green Brick advantageously in supply-constrained areas. The 21% YoY increase in homes under construction and 23% growth in active selling communities demonstrates strong operational momentum and expansion capabilities.

The company's self-development model for lots provides significant cost advantages, with management expecting stable lot costs through 2025. This vertical integration strategy, combined with prime market positioning in high-demand areas, creates sustainable competitive advantages for continued growth.

HOME CLOSINGS REVENUE OF $523M, A RECORD FOR ANY THIRD QUARTER, UP 25.7% YOY

DILUTED EPS OF $1.98, A RECORD FOR ANY THIRD QUARTER, UP 26.9% YOY

NET NEW HOME ORDERS OF 877, A RECORD FOR ANY THIRD QUARTER, UP 11.3% YOY

DEBT TO TOTAL CAPITAL OF 16.4%; NET DEBT TO TOTAL CAPITAL OF 12.5%

PLANO, Texas--(BUSINESS WIRE)-- Green Brick Partners, Inc. (NYSE: GRBK) (“we,” “Green Brick” or the “Company”), today reported record results for its third quarter ended September 30, 2024.

“We are pleased to report that we completed our best third quarter in history, highlighted by 25.7% home closings revenues growth year-over-year. During the third quarter, we delivered 956 homes with an average selling price of $546,900, bringing total home closings revenues to $522.9 million. We continued to generate an industry-leading homebuilding gross margin of 32.7%. As a result, diluted EPS increased 27% year-over-year to $1.98 per share, a record for any third quarter. Our year-to-date diluted EPS of $6.12 is up 34.5% year-over year, another record for the company for any year-to-date period through the third quarter,” said Jim Brickman, CEO and Co-Founder.

“Net new orders in the third quarter picked up from the previous quarter and grew 11.3% year-over-year to 877 units,” continued Mr. Brickman. “We were pleased to see a rebound of traffic in September, particularly with Trophy Signature Homes ('Trophy'). Trophy’s net sales represented 52% of the total sales in third quarter vs 41% in the third quarter last year. This growth is a reflection of larger communities in which Trophy was selling in the third quarter and its growth in year-to-date starts, which have increased from 44% of Green Brick’s total starts through September 2023 to 50% of overall starts in 2024. We believe the demographic shifts and housing supply shortage will continue to bolster the industry, especially in our markets, over the long term and are confident Green Brick is well poised to capitalize on pent-up housing demand and industry tailwinds.”

Mr. Brickman added, “We expect to achieve record revenue for fiscal year 2024. This is a testament to our team and their operational effectiveness both currently and for the years prior as we have built out Green Brick’s foundation, including, at its core, our dedicated, experienced, and skilled employees. This is particularly rewarding as we celebrate the 10th anniversary of Green Brick as a public homebuilding company on October 27th. Reflecting the strength of our team, our active selling communities and homes under construction as of the end of the third quarter are up year-over-year 23% and 21%, respectively. We believe our superior land and lot positions will continue to serve as the springboard for our growth. Over 80% of our revenue year-to-date was generated in infill and infill adjacent submarkets where supply is more limited. Our year-to-date homebuilding gross margin of 33.6% is up 290 bps and reflects a record for any year in our history through the third quarter. With the ability to self-develop our lots, we expect finished lot costs as a percentage of home closings revenue to remain essentially flat for 2024 and 2025.”

“Green Brick’s distinctive business model and strategy have yielded impressive results over the past decade. This has translated into exceptional returns for our stockholders, even while carrying land and lots on our balance sheet. Our year-to-date return on equity is 27.0%. This success is underpinned by our conservative balance sheet and financial discipline,” concluded Mr. Brickman. “At the end of the third quarter, our net debt to total capital ratio was 12.5% and our total debt to total capital ratio was only 16.4% with a weighted average pay rate of 3.4%. As we look ahead to the next decade, we remain committed to investing in our business and people to strengthen our platform and propel our growth.”

Results for the Quarter Ended September 30, 2024:
(Dollars in thousands, except per share data)	Three Months Ended September 30,
		2024				2023			Change
New homes delivered		956				754				26.8	%
Total revenues	$	523,660			$	418,978				25.0	%
Total cost of revenues		352,097				279,965				25.8	%
Total gross profit	$	171,563			$	139,013				23.4	%
Income before income taxes	$	118,976			$	98,086				21.3	%
Net income attributable to Green Brick Partners, Inc.	$	89,111			$	72,156				23.5	%
Diluted net income attributable to Green Brick Partners, Inc. per common share	$	1.98			$	1.56				26.9	%
Residential units revenue	$	522,859			$	415,923				25.7	%
Average sales price of homes delivered	$	546.9			$	551.5				(0.8	)%
Homebuilding gross margin percentage		32.7	%			33.3	%		-60 bps
Selling, general and administrative expenses as a percentage of residential units revenue		11.0	%			11.3	%		-30 bps
Backlog revenue	$	581,848			$	622,560			$	(40,712	)
Homes under construction		2,330				1,934				20.5	%

Results for the Nine Months Ended September 30, 2024:
(Dollars in thousands, except per share data)	Nine Months Ended September 30,
		2024				2023			Change
New homes delivered		2,764				2,298			20.3	%
Total revenues	$	1,531,629			$	1,327,328			15.4	%
Total cost of revenues		1,022,143				920,774			11.0	%
Total gross profit	$	509,486			$	406,554			25.3	%
Income before income taxes	$	373,786			$	289,470			29.1	%
Net income attributable to Green Brick Partners, Inc.	$	277,770			$	211,606			31.3	%
Diluted net income attributable to Green Brick Partners, Inc. per common share	$	6.12			$	4.55			34.5	%
Residential units revenue	$	1,513,281			$	1,320,730			14.6	%
Average sales price of homes delivered	$	547.4			$	574.1			(4.7	)%
Homebuilding gross margin percentage		33.6	%			30.7	%		290 bps
Selling, general and administrative expenses as a percentage of residential units revenue		11.0	%			10.8	%		20 bps

Earnings Conference Call:

We will host our earnings conference call to discuss our third quarter ended September 30, 2024 at 12:00 p.m. Eastern Time on Thursday, October 31, 2024. The call can be accessed by dialing 1-888-660-6353 for domestic participants or 1-929-203-2106 for international participants and should reference meeting number 3162560. Participants may also join the call via webcast at: https://events.q4inc.com/attendee/478287045

A telephone replay of the call will be available through November 30, 2024. To access the telephone replay, the domestic dial-in number is 1-800-770-2030, the international dial-in number is 1-609-800-9909 and the access code is 3162560, or by using the link at investors.greenbrickpartners.com.

GREEN BRICK PARTNERS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
Residential units revenue		$	522,859			$	415,923			$	1,513,281			$	1,320,730
Land and lots revenue			801				3,055				18,348				6,598
Total revenues			523,660				418,978				1,531,629				1,327,328
Cost of residential units			351,666				277,446				1,005,162				915,600
Cost of land and lots			431				2,519				16,981				5,174
Total cost of revenues			352,097				279,965				1,022,143				920,774
Total gross profit			171,563				139,013				509,486				406,554
Selling, general and administrative expenses			(57,740	)			(46,884	)			(165,912	)			(142,058	)
Equity in income of unconsolidated entities			992				1,345				4,770				11,265
Other income, net			4,161				4,612				25,442				13,709
Income before income taxes			118,976				98,086				373,786				289,470
Income tax expense			23,078				20,975				71,816				63,154
Net income			95,898				77,111				301,970				226,316
Net income attributable to noncontrolling interests			6,787				4,955				24,200				14,710
Net income attributable to Green Brick Partners, Inc.		$	89,111			$	72,156			$	277,770			$	211,606
Net income attributable to Green Brick Partners, Inc. per common share:
Basic		$	1.99			$	1.58			$	6.18			$	4.60
Diluted		$	1.98			$	1.56			$	6.12			$	4.55
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic			44,457				45,320				44,614				45,543
Diluted			44,530				45,792				45,019				45,988

GREEN BRICK PARTNERS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
	September 30, 2024				December 31, 2023
ASSETS
Cash and cash equivalents	$	80,069			$	179,756
Restricted cash		24,579				19,703
Receivables		11,329				10,632
Inventory		1,918,046				1,533,223
Investments in unconsolidated entities		59,356				84,654
Right-of-use assets - operating leases		7,535				7,255
Property and equipment, net		6,901				7,054
Earnest money deposits		13,869				16,619
Deferred income tax assets, net		15,307				15,306
Intangible assets, net		303				367
Goodwill		680				680
Other assets		34,096				27,583
Total assets	$	2,172,070			$	1,902,832
LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	67,346			$	54,321
Accrued expenses		165,900				96,457
Customer and builder deposits		45,065				43,148
Lease liabilities - operating leases		8,600				7,898
Borrowings on lines of credit, net		(1,718	)			(2,328	)
Senior unsecured notes, net		298,994				336,207
Notes payable		—				12,981
Total liabilities		584,187				548,684
Commitments and contingencies
Redeemable noncontrolling interest in equity of consolidated subsidiary		42,841				36,135
Equity:
Green Brick Partners, Inc. stockholders’ equity
Preferred stock, $0.01 par value: 5,000,000 shares authorized; 2,000 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		47,603				47,603
Common stock, $0.01 par value: 100,000,000 shares authorized; 44,498,248 issued and outstanding as of September 30, 2024 and 45,005,175 issued and outstanding as of December 31, 2023, respectively		445				450
Additional paid-in capital		243,199				255,614
Retained earnings		1,229,490				997,037
Total Green Brick Partners, Inc. stockholders’ equity		1,520,737				1,300,704
Noncontrolling interests		24,305				17,309
Total equity		1,545,042				1,318,013
Total liabilities and equity	$	2,172,070			$	1,902,832

GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
Residential Units Revenue and New Homes Delivered (dollars in thousands)		Three Months Ended September 30,															Nine Months Ended September 30,
			2024				2023			Change				%				2024				2023			Change				%
Home closings revenue		$	522,859			$	415,827			$	107,032			25.7	%		$	1,512,901			$	1,319,393			$	193,508			14.7	%
Mechanic’s lien contracts revenue			—				96				(96	)		(100.0	)%			380				1,337				(957	)		(71.6	)%
Residential units revenue		$	522,859			$	415,923			$	106,936			25.7	%		$	1,513,281			$	1,320,730			$	192,551			14.6	%
New homes delivered			956				754				202			26.8	%			2,764				2,298				466			20.3	%
Average sales price of homes delivered		$	546.9			$	551.5			$	(4.6	)		(0.8	)%		$	547.4			$	574.1			$	(26.7	)		(4.7	)%

Land and Lots Revenue (dollars in thousands)		Three Months Ended September 30,															Nine Months Ended September 30,
			2024				2023			Change				%				2024				2023			Change				%
Lots revenue		$	800			$	2,026			$	(1,226	)		(60.5	)%		$	5,644			$	5,569			$	75			1.3	%
Land revenue			1				1,029				(1,028	)		(99.9	)%			12,704				1,029				11,675			1,134.6	%
Land and lots revenue		$	801			$	3,055			$	(2,254	)		(73.8	)%		$	18,348			$	6,598			$	11,750			178.1	%
Lots closed			8				19				(11	)		(57.9	)%			79				55				24			43.6	%
Average sales price of lots closed		$	100.0			$	106.6			$	(6.6	)		(6.2	)%		$	71.4			$	101.3			$	(29.9	)		(29.5	)%

New Home Orders and Backlog (dollars in thousands)		Three Months Ended September 30,															Nine Months Ended September 30,
			2024				2023			Change				%				2024				2023			Change				%
Net new home orders			877				788				89			11.3	%			2,803				2,677				126			4.7	%
Revenue from net new home orders		$	454,358			$	452,436			$	1,922			0.4	%		$	1,539,549			$	1,572,859			$	(33,310	)		(2.1	)%
Average selling price of net new home orders		$	518.1			$	574.2			$	(56.1	)		(9.8	)%		$	549.3			$	587.5			$	(38.2	)		(6.5	)%
Cancellation rate			8.5	%			6.1	%			2.4	%		39.3	%			7.1	%			6.5	%			0.6	%		9.2	%
Absorption rate per average active selling community per quarter			8.4				9.2				(0.8	)		(8.7	)%			9.3				10.8				(1.5	)		(13.9	)%
Average active selling communities			105				86				19			22.1	%			100				83				17			20.5	%
Active selling communities at end of period			106				86				20			23.3	%
Backlog revenue		$	581,848			$	622,560			$	(40,712	)		(6.5	)%
Backlog units			809				916				(107	)		(11.7	)%
Average sales price of backlog		$	719.2			$	679.7			$	39.5			5.8	%

 

GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
	September 30, 2024									December 31, 2023
	Central			Southeast			Total			Central			Southeast			Total
Lots owned
Finished lots	4,070			726			4,796			4,014			964			4,978
Lots in communities under development	20,942			1,887			22,829			9,122			1,335			10,457
Land held for future development(1)	3,800			—			3,800			8,366			—			8,366
Total lots owned	28,812			2,613			31,425			21,502			2,299			23,801
Lots controlled
Lots under option contracts	851			—			851			1,169			—			1,169
Land under option for future development	1,656			223			1,879			1,710			460			2,170
Lots under option through unconsolidated development joint ventures	2,627			270			2,897			1,210			331			1,541
Total lots controlled	5,134			493			5,627			4,089			791			4,880
Total lots owned and controlled (2)	33,946			3,106			37,052			25,591			3,090			28,681
Percentage of lots owned	84.9	%		84.1	%		84.8	%		84.0	%		74.4	%		83.0	%

___________________
(1)	Land held for future development consists of raw land parcels where development activities have been postponed due to market conditions or other factors.
(2)	Total lots excludes lots with homes under construction.

The following table presents additional information on the lots we owned as of September 30, 2024 and December 31, 2023.

	September 30, 2024			December 31, 2023
Total lots owned(1)	31,425			23,801
Add certain lots included in Total Lots Controlled
Land under option for future acquisition and development	1,879			2,170
Lots under option through unconsolidated development joint ventures	2,897			1,541
Total lots self-developed	36,201			27,512
Self-developed lots as a percentage of total lots owned and controlled(1)	97.7	%		95.9	%

___________________
(1)	Total lots owned includes finished lot purchases, which were less than 1.8% of total lots self-developed as of September 30, 2024.

Non-GAAP Financial Measures

In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating our operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), they may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three and nine months ended September 30, 2024 and 2023 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

(Unaudited, in thousands):		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
Residential units revenue		$	522,859			$	415,923			$	1,513,281			$	1,320,730
Less: Mechanic’s lien contracts revenue			—				(96	)			(380	)			(1,337	)
Home closings revenue		$	522,859			$	415,827			$	1,512,901			$	1,319,393
Homebuilding gross margin		$	171,193			$	138,427			$	508,003			$	404,644
Homebuilding gross margin percentage			32.7	%			33.3	%			33.6	%			30.7	%
Homebuilding gross margin			171,193				138,427				508,003				404,644
Add back: Capitalized interest charged to cost of revenues			2,788				2,968				8,539				10,456
Add back: Land impairment charge		$	1,308			$	—			$	1,308			$	—
Adjusted homebuilding gross margin		$	175,289			$	141,395			$	517,850			$	415,100
Adjusted homebuilding gross margin percentage			33.5	%			34.0	%			34.2	%			31.5	%

Net debt to total capitalization is calculated as the total debt less cash and cash equivalents, divided by the sum of total Green Brick Partners, Inc. stockholders’ equity and total debt less cash and cash equivalents. The closest GAAP financial measure to the net debt to total capitalization ratio is the debt to total capitalization ratio. The following table represents a reconciliation of the net debt to total capitalization ratio as of September 30, 2024:

	Gross				Cash and cash equivalents				Net
Total debt, net of debt issuance costs	$	297,276			$	(80,069	)		$	217,207
Total Green Brick Partners, Inc. stockholders’ equity		1,520,737				—				1,520,737
Total capitalization	$	1,818,013			$	(80,069	)		$	1,737,944
Debt to total capitalization ratio		16.4	%
Net debt to total capitalization ratio										12.5	%

About Green Brick Partners, Inc.

Green Brick Partners, Inc (NYSE: GRBK), the third largest homebuilder in Dallas-Fort Worth, is a diversified homebuilding and land development company that operates through its seven subsidiary homebuilders in Texas, Georgia, and Florida. Green Brick owns five subsidiary homebuilders in Texas (CB JENI Homes, Normandy Homes, Southgate Homes, Trophy Signature Homes, and a 90% interest in Centre Living Homes), as well as a controlling interest in a homebuilder in Atlanta, Georgia (The Providence Group) and an 80% interest in a homebuilder in Port St. Lucie, Florida (GHO Homes). Green Brick also retains interests in related financial services platforms, including Green Brick Title and BHome Mortgage. Green Brick is engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing, and sales for its residential neighborhoods and master-planned communities. For more information about Green Brick Partners Inc.’s subsidiary homebuilders, please visit greenbrickpartners.com/brands-services/

Forward-Looking and Cautionary Statements:

This press release and our earnings call contain “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts and typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “feel,”, “poised,” “intend,” “plan,” “predict,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Specifically, these statements reflect our beliefs and expectations regarding (i) our strategic advantages, including our focus on owning land and self-developing and on infill and infill-adjacent locations, and the impact on our future results; (ii) our positioning to capture future demand, increase market share and succeed in the current environment, including our ability to maintain industry-leading performance and margins; (iii) our ability to successfully implement our growth strategy, including our expectations for expansion and growth of our Trophy brand, and ancillary business opportunities; (iv) our expectations regarding trends in our markets, such as demographic trends and demand for single-family homes; (v) our business priorities and our strategies to maintain the strength of our balance sheet and financial flexibility, and our positioning in the industry; (vi) the advantages of our lot and land strategies and locations, including the benefits to our returns, margins and ability to scale; (vii) our investments in land, lots and development in 2024, and the impact on our growth; (viii) our expected lot deliveries in 2024; (ix) our flexibility in adjusting home prices; (x) the demand for home ownership in the markets in which we operate and our ability to capitalize on such demand; (xi) the land-light model; (xii) our ability to scale our business and improve our operating leverage; and (xiii) our ability to deliver efficient and cost-effective growth, including our ability to manage costs and cycle times. These risks include, but are not limited to: (1) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (2) changes in macroeconomic conditions, including increasing interest rates and inflation that could adversely impact demand for new homes or the ability of potential buyers to qualify; (3) shortages, delays or increased costs of raw materials and increased demand for materials, or increases in other operating costs, including costs related to labor, real estate taxes and insurance, which in each case exceed our ability to increase prices; (4) significant periods of inflation or deflation; (5) a shortage of qualified labor; (6) an inability to acquire land in our markets at anticipated prices or difficulty in obtaining land-use entitlements; (7) our inability to successfully execute our strategies, including the successful development of our communities within expected time frames and the growth and expansion of our Trophy brand; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) the geographic concentration of our operations; (10) government regulation risks; (11) adverse changes in the availability or volatility of mortgage financing; (12) severe weather events or natural disasters; (13) difficulty in obtaining sufficient capital to fund our growth; (14) our ability to meet our debt service obligations; (15) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (16) our ability to adequately self-insure; and (17) changes in accounting standards that adversely affect our reported earnings or financial condition.. Green Brick assumes no obligation to update any forward-looking statements, which speak only as of the date they are made. For a more detailed discussion of these and other risks and uncertainties applicable to Green Brick please see our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030535676/en/

Benting Hu

Vice President of Finance

469-573-6755

IR@greenbrickpartners.com

Source: Green Brick Partners, Inc.

FAQ

What was Green Brick Partners' (GRBK) Q3 2024 revenue?

Green Brick Partners reported Q3 2024 home closings revenue of $523M, a record for any third quarter, representing a 25.7% increase year-over-year.

What was GRBK's earnings per share in Q3 2024?

Green Brick Partners achieved diluted earnings per share of $1.98 in Q3 2024, up 26.9% from the previous year.

How many homes did Green Brick Partners (GRBK) deliver in Q3 2024?

Green Brick Partners delivered 956 homes in Q3 2024, a 26.8% increase from 754 homes in Q3 2023.

What was Green Brick Partners' (GRBK) homebuilding gross margin in Q3 2024?

Green Brick Partners achieved a homebuilding gross margin of 32.7% in Q3 2024.