Overview and Financial Highlights

Green Brick Partners, Inc. reported solid financial results for the first quarter of 2025, continuing its strong operational performance. The company saw increases in key metrics like home deliveries, home closings revenue, and net new home orders compared to the same period in 2024.

Some of the key financial highlights for the quarter include:

• Home deliveries increased by 10.8%
• Home closings revenue increased by 11.8%
• Average sales price of homes delivered increased by 0.9%
• Net new home orders increased by 3.3%
• Homebuilding gross margin percentage decreased by 215 basis points to 31.2%

The company’s steady results were driven by its focus on high-growth markets, reduced cycle times, and strong demand for its new homes. However, the decrease in gross margin was attributed to higher labor, material, and selling costs.

Revenue and New Home Deliveries

Green Brick’s residential units revenue increased by 11.7% year-over-year, reaching $495.3 million for the quarter. This was primarily driven by a 10.8% increase in new homes delivered, which reached 910 units. The increase in deliveries was due to higher levels of finished and finishing spec home inventory, as well as a 10.6% increase in average active selling communities.

The average sales price of homes delivered also increased slightly by 0.9% to $544.3, mainly due to product mix changes. Lots revenue, which comes from opportunistic sales of finished lots to other homebuilders, decreased by 43.2% to $2.3 million.

New Home Orders and Backlog

Net new home orders increased 3.3% year-over-year to 1,106 units, while the revenue from those orders decreased 3.2% to $593.6 million. This was attributed to a higher mix of sales from newer, infill-adjacent communities and more sales incentives and discounts compared to the prior year.

The company’s backlog revenue decreased 18.1% year-over-year to $594.2 million, with backlog units down 15.3% to 864. However, backlog revenue increased 19.8% sequentially from the end of 2024, and the percentage of spec units under construction decreased from 75.6% to 64.1% as of March 31, 2025.

The company’s cancellation rate increased from 4.1% to 6.1% year-over-year, though it remained in a historically low range under 10%. The absorption rate per average active selling community decreased 7.0% due to the impact of high mortgage rates.

Gross Margins and Expenses

Residential units gross margin decreased from 33.4% to 31.2% year-over-year, primarily due to higher labor, material, and selling costs. Cost of residential units as a percentage of revenue increased from 66.6% to 68.8%.

Selling, general, and administrative (SG&A) expenses as a percentage of revenue for the builder operations segment decreased from 11.4% to 11.1%, as the company was able to better leverage overhead costs with the increase in revenue. Corporate and other unallocated SG&A expenses remained flat at $1.3 million.

Equity in income of unconsolidated entities decreased 81.8% to $0.5 million, while other income, net, decreased from $15.4 million to $4.8 million, primarily due to a large gain on the sale of an investment in the prior year period.

Liquidity and Capital Resources

As of March 31, 2025, Green Brick had $103.0 million in unrestricted cash and cash equivalents, down from $141.5 million at the end of 2024. The company’s principal uses of capital during the quarter included home construction, land purchases and development, debt repayments, operating expenses, share repurchases, and routine liabilities.

Green Brick’s debt to total capitalization ratio was approximately 14.5% as of March 31, 2025, with a target ratio of up to 20%. The company’s net debt to total capitalization ratio, a non-GAAP measure, was 9.8%, indicating a strong balance sheet position.

The company generated $68.7 million in net cash from operating activities during the quarter, compared to $1.0 million in the prior year period. This was driven by cash generated from business operations and a decrease in other assets, partially offset by an increase in inventory.

Green Brick has access to a $330 million unsecured revolving credit facility, which was undrawn as of March 31, 2025, as well as $80 million in warehouse facilities to fund mortgage loan originations. The company was in compliance with all debt covenants as of the end of the quarter.

Outlook and Strategy

Green Brick’s steady operational performance in the first quarter of 2025 was driven by its focus on high-growth, infill and infill-adjacent markets, as well as its ability to reduce cycle times and meet strong demand for its new homes. However, the company faced some margin pressure due to higher costs.

Going forward, the company remains focused on generating positive margins in its homebuilding operations and acquiring desirable land positions to maintain a strong balance sheet and support continued growth. It will also look to prudently employ leverage to invest in land acquisition, development, and homebuilding activities, targeting a debt to total capitalization ratio of up to 20%.

Despite the impact of high mortgage rates on absorption rates, Green Brick’s backlog and spec home inventory levels suggest it is well-positioned to navigate the current market environment. The company’s diversified geographic footprint, operational efficiency, and financial discipline should allow it to continue delivering solid results for shareholders.