LGI Homes (LGIH) Q2 2024 earnings summary

Executive summary

• Q2 2024 home closings declined 10.7% year-over-year to 1,655 units, but average sales price rose 4.6% to $364,047, generating $602.5 million in revenue.

• Gross margin improved to 25.0% (up 300 bps YoY), adjusted gross margin to 27.0% (up 320 bps YoY), returning to pre-pandemic levels.

• Net income increased 10.2% year-over-year to $58.6 million, with pre-tax net income at $76.9 million (12.8% margin) and diluted EPS of $2.48.

• Community count ended June at 128, up 25.5%–26% YoY, with a goal of 150 by year-end and owned/controlled lot inventory at 69,904.

• Backlog at quarter-end: 1,393 homes valued at $553.6 million.

Financial highlights

• Revenue for Q2 was $602.5 million, down 6.6% YoY, with 1,655 homes closed at an average price of $364,047.

• Gross margin improved 300 bps YoY and 160 bps sequentially; adjusted gross margin improved 320 bps YoY and 170 bps sequentially.

• Pre-tax net income was $76.9 million (12.8% of revenue), up 7.7% YoY.

• EBITDA for Q2 2024 was $88.3 million (14.7% margin), up from $81.1 million (12.6%) in Q2 2023.

• Cash and cash equivalents at June 30, 2024 were $51.1 million; total liquidity $405.9 million.

Outlook and guidance

• Updated 2024 guidance: 6,400–7,200 home closings, ASP of $360,000–$370,000, gross margin 23.5%–24.5%, adjusted gross margin 25.5%–26.5%.

• SG&A expected at 13%–14% of revenue; effective tax rate 24%–25%.

• Targeting approximately 150 active selling communities by year-end 2024.