LGI Homes (LGIH) Q3 2024 earnings summary

Executive summary

• Q3 2024 home sales revenue rose 5.6% year-over-year to $651.9 million, with 1,757 homes closed and average sales price up 5.2% to $371,004.

• Net income for Q3 2024 increased 3.8% year-over-year to $69.6 million, with diluted EPS at $2.95.

• Active communities grew 30.2% year-over-year to 138 at quarter-end, supporting future growth and marking the sixth consecutive quarter of expansion.

• Year-to-date 2024 home closings declined 9.6% to 4,495 units, but average sales price increased 4.0% to $366,007.

• Focused on maximizing long-term profitability and maintaining strong margins, even at a slower sales pace.

Financial highlights

• Q3 2024 gross margin was 25.1%, down 60 basis points year-over-year; adjusted gross margin held steady at 27.2%.

• Pre-tax net income margin reached 14.1%, up 130 basis points sequentially and above the pre-pandemic average.

• Diluted EPS was $2.95, up 4% year-over-year and 19% sequentially.

• Net income totaled $69.6 million.

• SG&A expenses were $83.2 million (12.8% of revenue); selling expenses rose due to higher advertising and new community openings.

Outlook and guidance

• Full-year 2024 guidance: home closings expected between 6,100 and 6,400; average sales price per home between $360,000 and $370,000.

• Raised full-year gross margin guidance to 24%–25% and adjusted gross margin to 26%–27%.

• Anticipate ending 2024 with ~150 active communities and 10%–20% community count growth in 2025.

• Margins in Q4 expected to be similar or slightly lower than Q3, depending on mix and incentives.

• The company believes it can fund liquidity needs for at least the next twelve months through cash on hand, operations, and available credit.