Tri Pointe Homes (TPH) Q2 2024 earnings summary

Executive summary

• Delivered 1,700 homes in Q2 2024, a 45% year-over-year increase, generating $1.13 billion in home sales revenue, up 38%, with net income rising 94% to $118 million and diluted EPS up 108% to $1.25.

• Homebuilding gross margin improved by 320 basis points to 23.6%, and adjusted gross margin reached 27.1%.

• Net new home orders declined 14% year-over-year to 1,651, with a monthly absorption rate of 3.6 per community; backlog at quarter-end was 2,692–2,700 homes valued at $2.0 billion.

• Expansion into new markets (Utah, Coastal Carolinas, Orlando) is progressing, with first Utah deliveries expected in 2025.

• Debt reduced by $450 million, lowering the homebuilding debt-to-capital ratio to a record low 22.9%.

Financial highlights

• SG&A as a percentage of home sales revenue improved by 90 basis points to 11.0%.

• Adjusted EBITDA for the quarter was $216 million, up 66% year-over-year.

• Homebuilding operating margin improved by 420 basis points to 12.6%.

• Income before income taxes increased 91% year-over-year to $159 million.

• Average sales price of homes delivered was $666,000, down 5% year-over-year.

Outlook and guidance

• Q3 2024: Expected deliveries of 1,450–1,550 homes at an average sales price of $685,000–$695,000; gross margin 23%–23.5%; SG&A 11%–11.5%; effective tax rate ~25.5%.

• Full-year 2024: Raised guidance to 6,300–6,500 deliveries, average sales price $670,000–$680,000, gross margin 23%–23.5%, SG&A 10.5%–11%, effective tax rate ~25.5%.

• Anticipates ~10% community count growth in 2025.

• Management expects housing demand to remain resilient, driven by household formations and persistent undersupply.

• Uncertainty remains for H2 2024 due to interest rates and consumer strength, but backlog and fundamentals support a positive outlook.