Green Brick Partners' Q4 2024: Sales, Development, and SG&A Expectations in Conflict

These are the key contradictions discussed in Green Brick Partners' latest 2024Q4 earnings call, specifically including: Sales Trends and Incentives, Development Spend Impact, Community Count Growth and Land Development Costs, and SG&A Leverage Expectations:



Record Financial Performance:
- Green Brick Partners reported record fourth quarter and full year 2024 results, with home closing revenue growing 24% year-over-year to $557 million.
- Net income attributable to Green Brick grew 42% to $104 million, and diluted EPS increased 46% year-over-year to $2.31.
- The strong performance was driven by a focus on infill and infill adjacent submarkets, affordable housing options, and a robust land position.

Home Closing and Order Growth:
- The company closed a record 1,019 homes in the fourth quarter, and net new home orders increased 29.3% year-over-year to 878.
- Growth in home closings and orders was attributed to the entry of millennials and Gen Z into their prime home buying years, as well as a low backlog ASP.

Gross Margin and Cost Control:
- Homebuilding gross margin increased 290 basis points to 33.8% for the full year, with a fourth-quarter gross margin of 34.3%.
- The improvement in gross margins was due to the company's ability to control lot costs and development timelines, and a strategic land position.

Land and Lot Expansion:
- Total land inventory increased to over 37,800 lots at the end of 2024, up from 4,700 lots in 2015.
- Expansion was attributed to strategic land acquisitions, self-development of over 95% of lots, and a focus on infill and infill adjacent submarkets.

Trophy Brand Growth:
- Trophy Signature Homes represented 51% of Green Brick's total closings in the fourth quarter, contributing 54% of net new orders by volume.
- Growth in the Trophy brand was driven by the company's ability to provide more affordable housing options, catering to a larger segment of potential homebuyers.