Landsea Homes 2025 Q1 Earnings Revenue Up 5.7% Despite Net Income Decline

Landsea Homes (LSEA) reported its fiscal 2025 Q1 earnings on May 13th, 2025. The results showed that revenue increased by 5.7% to $310.81 million compared to the same quarter last year. However, the company experienced a net loss of $7.09 million, significantly worse than the $734,000 net income reported in Q1 2024. A notable earnings miss was attributed to cost management challenges and inventory impairments. Despite this, an acquisition agreement with New Home Co. suggests a strategic shift towards growth.

Revenue

The revenue for Landsea Homes rose to $310.81 million in Q1 2025, marking a 5.7% increase from the previous year. Home sales generated $299.37 million, while lot sales and other revenues contributed an additional $11.44 million, culminating in the total revenue figure.

Earnings/Net Income

Landsea Homes recorded a net loss of $0.20 per share in Q1 2025, a stark contrast to the $0.01 per share profit in Q1 2024. This reflects a significant downturn in performance.

Post-Earnings Price Action Review

Following the earnings report, Landsea Homes' stock price showed an interesting trajectory, gaining 0.36% during the latest trading day and surging 94.31% over the past week. This positive movement is largely attributed to the company's strategic initiatives, such as the shift towards presold homes and product differentiation, which have resonated positively with investors. The company experienced a 27% increase in home deliveries and an 11.1% rise in net new home orders year-over-year, despite a 19.5% decline in closing ASPs. The market's response indicates investor optimism about the company's future prospects, driven by strong operational performance and the anticipated acquisition by New Home Co. for $11.30 per share. This acquisition is expected to further propel the stock as Landsea Homes transitions into a privately held entity, highlighting a promising outlook for the company's growth.

CEO Commentary

"Our acquisition of Landsea Homes is an important next step in New Home’s long-term growth strategy," said Matthew Zaist, President and CEO of New Home. John Ho, CEO of Landsea Homes, emphasized the transaction's immediate cash value to stockholders and its potential to accelerate growth.

Guidance

The acquisition by New Home is set to position Landsea Homes for accelerated growth, supported by a well-capitalized partner. The combined company aims to achieve nearly 4,000 annual closings, with plans to scale the platform nationally for market expansion.

Additional News

Landsea Homes has entered into a definitive agreement to be acquired by New Home Co. for $11.30 per share, representing a 61% premium to its closing share price on May 12, 2025. This all-cash transaction values Landsea Homes at approximately $1.2 billion and will create a top-25 national homebuilder across 10 high-growth markets. The acquisition is backed by the Apollo Funds, New Home’s majority shareholder, with a $650 million cash equity commitment to support the deal. The transaction is expected to close early in Q3 2025, subject to customary conditions, marking a significant strategic move for both companies.