Landsea Homes (LSEA) Q2 2024 earnings summary

Executive summary

• Total revenue reached $431.1 million in Q2 2024, up 47% year-over-year, with 760 home deliveries and a 2% increase in average sales price to $550,000.

• Adjusted net income was $13.3 million ($0.36 per share), while reported net income was $2.9 million ($0.08 per share), impacted by one-time acquisition and restructuring costs.

• Adjusted EBITDA grew 58% to $42.8 million, and book value per share increased to $17.94.

• Backlog at quarter-end was 694 homes valued at $391.1 million, average price $564,000.

• Strong demand trends and increased community count, led by Florida, Arizona, and California, drove growth.

Financial highlights

• Home sales revenue rose 43.5% to $418.2 million; total revenue up 47% to $431.1 million year-over-year.

• Home sales gross margin was 14.9%, with adjusted gross margin at 21.1%, both down year-over-year due to higher incentives.

• SG&A ratio improved to 13% of home sales revenue.

• Average selling price increased 2% to $550,000.

• Ending active community count was 85, up 49% year-over-year.

Outlook and guidance

• Q3 deliveries expected between 625–700, Q4 between 1,000–1,100, with ASP projected at $495,000–$510,000 for both quarters.

• Adjusted gross margins guided at 20–21% for Q3 and 23–24% for Q4; GAAP gross margins to improve in Q4.

• Focus on maintaining sales momentum, maximizing backlog, and reducing leverage in H2 2024.

• Continued use of incentives expected, but with improving trends as rates decline.