Green Brick Partners, Inc. Q4 FY2024 earnings call

• Record fourth quarter and full year 2024 results with 1019 homes closed in Q4 and 3783 units closed in full year 2024. • Home closing revenue grew 24% y-o-y in Q4 to $557 million and 17.1% y-o-y in full year to over $2 billion. • Full year 2024 net income attributable to Green Brick was $382 million, with diluted EPS of $8.45, a 38% increase from the prior year. • Significantly expanded land position with total land inventory growing almost 8x from 4700 lots in 2015 to over 37,800 lots in 2024. • Maintained low debt to total capital ratio of 17.2% at year end 2024. • Focused on infill and infill adjacent submarkets with strong demographic and job market trends. • Trophy brand specializes in more affordable housing options to capitalize on millennial and Gen Z homebuyer demand.

In the fourth quarter, home closing revenue was $557 million, up 24% year-over-year with 1019 units closed, a company record. Over 80% of fourth quarter home closing revenue was generated from infill and infill adjacent submarkets. Full year 2024 saw home closing revenue exceed $2 billion with 3783 units closed. Trophy represented 51% of Green Brick's total closings in Q4 2024. Fourth quarter gross margin was 34.3%, up 290 basis points year-over-year. Full year homebuilding gross margin was 33.8%, a record.

• Expect long-term housing demand to be fueled by millennials and Gen Z entering prime home buying years. • Housing market remains undersupplied by an estimated 4-7 million units, positioning Green Brick to capitalize on incremental demand. • Plan to increase land development spend by 46% in 2025 to approximately $300 million. • Trophy brand expected to continue strong performance with 54% of net new orders by volume in Q4 2024. • Monitor spec inventory, sales pace, incentive levels, and starts during spring selling season.

• Elevated mortgage rates pose challenges to homebuying affordability. • Housing market conditions, including inventory levels and demand fluctuations, could impact results. • Legislative changes and insurance compliance issues could affect warranty reserves and gross margins.

Q: How have trends been on a sales perspective in January and February, particularly related to incentives?

A: Jed Dolson stated they're off to a similar start from last year on sales, mortgage rates dropped in February so incentives ticked down. Jim Brickman added about incentive levels varying by market location.

Q: Could you break down the $100 million increase in development spend?

A: Jim Brickman and Jed Dolson explained it's due to land bought in 2023 and 2024, with development dollars flowing into the present and future, leading to potential community count growth later.

Q: Thoughts on SG&A leverage moving into 2025 and headcount?

A: Rick Costello mentioned continued predominance of Trophy leading to potential SG&A improvement over time, with a modest increase in personnel related to the land story, and impact from the nascent mortgage company on financial services side.