United Homes Group (UHG 2.47%), a Southeast-focused homebuilder known for its land-light operations and entry-level offerings, reported earnings for Q2 2025 on August 7, 2025. The most notable development was a swing to a net loss, with diluted earnings per share (GAAP) at $(0.11), a sharp reversal from last year’s Q2 profit of $0.50 per diluted share (GAAP). Revenue (GAAP) fell 3.6% year over year to $105.5 million, while gross margin (GAAP) improved by 1.0 percentage point to 18.9%. Management flagged ongoing margin progress due to cost efficiency and refreshed home designs, but orders and closings trended down. There were no analyst estimates for comparison. Overall, the quarter shows pressure on core volumes but positive impact from product and operational changes, framed by the announcement of a strategic review that could lead to a sale or significant restructuring.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| Revenue (GAAP) | $105.5 million | $109.4 million | (3.6%) |
| EPS – Diluted (GAAP) | $(0.11) | $0.50 | -$0.61 |
| Gross Margin | 18.9 % | 17.9 % | +1.0 pp |
| Adjusted EBITDA (Non-GAAP) | $7.2 million | $7.7 million | (6.5%) |
| Net New Orders | 304 | 323 | (5.9%) |
| Average Sale Price – Production-Built Homes | $349,000 | $341,000 | +2.3% |
United Homes Group: Business Model and Strategic Focus
United Homes Group operates as a regional homebuilder with a strategic focus on fast-growing markets in the Southeastern United States. The company designs and builds single-family detached and attached homes, catering primarily to entry-level buyers and those looking to trade up. Its land-light operating model relies on option contracts to secure lots, rather than holding large tracts of land outright.
This 'asset-light' strategy helps to reduce financial risk, minimizes upfront capital requirements, and aligns lot inventory closely with current sales trends. United Homes Group places strong emphasis on product refreshes and cost containment, with recent efforts targeting direct construction cost savings and new floor plans designed to appeal to a broad buyer base. Its growth strategy includes expanding in core markets, tapping into favorable migration trends, and pursuing opportunities for mergers, acquisitions, and eventual expansion into build-to-rent housing.
Quarter in Review: Margin Gains, Volume Pressure, and Strategic Uncertainty
United Homes Group reported a decline in revenue (GAAP) and a swing to a net loss (GAAP), but delivered a notable improvement in gross margin (GAAP). Home closings numbered 303, down 10% from the 337 closings in the prior-year quarter. Net new orders also slipped 6% compared to Q2 2024.
The company continues to see positive results in pricing. The average sale price for production-built homes rose 2.5% year over year, supported by the rollout of refreshed floor plans and a more balanced approach between speculative and pre-sold homes. Management noted that these newly designed homes have gained traction with buyers and contributed higher margins in Q1 2025.
Gross margin (GAAP) climbed to 18.9%, an improvement of 1.0 percentage point from Q2 2024. Executives attributed this to direct cost savings from its ongoing rebid initiative—a process of systematically renegotiating contracts with subcontractors and suppliers. Lower non-recurring costs also played a role. Leadership highlighted a 270-basis-point sequential gross margin improvement as the product refresh and cost reduction initiatives ramped up.
The company’s bottom line was impacted by a $6.2 million non-cash fair value loss on derivative liabilities. This accounting adjustment, linked to earnouts and not part of core operations, swung GAAP results into the red. Adjusted EBITDA, which excludes such items, edged down about 6.5% compared to Q2 2024. Operating expense discipline was apparent, with selling, general and administrative expense (SG&A) as a percentage of revenue dropping to 17.1% (GAAP). Liquidity at quarter-end stood at $95.2 million as of June 30, 2025, and United Homes Group maintained control over about 7,300 lots under its land-light model as of June 30, 2025.
Regional Performance and Product Updates
Operationally, performance varied across the company’s main geographic markets. In the Midlands, net new orders dropped 23%, while closings fell 17% in the Midlands segment for the year ended December 31, 2024. The Coastal segment posted a 6% decline in net new orders, but managed a modest 2% increase in closings. Upstate saw a 26% gain in net new orders, while the Rosewood region reported growth in both orders and closings off a low base for the year ended December 31, 2024. The company’s backlog—a measure of homes under contract but not yet closed—fell to 202 homes from 248 a year earlier, a 19% decrease in units and a 13% decrease in value as of June 30, 2025.
The refreshed product initiative, which involved updating floor plans and deploying new home designs, continues to receive positive feedback and is producing higher gross margins. Management expects this product update—along with the shift toward more presold homes, where buyers can customize features at higher margins—to play a larger role in the company’s results in the second half of 2025. Direct construction cost savings are accumulating as contract rebidding efforts progress, and these savings are expected to grow as the year continues.
United Homes Group is currently engaged in a review of strategic alternatives. This range of possibilities could include a sale of the entire business, the sale of specific assets, or a refinancing of existing debt. The stated purpose is to maximize shareholder value, but management cautioned that no timing or outcome is guaranteed. The strategic review adds a layer of uncertainty about future direction and could result in a significant change for the company and its investors.
Looking Ahead: Uncertain Demand, Margin Initiatives, and No Guidance
United Homes Group did not issue formal guidance for revenue or profitability for the next quarter or fiscal year. Management indicated optimism for further margin improvements as refreshed products and cost initiatives increase their share of closings. New community openings in the second half of 2025 are also expected to drive some growth in sales activity.
Investors may wish to watch for any results or announcements from the company’s ongoing strategic review process, which could lead to significant change in structure, operations, or even ownership. Key metrics to monitor in the upcoming quarters will include trends in order volumes, gross margin (GAAP), adjusted gross margin (non-GAAP), backlog, and updates on progress in the company’s cost control and product mix strategies. The company does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
