LGI Homes Reports Mixed Q3 Results with 5.6% Revenue Growth and 3.8% Net Income Increase

LGI Homes, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, reflecting a mixed performance in home sales and profitability compared to the previous fiscal period.

For Q3 2024, home sales revenues reached $651.9 million, marking a 5.6% increase from $617.5 million in Q3 2023. The company closed 1,757 homes during the quarter, a slight increase from 1,751 homes in the same period last year. The average sales price per home closed rose to $371,004, up 5.2% from $352,678 in Q3 2023. However, gross margin as a percentage of home sales revenues decreased to 25.1% from 25.7% in the prior year, despite an increase in gross margin dollars to $163.5 million.

Net income for Q3 2024 was $69.6 million, a 3.8% increase from $67.0 million in Q3 2023. The operating income for the quarter was $80.3 million, down 2.4% from $82.3 million in the previous year. The effective tax rate for the quarter was 24.3%, slightly lower than the 25.1% reported in Q3 2023.

For the nine months ended September 30, 2024, total home sales revenues decreased to $1.645 billion, down 6.0% from $1.750 billion in the same period of 2023. Home closings also fell by 9.6%, totaling 4,495 homes compared to 4,971 homes in the prior year. The average sales price per home closed increased by 4.0% to $366,007. Net income for the nine-month period was $145.2 million, a decrease of 1.3% from $147.1 million in 2023.

The company’s total assets increased to $3.826 billion as of September 30, 2024, up from $3.408 billion at the end of 2023. Total equity also rose to $1.997 billion from $1.856 billion. However, notes payable increased significantly to $1.546 billion from $1.248 billion, reflecting the company’s reliance on debt financing.

LGI Homes has been actively managing its inventory, with real estate inventory rising to $3.440 billion as of September 30, 2024, compared to $3.108 billion at the end of 2023. The company has also expanded its active communities to 138, up from 106 a year earlier.

In terms of strategic developments, LGI Homes has a $1.205 billion revolving credit facility under the 2023 Credit Agreement, which matures in 2028. The company remains compliant with all financial covenants and has plans to access debt and equity markets as needed to support its liquidity needs. The stock repurchase program, initiated in February 2022, has seen $193.5 million remaining for future repurchases, with $18.0 million spent on repurchasing shares during the nine months ended September 30, 2024.