Earnings call transcript: Century Communities Q2 2025 beats EPS forecast, stock steady

Century Communities Inc. (CCS) reported strong financial results for the second quarter of 2025, significantly surpassing earnings expectations. The homebuilder posted an adjusted earnings per share (EPS) of $1.37, beating the forecast of $1.12 by 22.32%. Revenue reached 1 billion, exceeding projections of 919.8 million by 8.72%. Trading at an attractive P/E ratio of 6.46x and showing solid financial health with an InvestingPro Overall Score of GOOD, the company appears slightly undervalued based on Fair Value analysis. Despite the impressive earnings beat, the company’s stock saw a modest increase of 0.63% in after-hours trading, closing at $63.72.

Key Takeaways

• Century Communities reported a 13% sequential increase in home deliveries, totaling 2,587 homes.
• The average sales price of homes decreased by 3% year-over-year to $378,000.
• The company repurchased $48 million in shares, equating to 3% of outstanding shares.
• Century Communities revised its 2025 home delivery guidance to 10,000-10,500 homes.

Company Performance

Century Communities demonstrated robust performance in Q2 2025, driven by a strong showing in its Century Complete brand, which focuses on affordable housing markets. With a healthy current ratio of 5.54 and revenue growth of 11.97% over the last twelve months, the company maintained a disciplined approach to community development, contributing to a 10% sequential increase in home sales revenues. Despite a slight decrease in average sales prices, the company effectively managed costs, with direct construction costs declining by 3% year-over-year. InvestingPro analysis reveals 8 additional key insights about CCS’s financial position and growth prospects.

Financial Highlights

• Revenue: 1 billion, up from forecasted 919.8 million
• Earnings per share: $1.37, surpassing the forecast of $1.12
• Pretax Income: $47 million
• Net Income: $35 million ($1.14 per diluted share)
• Adjusted Net Income: $42 million

Earnings vs. Forecast

Century Communities’ Q2 2025 results exceeded expectations, with an EPS surprise of 22.32% and a revenue surprise of 8.72%. This performance marks a significant improvement compared to previous quarters, reflecting the company’s strategic focus on cost management and market positioning.

Market Reaction

Following the earnings announcement, Century Communities’ stock experienced a slight uptick of 0.63% in after-hours trading, closing at $63.72. The stock remains within its 52-week range of $50.42 to $108.42, indicating stable investor sentiment despite broader market fluctuations.

Outlook & Guidance

The company revised its 2025 home delivery guidance to 10,000-10,500 homes and anticipates home sales revenues between $3.8 billion and $4 billion. Century Communities expects continued margin pressure due to increased incentives but plans to offset this with further direct cost reductions. The company maintains a shareholder-friendly approach, offering a 1.81% dividend yield and actively pursuing share buybacks, as highlighted by InvestingPro data. Subscribers can access the comprehensive Pro Research Report for detailed analysis of CCS’s financial health and growth prospects.

Executive Commentary

Dale Francescon, Co-CEO, emphasized the ongoing demand for affordable new homes, stating, "We continue to believe that there is underlying demand for affordable new homes supported by solid demographic trends." Rob Francescon, Co-CEO, highlighted the company’s strategic adjustments, noting, "We’re changing the terms to push things out into ’26."

Risks and Challenges

• Potential tariff impacts on lumber sourced from Canada, which constitutes 20-30% of their supply.
• Regional market variations, with challenges in areas like Dallas and Colorado.
• Continued pressure on margins due to increased incentives.

Q&A

During the earnings call, analysts inquired about the company’s land investment strategy, to which executives responded with plans to reduce investments, having dropped 12,000 lots in Q2. Questions also focused on the increasing acceptance of ARM loans in the mortgage product mix.

Full transcript - Century Communities Inc (CCS) Q2 2025:

Conference Operator: Good afternoon, ladies and gentlemen, and welcome to the Century Communities Inc. Second Quarter twenty twenty five Earnings Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Wednesday, 07/23/2025.

I would now like to turn the conference over to Tyler Langton. Please go ahead.

Tyler Langton, Investor Relations, Century Communities: Good afternoon. Thank you for joining us today for Century Communities earnings conference call the second quarter twenty twenty five. Before the call begins, I would like to remind everyone that certain statements made during this call may constitute forward looking statements. These statements are based on management’s current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described or implied in the forward looking statements. Certain of these risks and uncertainties can be found under the heading Risk Factors in the company’s latest 10 ks as supplemented by our latest 10 Q and other SEC filings.

We undertake no duty to update our forward looking statements. Additionally, certain non GAAP financial measures will be discussed on this conference call. The company’s presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Hosting the call today are Dale Francescon, Executive Chairman Rob Francescon, Chief Executive Officer and President and Scott Dixon, Chief Financial Officer. Following today’s prepared remarks, we will open up the line for questions.

With that, I’ll turn the call over to Dale. Thank you, Tyler, and good afternoon, everyone. In the second quarter, we continued to execute well in a challenging environment generating results that were in line with the expectations outlined during our first quarter conference call back in April. Similar to the trends from the first quarter, order activity for new homes has continued to be impacted by elevated mortgage rates, affordability constraints, economic uncertainty and lower consumer confidence. While we saw improvement in our order activity as the second quarter progressed, buyers are still cautious and hesitant and as expected our incentives increased in the second quarter as we look to maintain an appropriate sales pace.

Despite the market headwinds, our deliveries of 2,587 homes increased 13% on a sequential basis and exceeded our guidance of 2,300 to 2,500 homes as customers responded to incentives, enabling us to sell and close a greater number of homes within the quarter. While the spring selling season was clearly muted compared to historical trends, We continue to believe that there is underlying demand for affordable new homes supported by solid demographic trends, and we were encouraged by several trends that we saw during the second quarter. Both our net orders and absorption rates increased on a sequential basis in May and June, while our cancellation rates remained in line with the levels we have seen over the past several years and well below our pre COVID averages in the twenty percent to twenty five percent range. Also absorption rates for our Century Complete brand were roughly flat on a year over year basis and we believe the business continues to benefit from its focus on markets where there is less direct competition from other large builders. However, despite these positive trends, our second quarter absorptions were below seasonal expectations and given typical seasonality, so far in July our absorption rate is trending below second quarter twenty twenty five levels.

Our Indian community count increased to three twenty seven communities at the end of the second quarter, a record for the company. While we have remained disciplined on the land front and reassessed deals to make sure they pencil in the current environment, we also continue to expect our year end twenty twenty five community count to increase in the mid single digit percentage range on a year over year basis, which will provide a strong base to execute from over the next couple of years. As we have stated in the past, we are not focused on growth for the sake of growth alone, and we look to balance pace and price at the community level to optimize our returns. We are also taking a balanced approach towards capital allocation. We repurchased $48,000,000 of our shares in the second quarter or approximately 3% of shares outstanding at the beginning of the quarter, bringing our year to date total to $104,000,000 or 5% of our shares outstanding at the beginning of the year.

Additionally, since the start of 2024, we have repurchased over 8% of our shares outstanding. Our book value per share increased by 10% on a year over year basis to $86.39 a company record. Before turning the call over to Rob, I wanted to highlight that Century was recently recognized as one of the best companies to work for by U. S. News and Work Report.

It is our people that make Century Communities a great company, and I want to thank our team members for all they do to create a culture of excellence in support of our mission of providing our customers a home for every dream. I’ll now turn the call over to Rob to discuss our operations and land position in more detail.

Rob Francescon, Chief Executive Officer and President, Century Communities: Thank you, Dale, and good afternoon, everyone. Our second quarter net new contracts totaled 2,546 homes, with both our orders and absorption rates increasing sequentially in May and June. Our ending community count increased to three twenty seven communities at the end of the second quarter, a record for the company. I would like to point out that all of the net growth in our community count this quarter came in June and especially in the back June, with our April and May community counts below our first quarter ending community count of three eighteen. As a result, our orders in the second quarter did not see a significant benefit from the growth in our quarter end community count.

We currently expect our year end 2025 community count to increase in the mid single digit percentage range, which coupled with our 28% year over year growth for the full year 2024 will provide a strong base for future growth in the years ahead. We had continued success in controlling our costs in the second quarter. Our direct construction costs on the homes we delivered declined by 3% on a year over year basis and 2% sequentially. As housing starts have slowed, our negotiating power has increased, and we expect to see further cost reductions in the quarters ahead. On the land side, our finished lot costs on the homes we delivered in the second quarter were flat on a quarter over quarter basis, similar to the trend that we saw last quarter.

Going forward, we would expect to see some land inflation flow through on our deliveries that will be partially offset by direct cost reductions. As expected, given the competitive pressures in the new home market, our incentives on closed homes increased to approximately ten fifty basis points in the second quarter twenty twenty five, up from roughly 900 basis points in the first quarter. Looking forward, we continue to expect incentive levels to be the largest driver of changes to our gross margins in the near term given our success in managing our costs. We currently expect incentives to increase by up to another 100 basis points in our third quarter closings. During the second quarter, our cycle times continue to improve on a sequential basis and currently sit at approximately four months, and we have not seen any impacts from immigration reform on our labor base so far.

In the second quarter, we started 2,485 homes and similar to the past several quarters have continued our focus on maintaining an appropriate level of spec home inventory by generally matching our starts with our sales. Turning to land. We ended the second quarter with nearly 70,000 owned and controlled lots. Our owned lot count has remained relatively steady since the third quarter of last year, and we have remained disciplined on the land front and continue to underwrite deals to current market assumptions. During the quarter, we were also able to renegotiate a portion of our existing contracts for controlled lots, securing better terms for the most part and lower prices in some cases.

Given our discipline, our controlled lot count decreased by 12,000 lots sequentially as we exited deals that no longer met our criteria, which resulted in approximately $2,600,000 of charges. As we have said in the past, we believe that our low risk, land light business strategy that is primarily based on more traditional option agreements with individual land owners and third party land developers allows us greater flexibility to renegotiate terms versus what could be achieved through an option strategy based on land banking agreements. While the industry as a whole is currently facing headwinds, we remain focused on growing our community count, maintaining a solid balance sheet, being opportunistic with our allocation of capital and building value for our shareholders. I’ll now turn the call over to Scott to discuss our financial results in more detail.

Tyler Langton, Investor Relations, Century Communities: Thank you, Rob. In the second quarter, pretax income was $47,000,000 and net income was 35,000,000 or $1.14 per diluted share. Adjusted net income was $42,000,000 or $1.37 per diluted share. EBITDA for the quarter was $66,000,000 and adjusted EBITDA was $76,000,000 Home sales revenues for the second quarter were $976,000,000 up 10% sequentially on higher deliveries. Our deliveries of 2,587 homes in the second quarter was essentially flat on a year over year basis with elevated mortgage rates and economic uncertainty weighing on order activity.

Our second quarter average sales price of $378,000 decreased by 3% on a year over year basis, primarily due to higher levels of incentives. For the third quarter twenty twenty five, we expect our deliveries to range from 2,300 to 2,500 homes. This estimate is based on our backlog heading into the quarter and anticipated seasonal absorptions. As a reminder, we usually see a sequential decrease in our absorption rates in the third quarter with July and August typically representing some of the slower months of the year. At quarter end, our backlog of sold homes was twelve seventeen valued at $466,000,000 with an average sales price of $383,000 In the second quarter, adjusted homebuilding gross margin was 20% compared to 21.6% in the first quarter of this year.

And homebuilding gross margin, excluding inventory impairment, was 18.4% versus 19.9% in the first quarter. The quarter over quarter differential was driven almost entirely by increased incentive levels. Consistent with the first quarter, purchase price accounting associated with our two acquisitions in 2024 reduced our second quarter twenty twenty five gross margin by 20 basis points. We would expect purchase price accounting to have a similar impact on our homebuilding gross margin in the third and fourth quarters of twenty twenty five. We also took an inventory impairment charge of $7,000,000 in the second quarter related to five communities that were in their closeout phase and located primarily in Florida.

For the third quarter twenty twenty five, we expect our homebuilding gross margin to ease on a sequential basis by up to 100 basis points compared to our second quarter, primarily due to higher levels of incentives. SG and A as a percentage of home sales revenue was 13.2 in the second quarter. Assuming the midpoint of our full year home sales revenue guidance, we expect our SG and A as a percent of home sales revenue to be roughly 13% for the full year 2025, with SG and A as a percentage of home sales revenue of 14% for the third quarter. Revenues from financial services were $23,800,000 in the second quarter, and the business generated pretax income of $6,200,000 Our financial services results benefited from the sale of mortgage servicing rights on loans with $3,000,000,000 of unpaid principal for approximately $47,300,000 This transaction resulted in a gain of $4,000,000 This gain was partially offset by mark to market adjustments related to our mortgage loans held for investment. We currently anticipate that the contribution margin from Financial Services in the back half of the year will more closely resemble our first quarter results.

Our tax rate was 26% in the second quarter twenty twenty five. We continue to expect our full year tax rate for 2025 to be in the range of 25% to 26%, with the increase over our full year 2024 tax rate of 24.1%, primarily driven by a reduced number of homes expected to qualify for 45 l credits. Our second quarter twenty twenty five net homebuilding debt to net capital ratio equaled 31% and compared to first quarter twenty twenty five levels of 30.1%. Our homebuilding debt to capital ratio equaled 33.3% in the second quarter when compared to first quarter twenty twenty five levels of 32.4%. During the quarter, we maintained our quarterly cash dividend of $0.29 per share and also repurchased 884,000 shares of our common stock for $48,000,000 at an average share price of $54.35 or a 37% discount to our book value per share of $86.39 as of the end of the second quarter.

Through the first six months of the year, we have repurchased 1,600,000.0 shares or 5% of our shares outstanding at the beginning of the year. We ended the quarter with $2,600,000,000 in stockholders’ equity and $858,000,000 of liquidity. We also have no senior debt maturities until June, providing us ample flexibility with our leverage management. Turning to guidance. Due to current market conditions, we are revising our full year 2025 home delivery guidance to be in the range of 10,000 to 10,500 homes and home sales revenues to be in the range of 3,800,000,000.0 to $4,000,000,000 In closing, we are taking the necessary steps to address the headwinds facing the market, including reducing our costs, remaining disciplined on the land front and maintaining appropriate level of spec home inventory by matching our starts with our sales.

Given where our shares have been trading, we have been opportunistic with share repurchases while still positioning the company well for future growth that is supported by our lot pipeline, community count and strong balance sheet. With that, I’ll open the lines for questions. Operator?

Conference Operator: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question.

Your first question comes from Rohit from Alex Rygiel of Texas Capital. Please go ahead.

Alex Rygiel, Analyst, Texas Capital: Thank you. Good evening, gentlemen. First question, how are you thinking about your land investment in

Rohit Seth, Analyst, B. Riley: the second half of the year versus the first half?

Rob Francescon, Chief Executive Officer and President, Century Communities: So we’re going to reduce Alex, first off, great to hear from you. But we’re going to reduce our land investment going forward. And as we pointed out, we dropped about 12,000 lots in the second quarter as we’re getting a more disciplined underwriting to bring everything to market now. That was the bulk of things, we believe. But things are being pushed out because, candidly, we don’t need a lot of the lots right now.

So we’re changing the terms to push things out into ’26, and that’s kind of our focus right now. But the big kind of purge, if you will, was in Q2.

Tyler Langton, Investor Relations, Century Communities: Alex, this is Scott. If I could just add on. I think one of the benefits that we’re seeing of our maybe more traditional van light strategy is just our ability to have flexibility within our runway on the lot side. We were able to really move a significant number of lots either out or obtain better pricing with really, really small impact from a feasibility cost perspective.

Rohit Seth, Analyst, B. Riley: Sure. Understood. And then can you talk a little bit about the mortgage products, your buyers are using? And are you seeing any buyers use any ARMs?

Tyler Langton, Investor Relations, Century Communities: Yes. Great question and very topical at the moment. So we’re running about 70% on governmentals, 30% on conventionals, just generally speaking. We’ve really been leaning into the arms really firm kind of

: a late Q1 into Q2, and

Tyler Langton, Investor Relations, Century Communities: we’re certainly seeing the buyer acceptance of that continue to pick up sequentially as the quarter and the year has gone on. Very helpful. Thank you. Good luck. Thank you.

Conference Operator: Your second question comes from Rohit Seth of B. Riley. Just

Rohit Seth, Analyst, B. Riley: on the 2025 deliveries guidance, maybe just talk know, the drivers behind lowering it, what you’re seeing in July, you know, with the traffic, affordability, just any color you can add there. And then my follow-up would be on can you just discuss kinda what you’re seeing across your footprint?

Tyler Langton, Investor Relations, Century Communities: Sure. Absolutely. And this is Scott Rohit. So from a guide perspective, we really step back and look at it and look where our backlog is at the moment going into the quarter, knowing that the third quarter from a demand perspective is generally one of the slowest periods of the year, especially at the beginning of the quarter from July and August. That was really a large driver of the revision that we did, which is looking at to the third quarter.

From a market perspective, I can hit a handful of things here. I think as you run through our various regions, West, for the most part, I think it’s held up as strong as any of our markets. Certainly, we’ve seen a little bit of recent slowing maybe in California. But West, in general, continues to be very strong. Mountain is a little bit of the tale of various different markets.

We see Vegas started out the year very, very strong and has slowed slightly, but it’s still a very strong market for us with maybe Colorado at the moment working through some affordability issues. Moving on to Texas. We have a very small footprint in Dallas. I think Dallas generally has been very challenged. But Houston and San Antonio, which are slightly larger positions from us, are certainly working through some affordability items and some inventory supply.

But where we continue to move product and our margins continue to be rather consistent within Texas. And then I think our strongest market overall really has been Southeast. Atlanta is a large driver of our position in the Southeast as well as Charlotte and Nashville. And generally speaking, I would say that those have held up the best of any of our markets. And then the last piece that an interesting dynamic that we’re really excited to see is our brand, our Century Complete brand, which really attracts even a more affordable buyer type and really attracts and doesn’t compete necessarily directly with some of the larger publics in certain markets.

That has really held up quite well. The Carolinas as well as the Midwest, first since we complete our ones that I would call out, has been quite strong.

Rohit Seth, Analyst, B. Riley: Okay. And if I could squeeze one more in on gross margin. You kind of hit by the 20% on the adjusted side, raising incentives a little bit here. And so are there any offsets that we we should think about? And you talked about lower costs, lower direct costs, labor costs coming in, savings coming in, but you had some higher lands.

Just trying to get a sense of have we touched the bottom here for margins? Or you still got a

Tyler Langton, Investor Relations, Century Communities: little bit more pressure here? Yes, Rohit. Obviously, a little bit difficult I would say on the cost side, we have been very successful in getting direct costs out of our homes, and we believe there’s continued opportunity to do that. We see that flowing through from a deliveries perspective, certainly in the back half of the year.

However, to some degree, that is offset from really some normal inflation on the land side. So apples to apples, rather consistent on the cost side, and we continue to think that incentives as they move through the P and L will be really the largest driver on the margin side.

Alex Rygiel, Analyst, Texas Capital: Thank you.

Tyler Langton, Investor Relations, Century Communities: Absolutely.

Conference Operator: Your third question comes from Alan Ratner of Zelman Associates. Please go ahead.

Alan Ratner, Analyst, Zelman Associates: Hey, guys. Good afternoon. Thanks for all the detail and all the helpful guidance. It’s appreciated. Question, you alluded to this in a prior response to a question, but you walked away from, I think, 12,000 or so lots, but you did allude to renegotiations that are ongoing and even some price concessions from land sellers.

And I’m curious, what type of magnitude are you seeing there? Are you seeing real capitulation yet in the land market? And if so, is there any ability to actually lower land costs on actively selling communities? Or are these more kind of go forward projects that are earlier in the due

Tyler Langton, Investor Relations, Century Communities: It’s more go forward.

Rob Francescon, Chief Executive Officer and President, Century Communities: And we’re not seeing really huge changes in pricing, more on structure of deals, pushing outtakes for a more just in time basis. But in terms of pricing, there is some of that in select markets, but I would not say that’s an overreaching item through all the markets. We have not seen that across the board.

Alan Ratner, Analyst, Zelman Associates: Got it. Okay. Second question, if I look at your margin guidance for third quarter, take roughly the down 100 basis points on gross margin and the 14% on SG and A. I’m getting to a pretax margin in the low single digit range overall, which would definitely be the lowest level we’ve seen in quite a while. And that’s traditionally a level I would imagine where if that’s a company average, there’s a decent number of projects that are closer to breakeven.

So do you have any disclosure you give in terms of I know some builders give, like, an an impairment watch list, you know, what percentage of communities are on on that watch list that have indicators of potential impairment?

Tyler Langton, Investor Relations, Century Communities: Yes, Alan. All of our required disclosures, including how we evaluate it, which is consistent with the industry, will be in our 10 Q, which is filed later today. One important item to note is the gross margin item that we called out is really ex the impairment. The $7,000,000 impairment, from our perspective, is really directly related to a handful of communities that were in closeout they really decided to get aggressive on pricing. I think we would need to see the market deteriorate rather significantly from here for there to be significant additional impairments.

Alan Ratner, Analyst, Zelman Associates: Okay. Yes. I was just referring to more you did, I think, 20% this quarter ex impairments, and capitalized interest. Interest is running about a point and a half, so that that’s more like 18 and a half less the 14% s g and a. That that’s just how I was getting there.

Tyler Langton, Investor Relations, Century Communities: Yeah. Correct. And one, you know, one one little note just on the on the on the specific gap requirement of of impairment, you you ignore the SG and A. It’s just direct cost in and out. So it’s really much more akin to your gross margin than your pretax.

Alan Ratner, Analyst, Zelman Associates: Okay. That’s helpful. Appreciate that. Thanks, guys.

Tyler Langton, Investor Relations, Century Communities: Absolutely. Yep. Thank you.

Conference Operator: Your fourth question comes from Michael Rehaut of JPMorgan. Please go ahead.

Andrew Ozzi, Analyst, JPMorgan: Hi, everyone. This is Andrew Ozzi on for Michael Rehaut. I appreciate you taking my questions. Just wanted to kinda appreciate all the color you’ve given so far. Would love to drill down if possible on on you know, I think we talked about July a bit.

Would love to get a a sense of what happened April, May to June. And and given the volatility with rates, what are you were seeing in terms of your sales pace versus your expectations month to month?

Tyler Langton, Investor Relations, Century Communities: Yes, absolutely. So pretty consistent with some of the items that we outlined in the prepared remarks. We saw sequential improvement from a sales perspective throughout the month.

: So May was significantly better than April, and

Tyler Langton, Investor Relations, Century Communities: June was significantly better than May. I think consistent with maybe some of the commentary that you may have heard from others, the June was certainly very strong, taking advantage of some of the dips and rates. And then we’ve paused at the July, and it’s been a little bit choppy so far within July. And so that’s, from a cadence perspective, really where we’ve been at from a sales perspective.

Andrew Ozzi, Analyst, JPMorgan: Got it. And then in terms of potential, incremental Canadian tariffs on lumber, can you provide maybe your exposure to Canadian lumber versus U. S. Source and what kind of impact you’d expect?

Tyler Langton, Investor Relations, Century Communities: Yes, absolutely. So obviously, difficult to tell the exact impact at the moment. We need to wait to see until those additional tariffs are potentially finalized here. We generally source between 2030% of our lumber from Canada. It’s market dependent, but from a general rule, would be our exposure.

And certainly, we’re not seeing that currently running through any cost, but we’ll just have to see where where that lands going forward.

Andrew Ozzi, Analyst, JPMorgan: Got it. Much appreciated. I’ll pass it on. Thank you.

Tyler Langton, Investor Relations, Century Communities: Absolutely.

Conference Operator: For your next question, Ken Zener of Seaport Research Partners. Please go ahead. You there, Ken?

Tyler Langton, Investor Relations, Century Communities: Hey, Ken. We can’t hear you if you’re on. Hello? Hello? Ken, we heard you.

Alex Rygiel, Analyst, Texas Capital: Oh, you did? Okay. Can.

Tyler Langton, Investor Relations, Century Communities: Yeah. We got you now.

Alex Rygiel, Analyst, Texas Capital: Thank you for the time. So orders down a community count up more attributable to quarter end inventory excuse me, community growth. So I understand that. But the orders are still down, like, in the West quite a bit and the mountains specifically. Could you kinda provide details around, you know, what that driver was versus, you know, the baseline that you guys were, I don’t know, like, yeah, doing less bad than you guys printed, I guess, is what I’m asking?

Like, what what was the driver of that?

Tyler Langton, Investor Relations, Century Communities: Sure. I mean, there’s a handful of factors, obviously, that’s playing itself into it. You know, from from a from an overall perspective, you know, the

: way the way the quarter really played itself out from

Tyler Langton, Investor Relations, Century Communities: the consumer demand perspective was the sequential growth from May to April and obviously June to April. It was something that we experienced, but April certainly was off from March. So that was part of the driver from an absorption standpoint. The other item that we called out really in our prepared remarks is really the significant amount of the community count did come online in the back half of the year or excuse me, of the quarter, with most of it really coming online in June. And so that’s some of the dynamics that you’re seeing flow themselves through Mountain in particular.

Alex Rygiel, Analyst, Texas Capital: So the 51, I assume, quarter end community count versus 47, which is up. Right. You’re suggesting of the or not suggesting. Mean, I’m not trying to pin you down here, but with orders down, contracts down 39%. Is that fair to think that over half of that was attributable to an average community count being below the quarter end community count,

Tyler Langton, Investor Relations, Century Communities: is what you’re suggesting? Yeah. Without without quantifying that, that specifically, and potentially, we can walk through some of the details. Our the majority of the community count growth coming in Mountain occurred in June and therefore wasn’t open throughout the entire Okay. Period.

Yeah.

Alex Rygiel, Analyst, Texas Capital: So it’s not to be that’s where it was most expressed is what you’re saying, the late or the community average community count. That’s not necessarily a mountain century communities issue. It’s just just that community count not being available there. Okay. Do appreciate that.

Do you guys have any comment on what you think if if I wasn’t mistaken, did I hear you correctly saying your units under construct well, with your starts at $24.85 is that correct?

Tyler Langton, Investor Relations, Century Communities: That’s right.

Alex Rygiel, Analyst, Texas Capital: Do you expect kind of the starts to reflect the orders growth as it has been more or less into the back half?

Rob Francescon, Chief Executive Officer and President, Century Communities: More or less. Yes. More or less.

Alex Rygiel, Analyst, Texas Capital: And then more or less, what do you guys expect your inventory, you know, your units under construction, right? So wherever you are now, which you don’t disclose, but, like, starts closings. We can kinda get there. Do you what what’s the magnitude that you expect that to be down in the fourth quarter year over year?

Tyler Langton, Investor Relations, Century Communities: Know, Ken, I think I think in all honesty, it’s really yeah. I think I I think to some degree, it’s dependent on where the market is in terms of our ability to continue to drive starts. So we began the year with, obviously, a little bit of a higher level of units either under construction and or finished. And we’re really focused on working those down to levels that we feel feel, quite frankly, very confident in putting more units out into the market for the back half of the year to extent that we believe we believe that the market continues to support that level of starts. So it’ll be market dependent and demand dependent on an individual market basis.

Alex Rygiel, Analyst, Texas Capital: Excellent. And the last question, which I’ve been asking builders, is it’s the census data has inventory, you know, for sale, three categories, complete, under construction, not started. But do you guys respond to Census Bureau requests for, you know, inventory or sales or any of that type of information? Do you provide them data is what I’m asking you?

Tyler Langton, Investor Relations, Century Communities: Ken, I don’t believe we provide them specific inventory data, from a census on a regular basis.

Alex Rygiel, Analyst, Texas Capital: Thank you very much. It’s it’s interesting. I don’t know what builder is, so it’s getting to be interesting. Thank you very much, Jonas.

Tyler Langton, Investor Relations, Century Communities: Absolutely. Your

Conference Operator: next question comes from Alex Barron of Housing Research Center. Please go ahead.

: Yes. Thank you. I think I heard you say that the build times currently are around four months. I That’s was wondering, is there any room for improvement from that level? Do you feel that’s about as efficient as the business gets?

And if there is, is there any other initiatives you guys are potentially trying such as vertical integration or acquiring

Rob Francescon, Chief Executive Officer and President, Century Communities: certain trades or anything like that? So as far as acquiring certain trades, Alex, we have not been looking at that. But in terms of improving cycle times, sequentially each quarter, they’ve gotten better. Candidly, month by month, they’ve gotten better. That four months is a consolidated average.

We have homes, some that are being built in the low seventy day range, certainly a lot in the eighty 90. And we have other product specific and basement markets where the time frame may be a little bit longer than that four month period. But on average, that’s what we’re doing. We do see that potentially even getting better over time. But that has been a bright spot that we’re continuing to reduce that down.

: Got it. And as far as, you know, incentives, especially as it pertains to finished spec inventory, are you guys primarily just doing rate buy downs or are you also having to do price cuts?

Tyler Langton, Investor Relations, Century Communities: It’s a mixture of both. Certainly, our most aggressive opportunities on the mortgage side are generally geared towards our slowing moving communities, aged inventory and our consumer profiles that need that assistance. It generally is a mix of both, however.

: Got it. Well, best of luck, guys. Thank you.

Tyler Langton, Investor Relations, Century Communities: Thanks, Alex. Thank you.

Conference Operator: There are no further questions at this time. I will now turn the call over to Dale. Please continue.

Tyler Langton, Investor Relations, Century Communities: To everyone on the call, thank you for your time today and interest in Century Communities. To our team members, thank you for your hard work, dedication to Century and commitment to our valued homebuyers.

Conference Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now

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