Smith Douglas Homes Corp.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 4 November 2026: press release. The quarter’s numbers.

Key takeaways

Orders and backlog both grew: Net new home orders rose 13% to 777 and backlog homes rose 25% to 947 at quarter end. Nine-month net new orders were 2,728, against 2,194 a year earlier. Source
Diluted EPS and pretax income fell: Diluted EPS was $0.07 against $0.24 a year earlier. Pretax income was $3.3 million against $17.2 million. Source
Gross margin fell to 16.3%: Home closing gross margin was 16.3% against 21.0%. Cost of home closings rose to $219.8 million from $207.1 million, while revenue rose 0.2%. Source
Higher rates weighed on demand: Management attributed pressure on buyer demand and profitability to higher mortgage rates and affordability pressures. Source
Near-term conditions expected challenging: Management said it expects market conditions to remain challenging in the near term, and that it remains confident in long-term demand for affordable housing. Source
Debt-to-book capitalization rose: Debt-to-book capitalization was 18.8%, up from 13.2% at June 30, 2026 as reported in the previous release, and from 9.0% at December 31, 2025. Source

“We continued to execute with discipline during the third quarter despite increasingly challenging housing market conditions,”
Greg Bennett, Chief Executive Officer and Vice Chairman of Smith Douglas Homes

Results and growth drivers

Closings and revenue rose slightly: Home closings rose 5% to 831 and home closing revenue rose 0.2% to $262.5 million. Nine-month closings were 2,294, up 8%, with nine-month home closing revenue of $741,979 thousand. Source
Orders and backlog both grew: Net new home orders rose 13% to 777 and backlog homes rose 25% to 947 at quarter end. Nine-month net new orders were 2,728, against 2,194 a year earlier. Source
Diluted EPS and pretax income fell: Diluted EPS was $0.07 against $0.24 a year earlier. Pretax income was $3.3 million against $17.2 million. Source
Attributable net income declined: Net income attributable to Smith Douglas Homes Corp. was $577 thousand against $2,126 thousand. Nine-month attributable net income was $1,388 thousand against $7,174 thousand. Source

Segments and regions

Southeast closings up, revenue down: Southeast closings rose to 505 from 493, while segment revenue fell 2% and ASP of homes closed fell 4%. Southeast net income was $12.1 million against $20.9 million. Source
Central closings and revenue rose: Central closings rose 11% to 326 and revenue rose 4%, while Central ASP of homes closed fell 6%. Central net income was $3.1 million against $5.4 million. Source
Southeast backlog grew sharply: Southeast backlog rose 45% to 622 homes, with contract value up 33%. Central backlog fell 2% to 325 homes. Source
Other category loss widened: The Other category, covering corporate overhead and non-reportable homebuilding, recorded a net loss of $12.1 million against $10.0 million in the prior-year quarter. Source

“We believe our differentiated operating model and commitment to providing affordable, quality homes position us well to navigate the current environment.”
Greg Bennett, Chief Executive Officer and Vice Chairman of Smith Douglas Homes

Margins, costs and pricing

Gross margin fell to 16.3%: Home closing gross margin was 16.3% against 21.0%. Cost of home closings rose to $219.8 million from $207.1 million, while revenue rose 0.2%. Source
Selling and admin costs rose: SG&A costs were $40,380 thousand against $36,088 thousand in the quarter, and $118,206 thousand against $103,789 thousand for the nine months. Source
Price per home declined: ASP of net new home orders was $317 thousand against $336 thousand, and ASP of homes closed was $316 thousand against $333 thousand. Source
Cost and absorption focus cited: Management said its teams focus on managing costs, building efficiently and maintaining a steady absorption pace. Source

Demand and the order book

Higher rates weighed on demand: Management attributed pressure on buyer demand and profitability to higher mortgage rates and affordability pressures. Source
Cancellations near prior-year level: The cancellation rate was 11.3% against 11.2% a year earlier. The previous release reported 12.7% for the second quarter. Source
Order and backlog value rose: Contract value of net new home orders was $246,096 thousand against $231,818 thousand. Backlog contract value was $305,266 thousand against $258,732 thousand. Source
Near-term conditions expected challenging: Management said it expects market conditions to remain challenging in the near term, and that it remains confident in long-term demand for affordable housing. Source

“Our disciplined approach to capital allocation and land investment remains particularly important in today’s operating environment,”
Russ Devendorf, Executive Vice President and Chief Financial Officer

Land, communities and lots

Active communities rose 15%: Active communities were 113 at quarter end, up from 110 at June 30, 2026 and 98 a year earlier. Source
Total controlled lots rose 2%: Total controlled lots were 24,724, up 2%. Optioned lots were 22,693, up 1%, and homes under construction plus owned lots were 2,031, up 17%. Source
Southeast lots fell: Southeast controlled lots were 15,756, down 2%, and Southeast owned lots, including homes under construction, rose 17% to 1,124. Source
Land-light model cited: Management said its land-light model, cycle times and conservative balance sheet give flexibility through periods of weaker demand. Source

Capital, cash and leverage

Debt-to-book capitalization rose: Debt-to-book capitalization was 18.8%, up from 13.2% at June 30, 2026 as reported in the previous release, and from 9.0% at December 31, 2025. Source
Notes payable up, cash down: Notes payable were $101,420 thousand against $44,075 thousand at December 31, 2025. Cash was $5,922 thousand against $12,741 thousand. Source
Operating cash outflow narrowed: Nine-month cash used in operating activities was $28,486 thousand against $41,094 thousand. Investing outflow was $903 thousand against $5,573 thousand. Source
Inventory rose on balance sheet: Real estate inventory was $386,530 thousand against $298,637 thousand at December 31, 2025, and $331,216 thousand at June 30, 2026. Source

Share repurchases and share count

Third-quarter buybacks were small: The company repurchased 28,370 shares for $0.3 million in the quarter. The previous release reported 312,351 shares for $4.4 million in the second quarter. Source
Class A shares outstanding fell: Class A shares outstanding were 8,364,617 at September 30, 2026, against 8,386,996 at June 30, 2026. Source
Non-controlling holders took most income: Net income attributable to non-controlling interests was $2,454 thousand of the $3,031 thousand total net income in the quarter. Source

Strategy and management priorities

Priorities centre on efficiency and finances: Management said its priorities continue to be running an efficient homebuilding operation and preserving financial strength. Source
Liquidity and inventory focus: The CFO named preserving liquidity, managing inventory and generating returns on invested capital as current focus areas. Source
Positioning to emerge from period: The CFO said the company aims to emerge from the current period in a competitive position. Source

Adjusted net income and tax rate

Adjusted net income fell: Adjusted net income was $2,409 thousand in the quarter against $12,996 thousand, and $6,910 thousand for nine months against $40,702 thousand. Source
Tax rate assumptions shown: The release states a 27.2% blended federal and state tax rate for 2026 and 24.6% for 2025 in calculating adjusted net income. Source
Tax-effected adjustments reconciled: Tax-effected adjustments were $901 thousand in the quarter against $4,240 thousand, moving net income to the adjusted figure. Source

Figures management reported

Figure	Reported
Home closings Source	831
Net new home orders Source	777
Backlog homes (period end) Source	947
Active communities (period end) Source	113
Total controlled lots (period end) Source	24,724
ASP of homes closed Source	$316 thousand
Cancellation rate Source	11.3%

Risks management discussed

Demand: Management cited higher mortgage rates and affordability pressures as weighing on buyer demand and profitability. Source
External: Management said market conditions are expected to remain challenging in the near term. Source
Financial: Management named preserving liquidity and managing inventory as focus areas in the current environment. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Smith Douglas Homes Reports Third Quarter 2026 Results

ATLANTA, November 4, 2026 (Business Wire) - Smith Douglas Homes Corp. (NYSE: SDHC) (“Smith Douglas” or the “Company”) today announced third quarter results for the three and nine months ended September 30, 2026.

Q3 2026 Results as compared to Q3 2025:

Home closings increased 5% to 831
Home closing revenue increased 0.2% to $262.5 million
Home closing gross margin of 16.3% compared to 21.0%
Net new home orders increased 13% to 777
Backlog homes increased 25% to 947
Pretax income of $3.3 million compared to $17.2 million
Earnings of $0.07 per diluted share compared to $0.24
Debt-to-book capitalization of 18.8% compared to 9.0% at December 31, 2025
Active community count increased 15% to 113 at quarter end
Total controlled lots increased 2% to 24,724
Repurchased 28,370 shares of Class A common stock for $0.3 million

“We continued to execute with discipline during the third quarter despite increasingly challenging housing market conditions,” said Greg Bennett, Chief Executive Officer and Vice Chairman of Smith Douglas Homes. “Higher mortgage rates and affordability pressures have weighed on buyer demand and profitability, but our teams remain focused on things we can control with respect to managing costs, building efficiently, and maintaining a steady absorption pace. We believe our differentiated operating model and commitment to providing affordable, quality homes position us well to navigate the current environment.”

Mr. Bennett continued, “While we expect market conditions to remain challenging in the near term, we remain confident in the long-term demand for affordable housing. Our priorities continue to be running an efficient homebuilding operation and preserving our financial strength while remaining prepared to take advantage of opportunities as conditions improve.”

“Our disciplined approach to capital allocation and land investment remains particularly important in today’s operating environment,” said Russ Devendorf, Executive Vice President and Chief Financial Officer. “Our land-light operating model, efficient construction cycle times, and conservative balance sheet provide us with the flexibility to manage through periods of weaker demand without compromising our long-term objectives. We remain focused on preserving liquidity, managing inventory, and generating attractive returns on invested capital, while positioning Smith Douglas to emerge from this challenging period in a strong competitive position.”

Conference Call & Webcast Information

Management will host a conference call to discuss the Company’s results at 8:30 a.m. Eastern Time on November 4, 2026. Interested parties can dial in using the numbers below or access the call via a webcast link provided in the investor relations section of the Company’s website.

To join with dial-in:

Local: (+1) 585-542-9983

Toll Free: (+1) 833-461-5787

Conference ID: 245281666

A replay of the call will be available on the Company’s website shortly after the call concludes.

About Smith Douglas Homes

Headquartered in Woodstock, Georgia, Smith Douglas Homes completed its initial public offering in January 2024. Since its inception, Smith Douglas has been entrusted by over 20,000 families to fulfill their new home dreams. Ranked a top 50 builder nationally for several years and with 2,908 closings in 2025, Smith Douglas currently holds the #33 position on the Builder Magazine Top 100 list. The Smith Douglas communities are primarily targeted to entry-level and empty-nest homebuyers looking to purchase a new home priced below the Federal Housing Administration loan limit in the metro areas of Atlanta, Birmingham, Central Georgia, Charlotte, Chattanooga, Dallas-Fort Worth, Greenville, Houston, Huntsville, Nashville, Raleigh, and the Alabama Gulf Coast. Smith Douglas offers its homebuyers a personalized, affordable buying experience at attractive prices, delivering exceptional value and quality.

Forward-Looking Statements

Forward-looking statements notice

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the Company’s performance, growth, strategic plans and opportunities, financial position, ability to navigate the changing homebuilding landscape in the macroeconomic environment, and the timing of any of the foregoing. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. These forward-looking statements are based on management’s current estimates and expectations. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

Smith Douglas Homes

Condensed Consolidated Statements of Income

(Unaudited, in thousands, except share and per share amounts)

	Three months ended September 30,		Nine months ended September 30,
	2026	2025	2026	2025
Home closing revenue	$262,509	$262,041	$741,979	$710,687
Cost of home closings	219,791	207,071	610,889	550,248
Home closing gross profit	42,718	54,970	131,090	160,439
Selling, general and administrative costs	40,380	36,088	118,206	103,789
Equity in income from unconsolidated entities	(791)	(640)	(2,104)	(1,457)
Interest expense	66	898	1,554	2,336
Other (income) expense, net	(247)	1,388	3,941	1,789
Income before income taxes	3,310	17,236	9,493	53,982
Provision for income taxes	279	1,021	632	2,622
Net income	3,031	16,215	8,861	51,360
Net income attributable to non-controlling interests	2,454	14,089	7,473	44,186
Net income attributable to Smith Douglas Homes Corp.	$577	$2,126	$1,388	$7,174

	Three months ended September 30,				Nine months ended September 30,
	2026		2025		2026		2025
Earnings per share:
Basic	$0.07		$0.24		$0.16		$0.80
Diluted	$0.07		$0.24		$0.16		$0.78
Weighted average shares of common stock outstanding:
Basic		8,387,619		9,017,398		8,593,432		8,994,810
Diluted		8,387,619		9,056,364		8,593,432		9,192,482

Smith Douglas Homes

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

	September 30, 2026	December 31, 2025
	(Unaudited)
Assets
Cash and cash equivalents	$5,922	$12,741
Real estate inventory	386,530	298,637
Deposits on real estate under option or contract	140,591	138,763
Real estate not owned	14,535	28,051
Property and equipment, net	8,724	9,720
Goodwill	25,726	25,726
Deferred tax asset, net	9,687	9,666
Other assets	42,129	34,289
Total assets	$633,844	$557,593
Liabilities and Equity
Liabilities:
Accounts payable	$37,880	$1,938
Customer deposits	7,534	3,108
Notes payable	101,420	44,075
Liabilities related to real estate not owned	14,535	28,051
Accrued expenses and other liabilities	26,362	26,428
Tax receivable agreement liability	9,382	9,857
Total liabilities	197,113	113,457
Commitments and contingencies (Note 9)
Equity:
Preferred stock, $0.0001 par value - 10,000,000 shares authorized; none issued and outstanding as of September 30, 2026 and December 31, 2025	-	-
Class A common stock, $0.0001 par value - 250,000,000 shares authorized; 9,109,212 and 9,017,708 shares issued; 8,364,617 and 9,017,708 shares outstanding as of September 30, 2026 and December 31, 2025, respectively	1	1
Class B common stock, $0.0001 par value - 100,000,000 shares authorized; 42,435,897 shares issued and outstanding as of September 30, 2026 and December 31, 2025	4	4
Additional paid-in capital	63,616	60,610
Retained earnings	27,501	26,113
Treasury stock, at cost	(9,815)	-
Total stockholders’ equity attributable to Smith Douglas Homes Corp.	81,307	86,728
Non-controlling interests attributable to Smith Douglas Holdings LLC	355,424	357,408
Total equity	436,731	444,136
Total liabilities and equity	$633,844	$557,593

Smith Douglas Homes

Summary Cash Flow Information

(Unaudited, dollars in thousands)

Nine months ended September 30,		2026		2025
Net cash used in operating activities	$(28,486)		$(41,094)
Net cash used in investing activities	(903)		(5,573)
Net cash provided by financing activities	22,570		39,079
Net decrease in cash and cash equivalents	(6,819)		(7,588)
Cash and cash equivalents, beginning of period	12,741		22,363
Cash and cash equivalents, end of period	$5,922		$14,775

Smith Douglas Homes

Selected Other Operating Data

(Unaudited, dollars in thousands)

	Three months ended September 30,		Nine months ended September 30,
	2026	2025	2026	2025
Home closings	831	788	2,294	2,128
ASP of homes closed	$316	$333	$323	$334
Net new home orders	777	690	2,728	2,194
Contract value of net new home orders	$246,096	$231,818	$881,401	$737,957
ASP of net new home orders	$317	$336	$323	$336
Cancellation rate	11.3%	11.2%	11.1%	9.7%
Backlog homes (period end)	947	760	947	760
Contract value of backlog homes (period end)	$305,266	$258,732	$305,266	$258,732
ASP of backlog homes (period end)	$322	$340	$322	$340
Active communities (period end)	113	98	113	98
Controlled lots (period end):
Homes under construction	1,514	1,098	1,514	1,098
Owned lots	517	641	517	641
Optioned lots	22,693	22,561	22,693	22,561
Total controlled lots	24,724	24,300	24,724	24,300

(1)The cancellation rate is the total number of cancellations during the period divided by the total gross new home orders during the period.

(2)Backlog homes (period end) is the number of homes in backlog from the previous period plus the number of net new home orders generated during the current period minus the number of homes closed during the current period.

(3)A community becomes active once the model is completed or the community has its first sale. A community becomes inactive when it has fewer than two homes remaining to sell.

Smith Douglas Homes

Selected Financial Information by Segment

(Unaudited, dollars in thousands)

Home Closing Revenue

Three months ended September 30,				2026				2025	Period over period change
	Home closing revenue	Home closings	ASP of homes closed		Home closing revenue	Home closings	ASP of homes closed		Home closing revenue	Home closings	ASP of homes closed
Southeast	$163,178	505	$323		$166,625	493	$338		(2)%	2%	(4)%
Central	99,331	326	305		95,416	295	323		4%	11%	(6)%
Total	$262,509	831	$316		$262,041	788	$333		- %	5%	(5)%

Nine months ended September 30,				2026				2025	Period over period change
	Home closing revenue	Home closings	ASP of homes closed		Home closing revenue	Home closings	ASP of homes closed		Home closing revenue	Home closings	ASP of homes closed
Southeast	$453,251	1,372	$330		$446,110	1,292	$345		2%	6%	(4)%
Central	288,728	922	313		264,577	836	316		9%	10%	(1)%
Total	$741,979	2,294	$323		$710,687	2,128	$334		4%	8%	(3)%

Backlog

As of September 30,				2026				2025	Period over period change
	Backlog homes	Contract value of backlog homes	ASP of backlog homes		Backlog homes	Contract value of backlog homes	ASP of backlog homes		Backlog homes	Contract value of backlog homes	ASP of backlog homes
Southeast	622	$201,644	$324		430	$151,463	$352		45%	33%	(8)%
Central	325	103,622	319		330	107,269	325		(2)%	(3)%	(2)%
Total	947	$305,266	$322		760	$258,732	$340		25%	18%	(5)%

Controlled Lots

As of September 30,				2026				2025	Period over period change
	Owned	Optioned	Total Controlled		Owned	Optioned	Total Controlled		Owned	Optioned	Total Controlled
Southeast	1,124	14,632	15,756		961	15,039	16,000		17%	(3)%	(2)%
Central	907	8,061	8,968		778	7,522	8,300		17%	7%	8%
Total	2,031	22,693	24,724		1,739	22,561	24,300		17%	1%	2%

(1)Includes homes under construction and owned lots.

Net Income

	Three months ended September 30,			Nine months ended September 30,
	2026	2025	Period over period change	2026	2025	Period over period change
Southeast	$12,073	$20,854	$(8,781)	$35,127	$66,700	$(31,573)
Central	3,083	5,393	(2,310)	14,384	18,748	(4,364)
Segment total	15,156	26,247	(11,091)	49,511	85,448	(35,937)
Other	(12,125)	(10,032)	(2,093)	(40,650)	(34,088)	(6,562)
Total	$3,031	$16,215	$(13,184)	$8,861	$51,360	$(42,499)

(1)Other primarily includes homebuilding operations in non-reportable segments, corporate overhead costs, such as payroll and benefits, business insurance, information technology, office costs, outside professional services and travel costs, and certain other amounts that are not allocated to the reportable segments.

Non-GAAP Financial Measures

In addition to our results determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”), this press release includes net debt-to-net book capitalization and adjusted net income.

Net debt-to-net book capitalization

Net debt-to-net book capitalization is a supplemental measure of our leverage that is not required by, or presented in accordance with, GAAP and should not be considered as an alternative to debt-to-book capitalization or any other measure derived in accordance with GAAP. We caution investors that amounts presented in accordance with our definition of net debt-to-net book capitalization may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate this non-GAAP financial measure in the same manner. We present this non-GAAP financial measure because we consider it to be an important supplemental measure of our leverage and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry.

We define net debt-to-net book capitalization as:

Total debt, less cash and cash equivalents, divided by
Total debt, less cash and cash equivalents, plus equity.

This non-GAAP financial measure has limitations as an analytical tool in that it subtracts cash and cash equivalents and therefore may imply that the Company has less debt than the most comparable measure determined in accordance with GAAP. Because of this limitation, this non-GAAP financial measure should be considered along with other financial measures presented in accordance with GAAP. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. We have reconciled this non-GAAP financial measure with the most directly comparable GAAP financial measure in the following table:

As of (in thousands, except percentages)	September 30, 2026	December 31, 2025
Notes payable	$101,420	$44,075
Equity	436,731	444,136
Total capitalization	$538,151	$488,211
Debt-to-book capitalization	18.8%	9.0%
Notes payable	$101,420	$44,075
Less: cash and cash equivalents	5,922	12,741
Net debt	95,498	31,334
Equity	436,731	444,136
Total net capitalization	$532,229	$475,470
Net debt-to-net book capitalization	17.9%	6.6%

Adjusted net income

Adjusted net income is not a measure of net income or net income margin as determined by GAAP. Adjusted net income is a supplemental non-GAAP financial measure used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies. We define adjusted net income as net income adjusted for the tax impact using an applicable federal and state blended tax rate (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented).

Management believes adjusted net income is useful because it allows management to more effectively evaluate our operating performance and comparability to industry peers who record income tax expense on their income before tax as opposed to the income of Smith Douglas Holdings LLC not being taxed at the entity level and, therefore, not reflecting a charge against earnings for income tax expense. Adjusted net income should not be considered as an alternative to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. Our computation of adjusted net income may not be comparable to adjusted net income of other companies. We present adjusted net income because we believe it provides useful information regarding our comparability to peers.

The following table presents a reconciliation of adjusted net income to the GAAP financial measure of net income for each of the periods indicated (in thousands):

	Three months ended September 30,		Nine months ended September 30,
	2026	2025	2026	2025
Net income	$3,031	$16,215	$8,861	$51,360
Provision for income taxes	279	1,021	632	2,622
Income before income taxes	3,310	17,236	9,493	53,982
Tax-effected adjustments	901	4,240	2,583	13,280
Adjusted net income	$2,409	$12,996	$6,910	$40,702

(1)For the three and nine months ended September 30, 2026 and 2025, our tax expenses assume a 27.2% and 24.6% federal and state blended tax rate, respectively, (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented).

Contacts
Joe Thomas investors@smithdouglas.com