Century Communities, Inc. (NYSE:CCS) Q3 2024 Earnings Conference Call October 23, 2024 5:00 PM ET

Company Participants

Tyler Langton - SVP, IR
Dale Francescon - Chairman and Co-CEO
Rob Francescon - Co-CEO and President
Scott Dixon - CFO

Conference Call Participants

Carl Reichardt - BTIG
Ken Zener - Seaport Research Partners
Alex Rygiel - B. Riley FBR
Alan Ratner - Zelman & Associates
Jay McCanless - Wedbush Securities
Andrew Azzi - JP Morgan
Alex Barron - Housing Research Center

Operator

Greetings. Welcome to Century Communities' Third Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode [Operator Instructions]. Please note this event is being recorded.

I would now like to turn the floor over to Tyler Langton, Senior Vice President of Investor Relations of Century Communities. Thank you, you may begin.

Tyler Langton

Good afternoon. Thank you for joining us today for Century Communities' earnings conference call for the third quarter 2024. 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-K 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, Chairman and Co-Chief Executive Officer; Rob Francescon, Co-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.

Dale Francescon

Thank you, Tyler. And good afternoon, everyone. We're very pleased with our results in the third quarter of 2024, which positions us well for the balance of the year 2025 and beyond. Our community count increased 21% year-over-year and 15% sequentially to a new company record of 305 communities. Deliveries of 2,834 homes were a third quarter record and increased 25% versus the prior year quarter and by 8% quarter-over-quarter while our home sales revenues of $1.1 billion posted gains of 29% and 10% respectively. Our adjusted homebuilding gross margin of 23.6% was roughly in line with second quarter 2024 levels of 24%, while our SG&A as a percentage of home sales revenues declined by 100 basis points year-over-year and 50 basis points sequentially as we continue to leverage our fixed costs. Turning to sales, our third quarter net new contracts of 2,563 increased by 19% year-over-year. We saw growth in all of our regions during the quarter with the West increasing by 36%, Texas by 20% and Century Complete by 17% versus the prior year quarter. Within the quarter, our orders increased sequentially in both August and September while our orders so far in October have moderated from September levels as buyers adjust to the recent increase in mortgage rates. Looking out to the fourth quarter, if typical seasonality holds, we would expect our per community order activity to remain consistent on a sequential basis.