Century Communities, Inc. (CCS) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reflects strong financial performance with record net orders, reduced costs, and improved cash flow. Despite a slight decline in average sales price and gross margin, the optimistic guidance and strategic share repurchases suggest positive sentiment. The Q&A reveals management's cautious optimism for the spring selling season and confidence in operational efficiencies, which further supports a positive outlook. Considering the market cap, the stock is likely to see a positive movement of 2% to 8% over the next two weeks.
Key Financial Performance
Residential Units Delivered 3,435 units in Q4 2025, including 3,030 new homes, 105 previously leased rental homes, and 300 multifamily units. Full year total: 10,792 units. Reasons: Focus on increasing sales pace and use of price and financing incentives.
Net Orders 2,702 homes in Q4 2025, a company record, up 13% sequentially. Reasons: Improved absorption rates and focus on older, higher-cost communities.
Direct Construction Costs Reduced by an average of $13,000 per home for the full year 2025. Reasons: Operational efficiencies and faster build times.
Cycle Times Reduced by 13 days to 114 calendar days in 2025. Reasons: Faster build times and operational improvements.
SG&A (excluding commissions and advertising) Decreased by 5% year-over-year in 2025. Reasons: Cost reduction efforts.
Cash Flow from Operations $153 million in 2025, up from $126 million in 2024. Reasons: Operational efficiencies and land investments.
Home Sales Revenues $1.1 billion in Q4 2025, up 16% sequentially. Reasons: Increased deliveries and higher volumes.
Average Sales Price (ASP) $367,000 in Q4 2025, down 5% quarter-over-quarter. Reasons: Increased incentive levels.
GAAP Homebuilding Gross Margin 15.4% in Q4 2025, negatively impacted by 100 basis points of inventory impairment and 10 basis points of purchase price accounting.
Adjusted Homebuilding Gross Margin 18.3% in Q4 2025. Reasons: Excludes inventory impairment and purchase price accounting.
Mortgage Capture Rate 84% in Q4 2025 and full year 2025, a record. Reasons: Strong financial services performance.
Net Homebuilding Debt to Net Capital Ratio Improved to 25.9% in Q4 2025 from 31.4% in Q3 2025. Reasons: Debt reduction and operational efficiencies.
Stock Repurchases 2.3 million shares repurchased in 2025, 7% of shares outstanding, at an average price of $63.32. Reasons: Attractive valuation levels.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Residential Units Delivered: Delivered 3,435 residential units in Q4 2025, including 3,030 new homes, 105 previously leased rental homes, and 300 multifamily units. Full-year deliveries totaled 10,792 units.
New Home Deliveries Guidance: For 2026, new home deliveries are expected to range from 10,000 to 11,000 homes.
Multifamily Segment: Sold a 300-unit multifamily community for $97 million in Q4 2025.
Land Acquisition and Development: Invested $1.2 billion in land acquisition and development in 2025, with plans to maintain similar levels in 2026.
Community Count: Average community count increased by 13% in 2025 to 318 communities. Year-end count was 305, with expectations for low to mid-single-digit percentage growth in 2026.
Construction Costs and Cycle Times: Reduced direct construction costs by $13,000 per home and cycle times by 13 days to a record 114 calendar days in 2025.
Incentives and Margins: Increased incentives on closed homes to 1,300 basis points in Q4 2025, impacting margins. Adjusted homebuilding gross margin was 18.3%.
SG&A Efficiency: Reduced SG&A (excluding commissions and advertising) by 5% year-over-year in 2025.
Land Strategy: Focused on a traditional land option strategy, securing 26,000 lots with nonrefundable deposits totaling $74 million, providing flexibility and reduced risk.
Share Repurchases: Repurchased 7% of shares outstanding in 2025, returning $178 million to shareholders through dividends and buybacks.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Market Conditions: The company faces challenges from slower market conditions, which have impacted sales pace and required the use of increased incentives to drive sales. The slower sales pace in early 2026 compared to the same period in 2025 highlights ongoing market uncertainties.
Competitive Pressures: Increased competition among builders has led to higher incentives on closed homes, which negatively impacts margins. The company has had to balance pace and price to remain competitive.
Economic Uncertainties: Affordability challenges in the housing market persist, driven by high interest rates and economic conditions. The company has had to rely more on adjustable-rate mortgages (ARMs) to address these challenges, which may carry additional risks.
Inventory Impairment: The company recorded a $10.9 million inventory impairment charge related to several closeout communities, reflecting challenges in managing older or less desirable inventory.
Land Acquisition and Development: While the company has invested heavily in land acquisition and development, there is a risk of overexposure if market conditions do not improve. The flexibility in land option agreements mitigates some of this risk, but it remains a concern.
Margin Pressures: Increased use of incentives and higher costs have negatively impacted gross margins, with adjusted homebuilding gross margin at 18.3% in Q4 2025.
Regulatory and Tax Risks: The company anticipates a higher tax rate of 25%-26% for 2026, which could impact net income.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Future Deliveries Growth: Century Communities expects to grow its deliveries by 10% annually in 2026 and 2027, assuming improved market conditions, based on its existing lot count as of the end of 2025.
Capital Allocation Flexibility: The company plans to maintain flexibility in capital allocations in 2026, allowing for quick growth ramp-up when the market rebounds, supported by a strong balance sheet.
Market Demand and Interest Rates: Century anticipates that any interest rate relief, improvement in consumer confidence, or governmental support for homebuyers will unlock buyer demand, which the company is well-positioned to meet.
Incentives and Margins: Incentives on closed homes in Q1 2026 are expected to improve by up to 50 basis points from Q4 2025 levels. The company plans to adopt a more balanced approach between pace and price in 2026.
Community Count Growth: The average community count is expected to increase in the low to mid-single-digit percentage range year-over-year in 2026.
Land Acquisition and Development: Land acquisition and development expenses in 2026 are expected to remain roughly flat compared to 2025 levels, with flexibility to adjust based on market conditions.
Finished Lot Costs: The average finished lot cost for 2026 is expected to increase by only 2% to 3% compared to Q4 2025 levels.
Home Sales Revenue Guidance: For 2026, new home deliveries are expected to range from 10,000 to 11,000 homes, with home sales revenues projected between $3.6 billion and $4.1 billion.
Adjusted Homebuilding Gross Margin: The most significant driver of adjusted homebuilding gross margin in Q1 2026 will be incentives needed to generate an acceptable sales pace.
SG&A Expenses: SG&A as a percentage of home sales revenue is expected to be roughly 13% for the full year 2026, with 14.5% for Q1 2026.
Tax Rate: The full-year tax rate for 2026 is expected to range between 25% and 26%.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Quarterly cash dividend: Maintained at $0.29 per share in Q4 2025.
Total dividends in 2025: Returned a record $178 million to shareholders through dividends and share repurchases.
Share repurchase in Q4 2025: Repurchased 334,000 shares for $20 million at an average share price of $59.90, a 33% discount to book value.
Total share repurchase in 2025: Repurchased 2.3 million shares, representing 7% of shares outstanding at the beginning of the year, at an average price of $63.32, a 29% discount to book value.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you clarify your comments on the spring selling season and consumer behavior?
A:Sales pace in January has been slower year-over-year, but order activity and potential leads have improved sequentially. Management is hopeful for a better spring selling season compared to last year, citing increased publicity and PR on housing as potential tailwinds.
Q:Are the administration's efforts baked into your guidance?
A:No, those efforts would be considered additional help.
Q:How should we think about community count growth quarter-to-quarter?
A:The average community count for the year was 318, with a slight dip at year-end due to closeout communities and older specs. Growth is expected to continue, especially in the middle and back half of the year.
Q:Will gross margin be in line or worse than the fourth quarter?
A:Gross margin is expected to see a slight pullback of about 50 basis points in Q1 due to intentional focus on closeout communities and incentives. Management plans to revert to a more balanced approach later in the year.
Q:Are there any geographic standouts in terms of traffic and order pace?
A:No specific regions or markets were called out. Traffic has increased slightly, driven by mortgage rates nearing 6%, but January is historically a muted month, and more time is needed to assess regional performance.
Q:How much is left on the stock repurchase authorization?
A:There are approximately 1.5 million shares remaining under the stock repurchase program.
Q:Why is SG&A as a share of sales expected to be 14.5% in Q1 2026?
A:Q1 is typically the lowest closing quarter, making it the highest percentage of SG&A. Additionally, factors like ASP in backlog and implied guidance contribute to the 14.5% figure.
Q:How confident are you in dialing back incentives if order activity remains lower year-over-year?
A:Management is cautiously optimistic but acknowledges uncertainty. They are slightly behind pace but believe the spring selling season may improve.
Q:Was there margin pressure from the sale of Century Living units?
A:No, the sale of Century Living units is not included in gross margin or incentive commentary.
Q:Is the teaser interest rate of 3.75% driving buyer action?
A:Teaser rates below 4% and other mortgage products like a 4.875% 30-year fixed are helping solve affordability issues. The average mortgage rate originated is around 5.25% to 5.5%.
Q:How is the industry's level of spec inventory developing?
A:Spec inventory is lower year-over-year as builders, including Century, focused on pace over price. However, new product can be ramped up quickly due to reduced cycle times of 114 calendar days.
Q:Review of Unclear Management Responses
A:Management avoided providing specific geographic standouts for traffic and order pace, citing the need for more time to assess. Additionally, they were vague about their confidence in dialing back incentives if order activity remains lower year-over-year, emphasizing uncertainty and the need to wait and see.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ARMs market
Century Communities
ability delivery
accomplishment
acquisition development
addition
approach pace
balance sheet
basis lot
beginning
calendar day
case
cash flow
community closeout
condition lot
cost community
count community
count end
day record
home community
home record
land acquisition
land inventory
land option
land year
level land
lot land
market condition
pace price
point basis
profile
sale pace
strength
trend
CCS Transcript
Century Communities, Inc. (CCS) Q4 2025 Earnings Call Transcript
Positive1-28
The earnings call reflects strong financial performance with record net orders, reduced costs, and improved cash flow. Despite a slight decline in average sales price and gross margin, the optimistic guidance and strategic share repurchases suggest positive sentiment. The Q&A reveals management's cautious optimism for the spring selling season and confidence in operational efficiencies, which further supports a positive outlook. Considering the market cap, the stock is likely to see a positive movement of 2% to 8% over the next two weeks.
Century Communities, Inc. (CCS) Q3 2025 Earnings Call Transcript
Positive10-22
The earnings call reveals strong financial performance with improved debt ratios and liquidity. Share repurchases indicate confidence in stock value. Positive Q&A insights include effective cost controls and strategic use of ARMs, despite slight caution in consumer behavior. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction.
Earnings call transcript: Century Communities Q4 2024 beats EPS forecast
Positive1-29
The earnings call reflects strong financial performance with record deliveries, revenue, and net income. The company has increased guidance for 2024, indicating confidence in future growth. Shareholder returns are enhanced through dividends and repurchases, and financial health is solid with improved debt ratios and liquidity. Despite some concerns about regulatory issues and competitive pressures, the overall sentiment is positive. The market cap suggests a moderate reaction, leading to a 'Positive' prediction for stock price movement over the next two weeks.
Century Communities, Inc. (CCS) Q3 2024 Earnings Call Transcript
Unknown10-23
The earnings call presents a mixed picture: strong financial performance with increased revenues and deliveries, but challenges like mortgage rate increases, competitive pressures, and reduced financial services revenue. The acquisition of Anglia Homes increases debt, posing a risk if growth doesn't materialize. While financial metrics are strong, guidance is cautious, and no share buyback is planned. The Q&A reveals unclear management responses, particularly regarding the Anglia acquisition's impact. Given the market cap, the stock is likely to remain neutral over the next two weeks, with limited immediate catalysts for significant movement.
CCS Slides
CCS Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
