Smith Douglas Homes Corp. Class A

Hello, everyone. Thank you for joining us and welcome to Smith Douglas Homes first quarter 2026 earnings call and webcast. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your keypad to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Joe Thomas, SVP of Accounting and Finance. Joe, please go ahead.

Good morning and welcome to the earnings conference call for Smith Douglas Homes. We issued a press release this morning outlining our results for the first quarter of 2026, which we will discuss on today's call and which can be found on our website at investors.smithdouglas.com or by selecting the investor relations link at the bottom of our homepage. Please note, this call will be simultaneously webcast on the investor relations section of our website. Before the call begins, I would like to remind everyone that certain statements made on this call, which are not historical facts, including statements concerning future financial and operating goals and performance, are forward-looking statements. Actual results could differ materially from such statements due to known and unknown risks, uncertainties, and other important factors as detailed in the company's SEC filings. Except as required by law, The company undertakes no duty to update these forward-looking statements. Additionally, reconciliations of non-GAAP financial measures discussed on this call to the most comparable GAAP measures can be found in our press release located on our website and our SEC filings. Hosting the call this morning are Greg Bennett, the company's CEO and Vice Chairman, and Russ Stevendorf, our Executive Vice President and CFO. I'd now like to turn the call over to Greg.

Good morning and thank you for joining us today to review our results for the first quarter of 2026 and provide an update on our operations. Smith Douglas Homes generated $4.3 million in pre-tax income for the quarter, net income of $0.06 per share. We delivered 624 homes, which came in at the high end of our guidance range. While home closing gross margin exceeded expectations at 19.6%, on a GAAP basis. For the quarter, we generated 981 net new orders, up 28% from a year ago, and a new quarterly record for the company. While order activity remained choppy throughout the quarter, we experienced a sequential improvement in our sales space each month of the quarter, culminating in a sales space of four homes per community in the month of March. Financing incentives continue to be a key selling tool as buyers remain motivated to own a home, provided they can secure a monthly mortgage payment that fits their budget. We're encouraged by the price elasticity we experienced during the quarter, as incremental adjustments in pricing led to an uptick in demand. We view this as an indicator that underlying demand remains intact across our markets, despite broader macroeconomic uncertainty. From an operational standpoint, we remain focused on pace over price philosophy, which means maintaining a consistent cadence of starts, driving efficient inventory turns, and driving towards a more pre-sale oriented backlog. Our average build time is 57 days during the quarter, consistent with prior period. And we continue to view our ability to deliver homes quickly and reliably with an offering of home choice and personalization as a key competitive advantage. Our landline strategy also remains central to how we operate. By relying on third-party lot developers, we're able to allocate capital efficiently and maintain flexibility through varying market conditions. We believe this approach positions us well to manage risk while continuing to scale the business. We also make progress on our growth initiatives during the quarter. Community count expanded to 108 active communities across our markets, up 24% from a year ago, and we continue to ramp operations in our new markets such as Dallas, Chattanooga, Greenville, and Alabama Gulf Coast. Our experience in Houston continues to demonstrate that our operating model translates well beyond our legacy footprint, and we remain focused on executing a discipline an opportunistic expansion strategy over time. As we move through the spring selling season, we're encouraged by sales orders generated during the quarter, which helps rebuild backlog and provide momentum heading into the second quarter. We have continued to see encouraging traffic and order activity early in the second quarter, although demand remains variable week to week. We will continue to evaluate pricing and incentives at the community level and adjust as needed to maintain the pace required to support our operating model. While macro conditions remain dynamic, employment trends have been relatively resilient and we continue to see motivated and engaged buyers in our markets. We believe our focus on attainable pricing, personalization, and value put us in a good position to compete for these buyers and drive market share gains over time. Finally, I'd like to thank all of our team members for the hard work during this quarter. We challenged everyone to focus on getting off to a strong start this year and our results this quarter showed they were up to the challenge. With that, I'd like to turn the call over to Russ, who will provide more color on our financial results this quarter and give an update on our outlook.