Smith Douglas Homes Corp. (NYSE:SDHC) reported fourth-quarter adjusted earnings per share of $0.39 on Wednesday, falling short of analyst forecasts of $0.75, although revenue of $260.4 million came in above expectations.
Despite the earnings miss, the homebuilder’s stock advanced about 3.05% in after-hours trading following the release. The move was supported by stronger-than-expected gross margins and signs of improved sales momentum early in 2026.
During the quarter, the company completed 780 home closings, representing a 7% decline year over year, while revenue slipped 9% from $287.5 million recorded in the same period a year earlier. Home closing gross margin reached 19.9%, surpassing the company’s guidance range, though still lower than the 25.5% margin reported in the fourth quarter of 2024. Net new home orders totaled 532, also down 7% compared with the prior year.
For the full year 2025, Smith Douglas delivered 2,908 homes, a 1% increase from the previous year, while annual revenue edged down 0.4% to $971.1 million. Adjusted earnings for the year were $1.19 per diluted share, compared with $1.81 in 2024.
The builder expanded its active community footprint by 28% to reach 100 locations and increased the number of controlled lots by 14% to 22,268 by the end of the year.
“Smith Douglas Homes closed out 2025 on a strong note, delivering record full-year closings and finishing the fourth quarter with both deliveries and gross margin above our stated guidance range,” said Greg Bennett. “Despite a challenging selling environment marked by affordability pressures and aggressive competitive discounting, our teams remained disciplined in maintaining sales pace and operational efficiency.”
The company’s debt-to-book capitalization rose to 9.0%, compared with 0.8% in the previous year. Meanwhile, full-year home closing gross margin narrowed to 21.8% from 26.2% in 2024, reflecting competitive pressure across the housing market.
Russ Devendorf added that although sales conditions were uneven toward the end of the year, the company has observed encouraging traffic and order trends as it enters the spring 2026 home-selling season.