0001825088FALSE00018250882024-10-312024-10-31


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): October 31, 2024
Dream Finders Homes, Inc.
(Exact name of registrant as specified in its charter)
Delaware001-3991685-2983036
(State or other jurisdiction of incorporation)
(Commission
 File Number)
(I.R.S. Employer
 Identification No.)
14701 Phillips Highway, Suite 300
Jacksonville , Florida
32256
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (904) 644-7670
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common StockDFHNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02 Results of Operations and Financial Condition.

On October 31, 2024, Dream Finders Homes, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference into this Item 2.02.

The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

NumberDescription
Earnings Press Release dated October 31, 2024
104Cover Page Interactive Data File (embedded within the inline XBRL document)




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 31, 2024
DREAM FINDERS HOMES, INC.
   
 By:/s/ Robert E. Riva
   
  Robert E. Riva
  Vice President, General Counsel and Corporate Secretary
   
  



Exhibit 99.1

dfhlogoforera.jpg

Dream Finders Announces Third Quarter 2024 Results

Third Quarter Revenues of $1 Billion

Homebuilding Revenues Up 10%, Net New Orders Up 9%

Return on Participating Equity of 30.4%

Jacksonville, FL. — October 31, 2024 — Dream Finders Homes, Inc. (the “Company”, “Dream Finders Homes”, “Dream Finders” or “DFH”) (NYSE: DFH) announced its financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Highlights (As Compared to Third Quarter 2023, unless otherwise noted)
•Homebuilding revenues increased 10% to $986 million from $894 million
•Home closings increased 5% to 1,889 from 1,798
•Net new orders increased 9% to 1,680 from 1,535
•Average sales price of homes closed increased 3% to $518,553 from $501,536
•Homebuilding gross margin of 19.2% compared to 20.6%
•Adjusted homebuilding gross margin (non-GAAP) of 27.6% compared to 28.4%
•Pre-tax income decreased 11% to $92 million from $104 million
•Net income attributable to DFH decreased 7% to $71 million, or $0.72 per basic share, from $76 million, or $0.79 per basic share
•Active community count of 235 as of September 30, 2024
•Backlog of 3,996 sold homes as of September 30, 2024, valued at $2.0 billion
•Controlled lot pipeline of 44,825 as of September 30, 2024, compared to 30,614 as of September 30, 2023
•Total liquidity, comprised of cash and cash equivalents and availability under the revolving credit facility, of $493 million as of September 30, 2024
•Net homebuilding debt to net capitalization (non-GAAP) of 45.6% as of September 30, 2024, compared to 34.5% as of September 30, 2023
•Return on participating equity of 30.4% for the trailing twelve months ended September 30, 2024, compared to 38.9% for the trailing twelve months ended September 30, 2023
•Repurchased 180,164 Class A common shares for $5 million during the three months ended September 30, 2024

Management Commentary
Patrick Zalupski, Dream Finders Homes Chairman and CEO, said, “In the third quarter, Dream Finders continued to demonstrate our focus on long-term growth objectives. We delivered homebuilding revenue growth of 10%, along with increased home closings and net sales of 5% and 9%, respectively, compared to the prior year quarter. While we experienced some margin erosion in Q3, we are more focused on maintaining our growth expectations.
We completed our acquisition of Jet HomeLoans on July 1, 2024, our sixth acquisition in five years. This deal was immediately accretive, contributing revenues of $16 million and pre-tax profitability of $7 million in the third quarter. Now having 100% control of this entity, we look to grow this business line into a highly profitable segment for DFH. 
During the third quarter, we repurchased 180,164 shares of our class A common stock under our approved buyback program. In addition to investing in the growth and scale of our business, we remain committed to our capital allocation strategy, which includes buying back shares when we believe there is an attractive disconnect between the market price and the intrinsic value of the shares. We will remain opportunistic in all facets of growing the per share returns of DFH. 
We are focused on closing out another successful year in 2024 while also hard at work building long-term value for 2025 and beyond. We reiterate our guidance of 8,250 closings for the full year 2024.”
Acquisition of Jet HomeLoans
On July 1, 2024, we acquired the remaining 40% equity interest in the previously unconsolidated mortgage joint venture, Jet HomeLoans, which is now consolidated as of that date in the Company’s financial statements. Jet HomeLoans continues to be included in the Company’s Financial Services segment for segment reporting purposes. Jet HomeLoans contributed financial services revenue of $16 million in the third quarter of 2024.
Third Quarter 2024 Results
Homebuilding revenues in the third quarter of 2024 increased 10% to $986 million, compared to $894 million in the third quarter of 2023. Average sales price (“ASP”) of homes closed for the third quarter of 2024 was $518,553, an increase of 3% compared to the prior year quarter ASP of $501,536. Home closings increased 5% to 1,889 compared to 1,798 in the third quarter of 2023. The growth in homebuilding revenue during the third quarter of 2024 when compared to the third quarter of 2023 was primarily due to the increase in home closings, as well as higher ASP, both largely due to the February 2024 Crescent Homes acquisition. Crescent Homes contributed 223 closings with an ASP of $554,231 during the third quarter of 2024. Additionally, the increased use of sales incentives during the third quarter of 2024 had a partially offsetting impact on our homebuilding revenue growth.
Homebuilding gross margin in the third quarter of 2024 was 19.2%, a decrease of 140 bps, compared to 20.6% in the third quarter of 2023. The slight decline in homebuilding gross margin for the third quarter of 2024 was mostly the result of higher land and financing costs, offset by direct cost reductions and, to a lesser extent, continued improvements in cycle times.
Adjusted homebuilding gross margin in the third quarter of 2024 was 27.6%, a decrease of 80 bps from the third quarter 2023 adjusted homebuilding gross margin of 28.4%. Adjusted homebuilding gross margin is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures.”
Selling, general and administrative expense (“SG&A”) in the third quarter of 2024 increased 30% to $102 million, compared to $79 million in the third quarter of 2023. SG&A as a percentage of homebuilding revenues in the third quarter of 2024 increased 150 bps to 10.3% compared to 8.8% in the third quarter of 2023. The increase was primarily attributable to costs associated with forward mortgage commitment programs which allow our homebuyers to lock in their mortgage interest rates at the time of sale, as well as higher compensation costs as we continue to expand our operations.
Net income attributable to DFH in the third quarter of 2024 decreased 7% to $71 million, or $0.72 per basic share, from $76 million, or $0.79 per basic share in the third quarter of 2023. Aside from the operational results discussed above, the decrease was partially offset by a related decrease in income tax expense and, to a lesser extent, a reduction in contingent consideration expense in the third quarter of 2024 compared to the prior year quarter. As of September 30, 2024, the earnout period for the H&H acquisition concluded and the final payment is due in the fourth quarter of 2024.
Net new orders in the third quarter of 2024 were 1,680, an increase of 9% compared to 1,535 net new orders for the third quarter of 2023. The cancellation rate in the third quarter of 2024 was 13.8%, an improvement of 110 bps compared with the third quarter of 2023 cancellation rate of 14.9%. We believe the increase in net new orders and our lowered cancellation rate are reflective of our successful sales incentives and availability of quick, move-in-ready homes in our communities.
Our total available liquidity as of September 30, 2024 was $493 million, including $205 million of unrestricted operating cash. In addition, net homebuilding debt to net capitalization as of September 30, 2024 was 45.6%. Net homebuilding debt to net capitalization is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures.” During the first nine months of 2024, we released a significant number of housing starts and purchased additional lots for production, increasing our investment in inventory by $620 million since the end of 2023. This directly impacted our net homebuilding debt to net capitalization ratio and liquidity as we prepared to deliver our homes for the remainder of the year and in order to maintain an active pipeline of quick, move-in-ready homes.

Third Quarter 2024 Backlog
As of September 30, 2024, DFH had a backlog of 3,996 homes, valued at $2.0 billion, compared to the backlog of 4,205 homes, valued at $2.1 billion as of June 30, 2024. As of September 30, 2024, the ASP in backlog was $501,524 compared to $505,022 as of June 30, 2024. As of September 30, 2024, approximately 1,858 of the homes in backlog are expected to be delivered in 2025 and beyond.
The following table shows the backlog units and ASP as of September 30, 2024 by homebuilding segment:
As of September 30, 2024
(unaudited)
Backlog:UnitsAverage Sales Price
Southeast1,645$409,100 
Mid-Atlantic1,109461,822 
Midwest1,242659,389 
      Total3,996$501,524 
Full Year 2024 Outlook
Dream Finders Homes maintains its guidance of approximately 8,250 home closings for the full year 2024.
About Dream Finders Homes, Inc.
Dream Finders Homes (NYSE: DFH) is a homebuilder based in Jacksonville, Florida. Dream Finders Homes builds single-family homes throughout the Southeast, Mid-Atlantic and Midwest, including Florida, Texas, Tennessee, North Carolina, South Carolina, Georgia, Colorado, and the Washington, D.C. metropolitan area, which comprises Northern Virginia and Maryland. Through its wholly owned subsidiaries, DFH also provides mortgage financing and title services to homebuyers. Dream Finders Homes achieves its industry-leading growth and returns by maintaining an asset-light homebuilding model. For more information, please visit www.dreamfindershomes.com.
Forward-Looking Statements
This press release includes forward-looking statements regarding future events, including projected 2024 home closings and market conditions, possible or assumed future results of operations and statements regarding the Company’s strategies and expectations as they relate to market opportunities and growth. All forward-looking statements are based on Dream Finders Homes’ beliefs as well as assumptions made by and information currently available to Dream Finders Homes. These statements reflect Dream Finders Homes’ current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in Dream Finders Homes’ Annual Report on Form 10-K for the year ended December 31, 2023, subsequently filed Form 10-Qs and other filings with the U.S. Securities and Exchange Commission. Dream Finders Homes undertakes no obligation to update or revise any forward-looking statement except as may be required by applicable law.

Dream Finders Homes, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
September 30,
2024		December 31,
2023
Assets 
Cash and cash equivalents$204,906 $494,145 
Restricted cash27,942 54,311 
Accounts receivable30,202 30,874 
Inventories2,060,168 1,440,249 
Lot deposits367,893 247,207 
Other assets105,578 80,759 
Investments in unconsolidated entities6,558 15,364 
Mortgage loans held for sale177,610 — 
Property and equipment, net24,898 7,043 
Right-of-use assets18,592 20,280 
Goodwill300,313 172,207 
Total assets$3,324,660 $2,562,439 
Liabilities
Accounts payable$168,982 $134,115 
Accrued expenses186,667 207,389 
Customer deposits130,199 172,574 
Construction lines of credit991,208 530,384 
Senior unsecured notes, net294,713 293,918 
Mortgage warehouse facilities170,167 — 
Lease liabilities19,515 21,114 
Contingent consideration73,497 116,795 
Total liabilities$2,034,948 $1,476,289 
Mezzanine Equity
Redeemable preferred stock148,500 148,500 
Redeemable noncontrolling interest21,451 — 
Equity
Class A common stock, $0.01 per share, 289,000,000 authorized, 34,502,077 and 32,882,124 issued as of September 30, 2024 and December 31, 2023, respectively
345 329 
Class B common stock, $0.01 per share, 61,000,000 authorized, 59,226,153 and 60,226,153 issued as of September 30, 2024 and December 31, 2023, respectively
592 602 
Additional paid-in capital276,431 275,241 
Retained earnings844,375 648,412 
Treasury stock, at cost, 251,997 shares of Class A common stock as of September 30, 2024(6,670)— 
Total Dream Finders Homes, Inc. stockholders’ equity1,115,073 924,584 
Noncontrolling interests4,688 13,066 
Total equity1,119,761 937,650 
Total liabilities, mezzanine equity and equity$3,324,660 $2,562,439 










Dream Finders Homes, Inc.
Condensed Consolidated Statements of Comprehensive Income
(In thousands, except share and per share amounts)
(Unaudited)

Three Months Ended
September 30, 		Nine Months Ended
September 30,
2024202320242023
Revenues:
Homebuilding$986,257 $893,502 $2,863,714 $2,603,858 
Financial services20,612 2,328 27,140 6,731 
Total revenues1,006,869 895,830 2,890,854 2,610,589 
Homebuilding cost of sales797,110 709,286 2,328,587 2,109,485 
Financial services expenses12,156 1,449 16,254 3,885 
Selling, general and administrative expense101,886 78,514 278,945 210,548 
Income from unconsolidated entities(99)(4,557)(10,301)(12,219)
Contingent consideration revaluation5,948 9,026 13,793 32,608 
Other income, net(2,556)(1,646)(5,680)(2,711)
Income before taxes 92,424 103,758 269,256 268,993 
Income tax expense(20,780)(24,158)(59,166)(66,000)
Net and comprehensive income71,644 79,600 210,090 202,993 
Net and comprehensive income attributable to noncontrolling interests(993)(3,503)(4,002)(9,043)
Net and comprehensive income attributable to Dream Finders Homes, Inc.$70,651 $76,097 $206,088 $193,950 
Earnings per share
Basic$0.72 $0.79 $2.10 $1.98 
Diluted$0.70 $0.75 $2.06 $1.83 
Weighted-average number of shares
Basic93,527,205 93,108,277 93,399,681 93,052,507 
Diluted100,736,148 102,052,181 100,140,134 105,819,964 
























Dream Finders Homes, Inc.
Other Financial and Operating Data
(Unaudited)

Three Months Ended
September 30, 		Nine Months Ended
September 30,
2024202320242023
Other Financial and Operating Data
Home closings1,889 1,798 5,575 5,161 
Average sales price of homes closed(1)
$518,553 $501,536 $510,204 $499,433 
Net new orders1,680 1,535 5,116 4,638 
Cancellation rate13.8 %14.9 %15.8 %17.1 %
Homebuilding gross margin (in thousands)(2)
$189,147 $184,216 $535,127 $494,373 
Homebuilding gross margin %(3)
19.2 %20.6 %18.7 %19.0 %
Adjusted homebuilding gross margin (in thousands)(4)
$272,117 $254,172 $773,901 $696,276 
Adjusted homebuilding gross margin %(3)(4)
27.6 %28.4 %27.0 %26.7 %
Active communities as of period end(5)
235 219 
Backlog - units3,996 5,025 
Backlog - value (in thousands)$2,004,091 $2,410,182 
Net homebuilding debt to net capitalization(4)
45.6 %34.5 %
Return on participating equity(6)
30.4 %38.9 %
(1)Average sales price of homes closed is calculated based on homebuilding revenues, adjusted for the impact of percentage of completion revenues, and excluding deposit forfeitures and land sales, over homes closed.
(2)Homebuilding gross margin is homebuilding revenues less homebuilding cost of sales.
(3)Calculated as a percentage of homebuilding revenues.
(4)Adjusted homebuilding gross margin and net homebuilding debt to net capitalization are non-GAAP financial measures. For definitions of these non-GAAP financial measures and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “Reconciliation of Non-GAAP Financial Measures.”
(5)A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five homesites remaining to sell.
(6)Return on participating equity is calculated as net income attributable to DFH, less redeemable preferred stock distributions, divided by average beginning and ending total Dream Finders Homes, Inc. stockholders’ equity (“participating equity”) for the trailing twelve months.

Three Months Ended
September 30, 		Nine Months Ended
September 30,
2024
 (unaudited)
2023
 (unaudited)
2024
 (unaudited)
2023
 (unaudited)
Home Closings:UnitsAverage Sales PriceUnitsAverage Sales PriceUnitsAverage Sales Price UnitsAverage Sales Price
Southeast592$494,163 828$467,896 1,838$492,913 2,261$460,524 
Mid-Atlantic603461,320 388407,798 1,704441,184 1,144386,114 
Midwest694589,087 582611,886 2,033583,688 1,756623,358 
Total1,889$518,553 1,798 $501,536 5,575$510,204 5,161 $499,433 


Reconciliation of Non-GAAP Financial Measures
Management utilizes specific non-GAAP financial measures as supplementary tools to evaluate operating performance. These include adjusted homebuilding gross margin and net homebuilding debt to net capitalization. Other companies may not calculate non-GAAP financial measures in the same manner that we do. Accordingly, these non-GAAP financial measures should be considered only as a supplement to relevant GAAP information, as reconciled for each measure below. In the future, we may incorporate additional adjustments to these non-GAAP financial measures as we find them relevant and beneficial for both management and investors.
Adjusted Homebuilding Gross Margin
The following table presents a reconciliation of adjusted homebuilding gross margin to the GAAP financial measure of homebuilding gross margin for each of the periods indicated (unaudited and in thousands, except percentages):

Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Homebuilding gross margin(1)
$189,147 $184,216 $535,127 $494,373 
Interest expense in homebuilding cost of sales(2)
41,818 30,369 114,222 85,586 
Amortization in homebuilding cost of sales(3)
(1,186)— 5,914 — 
Commission expense42,338 39,587 118,638 116,317 
Adjusted homebuilding gross margin$272,117 $254,172 $773,901 $696,276 
Homebuilding gross margin %(4)
19.2 %20.6 %18.7 %19.0 %
Adjusted homebuilding gross margin %(4)
27.6 %28.4 %27.0 %26.7 %
(1)Homebuilding gross margin is homebuilding revenues less homebuilding cost of sales.
(2)Includes interest charged to homebuilding cost of sales related to our construction lines of credit and senior unsecured notes, net, as well as lot option fees.
(3)Represents amortization of purchase accounting adjustments from the Crescent Homes acquisition.
(4)Calculated as a percentage of homebuilding revenues.
We define adjusted homebuilding gross margin as homebuilding gross margin excluding the effects of capitalized interest, lot option fees, amortization included in homebuilding cost of sales (adjustments resulting from the application of purchase accounting in connection with acquisitions) and commission expense. Our management believes this information is meaningful because it isolates the impact that these excluded items have on homebuilding gross margin. We include internal and external commission expense in homebuilding cost of sales, not selling, general and administrative expense, and therefore commission expense is taken into account in homebuilding gross margin.
As a result, in order to provide a meaningful comparison to the public company homebuilders that include commission expense below the homebuilding gross margin line in selling, general and administrative expense, we have excluded commission expense from adjusted homebuilding gross margin. However, because adjusted homebuilding gross margin information excludes capitalized interest, lot option fees, purchase accounting amortization and commission expense, which have real economic effects and could impact our results of operations, the utility of adjusted homebuilding gross margin information as a measure of our operating performance may be limited.











Net Homebuilding Debt to Net Capitalization
The following table presents a reconciliation of net homebuilding debt to net capitalization to the GAAP financial measure of total debt to total capitalization for each of the periods indicated (unaudited and in thousands, except percentages):

As of
September 30,
20242023
Total debt $1,456,088 $849,116 
Total mezzanine equity169,951 148,500 
Total equity 1,119,761 837,572 
Total capitalization $2,745,800 $1,835,188 
Total debt to total capitalization53.0 %46.3 %
Total debt $1,456,088 $849,116 
Less: mortgage warehouse facilities 170,167 — 
Less: cash and cash equivalents204,906 330,129 
Net homebuilding debt$1,081,015 $518,987 
Total mezzanine equity 169,951 148,500 
Total equity1,119,761 837,572 
Net capitalization$2,370,727 $1,505,059 
Net homebuilding debt to net capitalization45.6 %34.5 %
We define net homebuilding debt to net capitalization as the sum of construction lines of credit and senior unsecured notes, net less cash and cash equivalents (“net homebuilding debt”), divided by the sum of net homebuilding debt, total mezzanine equity and total equity (“net capitalization”). Net homebuilding debt excludes borrowings under our mortgage warehouse facilities. Management believes the net homebuilding debt to net capitalization is meaningful as it is used to assess our consolidated performance and the performance of our homebuilding segments, as well as to establish targets for performance-based compensation. We also use this ratio as a measure of overall leverage.

















Contacts:
Investor Contact: investors@dreamfindershomes.com
Media Contact: mediainquiries@dreamfindershomes.com

v3.24.3
Cover
Oct. 31, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 31, 2024
Entity Registrant Name Dream Finders Homes, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-39916
Entity Tax Identification Number 85-2983036
Entity Address, Address Line One 14701 Phillips Highway
Entity Address, Address Line Two Suite 300
Entity Address, City or Town Jacksonville
Entity Address, State or Province FL
Entity Address, Postal Zip Code 32256
City Area Code 904
Local Phone Number 644-7670
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock
Trading Symbol DFH
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001825088
Amendment Flag false
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