Smith Douglas Homes, No. 36 on the 2024 Builder 100, reported strong growth in revenue, closings, and orders during the builder’s first quarter as a public company. For the fiscal first quarter, ended March 31, home sales revenue increased 13% year over year to $189.2 million.

The company, which completed its IPO in January, saw home closings increase 13% to 566 in the quarter on a sales pace of 3.6 homes per community per month. Smith Douglas Homes’ cancellation rate remained low in the period at 10.6%. Net new orders increased 15% in the quarter to 765, driven by positive demand tailwinds such as healthy job creation, in-migration, and household formation in the home builder’s operating markets. The company’s build times in the first quarter were “in line with expectations,” at 60 days, according to vice chairman and CEO Greg Bennett.

“Our focus remains on the more affordable segments of the market, which is reflected in our average sales price of $334,000 for the quarter,” Bennett said during the company’s earnings call. “We believe it is the most supply-constrained segment of the market and most attractive from a buyer demographic standpoint. We cater our home offers to first-time buyers and empty nesters who are looking for customizable homes at an affordable price.”

During the period, Smith Douglas Homes generated profit of $20.5 million and profits per share of $0.33.

“Having our capital markets transactions behind us, we are in a strong financial position and can now focus on executing our growth strategy,” Russ Devendorf, executive vice president and chief financial officer, said.

As a public company, Bennett said Smith Douglas will look to expand both organically and through mergers and acquisition as opportunities present themselves. The builder’s acquisition of Devon Street Homes in the Houston market contributed an estimated $3 million to profit in the first quarter, and it expanded organically in Georgia and Tennessee, according to Bennett.

“During the quarter we also had the opportunity to expand our footprint by contracting for lots in the central Georgia market in Houston County, which includes Perry, Warner Robbins, and the surrounding submarket, as well as in Chattanooga, Tennessee,” Bennett said. “We intend to leverage our expansive operations in our Atlanta division.”

Smith Douglas Homes ended the first quarter with 1,110 homes in backlog with a sales value of $381.2 million, year-over-year increases of 19% and 25%, respectively. Total controlled lots increased 82% year over year to 14,117 lots in the first quarter.

“We continue to employ a land-light strategy, with 95% of our lots controlled via option agreements at the end of the first quarter,” Bennett said. “Through our strong relationships with land bankers, land sellers, and developers, we strive to acquire lots on a just-in-time basis. This allows us to turn our inventory more quickly and focus on what we do best: build and sell homes.”

Devendorf reiterated the builder’s second quarter closings target range of 600 to 625 homes. For the full fiscal 2024, Smith Douglas Homes is targeting between 2,600 and 2,800 closings, which would represent between 9.6% and 18% annual growth from the 2,373 homes closed in 2023.