Century Communities, Inc. (CCS) has emerged as one of the nation's largest and most respected homebuilders, known for its commitment to quality, innovation, and customer satisfaction. With a strong presence across 17 states and over 45 markets, the company has weathered the ebbs and flows of the housing market, consistently delivering solid financial results and positioning itself for continued growth.
Business Overview and History Incorporated in 2002 and headquartered in Greenwood Village, Colorado, Century Communities has undergone a remarkable transformation over the past two decades. The company began as a regional homebuilder focused on Colorado, but through a strategic series of acquisitions and organic expansion, it has now established a nationwide footprint.
In 2014, Century Communities made its debut on the New York Stock Exchange, raising capital to fuel its ambitious growth plans. Over the years, the company has acquired several regional homebuilders, further strengthening its market presence and capabilities.
Century Communities is engaged in the development, design, construction, marketing, and sale of single-family attached and detached homes. In addition to building homes, the company also entitles and develops the underlying land for many of its projects. This vertical integration allows Century Communities to maintain greater control over its projects and potentially capture additional value.
During the housing downturn in the late 2000s, Century Communities, like many of its peers, had to adapt its business model and strategies to weather the difficult market conditions. The company's ability to navigate these challenges successfully demonstrates its resilience and adaptability in the face of market fluctuations.
In 2021, Century Communities was named to Newsweek's list of America's Most Trustworthy Companies, highlighting its commitment to ethical business practices. This recognition underscores the company's focus on building trust with its customers, employees, and stakeholders.
The company's growth has been fueled by its ability to identify and acquire attractive land parcels, efficiently manage its construction processes, and maintain strong relationships with subcontractors and suppliers. These capabilities have allowed Century Communities to expand its operations while maintaining quality and cost-effectiveness.
Today, Century Communities operates through two distinct brands - the Century Communities brand, which caters to a wide range of buyer profiles, including entry-level, first-time move-up, and lifestyle homebuyers, and the Century Complete brand, which targets the entry-level market with a focused, asset-light business model.
The Century Communities brand is organized into four geographic operating segments - West, Mountain, Texas, and Southeast. This brand offers customers the ability to personalize their homes through various option and upgrade selections. The Century Complete brand, on the other hand, operates in 10 states and generally does not offer any option or upgrade selections to customers, instead focusing on providing an affordable, no-frills home buying experience.
In addition to its two homebuilding brands, Century Communities also has a Financial Services segment that provides mortgage, title, insurance brokerage, and escrow services primarily to the company's homebuyers. This segment originates the majority of its mortgage loans and then sells them in the secondary mortgage market.
Financials Financial Performance and Metrics Century Communities has consistently delivered strong financial results, even in the face of market volatility. In the fiscal year 2024, the company reported total revenue of $4.40 billion, a 19.1% increase from the prior year. Net income for the full year 2024 reached $333.82 million, a 28.8% year-over-year improvement.
The company's strong performance was driven by a 15% rise in the number of homes delivered to 11,010 and a 3.8% increase in the average sales price to $390,900. The homebuilding gross margin percentage increased to 21.5% in 2024, up from 21.2% in the prior year, as the mix of deliveries within individual communities improved.
Selling, general, and administrative expenses increased 15.5% to $516.49 million but decreased as a percentage of home sales revenue to 12% from 12.4% the year before. Earnings per diluted share for 2024 were $10.40, up from $8.05 in the prior year.
For the fourth quarter of 2024, Century Communities reported revenue of $1.27 billion, representing a 5.6% year-over-year increase. Net income for the quarter was $102.7 million.
Liquidity The company's balance sheet remains robust, with a net homebuilding debt to net capital ratio of 27.4% as of December 31, 2024, demonstrating its prudent approach to financial management. Century Communities' operating cash flow for the full year 2024 was $125.69 million, while its free cash flow reached -$39.85 million, reflecting the company's investments in growth initiatives.
As of December 31, 2024, Century Communities had a debt-to-equity ratio of 0.56 and $918 million in liquidity, consisting of $150 million in cash and cash equivalents and $900 million available under its revolving credit facility. The company's current ratio was 9.11 and quick ratio was 1.16, indicating a strong ability to meet short-term obligations.
Operational Highlights and Competitive Positioning One of Century Communities' key strengths is its geographically diversified footprint, with operations spanning 17 states and over 45 markets. This diversification has allowed the company to capitalize on regional housing market dynamics, mitigating the impact of localized downturns.
In 2024, the company delivered a record 11,007 homes, a 15% year-over-year increase, highlighting its ability to scale its operations effectively. The community count also reached a new high of 322 at the end of 2024, up 28% from the prior year, positioning Century Communities for continued growth.
The company's focus on affordable housing has been a significant competitive advantage, as entry-level and first-time homebuyers have become an increasingly important segment of the market. In 2024, 93% of Century Communities' deliveries were priced below FHA limits, underscoring its commitment to providing affordable housing options.
Century Communities continued to strategically manage its lot pipeline in 2024, ending the year with 80,630 owned and controlled lots, a 9.4% increase compared to the prior year. The company also completed two acquisitions during the year - Landmark Homes of Tennessee, Inc. and Anglia Homes LP, which expanded its operations in Nashville, Tennessee and the greater Houston, Texas area, respectively. These acquisitions added 6 active communities in Nashville and 26 active communities in the Houston area.
Performance by Geographic Markets Century Communities' performance varied across its geographic markets in 2024. The West, Texas, and Southeast regions saw delivery growth of over 20% year-over-year. The Mountain region also experienced solid growth of 6.7% year-over-year. However, Texas and Florida, which account for 31% of total 2024 deliveries, have seen some concern around rising inventory levels.
Weathering Market Challenges The homebuilding industry has faced its share of challenges in recent years, including supply chain disruptions, labor shortages, and volatile mortgage rates. Century Communities has demonstrated its resilience in navigating these obstacles.
The company has proactively managed its costs, leveraging its scale and relationships with suppliers to mitigate the impact of input cost inflation. Additionally, the company's emphasis on spec home construction and its captive mortgage subsidiary, Inspire Home Loans, have helped to provide homebuyers with certainty around financing and reduce the effects of rising interest rates.
Moving Forward: Opportunities and Risks As Century Communities looks to the future, the company remains optimistic about the long-term prospects of the housing market, citing favorable demographic trends and the continued demand for affordable homes. For the full year 2025, Century Communities has provided guidance projecting deliveries to increase by approximately 10% year-over-year at the midpoint of the guidance range of 11,700 to 12,400 homes. Home sales revenue is expected to be in the range of $4.5 billion to $4.8 billion.
The company anticipates being able to grow deliveries by at least another 10% in 2026 as well, barring any changes to the homebuilding environment. This delivery growth is expected to come from increasing market share primarily within existing markets, which should positively impact margins and returns as the company leverages investments made at the corporate and local levels.
Century Communities expects SG&A as a percentage of home sales revenues to decline on a year-over-year basis in 2025 as they continue to leverage investments. The company's full-year tax rate for 2025 is projected to be in the range of 25% to 26%, up from 24.1% in 2024, primarily due to a reduced number of homes expected to qualify for 45L credits.
However, the company is not immune to the broader macroeconomic and industry-specific risks that may impact the homebuilding sector. Factors such as further interest rate hikes, labor and supply chain challenges, and potential economic downturns could pose challenges to the company's growth and profitability.
To mitigate these risks, Century Communities has emphasized maintaining a strong balance sheet, prudent capital allocation, and a diversified geographic footprint. The company's track record of successfully navigating market cycles and its commitment to innovation and customer service position it well for long-term success.
Conclusion Century Communities has emerged as a leader in the homebuilding industry, known for its commitment to quality, affordability, and customer satisfaction. Despite the challenges posed by the volatile housing market, the company has demonstrated its resilience, delivering strong financial results and positioning itself for continued growth.
As the company navigates the evolving market landscape, its geographically diversified footprint, focus on affordable housing, and prudent financial management provide a solid foundation for long-term success. With a strong pipeline of owned and controlled lots, strategic acquisitions, and a focus on increasing market share within existing markets, Century Communities is well-positioned to capitalize on the opportunities ahead while managing potential risks in the dynamic homebuilding industry.