Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 29, 2024 | Jun. 30, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39916 | ||
Entity Registrant Name | DREAM FINDERS HOMES, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 85-2983036 | ||
Entity Address, Address Line One | 14701 Philips 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 | ||
Title of 12(b) Security | Class A Common Stock, par value $0.01 per share | ||
Trading Symbol | DFH | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 447.8 | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement for the 2024 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001825088 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 34,040,169 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 59,226,153 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Jacksonville, Florida |
Auditor Firm ID | 238 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 494,145 | $ 364,531 |
Restricted cash | 54,311 | 30,599 |
Accounts receivable | 30,874 | 43,490 |
Inventories | 1,440,249 | 1,378,185 |
Lot deposits | 247,207 | 277,258 |
Other assets | 80,759 | 59,438 |
Investments in unconsolidated entities | 15,364 | 14,008 |
Property and equipment, net | 7,043 | 7,337 |
Right-of-use assets | 20,280 | 24,084 |
Goodwill | 172,207 | 172,207 |
Total assets | 2,562,439 | 2,371,137 |
Liabilities | ||
Accounts payable | 134,115 | 134,702 |
Accrued expenses | 207,389 | 184,051 |
Customer deposits | 172,574 | 145,654 |
Construction lines of credit | 530,384 | 966,248 |
Senior unsecured notes, net | 293,918 | 0 |
Lease liabilities | 21,114 | 24,661 |
Contingent consideration | 116,795 | 115,128 |
Total liabilities | 1,476,289 | 1,570,444 |
Commitments and contingencies (Note 5) | ||
Mezzanine Equity | ||
Preferred mezzanine equity | 148,500 | 156,045 |
Stockholders’ Equity | ||
Additional paid-in capital | 275,241 | 264,757 |
Retained earnings | 648,412 | 365,994 |
Noncontrolling interests | 13,066 | 12,970 |
Total mezzanine and stockholders’ equity | 1,086,150 | 800,693 |
Total liabilities, mezzanine equity and stockholders’ equity | 2,562,439 | 2,371,137 |
Class A Common Stock | ||
Stockholders’ Equity | ||
Common stock, value | 329 | 325 |
Class B Common Stock | ||
Stockholders’ Equity | ||
Common stock, value | $ 602 | $ 602 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Class A Common Stock | ||
Stockholders’ Equity | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 289,000,000 | 289,000,000 |
Common stock shares outstanding (in shares) | 32,882,124 | 32,533,883 |
Class B Common Stock | ||
Stockholders’ Equity | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 61,000,000 | 61,000,000 |
Common stock shares outstanding (in shares) | 60,226,153 | 60,226,153 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | |||
Total revenues | $ 3,748,586 | $ 3,342,335 | $ 1,923,910 |
Homebuilding cost of sales | 3,011,813 | 2,722,139 | 1,610,332 |
Selling, general and administrative expense | 308,795 | 271,040 | 154,405 |
Income from unconsolidated entities | (18,075) | (16,122) | (9,428) |
Contingent consideration revaluation | 46,590 | 11,053 | 7,533 |
Other income, net | (4,962) | (1,931) | (981) |
Income before taxes | 404,425 | 356,156 | 162,049 |
Income tax expense | (96,483) | (81,859) | (27,455) |
Comprehensive income | 307,942 | 274,297 | 134,594 |
Net income | 307,942 | 274,297 | 134,594 |
Comprehensive income attributable to non-controlling interests | (12,042) | (11,984) | (13,461) |
Net income attributable to non-controlling interests | (12,042) | (11,984) | (13,461) |
Comprehensive income attributable to Dream Finders Homes, Inc. | 295,900 | 262,313 | 121,133 |
Net income attributable to Dream Finders Homes, Inc. | $ 295,900 | $ 262,313 | $ 121,133 |
Earnings per share | |||
Basic (in dollars per share) | $ 3.03 | $ 2.67 | $ 1.27 |
Diluted (in dollars per share) | $ 2.79 | $ 2.45 | $ 1.27 |
Weighted-average number of shares | |||
Basic (in shares) | 93,066,564 | 92,745,781 | 92,521,482 |
Diluted (in shares) | 106,027,548 | 106,691,248 | 95,313,593 |
Homebuilding | |||
Revenues: | |||
Total revenues | $ 3,738,888 | $ 3,334,559 | $ 1,917,301 |
Other | |||
Revenues: | |||
Total revenues | $ 9,698 | $ 7,776 | $ 6,609 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Redeemable Preferred Units/Stock Mezzanine | Redeemable Common Units Mezzanine | Common Units Members’ | Common Stock Common Stock - Class A | Common Stock Common Stock - Class B | Additional Paid-in Capital | Retained Earnings | Total Non- Controlling Interests |
Beginning balance (in shares) at Dec. 31, 2020 | 48,543 | 7,010 | |||||||
Beginning balance at Dec. 31, 2020 | $ 55,638 | $ 20,593 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Reorganization transactions (in shares) | (15,400) | (7,010) | |||||||
Reorganization transactions | $ (19,958) | $ (19,227) | |||||||
Issuance of convertible preferred stock (in shares) | 150,000 | ||||||||
Issuance of convertible preferred stock | $ 148,124 | $ 148,124 | |||||||
Redemptions (in shares) | (26,000) | ||||||||
Redemptions / Redemption of Series B preferred units | $ (25,530) | ||||||||
Distributions | (3,617) | (1,275) | $ (18,384) | ||||||
Net income and comprehensive income | $ 563 | $ (91) | $ (996) | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 157,143 | 0 | |||||||
Ending balance at Dec. 31, 2021 | $ 155,220 | $ 0 | |||||||
Beginning balance (in shares) at Dec. 31, 2020 | 76,655 | 0 | 0 | ||||||
Beginning balance at Dec. 31, 2020 | 212,023 | $ 103,853 | $ 0 | $ 0 | $ 0 | $ 0 | $ 31,939 | ||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Reorganization transactions (in shares) | 76,655 | 21,255,329 | 60,226,153 | ||||||
Reorganization transactions | 0 | $ (84,473) | $ 213 | $ 602 | 122,843 | ||||
Issuance of common stock, net (in shares) | 11,040,000 | ||||||||
Issuance of common stock, net | 129,997 | $ 110 | 129,887 | ||||||
Issuance of convertible preferred stock | 148,124 | 148,124 | |||||||
Stock-based compensation | 5,233 | 5,233 | |||||||
Contributions | 2,000 | 2,000 | |||||||
Redemptions / Redemption of Series B preferred units | (25,530) | ||||||||
Distributions | (46,608) | (13) | (23,319) | ||||||
Preferred stock dividends declared | (3,450) | (3,450) | |||||||
Net income and comprehensive income | 134,594 | 121,657 | 13,461 | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 0 | 32,295,329 | 60,226,153 | ||||||
Ending balance at Dec. 31, 2021 | 556,383 | $ 0 | $ 323 | $ 602 | 257,963 | 118,194 | 24,081 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Net income and comprehensive income | $ 825 | ||||||||
Ending balance (in shares) at Dec. 31, 2022 | 157,143 | 0 | |||||||
Ending balance at Dec. 31, 2022 | 156,045 | $ 156,045 | $ 0 | ||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Stock-based compensation (in shares) | 238,554 | ||||||||
Stock-based compensation | 6,796 | $ 2 | 6,794 | ||||||
Distributions | (23,095) | (23,095) | |||||||
Preferred stock dividends declared | (13,688) | (13,688) | |||||||
Net income and comprehensive income | 274,297 | 261,488 | 11,984 | ||||||
Ending balance (in shares) at Dec. 31, 2022 | 0 | 32,533,883 | 60,226,153 | ||||||
Ending balance at Dec. 31, 2022 | 800,693 | $ 0 | $ 325 | $ 602 | 264,757 | 365,994 | 12,970 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Redemptions (in shares) | (7,143) | ||||||||
Redemptions / Redemption of Series B preferred units | $ (8,132) | ||||||||
Net income and comprehensive income | $ 587 | ||||||||
Ending balance (in shares) at Dec. 31, 2023 | 150,000 | 0 | |||||||
Ending balance at Dec. 31, 2023 | 148,500 | $ 148,500 | $ 0 | ||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Stock-based compensation | 14,098 | 14,098 | |||||||
Vesting of stock-based compensation (in shares) | 371,841 | ||||||||
Vesting of stock-based compensation | 0 | $ 4 | (4) | ||||||
Withholdings of common stock for taxes (in shares) | (23,600) | ||||||||
Withholding of common stock for taxes | (322) | (322) | |||||||
Redemptions / Redemption of Series B preferred units | (11,077) | (3,288) | 343 | ||||||
Distributions | (11,946) | (11,946) | |||||||
Preferred stock dividends declared | (13,238) | (13,238) | |||||||
Net income and comprehensive income | 307,942 | 295,313 | 12,042 | ||||||
Ending balance (in shares) at Dec. 31, 2023 | 0 | 32,882,124 | 60,226,153 | ||||||
Ending balance at Dec. 31, 2023 | $ 1,086,150 | $ 0 | $ 329 | $ 602 | $ 275,241 | $ 648,412 | $ 13,066 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows from Operating Activities | |||
Net and comprehensive income | $ 307,942 | $ 274,297 | $ 134,594 |
Adjustments to reconcile net and comprehensive income to net cash provided by/(used in) operating activities | |||
Depreciation and amortization | 10,651 | 11,252 | 6,065 |
Gain on sale of property and equipment | (56) | (92) | (87) |
Extinguishment of unamortized debt issuance costs | 0 | 283 | 507 |
Amortization of lease right-of-use assets | 7,245 | 5,839 | 3,786 |
Stock-based compensation | 14,098 | 6,796 | 5,233 |
Income from Paycheck Protection Program | 0 | 0 | 7,220 |
Deferred income tax benefit | (22,345) | (294) | (946) |
Return on investments, net of income from unconsolidated entities | (1,286) | 1,810 | (3,918) |
Contingent consideration revaluation | 46,590 | 11,053 | 7,533 |
Payments of contingent consideration | (12,331) | (4,461) | 0 |
Changes in Operating Assets and Liabilities | |||
Accounts receivable | 12,616 | (11,850) | (16,717) |
Inventories | (61,623) | (311,523) | (80,196) |
Lot deposits | 30,051 | (35,852) | (134,238) |
Other assets | (1) | (2,868) | (1,746) |
Accounts payable and accrued expenses | 22,750 | 65,748 | 63,361 |
Customer deposits | 26,921 | (32,031) | 78,167 |
Lease liabilities | (6,988) | (5,730) | (3,646) |
Net cash provided by/(used in) operating activities | 374,234 | (27,623) | 64,972 |
Cash Flows from Investing Activities | |||
Purchase of property and equipment | (4,781) | (5,545) | (2,774) |
Proceeds from disposal of property and equipment | 367 | 152 | 508 |
Investments in unconsolidated entities | (300) | (300) | (1,980) |
Return of investments from unconsolidated entities | 230 | 449 | 668 |
Business combinations, net of cash acquired | 0 | (280) | (519,465) |
Net cash used in investing activities | (4,484) | (5,524) | (523,043) |
Cash Flows from Financing Activities | |||
Proceeds from senior unsecured notes | 300,000 | 0 | 0 |
Proceeds from construction lines of credit | 5,410,000 | 11,023,077 | 1,897,540 |
Repayments on construction lines of credit | (5,845,864) | (10,820,121) | (1,450,639) |
Payments of debt issuance costs | (11,385) | (5,539) | (7,657) |
Proceeds from common stock issuance | 0 | 0 | 143,630 |
Proceeds from issuance of convertible preferred stock | 0 | 0 | 148,500 |
Payments of equity issuance costs | 0 | 0 | (14,009) |
Payments of preferred stock dividends | (13,238) | (13,688) | 0 |
Payments for common stock withheld for taxes | (322) | 0 | 0 |
Conversion of LLC units | 0 | 0 | (123,658) |
Contributions | 0 | 0 | 125,658 |
Distributions | (11,946) | (23,095) | (46,608) |
Redemptions of preferred units | (11,077) | 0 | (25,530) |
Payments of contingent consideration | (32,592) | (13,679) | (1,207) |
Net cash (used in)/provided by financing activities | (216,424) | 146,955 | 646,020 |
Net increase in cash, cash equivalents and restricted cash | 153,326 | 113,808 | 187,949 |
Cash, cash equivalents and restricted cash at beginning of period | 395,130 | 281,322 | 93,373 |
Cash, cash equivalents and restricted cash at end of period | 548,456 | 395,130 | 281,322 |
Reconciliation of cash, cash equivalents and restricted cash | |||
Cash and cash equivalents | 494,145 | 364,531 | 227,227 |
Restricted cash | 54,311 | 30,599 | 54,095 |
Total cash, cash equivalents and restricted cash | 548,456 | 395,130 | 281,322 |
Supplemental disclosures of cash payments: | |||
Cash paid for interest | 80,111 | 105,224 | 33,946 |
Cash paid for income taxes, net of refunds | 81,320 | 47,935 | 27,819 |
Noncash Financing Activities | |||
Contingent consideration | 0 | (1,841) | 94,573 |
Financed land payments to seller | 0 | 0 | 8,916 |
Total noncash financing activities | $ 0 | $ (1,841) | $ 103,489 |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Nature of Business and Significant Accounting Policies | Nature of Business and Significant Accounting Policies Nature of Business Dream Finders Homes, Inc. (together with its subsidiaries, “Dream Finders”, the “Company” or “DFH, Inc.”) designs, builds and sells homes in markets throughout the United States. The Company also offers title insurance and mortgage banking solutions. The Company was incorporated in the State of Delaware on September 11, 2020. Principles of Consolidation The accompanying consolidated financial statements include the accounts of DFH, Inc., its wholly owned subsidiaries and its investments that qualify for consolidation treatment (Note 6, Variable Interest Entities ). The noncontrolling interests represent equity interests held by others in certain of our subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. There are no other components of comprehensive income not already reflected in net and comprehensive income on our Consolidated Statements of Comprehensive Income. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Cash and Cash Equivalents and Concentration Risk Cash and cash equivalents consist of highly liquid instruments, with original maturities of three months or less. Cash and cash equivalents include cash proceeds from home closings in-transit from or held by third-party title company escrow accounts for the benefit of the Company, typically for less than five days. At various times throughout the year, the Company may have cash deposited with financial institutions that exceed the federally insured deposit amount. The Company has entered into insured cash sweep account agreements that protect material deposit balances with certain financial institutions. In addition, management reviews the financial viability of these financial institutions on a periodic basis and does not anticipate that any potential nonperformance by the financial institutions would have a material impact to the Company’s results of operations or cash flows. Restricted Cash Restricted cash represents funds held in accounts that are restricted for specific purposes, primarily related to escrow monies held in title companies. Inventories and Cost of Sales Inventories inclu de the costs of direct land acquisition, land development, construction, capitalized interest on qualifying assets, lot option fees, real estate taxes and direct overhead costs incurred related to land acquisition and development, home construction, and sales commissions. Indirect overhead costs are charged to selling, general, and administrative expenses as incurred. Land and development costs are typically allocated to individual residential lots on a pro rata basis based on the number of lots in the development. The costs of residential lots are transferred to construction in process when home construction begins and are expensed on a specific identification basis as homebuilding cost of sales as the homes close. Homebuilding cost of sales for homes closed includes the specific construction costs of each home and all applicable land acquisition, land development and related costs allocated to each residential lot, as well as interest and sales commissions. Inventories are carried at the lower of accumulated cost or net realizable value. The Company reviews the performance and outlook of its inventories for indicators of potential impairment at the community level on a quarterly basis. In addition to considering market and economic conditions, the Company assesses current sales absorption levels and recent profitability. The Company looks for instances where sales prices for homes in backlog or potential sales prices for future sold homes (expected undiscounted future cash flows) would be at a level at which the carrying value of the home may not be recoverable. Recoverability is measured by comparing the expected undiscounted future cash flows of the inventory to its carrying amount. There were $2.0 million and $1.8 million in inventory impairment charges recorded for the years ended December 31, 2023 and 2022, respectively, and no impairment charges recorded for the year ended December 31, 2021. Debt Issuance Costs Debt issuance costs that are recorded to capitalized interest are amortized to interest expense over the estimated economic life of the underlying debt instrument using the straight-line method, which approximates the effective interest method. Portions of this amortization are evaluated for capitalization as inventories and subsequently expensed through cost of sales at the home closing. Lot Deposits Lot deposits represent amounts paid by the Company to secure the ability to acquire finished lots or land for development through an option contract. The contracts provide for a due diligence period, during which the deposit is refundable. After this period, the deposit may be partially or completely forfeited should the Company decide not to proceed. The Company reviews lot deposits for impairment on a quarterly basis and will record an impairment charge if it believes it will forfeit its deposit on an individual or portfolio of lots. Impairment charges are included in selling, general and administrative expense (“SG&A”) on the Consolidated Statements of Comprehensive Income. There were $3.3 million and $3.0 million in impairment charges recorded for the years ended December 31, 2023 and 2022 , respectively, a nd no impairment charges recorded for the year ended December 31, 2021. Variable Interest Entities and Investments in Unconsolidated Entities Pursuant to Accounting Standards Codification (“ASC”) 810 and subtopics related to the consolidation of variable interest entities (“VIEs”), m anagement analyzes the Company’s investments first under the variable interest model to determine if they are VIEs and, if so, whether the Company is the primary beneficiary. Management determines whether the Company is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion if changes to the Company’s involvement arise. To make this determination, management considers factors such as whether the Company could direct finance, determine or limit the scope of the entity, sell or transfer property, direct development or direct other operating decisions. The primary beneficiary is defined as the entity having both of the following characteristics: 1) the power to direct the activities that most significantly impact the VIE’s performance, and 2) the obligation to absorb losses and rights to receive the returns from the VIE that would be potentially significant to the VIE. Management consolidates the entity if the Company is the primary beneficiary or if a standalone primary beneficiary does not exist and the Company and its related parties collectively meet the definition of a primary beneficiary. If the investment does not qualify as a VIE under the variable interest model, management then evaluates the entity under the voting interest model to assess if consolidation is appropriate. Refer to Note 6, Variable Interest Entities, for a description of the Company’s interests, including which entities were determined to be VIEs. Accounting for Unconsolidated VIEs Investments for which the Company is not identified as the primary beneficiary, but the Company has significant influence are accounted for as equity method investments. Investments for which the Company does not have significant influence are accounted for at cost under the cost method. Equity and cost method investments are classified as investments in unconsolidated entities on the Consolidated Balance Sheets. For equity method investments, the Company shares in the earnings (losses) of these unconsolidated entities generally in accordance with its respective equity interests. In some instances, the Company recognizes earnings (losses) that differ from its equity interest in the unconsolidated entity. For distributions received from equity method investments, the Company has elected to use the cumulative earnings approach for the Consolidated Statements of Cash Flows. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized are treated as returns on investment within operating cash flows and those in excess of that amount are treated as returns of investment within investing cash flows. When applicable dividends are declared for the cost method investments, we record them as income of unconsolidated entities on the Consolidated Statements of Comprehensive Income. Leases The Company determines if an arrangement is, or contains, a lease at inception. We recognize leases when the contract provides us the right to use an identified asset for a period of time in exchange for consideration. Leases are included in right-of-use (“ROU”) assets and lease liabilities in the Consolidated Balance Sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an explicit rate, management uses the Company’s incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. An explicit rate is used when readily determinable. The ROU assets also include any lease payments made, reduced by any lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company applies the practical expedient to combine lease and nonlease components when accounting for the ROU assets and liabilities for all asset classes. Variable lease costs are expensed as incurred. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. Goodwill Goodwill represents the excess of purchase price over the fair value of the assets acquired less the liabilities assumed in a business combination. Refer to Note 7, Contingent Consideration, for details on recent acquisitions. The Company tests for impairment at least annually as of October 1, but the Company tests for impairment more frequently if a triggering event occurs. This test assesses qualitative factors to determine if it is more likely than not that the fair value of the reporting units is less than their carrying value. These qualitative factors include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall performance of the reporting unit and other entity and reporting unit specific events. If the qualitative assessment indicates a stable fair value, no further testing is required. However, if the qualitative assessment indicates that the fair value of a reporting unit has declined past its carrying value, the Company will then calculate the fair value of the reporting unit based on discounted future cash flows. An impairment loss is recorded if this assessment concludes that the fair value of the reporting unit is less than its current carrying value. The Company completed its most recent goodwill impairment test as of October 1, 2023 and determined that the fair value of each of the reporting units was not less than carrying value. No goodwill impairment was recognized during the years ended December 31, 2023, 2022 or 2021. Intangible Assets The Company has intangible assets that consist of trade names that are recorded in connection with acquisitions at their fair value based on the results of valuation analyses. Trademarks acquired in business combinations are generally valued using the relief-from-royalty method, which is a Level 3-type measurement. Trademarks with finite lives are amortized over no more than five-year periods. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred and betterments are capitalized. When items of property and equipment are sold or otherwise disposed, the asset and related accumulated depreciation accounts are eliminated and any gain or loss is included in operations. Depreciation expense is included within SG&A on the Consolidated Statements of Comprehensive Income. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Asset Class Useful Life Years Furniture and fixtures 2-7 Office equipment 4 Software 1-4 Vehicles 5 Buildings 39 Business Combinations and Contingent Consideration Business combinations are evaluated and accounted for in accordance with guidance set forth in ASC 805. Once a business combination has been identified, all material assets and liabilities of the business are recognized at fair value as of the acquisition date. Any residual amount remaining of the purchase price in excess of the fair value of the net assets is recognized as goodwill. In connection with applicable business combinations, the Company records the fair value of contingent consideration as a liability on the acquisition date as prescribed by the underlying agreement. The initial measurement of contingent consideration is based on projected cash flows such as revenues, gross margin, overhead expenses and pre-tax income of the acquired business and is discounted to present value using the discounted cash flow method. Subsequently, the future estimated contingent consideration payments are remeasured to fair value at each reporting date based on the estimated future pre-tax income of the acquired entities and the re-assessment of risk-adjusted discount rates that reflect current market conditions. The adjustments made as a result of the remeasurements at each reporting date are included in contingent consideration revaluation on the Consolidated Statements of Comprehensive Income. Contingent consideration payments are included within cash flows from financing on the Consolidated Statements of Cash Flows to the extent these payments do not exceed the initial liability recorded at the acquisition date for each arrangement. Payments exceeding the initial contingent consideration liability estimated at acquisition are classified as cash used in operating activities. Maximum potential exposure for the contingent consideration payments is not estimable based on the contractual terms, as the contingent consideration arrangements allow a percentage payout based on a potentially unlimited range of pre-tax net income. Customer Deposits Customer deposits are amounts collected from customers in conjunction with the execution of the home sale contract, and are recorded as a liability when cash is received. Customer deposits are applied against the final settlement due at the home closing. In the event of contract cancellation, the customer deposit is contractually forfeited and recognized as homebuilding revenue. Warranty Reserve The Company provides a limited warranty for its homes for a period of one year. The Company’s standard warranty requires the Company or its subcontractors to repair or replace defective construction during such warranty period at no cost to the homebuyer. At the time a home is sold, the Company records an estimate of warranty expense based on historical warranty costs. An analysis of the warranty reserve is performed quarterly to ensure the reserve’s adequacy. The warranty reserve is classified on the Consolidated Balance Sheets as an accrued expense. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, which requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We recognize revenue by following the five-step model: (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. The Company’s revenues consist primarily of home sales in the United States, which is its principal market. Home sale transactions are made pursuant to contracts under which the Company typically has a single performance obligation to deliver a completed home to the homebuyer when closing conditions are met. The Company generally determines the selling price per home based on the expected cost-plus margin. The Company has performed an assessment and its contracts do not contain significant financing terms. A large portion of the Company’s contracts with customers and the related performance obligations have an original expected duration of one year or less. For the majority of contracts, performance obligations are satisfied and revenue is recognized at the point in time when control of the asset is transferred to the customer, which is generally when title to and possession of the home and the risks and rewards of ownership are transferred to the homebuyer on the closing date. Under home sale contracts, the Company typically receives an initial cash deposit from the homebuyer at the time the sales contract is executed and receives the remaining consideration to which the Company is entitled, through an escrow agent, at closing. In certain contracts, the customer controls the underlying land upon which the home is constructed. For these specific contracts, the performance obligation is satisfied over time, as the Company’s performance creates or enhances an asset that the customer controls. The Company recognizes revenue for these contracts based on the percentage of completion of the project, determined by the number of days of construction completed compared to the total estimated number of days to construct the home. Typically, the Company has two types of percentage of completion contracts. The first type is with individual customers for which the Company acts as a general contractor on land owned by the homebuyer. The second is with institutional buyers for which the Company acts as a general contractor on land owned by the institution. Individual customers generally have construction-to-permanent loans that are taken out by the customer. During the underwriting process for our individual and institutional customers, a draw schedule is agreed upon by the bank, the customer, and the Company. Funds are disbursed for labor and materials that have been completed or installed. These both result in a contract asset as work is being completed prior to receiving funds. A contract liability would be recorded in cases where we have received funds in excess of costs incurred. As of December 31, 2023 and 2022, the contract asset related to percentage of completion contracts was $13.7 million and $20.7 million, respectively, and is included in other assets on the Consolidated Balance Sheets. As of December 31, 2023 and 2022, the contract liability related to percentage of completion contracts was $1.2 million and $2.2 million, respectively, and is included in accrued expenses on the Consolidated Balance Sheets. Revenues include forfeited deposits, which occur when home sale or land sale contracts that include a nonrefundable deposit are cancelled. Sales incentives in the form of price concessions on the selling price of a home are recorded as a reduction of revenues. The cost of sales incentives in the form of free or discounted products or services provided to homebuyers, including option upgrades, are reflected in land and development costs because such incentives are identified in home sale contracts with homebuyers as an intrinsic part of the Company’s single performance obligation to deliver and transfer title to the home for the transaction price stated in the contracts. Refer to Note 9, Segment Reporting for a more detailed disaggregation of our revenues by reportable segments. Stock-Based Compensation The Company records expense for restricted stock units awarded to employees in return for employee service. The cost is measured as of the grant-date fair value of the restricted stock units and recognized as stock-based compensation on a straight-line basis over the employee service period, which is normally the vesting period. We recognize forfeitures of restricted stock units as a reduction to stock-based compensation in the period in which they occur . Stock-based compensation is included within SG&A on the Consolidated Statements of Comprehensive Income. Income Taxes Our deferred income tax assets and liabilities are computed for differences between the asset and liability method and financial statement amounts that will result in taxable or deductible amounts in the future. We compute deferred balances based on enacted tax laws and applicable rates for the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized for deferred tax assets if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If we determine we would be able to realize our deferred tax assets for which a valuation allowance had been recorded, then we would adjust the deferred tax asset valuation allowance, which would reduce our provision for income taxes. We evaluate the tax positions taken on income tax returns that remain open and positions expected to be taken on the current year tax returns to identify uncertain tax positions. Unrecognized tax benefits on uncertain tax positions are recorded on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is more than 50% likely to be realized is recognized. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. Our proportional share of the Company’s subsidiaries’ provisions are included in our consolidated financial statements. Refer to Note 8, Income Taxes. Reclassifications Certain reclassifications have been made in the 2022 and 2021 consolidated financial statements to conform to the classifications used in 2023. Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) Number 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires more disaggregated income tax disclosures, including additional information in the rate reconciliation and additional disclosures about income taxes paid. ASU 2023-09 will become effective for us for the fiscal year ending December 31, 2025. Early adoption is permitted, and guidance should be applied prospectively, with an option to apply guidance retrospectively. We are currently evaluating the impact of the adoption of ASU 2023-09 on our consolidated financial statements. In November 2023, the FASB issued ASU Number 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker(s) that are included within each reported measure of segment profit or loss. The guidance also expands disclosure requirements for interim periods, as well as requires disclosure of other segment items, including the title and position of the entity’s chief operations decision maker(s). ASU 2023-07 will become effective for us for the fiscal year ending December 31, 2024, and for interim periods starting in our first quarter of 2025. Early adoption is permitted, and guidance is required to be applied retrospectively. We are currently evaluating the impact of the adoption of ASU 2023-07 on our consolidated financial statements. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Line of Credit Facility [Abstract] | |
Debt | Debt Senior Unsecured Notes On August 22, 2023, the Company issued $300.0 million in aggregate principal amount of 8.25% senior unsecured notes due August 15, 2028 (the “2028 Notes”), which were issued pursuant to an indenture (the “Indenture”). Interest on the 2028 Notes is payable in arrears semiannually on each February 15 and August 15, beginning February 15, 2024. The 2028 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of the Company’s subsidiaries. The Company received net proceeds from the issuance and sale of the 2028 Notes of $293.5 million after unamortized debt issuance costs of $6.5 million, which reduce the carrying value of the 2028 Notes reported on the Consolidated Balance Sheets. The net proceeds from the 2028 Notes were used to repay a portion of the then outstanding balance under the Company’s Credit Agreement. As of December 31, 2023, unamortized debt issuance costs were $6.1 million. The 2028 Notes are redeemable by the Company prior to August 15, 2025 through the payment of the principal amount due, which can be accomplished through the issuance of certain restricted equity offerings for specified portions of principal notes outstanding, plus specified rates and accrued and unpaid interest, and a make-whole premium in the event 100% of the principal amount is redeemed. On or after August 15, 2025, the 2028 Notes are redeemable at specified rates equal to 104.1% of the principal balance, plus accrued and unpaid interest, and periodically decrease to 100% on August 15, 2027. Upon the occurrence of a Change of Control (as defined in the Indenture), the holders of the 2028 Notes will have the right to require the Company to repurchase all or a portion of the 2028 Notes at a price equal to 101% of the aggregate principal amount of the 2028 Notes, plus any accrued and unpaid interest. The Indenture includes customary events of default. Subject to specified exceptions, the Indenture contains certain restrictive covenants that, among other things, limit our ability to incur or guarantee certain indebtedness, issue certain equity interests or engage in certain capital stock transactions. In addition, the Indenture contains certain limitations related to mergers, consolidations, and transfers of assets. Credit Agreement On July 19, 2023, the Company entered into amendments to its existing credit agreement (as amended, the “Credit Agreement”). The amendments, among other things, (i) provide for an increase in the aggregate commitments under the revolving credit facility to $1.2 billion, subject to a borrowing base; (ii) extend the maturity date from June 2, 2025 to July 17, 2026 for certain new and existing lenders comprising $1.1 billion of the $1.2 billion of aggregate commitments under the Credit Agreement; (iii) authorize the non-extending lenders to extend their maturity dates to July 17, 2026, with the consent of the Company; (iv) provide the Company with the ability to incur certain additional unsecured debt; and (v) reference a Secured Overnight Financing Rate (“SOFR”) based rate, as described below. Certain of our subsidiaries guaranteed the Company’s obligations under the Credit Agreement. The amendments also updated the Company’s minimum tangible net worth covenant which resulted in an increase to the base component of such covenant from $385.0 million to $607.0 million. The Credit Agreement retains an accordion feature that allows the aggregate commitments to increase up to $1.6 billion, subject to a borrowing base. Under the Credit Agreement, the Company has the option to draw “Term SOFR Rate Loans” or “Daily Simple SOFR Rate Loans”. Term SOFR Rate Loans bear interest based on Term SOFR rates for one, three or six-month interest periods, which include SOFR adjustments of 10, 15 and 25 basis points for each interest period, respectively. Daily Simple SOFR Rate Loans bear interest based on Daily Simple SOFR rates and include a SOFR adjustment of 10 basis points. Interest under Term SOFR Rate Loans and Daily Simple SOFR Rate Loans also include an “applicable rate margin” determined based on the Company’s net debt to capitalization ratio, equivalent to credit spreads of 2.5% to 3.3%. As of December 31, 2023 and 2022, the outstanding balance under the Credit Agreement was $530.0 million and $965.0 million, respectively. Under the Credit Agreement, the funds available are unsecured and availability under the borrowing base is calculated based on specific advance rates for each of finished lots, construction in process, and finished homes inventory on the Consolidated Balance Sheets, and reduced for any outstanding unsecured indebtedness permitted under the Credit Agreement, including the 2028 Notes. The Company had capitalized debt issuance costs related to construction lines of credit, net of amortization, of $7.0 million and $7.3 million as of December 31, 2023 and 2022, respectively, which were included in other assets on the Consolidated Balance Sheets. Debt issuance costs that are recorded to capitalized interest are expensed in cost of sales as the homes close. The Company was in compliance with all debt covenants as of December 31, 2023 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of owned land and fi nished lots, and construction in process (“CIP”) and finished homes, including capitalized interest costs incurred under our debt obligations discussed in Note 2. In addition, preconstruction costs related to finished lots or land under development held by third-party land bank partners incurred prior to the Company’s purchase of the land, including lot option fees, property taxes and due diligence costs are capitalized into owned land and lots. Finished lots are generally purchased just-in-time for construction, whether for speculative (“spec”) or sold homes, and are included within owned land and lots in the table below until construction begins when the finished lot cost is transferred to CIP. CIP represents homes under construction or completed, including sold, spec and model homes. CIP includes the cost of finished lots and all direct costs incurred to build homes. The cost of homes is expensed on a specific identification basis when the home is delivered to the customer. Inventories consisted of the following as of December 31, 2023 and 2022 (in thousands) : As of 2023 2022 Construction in process and finished homes $ 1,251,767 $ 1,148,654 Owned land and lots 188,482 229,531 Inventories $ 1,440,249 $ 1,378,185 Capitalized interest activity related to our construction lines of credit and senior unsecured notes, net is summarized in the table below for the years ended December 31, 2023 and 2022 (in thousands): Year Ended 2023 2022 Capitalized interest as of beginning of the period $ 27,682 $ 16,317 Interest incurred 77,278 52,972 Interest expensed (1) (32) Interest charged to homebuilding cost of sales (77,648) (41,575) Capitalized interest as of end of the period $ 27,311 $ 27,682 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property Plant and Equipment Income Statement Disclosures [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net consisted of the following as of December 31, 2023 and 2022 (in thousands): As of 2023 2022 Furniture and fixtures $ 22,787 $ 18,753 Buildings 401 401 Land 216 216 Vehicles 92 64 Office equipment and software 2,156 3,733 Total property and equipment 25,652 23,167 Less: Accumulated depreciation (18,609) (15,830) Property and equipment, net $ 7,043 $ 7,337 Depreciation expense was $4.8 million, $5.0 million and $3.7 million for the years ended December 31, 2023, 2022 and 2021, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings We are party to legal matters from time to time that typically are derived from the Company’s general business practices, primarily related to the construction of homes. The Company believes that if a claim has merit, parties other than the Company would be, at least in part, liable for the claim, and the eventual outcome of the claim would not have a material adverse effect upon our consolidated financial statements. When we believe that a loss is probable and estimable, we record the estimated contingency loss in our Consolidated Statements of Comprehensive Income. We do not believe that any future outcomes of any claims or lawsuits currently outstanding will have a material adverse effect upon our consolidated financial statements. Leases The Company has operating leases primarily associated with office space that is used by our divisions, model home sale-leasebacks and a corporate office building sale-leaseback in Jacksonville, Florida. This corporate office building lease has a remaining lea se term of 11 years with potential renewal options. There are no significant operating or finance leases that have not yet commenced as of December 31, 2023. The following table shows the operating lease costs for the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, Lease Cost Classification 2023 2022 2021 Operating lease cost (1) Selling, general and administrative expense $ 12,378 $ 11,547 $ 6,403 (1) Includes short-term leases and variable lease costs which are immaterial. Supplemental disclosure of noncash activities related to leases was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Leased assets obtained in exchange for new operating lease liabilities $ 3,442 $ 10,564 $ 8,149 During the year ended December 31, 2023, there have been no material changes in our lease liabilities for the next five years. As of 2023 2022 Weighted average remaining lease term Operating leases 6 years 6 years Weighted average discount rate Operating leases 6.3% 6.3% The following table shows the maturities of our lease liabilities as of December 31, 2023 (in thousands): Maturity of Lease Liabilities Operating Leases (1) 2024 $ 7,072 2025 4,661 2026 3,595 2027 2,120 2028 1,695 Thereafter 6,102 Total lease payments 25,245 Less: Interest 4,131 Present value of lease liabilities $ 21,114 (1) We use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2023 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Variable Interest Entities The Company holds investments in certain limited partnerships and similar entities that conduct land acquisition, land development and/or other homebuilding activities in various markets where our homebuilding operations are located, which are considered variable interests. The Company’s investments create a variable interest in a VIE, depending on the contractual terms of the arrangement. Additionally, the Company, in the ordinary course of business, enters into option contracts with third parties and unconsolidated entities for the ability to acquire rights to finished lots for the construction of homes. Under these contracts, the Company typically makes a specified earnest money deposit in consideration for the right to purchase finished lots in the future, usually at a predetermined price. The VIEs are funded by initial capital contributions from the Company, as well as its other partners, and generally do not have significant debt. In some cases, an unrelated third party is the general partner or managing member and, in others, the general partner or managing member is a related party. The primary risk of loss associated with the Company’s involvement in these VIEs is limited to the Company’s initial capital contributions due to bankruptcy or insolvency of the VIE; however, management has deemed the likelihood of this as remote. The maximum exposure to loss related to the VIEs is disclosed below for both consolidated and unconsolidated VIEs, which equals the Company’s capital investment in each entity. For VIEs that the Company does consolidate, management has the power to direct the activities that most significantly impact the VIEs’ economic performance. The Company typically serves as the party with homebuilding expertise in the VIE. The Company does not guarantee the debts of the VIEs, and creditors of the VIEs have no recourse against the Company. For VIEs that the Company does not consolidate, the Company does not hold the power to direct the activities that most significantly impact the VIEs’ economic performance. The Company’s maximum exposure to loss is limited to its investment in the entities because the Company is not obligated to provide them any additional capital and does not guarantee any of the unconsolidated VIEs’ debt or other liabilities. The tables below display the carrying amounts of the assets and liabilities related to the consolidated VIEs, as well as the Company’s investments in unconsolidated VIEs (in thousands): As of December 31, Consolidated 2023 2022 Assets $ 4,075 $ 13,344 Liabilities 1,766 4,787 As of December 31, Unconsolidated 2023 2022 Jet HomeLoans (1) $ 9,301 $ 7,102 Other unconsolidated VIEs 6,063 6,906 Total investment in unconsolidated VIEs $ 15,364 $ 14,008 (1) On September 30, 2023, the joint venture was converted into a limited partnership, now known as Jet HomeLoans LP (“Jet HomeLoans”). Refer to Note 11, Related Party Transactions for more information. Lot Option Contracts The Company generally does not engage in the land development business. Instead, the Company employs an asset-light land financing strategy, providing us optionality to purchase lots on a ‘‘just-in-time’’ basis for construction and affording us flexibility to acquire lots at a rate that matches the expected sales pace in a given community. The Company primarily employs two variations of our asset-light land financing strategy—finished lot option contracts and land bank option contracts—pursuant to which the Company secures the right to purchase finished lots at predetermined market prices from various land sellers and land bank partners, by paying deposits based on the aggregate purchase price of the finished lots. These option contracts generally allow us, at our option, to forfeit our right to purchase the lots controlled for any reason, and our sole legal obligation and economic loss as a result of such forfeitures is limited to the amount of the deposits paid pursuant to such option contracts and, in the case of land bank option contracts, our loss is limited to the related lot option fees paid to the land bank partner, and for certain land bank option contracts, any potential performance obligations, management of the land development to completion and any cost overruns relative to the project. None of the creditors of any of the land bank entities with which the Company enters into lot option contracts have recourse to our general credit. The Company generally does not have any specific performance obligations to purchase any of the lots or guarantee any of the land bankers’ liabilities. The Company is not involved in the design or creation of the land bank entities from which the Company purchases lots under lot option contracts. The land bankers’ equity holders have the power to direct 100% of the operating activities of the land bank entity and the Company has no voting rights. The sole purpose of the land bank entity’s activities is to generate returns for such entity’s equity holders. Further, the Company does not share in any of the profit or loss generated by the project’s development. The profits and losses are passed directly to the land bankers’ equity holders. The deposit placed by us pursuant to the lot option contracts is deemed to be a variable interest in the respective land bank entities. Certain of those land bank entities are deemed to be VIEs. Therefore, the land bank entities with which the Company enters into lot option contracts are evaluated for possible consolidation by the Company. The Company believes the activities that most significantly impact a land bank entity’s economic performance are the operating activities of the land bank entity. In the case of development projects, unless and until a land bank entity delivers finished lots for sale, the land bank entity’s equity investors bear the risk of land ownership and do not earn any revenues, except for lot option fees paid by the Company. The operating development activities are directed by the land bank entity’s equity investors. Dream Finders possesses no more than limited protective legal rights through the lot option contracts in the specific finished lots that are purchased, and possesses no participative rights in the land bank entities. Accordingly, the Company does not have the power to direct the activities of a land bank entity that most significantly impact its economic performance. For the aforementioned reasons, the Company concluded that it is not the primary beneficiary of the land bank entities with which it enters into lot option contracts, and therefore the Company does not consolidate any of these VIEs. The Company’s risk of loss related to finished lot option and land bank option deposits and related fees was $328.0 million and $461.6 million as of December 31, 2023 and 2022, respectively . |
Contingent Consideration
Contingent Consideration | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Contingent Consideration | Contingent Consideration As of December 31, 2023 and 2022, the Company remeasured the fair value of contingent consideration related to the 2020 acquisition of H&H Constructors of Fayetteville, LLC and adjusted the liability to $11.7 million and $11.6 million, respectively, based on actual results achieved, revised pre-tax income forecasts and revised discount rates as of the balance sheet date and from accretion of the liability . The Company recorded contingent consideration adjustments resulting in $2.9 million of expense , $2.0 million of income, and $4.6 million of expense for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 , there were 9 months remaining under the contingent consideration agreement. As of December 31, 2023 and 2022, the Company remeasured the fair value of contingent consideration related to the September 2021 acquisition of McGuyer Homebuilders, Inc. (“MHI”) and adjusted the liability to $105.1 million and $102.1 million , respectively, based on actual results achieved, revised pre-tax income forecasts and revised discount rates as of the balance sheet date and from accretion of the liability . The Company recorded contingent consideration adjustments resulting in expense of $43.3 million, $12.4 million, and $2.2 million for the year ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 , there were 21 months remaining under the contingent consideration agreement. Refer to Note 10, Fair Value Disclosures for the fair value measurement for contingent consideration. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is a corporation subject to U.S. federal income taxes, in addition to state and local income taxes. Income tax expense for the years ended December 31, 2023, 2022 and 2021 , consists of the following (in thousands): Year Ended December 31, 2023 2022 2021 Current: Federal $ 101,093 $ 66,473 $ 26,336 State 17,734 15,680 5,088 Total current 118,827 82,153 31,424 Deferred: Federal (19,471) 5 (3,305) State (2,873) (299) (664) Total deferred (22,344) (294) (3,969) Total income tax expense $ 96,483 $ 81,859 $ 27,455 The following table reconciles the statutory federal income tax rate to the effective income tax rate: Year Ended December 31, 2023 2022 2021 Income taxes at federal statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal tax 2.8 3.5 2.4 Federal tax credits (0.6) (3.9) (5.9) Non-deductible executive compensation 1.0 1.3 0.8 Other (0.3) 1.1 0.2 Effective tax rate 23.9 % 23.0 % 18.5 % The significant components of deferred income tax assets and liabilities as of December 31, 2023 and 2022, consist of the following (in thousands): As of 2023 2022 Deferred tax assets: Contingent consideration $ 14,876 $ 4,145 Incentive compensation plans 9,232 246 Lease liabilities 4,951 5,809 Other 9,705 2,493 Total deferred tax asset 38,764 12,693 Deferred tax liabilities: Right-of-use assets (4,789) (5,674) Other (7,106) (2,493) Total deferred tax liabilities (11,895) (8,167) Net deferred tax asset $ 26,869 $ 4,526 Management believes that we will have sufficient future taxable income to make it more likely than not that the net deferred tax assets will be realized. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company primarily operates in the homebuilding business and is organized and reported primarily by region. During the third quarter of 2023, organization of the homebuilding segments for making operating decisions and assessing performance changed from divisional to regional. There are now four reportable segments, which are comprised of the following: • Southeast (Jacksonville, Orlando, and Tampa, Florida; Savannah, Georgia; Hilton Head and Bluffton, South Carolina; Active Adult and Custom Homes operations in northeast Florida) • Mid-Atlantic (The Carolinas and DC Metro) • Midwest ( Austin, Dallas, Houston and San Antonio, Texas and Denver, Colorado ) • Financial Services (primarily Jet HomeLoans and Golden Dog Title and Trust) The corporate component, which is not considered an operating segment, is reported separately as “Corporate”. In accordance with ASC 280, operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision-makers (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM primarily evaluate performance based on the number of homes closed, average sales price and financial results. Segment profitability is primarily measured by income before taxes. The following tables summarize revenues and net and comprehensive income by segment for the years ended December 31, 2023, 2022 and 2021 as well as total assets and goodwill by segment as of December 31, 2023 and 2022 (in thousands): Year Ended December 31, Revenues: 2023 2022 2021 Southeast $ 1,521,414 $ 1,237,389 $ 914,765 Mid-Atlantic 633,131 566,632 464,070 Midwest 1,584,343 1,530,538 538,466 Financial Services 48,878 34,175 34,665 Total segment revenues 3,787,766 3,368,734 1,951,966 Reconciling items from equity method investments (39,180) (26,399) (28,056) Consolidated revenues $ 3,748,586 $ 3,342,335 $ 1,923,910 Year Ended December 31, Income before taxes 2023 2022 2021 Southeast $ 183,537 $ 165,367 $ 103,136 Mid-Atlantic 54,646 40,028 25,277 Midwest 168,115 164,377 35,585 Financial Services 28,915 21,219 11,782 Corporate (1) (21,334) (28,971) (7,110) Total segment income before taxes 413,879 362,020 168,670 Reconciling items from equity method investments (9,454) (5,864) (6,621) Consolidated income before taxes $ 404,425 $ 356,156 $ 162,049 Assets: Goodwill: December 31, December 31, 2023 2022 2023 2022 Southeast $ 781,162 $ 770,029 $ 14,003 $ 14,003 Mid-Atlantic 404,657 422,490 16,853 16,853 Midwest 915,199 1,007,604 141,071 141,071 Financial Services 207,385 170,151 280 280 Corporate (1) 407,932 89,696 — — Total segments 2,716,335 2,459,970 172,207 172,207 Reconciling items from equity method investments (153,896) (88,833) — — Consolidated $ 2,562,439 $ 2,371,137 $ 172,207 $ 172,207 (1) |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair Value Disclosures Fair value represents the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values are determined using a fair value hierarchy based on the inputs used to measure fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 inputs are inputs other than quoted market prices that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable and significant to the fair value. The following table presents a summary of the change in fair value measurement of contingent consideration, which is based on Level 3 inputs and is the only asset or liability measured at fair value on a recurring basis (in thousands): Beginning balance, December 31, 2022 $ 115,128 Fair value adjustments related to prior year acquisitions 46,590 Contingent consideration payments (44,923) Ending balance, December 31, 2023 $ 116,795 Fair value measurements may also be utilized on a nonrecurring basis, such as for the impairment of long-lived assets and inventory. The fair value of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, notes payable and customer deposits, approximate their carrying amounts due to the short-term nature of these instruments. The fair value of the construction lines of credit approximate their carrying amounts since they are subject to short-term floating interest rates that reflect current market rates. The senior unsecured notes are Level 2 financial instruments. The estimated fair value of the 2028 Notes as of December 31, 2023 is $318.2 million, based on recent trades or quoted market prices for debt of similar terms, including maturity, to achieve comparable yields. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company enters into or participates in related party transactions. The majority of these transactions are entered into to secure finished lots for the construction of new homes. DF Capital Management, LLC Funds DF Capital Management, LLC (“DF Capital”) organizes real estate investment funds to acquire land and develop and sell finished lots. DF Capital is the investment manager of the funds. The Company owns a 49% membership interest in DF Capital. DF Capital is controlled by unaffiliated parties. DF Residential I, LP (“Fund I”), the first of such investment vehicles was fully committed in 2019 with total capital commitments of $36.7 million. Dream Finders Homes LLC and DFH Investors LLC, collectively, invested $1.4 million or 3.8% of the total committed capital of Fund I. Fund I is nearing its final stage in which residual earnings are distributed. DF Residential II, LP (“Fund II”) was organized in 2021. DF Management GP II, LLC, serves as the general partner of Fund II (the “General Partner”). The Company indirectly owns 72.0% of the membership interests in the General Partner and receives 72.0% of the economic interests. The General Partner is controlled by unaffiliated parties. Fund II was fully committed as of January 2022 with total capital commitments of $322.1 million. The Company invested $3.0 million or 0.9% of the total committed capital of Fund II. Certain directors, executive officers and members of management invested as limited partners in Fund II in an aggregate amount of $33.9 million or 10.5% of the total committed capital. In addition, Rockpoint Group, LLC, an affiliate of a former director of the Company invested $100.0 million in Fund II. On March 11, 2021, the Company entered into land bank financing arrangements and a Memorandum of Right of First Offer with Fund II, under which Fund II has an exclusive right of first offer on any land bank financing projects that meet its investment criteria and are undertaken by the Company during Fund II’s investment period. DF Capital raised additional commitments from limited partners through deals other than Fund I and Fund II, which provided land bank financing for specific projects. One of the Company’s officers invested $0.2 million in one of these funds managed by DF Capital as a limited partner in 2019. The Company continues to purchase lots controlled by these funds. As of December 31, 2023 and 2022 , the Company had $48.5 million and $58.6 million , respectively, in outstanding lot deposits primarily related to Fund II and other land bank transaction deals in relation to DF Capital projects, controlling approximately 4,028 lots. Aircraft Agreement In November 2023, the Company entered into an aircraft dry lease agreement with a company owned by Patrick Zalupski, DFH’s President, Chief Executive Officer, and Chairman of the Board (the “Aircraft Agreement”). The Aircraft Agreement provides the Company access to an airplane owned by Mr. Zalupski on a non-exclusive basis at a fixed monthly rate for an annually set number of hours. The Aircraft Agreement has an eight-year term, which is automatically extended for up to two successive one-year periods unless terminated by either party. The Company and Mr. Zalupski have separately contracted with a non-affiliated aviation management entity to provide aircraft-related services. The Company incurred $1.3 million in expense related to the use of the airplane during the year ended December 31, 2023, inclusive of one-time set-up and other costs incurred prior to the commencement of the Aircraft Agreement, included in selling, general and administrative expense on the Consolidated Statement of Comprehensive Income . Transactions with Rockpoint Group, LLC and affiliates From time to time, the Company enters into land bank option contracts with Rockpoint Group, LLC (“Rockpoint”) or its affiliates in connection with the Company’s acquisition and development of land. Rockpoint or its affiliate provides the funding for the land acquisition and the Company secures the right to purchase finished lots at market prices by paying deposits based on the aggregate purchase price of the finished lots and any related fees, similar to land bank option contracts with third-party land bankers. William H. Walton III is the founding principal and chief executive officer of Rockpoint. Mr. Walton served as a member of the Board through May 21, 2023. During the year ended December 31, 2023 , no transactions were entered into between Rockpoint and the Company. Jet HomeLoans LP, formerly Jet HomeLoans LLC Jet HomeLoans performs mortgage origination activities for the Company, including underwriting and originating home mortgages for Company customers and non-Company customers. On September 30, 2023, the Company entered into a limited partnership agreement with the partners of Jet HomeLoans LLC to convert the venture into Jet HomeLoans LP. As part of the limited partnership agreement, the Company’s ownership percentage changed from 49.9% to 60.0%, but the Company is not the primary beneficiary. The change in ownership was effectuated through a distribution to the partners in exchange for the additional 10.1% ownership. Jet HomeLoans is accounted for under the equity method and is a related party of the Company. Jet HomeLoans is included within the Financial Services segment (Note 9, Segment Reporting). |
Mezzanine and Stockholders_ Equ
Mezzanine and Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Mezzanine and Stockholders’ Equity | Mezzanine and Stockholders’ Equity Series B Preferred Units On August 31, 2023, the Company redeemed all of its previously 7,143 outstanding Series B preferred units . The Company made an aggregate cash payment to the Series B holders of $11.1 million, which included $7.1 million in principal plus cumulative undistributed earnings, less a negotiated discount on that date. Following the redemption, no Series B preferred units remain outstanding. The difference between the carrying amount and the cash redemption was reclassified to retained earnings as it reflects a return from the Series B unit holders and resulted in a one-time, non-cash increase to net income available to common stockholders of $0.3 million utilized in the computations of basic and diluted earnings per share for the year ended December 31, 2023. Share Buyback Program In June 2023, the Company’s Board of Directors (the “Board”) approved a share buyback program under which the Company can repurchase up to $25.0 million of its Class A common stock through June 30, 2026 in open market purchases, privately negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The actual timing, number and value of shares repurchased under the share buyback program will depend on a number of factors, including constraints specified in relation to price, general business and market conditions, and alternative investment opportunities. The share buyback program does not obligate the Company to acquire any specific number of shares in any period, and may be expanded, extended, modified or discontinued at any time. As of February 29, 2024, we have not executed any repurchases under our share buyback program. Series A Convertible Preferred Stock On September 29, 2021, the Company filed a Certificate of Designations with the State of Delaware establishing 150,000 shares of Series A convertible preferred stock with an initial liquidation preference of $1,000 per share and a par value $0.01 per share (the “convertible preferred stock”) and sold 150,000 shares of convertible preferred stock for an aggregate purchase price of $150.0 million. The Company used the proceeds from the sale of the convertible preferred stock to fund a portion of the MHI acquisition (Note 7, Contingent Consideration ). Pursuant to the Certificate of Designations, the convertible preferred stock ranks senior to the Company’s Class A and B common stock with respect to dividends and distributions on liquidation, winding-up and dissolution. Upon a liquidation, dissolution or winding up of the Company, each share of convertible preferred stock will be entitled to receive the initial liquidation preference of $1,000 per share, subject to adjustment, plus all accrued and unpaid dividends thereon. In addition, the convertible preferred stock has the following terms: • Cumulative Dividends: The convertible preferred stock accumulates cumulative dividends at a rate per annum equal to 9% payable quarterly in arrears. • Duration: The convertible preferred stock is perpetual with call and conversion rights. The convertible preferred stock is not convertible by the Purchasers in the first five years following issuance, with the exception of the acceleration of the Conversion Right (as defined below) upon breach of the protective covenants (described below). The Company can call the outstanding convertible preferred stock at any time for one-hundred and two percent (102%) of its liquidation preference during the fourth year following its issuance and for one-hundred and one percent (101%) of its liquidation preference during the fifth year following its issuance, plus accrued but unpaid dividends, if any. Subsequent to the fifth anniversary of its issuance, a Purchaser can convert the convertible preferred stock into Class A common stock of the Company (the “Conversion Right”). The conversion price will be based on the average of the trailing 90 days’ closing price of Class A common stock of the Company, less 20% of the average and subject to a floor conversion price of $4.00 (the “Conversion Discount”). • Protective Covenants: The protective covenants of the convertible preferred stock require the Company to maintain compliance with all covenants related to (i) the Credit Agreement, as may be further amended from time to time; provided that any amendment, restatement, modification or waiver of the Credit Agreement that would adversely and materially affect the rights of the Purchasers will require the written consent of holders of a majority of the then-outstanding shares of convertible preferred stock; and (ii) any agreement between the Company and any Purchaser (the covenants referred to in clauses (i) and (ii), collectively, the “Protective Covenants”). Non-compliance beyond any applicable cure period only with the Protective Covenants related to the Credit Agreement will accelerate the Conversion Right, and in the event of such acceleration that occurs before the fifth anniversary following the issuance of the convertible preferred stock, the Conversion Discount shall be increased from 20% to 25%. • Voting Rights: Except as may be expressly required by Delaware law, the shares of convertible preferred stock have no voting rights. • Redemption in a Change of Control: The convertible preferred stock will be redeemed, contingent upon and concurrently with the consummation of a change of control of the Company. Shares of convertible preferred stock will be redeemed in a change of control of the Company at a price, in cash, equal to the liquidation preference, subject to adjustment, plus all accumulated and unpaid dividends, plus, if the change of control occurs before the fourth anniversary of the date of issuance of the convertible preferred stock, a premium equal to the dividends that would have accumulated on such share of convertible preferred stock from and after the change of control redemption date and through the fourth anniversary of the issuance of the convertible preferred stock. Pursuant to the terms of the Certificate of Designations, unless and until approval of the Company’s stockholders is obtained, no shares of Class A common stock will be issued or delivered upon conversion of any convertible preferred stock to the extent that such issuance would (i) result in the holder beneficially owning in excess of 19.99% of the outstanding Class A common stock as of the date of the Certificate of Designations or (ii) exceed 19.99% of the outstanding shares of Class A and Class B common stock combined as of the date of the Certificate of Designations. In addition, in connection with the sale of the convertible preferred stock, on September 29, 2021, the Company and the Purchasers entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which, among other things, the Company granted the Purchasers certain registration rights. Under the Registration Rights Agreement, the Company is required to register the convertible preferred stock owned by the Purchasers and the shares of Class A common stoc k issuable upon conversion of such shares equal to 19.99% of the outstanding shares of Class A common stock for resale, which registration statement was filed and declared effective during March 2022. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company is authorized to grant up to an aggregate of 9.1 million of Class A common stock under the 2021 Equity Incentive Plan (the “2021 Plan”), which is administered by the Compensation Committee of the Board of Directors. The Company grants restricted stock to certain executives, directors and members of management, primarily as incentive awards. These stock grants typically vest over a period of three $14.1 million, $6.8 million and $5.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 and 2022, the total unrecognized stock-based compensation under the 2021 Plan was $20.3 million and $11.3 million, respectively. The unrecognized stock-based compensation will be recognized over a weighted-average period of two years. The Company’s restricted stock units as of December 31, 2023 and changes during the year then ended are presented below (in thousands, except share amounts): Shares Weighted Average Grant Date Fair Value Balance as of December 31, 2022 892,556 $ 20.29 Granted 1,874,176 $ 12.59 Forfeited (59,958) $ 13.50 Vested (347,524) $ 21.22 Balance as of December 31, 2023 2,359,250 $ 14.21 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following weighted-average shares and share equivalents were used to calculate basic and diluted earnings per share (“EPS”) for the years ended December 31, 2023, 2022 and 2021 (in thousands, except share amounts): Year Ended December 31, 2023 2022 2021 Numerator Net and comprehensive income attributable to Dream Finders Homes, Inc. $ 295,900 $ 262,313 $ 121,133 Less: Preferred dividends, net (1) 13,482 14,513 4,845 Add: Loss prior to reorganization attributable to DFH LLC members — — 1,244 Net and comprehensive income available to common stockholders (2) $ 282,418 $ 247,800 $ 117,532 Denominator Weighted-average number of common shares outstanding - basic 93,066,564 92,745,781 92,521,482 Add: Common stock equivalent shares (3) 12,960,984 13,945,467 2,792,111 Weighted-average number of shares outstanding - diluted 106,027,548 106,691,248 95,313,593 (1) Includes a one-time increase of $0.3 million to the numerator of the computations of basic and diluted EPS for the year ended December 31, 2023 for the excess of the carrying amount over the redemption amount of the Series B preferred units. Refer to Note 12, Mezzanine and Stockholders’ Equity. (2) For the diluted EPS calculation, $13.2 million, $13.7 million and $3.5 million in preferred dividends associated with convertible preferred stock that are assumed to be converted have been added back to the numerator for the years ended December 31, 2023, 2022 and 2021, respectively. (3) Since the conversion price of the Company’s convertible preferred stock is based on an average of the closing price of Class A common stock for the 90 trading days immediately preceding the end of the current period, changes in the price of the Class A common stock may significantly affect the number of additional assumed common shares outstanding under the if-converted method for diluted EPS, even when the number of convertible preferred stock shares outstanding is unchanged. Stock-based compensation awards are excluded from the calculation of diluted EPS in the event they are antidilutive. There were 0.6 million, 0.8 million, and 0.2 million of common stock equivalent shares excluded from the diluted earnings per share calculation during the years ended December 31, 2023, 2022 and 2021, respectively, related to unvested restricted stock that were antidilutive. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Crescent Homes Acquisition On February 1, 2024, the Company completed the acquisition of certain assets and assumed certain liabilities, comprising of the majority of the homebuilding business of Crescent Ventures, LLC (“Crescent Homes”) through DFH subsidiaries, Dream Finders Holdings LLC, and DFH Crescent, LLC (“DFH Crescent”), a newly formed entity for purposes of consummating this transaction. This acquisition allows us to expand into the markets of Charleston and Greenville, South Carolina, and Nashville, Tennessee. The consideration given for the Crescent Homes acquisition was cash in the amount of $185 million, subject to customary post-closing adjustments based on the closing date net asset value of the purchased assets and assumed liabilities. As part of the transaction, the former owner of Crescent Homes received a 10% non-controlling ownership in DFH Crescent and contractual rights to a portion of its future earnings according to the terms of the agreement. The Company has not yet completed its evaluation and determination of consideration paid and certain assets and liabilities acquired in accordance with ASC 805. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net and comprehensive income attributable to Dream Finders Homes, Inc. | $ 295,900 | $ 262,313 | $ 121,133 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Nature of Business and Signif_2
Nature of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Dream Finders Homes, Inc. (together with its subsidiaries, “Dream Finders”, the “Company” or “DFH, Inc.”) designs, builds and sells homes in markets throughout the United States. The Company also offers title insurance |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of DFH, Inc., its wholly owned subsidiaries and its investments that qualify for consolidation treatment (Note 6, Variable Interest Entities ). The noncontrolling interests represent equity interests held by others in certain of our subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. There are no other components of comprehensive income not already reflected in net and comprehensive income on our Consolidated Statements of Comprehensive Income. |
Use of Estimates | Use of Estimates |
Cash and Cash Equivalents and Concentration Risk | Cash and Cash Equivalents and Concentration Risk Cash and cash equivalents consist of highly liquid instruments, with original maturities of three months or less. Cash and cash equivalents include cash proceeds from home closings in-transit from or held by third-party title company escrow accounts for the benefit of the Company, typically for less than five days. At various times throughout the year, the Company may have cash deposited with financial institutions that exceed the federally insured deposit amount. The Company has entered into insured cash sweep account agreements that protect material deposit balances with certain financial institutions. In addition, management reviews the financial viability of these financial institutions on a periodic basis and does not anticipate that any potential nonperformance by the financial institutions would have a material impact to the Company’s results of operations or cash flows. |
Restricted Cash | Restricted Cash |
Inventories and Cost of Sales | Inventories and Cost of Sales Inventories inclu de the costs of direct land acquisition, land development, construction, capitalized interest on qualifying assets, lot option fees, real estate taxes and direct overhead costs incurred related to land acquisition and development, home construction, and sales commissions. Indirect overhead costs are charged to selling, general, and administrative expenses as incurred. Land and development costs are typically allocated to individual residential lots on a pro rata basis based on the number of lots in the development. The costs of residential lots are transferred to construction in process when home construction begins and are expensed on a specific identification basis as homebuilding cost of sales as the homes close. Homebuilding cost of sales for homes closed includes the specific construction costs of each home and all applicable land acquisition, land development and related costs allocated to each residential lot, as well as interest and sales commissions. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs that are recorded to capitalized interest are amortized to interest expense over the estimated economic life of the underlying debt instrument using the straight-line method, which approximates the effective interest method. Portions of this amortization are evaluated for capitalization as inventories and subsequently expensed through cost of sales at the home closing. |
Lot Deposits | Lot Deposits Lot deposits represent amounts paid by the Company to secure the ability to acquire finished lots or land for development through an option contract. The contracts provide for a due diligence period, during which the deposit is refundable. After this period, the deposit may be partially or completely forfeited should the Company decide not to proceed. The Company reviews lot deposits for impairment on a quarterly basis and will record an impairment charge if |
Variable Interest Entities and Investments in Unconsolidated Entities | Variable Interest Entities and Investments in Unconsolidated Entities Pursuant to Accounting Standards Codification (“ASC”) 810 and subtopics related to the consolidation of variable interest entities (“VIEs”), m anagement analyzes the Company’s investments first under the variable interest model to determine if they are VIEs and, if so, whether the Company is the primary beneficiary. Management determines whether the Company is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion if changes to the Company’s involvement arise. To make this determination, management considers factors such as whether the Company could direct finance, determine or limit the scope of the entity, sell or transfer property, direct development or direct other operating decisions. The primary beneficiary is defined as the entity having both of the following characteristics: 1) the power to direct the activities that most significantly impact the VIE’s performance, and 2) the obligation to absorb losses and rights to receive the returns from the VIE that would be potentially significant to the VIE. Management consolidates the entity if the Company is the primary beneficiary or if a standalone primary beneficiary does not exist and the Company and its related parties collectively meet the definition of a primary beneficiary. If the investment does not qualify as a VIE under the variable interest model, management then evaluates the entity under the voting interest model to assess if consolidation is appropriate. Refer to Note 6, Variable Interest Entities, for a description of the Company’s interests, including which entities were determined to be VIEs. Accounting for Unconsolidated VIEs Investments for which the Company is not identified as the primary beneficiary, but the Company has significant influence are accounted for as equity method investments. Investments for which the Company does not have significant influence are accounted for at cost under the cost method. Equity and cost method investments are classified as investments in unconsolidated entities on the Consolidated Balance Sheets. For equity method investments, the Company shares in the earnings (losses) of these unconsolidated entities generally in accordance with its respective equity interests. In some instances, the Company recognizes earnings (losses) that differ from its equity interest in the unconsolidated entity. For distributions received from equity method investments, the Company has elected to use the cumulative earnings approach for the Consolidated Statements of Cash Flows. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized are treated as returns on investment within operating cash flows and those in excess of that amount are treated as returns of investment within investing cash flows. |
Leases | Leases The Company determines if an arrangement is, or contains, a lease at inception. We recognize leases when the contract provides us the right to use an identified asset for a period of time in exchange for consideration. Leases are included in right-of-use (“ROU”) assets and lease liabilities in the Consolidated Balance Sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an explicit rate, management uses the Company’s incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. An explicit rate is used when readily determinable. The ROU assets also include any lease payments made, reduced by any lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company applies the practical expedient to combine lease and nonlease components when accounting for the ROU assets and liabilities for all asset classes. Variable lease costs are expensed as incurred. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. |
Goodwill | Goodwill Goodwill represents the excess of purchase price over the fair value of the assets acquired less the liabilities assumed in a business combination. Refer to Note 7, Contingent Consideration, for details on recent acquisitions. The Company tests for impairment at least annually as of October 1, but the Company tests for impairment more frequently if a triggering event occurs. This test assesses qualitative factors to determine if it is more likely than not that the fair value of the reporting units is less than their carrying value. These qualitative factors include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall performance of the reporting unit and other entity and reporting unit specific events. If the qualitative assessment indicates a stable fair value, no further testing is required. However, if the qualitative assessment indicates that the fair value of a reporting unit has declined past its carrying value, the Company will then calculate the fair value of the reporting unit based on discounted future cash flows. An impairment loss is recorded if this assessment concludes that the fair value of the reporting unit is less than its current carrying value. The Company completed its most recent goodwill impairment test as of October 1, 2023 and determined that the fair value of each of the reporting units was not less than carrying value. No goodwill impairment was recognized during the years ended December 31, 2023, 2022 or 2021. |
Intangible Assets | Intangible Assets The Company has intangible assets that consist of trade names that are recorded in connection with acquisitions at their fair value based on the results of valuation analyses. Trademarks acquired in business combinations are generally valued using the relief-from-royalty method, which is a Level 3-type measurement. Trademarks with finite lives are amortized over no more than five-year periods. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred and betterments are capitalized. When items of property and equipment are sold or otherwise disposed, the asset and related accumulated depreciation accounts are eliminated and any gain or loss is included in operations. Depreciation expense is included within SG&A on the Consolidated Statements of Comprehensive Income. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Asset Class Useful Life Years Furniture and fixtures 2-7 Office equipment 4 Software 1-4 Vehicles 5 Buildings 39 |
Business Combinations and Contingent Consideration | Business Combinations and Contingent Consideration Business combinations are evaluated and accounted for in accordance with guidance set forth in ASC 805. Once a business combination has been identified, all material assets and liabilities of the business are recognized at fair value as of the acquisition date. Any residual amount remaining of the purchase price in excess of the fair value of the net assets is recognized as goodwill. In connection with applicable business combinations, the Company records the fair value of contingent consideration as a liability on the acquisition date as prescribed by the underlying agreement. The initial measurement of contingent consideration is based on projected cash flows such as revenues, gross margin, overhead expenses and pre-tax income of the acquired business and is discounted to present value using the discounted cash flow method. Subsequently, the future estimated contingent consideration payments are remeasured to fair value at each reporting date based on the estimated future pre-tax income of the acquired entities and the re-assessment of risk-adjusted discount rates that reflect current market conditions. The adjustments made as a result of the remeasurements at each reporting date are included in contingent consideration revaluation on the Consolidated Statements of Comprehensive Income. Contingent consideration payments are included within cash flows from financing on the Consolidated Statements of Cash Flows to the extent these payments do not exceed the initial liability recorded at the acquisition date for each arrangement. Payments exceeding the initial contingent consideration liability estimated at acquisition are classified as cash used in operating activities. Maximum potential exposure for the contingent consideration payments is not estimable based on the contractual terms, as the contingent consideration arrangements allow a percentage payout based on a potentially unlimited range of pre-tax net income. |
Customer Deposits | Customer Deposits Customer deposits are amounts collected from customers in conjunction with the execution of the home sale contract, and are recorded as a liability when cash is received. Customer deposits are applied against the final settlement due at the home closing. In the event of contract cancellation, the customer deposit is contractually forfeited and recognized as homebuilding revenue. |
Warranty Reserve | Warranty Reserve The Company provides a limited warranty for its homes for a period of one year. The Company’s standard warranty requires the Company or its subcontractors to repair or replace defective construction during such warranty period at no cost to the homebuyer. At the time a home is sold, the Company records an estimate of warranty expense based on historical warranty costs. An analysis of the warranty reserve is performed quarterly to ensure the reserve’s adequacy. The warranty reserve is classified on the Consolidated Balance Sheets as an accrued expense. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, which requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We recognize revenue by following the five-step model: (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. The Company’s revenues consist primarily of home sales in the United States, which is its principal market. Home sale transactions are made pursuant to contracts under which the Company typically has a single performance obligation to deliver a completed home to the homebuyer when closing conditions are met. The Company generally determines the selling price per home based on the expected cost-plus margin. The Company has performed an assessment and its contracts do not contain significant financing terms. A large portion of the Company’s contracts with customers and the related performance obligations have an original expected duration of one year or less. For the majority of contracts, performance obligations are satisfied and revenue is recognized at the point in time when control of the asset is transferred to the customer, which is generally when title to and possession of the home and the risks and rewards of ownership are transferred to the homebuyer on the closing date. Under home sale contracts, the Company typically receives an initial cash deposit from the homebuyer at the time the sales contract is executed and receives the remaining consideration to which the Company is entitled, through an escrow agent, at closing. In certain contracts, the customer controls the underlying land upon which the home is constructed. For these specific contracts, the performance obligation is satisfied over time, as the Company’s performance creates or enhances an asset that the customer controls. The Company recognizes revenue for these contracts based on the percentage of completion of the project, determined by the number of days of construction completed compared to the total estimated number of days to construct the home. Typically, the Company has two types of percentage of completion contracts. The first type is with individual customers for which the Company acts as a general contractor on land owned by the homebuyer. The second is with institutional buyers for which the Company acts as a general contractor on land owned by the institution. Individual customers generally have construction-to-permanent loans that are taken out by the customer. During the underwriting process for our individual and institutional customers, a draw schedule is agreed upon by the bank, the customer, and the Company. Funds are disbursed for labor and materials that have been completed or installed. These both result in a contract asset as work is being completed prior to receiving funds. A contract liability would be recorded in cases where we have received funds in excess of costs incurred. As of December 31, 2023 and 2022, the contract asset related to percentage of completion contracts was $13.7 million and $20.7 million, respectively, and is included in other assets on the Consolidated Balance Sheets. As of December 31, 2023 and 2022, the contract liability related to percentage of completion contracts was $1.2 million and $2.2 million, respectively, and is included in accrued expenses on the Consolidated Balance Sheets. Revenues include forfeited deposits, which occur when home sale or land sale contracts that include a nonrefundable deposit are cancelled. Sales incentives in the form of price concessions on the selling price of a home are recorded as a reduction of revenues. The cost of sales incentives in the form of free or discounted products or services provided to homebuyers, including option upgrades, are reflected in land and development costs because such incentives are identified in home sale contracts with homebuyers as an intrinsic part of the Company’s single performance obligation to deliver and transfer title to the home for the transaction price stated in the contracts. |
Stock-Based Compensation | Stock-Based Compensation The Company records expense for restricted stock units awarded to employees in return for employee service. The cost is measured as of the grant-date fair value of the restricted stock units and recognized as stock-based compensation on a straight-line basis over the employee service period, which is normally the vesting period. We recognize forfeitures of restricted stock units as a reduction to stock-based compensation in the period in which they occur . Stock-based compensation is included within SG&A on the Consolidated Statements of Comprehensive Income. |
Income Taxes | Income Taxes |
Reclassifications | Reclassifications Certain reclassifications have been made in the 2022 and 2021 consolidated financial statements to conform to the classifications used in 2023. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) Number 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires more disaggregated income tax disclosures, including additional information in the rate reconciliation and additional disclosures about income taxes paid. ASU 2023-09 will become effective for us for the fiscal year ending December 31, 2025. Early adoption is permitted, and guidance should be applied prospectively, with an option to apply guidance retrospectively. We are currently evaluating the impact of the adoption of ASU 2023-09 on our consolidated financial statements. In November 2023, the FASB issued ASU Number 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker(s) that are included within each reported measure of segment profit or loss. The guidance also expands disclosure requirements for interim periods, as well as requires disclosure of other segment items, including the title and position of the entity’s chief operations decision maker(s). ASU 2023-07 will become effective for us for the fiscal year ending December 31, 2024, and for interim periods starting in our first quarter of 2025. Early adoption is permitted, and guidance is required to be applied retrospectively. We are currently evaluating the impact of the adoption of ASU 2023-07 on our consolidated financial statements. |
Nature of Business and Signif_3
Nature of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Assets | Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Asset Class Useful Life Years Furniture and fixtures 2-7 Office equipment 4 Software 1-4 Vehicles 5 Buildings 39 Property and equipment, net consisted of the following as of December 31, 2023 and 2022 (in thousands): As of 2023 2022 Furniture and fixtures $ 22,787 $ 18,753 Buildings 401 401 Land 216 216 Vehicles 92 64 Office equipment and software 2,156 3,733 Total property and equipment 25,652 23,167 Less: Accumulated depreciation (18,609) (15,830) Property and equipment, net $ 7,043 $ 7,337 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following as of December 31, 2023 and 2022 (in thousands) : As of 2023 2022 Construction in process and finished homes $ 1,251,767 $ 1,148,654 Owned land and lots 188,482 229,531 Inventories $ 1,440,249 $ 1,378,185 |
Capitalized Inventory | Capitalized interest activity related to our construction lines of credit and senior unsecured notes, net is summarized in the table below for the years ended December 31, 2023 and 2022 (in thousands): Year Ended 2023 2022 Capitalized interest as of beginning of the period $ 27,682 $ 16,317 Interest incurred 77,278 52,972 Interest expensed (1) (32) Interest charged to homebuilding cost of sales (77,648) (41,575) Capitalized interest as of end of the period $ 27,311 $ 27,682 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property Plant and Equipment Income Statement Disclosures [Abstract] | |
Property and Equipment | Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Asset Class Useful Life Years Furniture and fixtures 2-7 Office equipment 4 Software 1-4 Vehicles 5 Buildings 39 Property and equipment, net consisted of the following as of December 31, 2023 and 2022 (in thousands): As of 2023 2022 Furniture and fixtures $ 22,787 $ 18,753 Buildings 401 401 Land 216 216 Vehicles 92 64 Office equipment and software 2,156 3,733 Total property and equipment 25,652 23,167 Less: Accumulated depreciation (18,609) (15,830) Property and equipment, net $ 7,043 $ 7,337 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Cost | The following table shows the operating lease costs for the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, Lease Cost Classification 2023 2022 2021 Operating lease cost (1) Selling, general and administrative expense $ 12,378 $ 11,547 $ 6,403 (1) Includes short-term leases and variable lease costs which are immaterial. |
Weighted-Average Lease Term and Discount Rate | During the year ended December 31, 2023, there have been no material changes in our lease liabilities for the next five years. As of 2023 2022 Weighted average remaining lease term Operating leases 6 years 6 years Weighted average discount rate Operating leases 6.3% 6.3% |
Supplemental disclosure of noncash activities related to leases | Supplemental disclosure of noncash activities related to leases was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Leased assets obtained in exchange for new operating lease liabilities $ 3,442 $ 10,564 $ 8,149 |
Maturities of Lease Liabilities | The following table shows the maturities of our lease liabilities as of December 31, 2023 (in thousands): Maturity of Lease Liabilities Operating Leases (1) 2024 $ 7,072 2025 4,661 2026 3,595 2027 2,120 2028 1,695 Thereafter 6,102 Total lease payments 25,245 Less: Interest 4,131 Present value of lease liabilities $ 21,114 (1) We use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Variable Interest Entities [Abstract] | |
Schedule of Variable Interest Entities | The tables below display the carrying amounts of the assets and liabilities related to the consolidated VIEs, as well as the Company’s investments in unconsolidated VIEs (in thousands): As of December 31, Consolidated 2023 2022 Assets $ 4,075 $ 13,344 Liabilities 1,766 4,787 |
Investment in Unconsolidated VIEs | As of December 31, Unconsolidated 2023 2022 Jet HomeLoans (1) $ 9,301 $ 7,102 Other unconsolidated VIEs 6,063 6,906 Total investment in unconsolidated VIEs $ 15,364 $ 14,008 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense for the years ended December 31, 2023, 2022 and 2021 , consists of the following (in thousands): Year Ended December 31, 2023 2022 2021 Current: Federal $ 101,093 $ 66,473 $ 26,336 State 17,734 15,680 5,088 Total current 118,827 82,153 31,424 Deferred: Federal (19,471) 5 (3,305) State (2,873) (299) (664) Total deferred (22,344) (294) (3,969) Total income tax expense $ 96,483 $ 81,859 $ 27,455 |
Schedule of Effective Income Tax Rate Reconciliation | The following table reconciles the statutory federal income tax rate to the effective income tax rate: Year Ended December 31, 2023 2022 2021 Income taxes at federal statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal tax 2.8 3.5 2.4 Federal tax credits (0.6) (3.9) (5.9) Non-deductible executive compensation 1.0 1.3 0.8 Other (0.3) 1.1 0.2 Effective tax rate 23.9 % 23.0 % 18.5 % |
Schedule of Deferred Tax Assets and Liabilities | The significant components of deferred income tax assets and liabilities as of December 31, 2023 and 2022, consist of the following (in thousands): As of 2023 2022 Deferred tax assets: Contingent consideration $ 14,876 $ 4,145 Incentive compensation plans 9,232 246 Lease liabilities 4,951 5,809 Other 9,705 2,493 Total deferred tax asset 38,764 12,693 Deferred tax liabilities: Right-of-use assets (4,789) (5,674) Other (7,106) (2,493) Total deferred tax liabilities (11,895) (8,167) Net deferred tax asset $ 26,869 $ 4,526 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables summarize revenues and net and comprehensive income by segment for the years ended December 31, 2023, 2022 and 2021 as well as total assets and goodwill by segment as of December 31, 2023 and 2022 (in thousands): Year Ended December 31, Revenues: 2023 2022 2021 Southeast $ 1,521,414 $ 1,237,389 $ 914,765 Mid-Atlantic 633,131 566,632 464,070 Midwest 1,584,343 1,530,538 538,466 Financial Services 48,878 34,175 34,665 Total segment revenues 3,787,766 3,368,734 1,951,966 Reconciling items from equity method investments (39,180) (26,399) (28,056) Consolidated revenues $ 3,748,586 $ 3,342,335 $ 1,923,910 Year Ended December 31, Income before taxes 2023 2022 2021 Southeast $ 183,537 $ 165,367 $ 103,136 Mid-Atlantic 54,646 40,028 25,277 Midwest 168,115 164,377 35,585 Financial Services 28,915 21,219 11,782 Corporate (1) (21,334) (28,971) (7,110) Total segment income before taxes 413,879 362,020 168,670 Reconciling items from equity method investments (9,454) (5,864) (6,621) Consolidated income before taxes $ 404,425 $ 356,156 $ 162,049 Assets: Goodwill: December 31, December 31, 2023 2022 2023 2022 Southeast $ 781,162 $ 770,029 $ 14,003 $ 14,003 Mid-Atlantic 404,657 422,490 16,853 16,853 Midwest 915,199 1,007,604 141,071 141,071 Financial Services 207,385 170,151 280 280 Corporate (1) 407,932 89,696 — — Total segments 2,716,335 2,459,970 172,207 172,207 Reconciling items from equity method investments (153,896) (88,833) — — Consolidated $ 2,562,439 $ 2,371,137 $ 172,207 $ 172,207 (1) |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of the Change in Fair Value Measurement of Contingent Consideration | The following table presents a summary of the change in fair value measurement of contingent consideration, which is based on Level 3 inputs and is the only asset or liability measured at fair value on a recurring basis (in thousands): Beginning balance, December 31, 2022 $ 115,128 Fair value adjustments related to prior year acquisitions 46,590 Contingent consideration payments (44,923) Ending balance, December 31, 2023 $ 116,795 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Restricted Stock Awards | The Company’s restricted stock units as of December 31, 2023 and changes during the year then ended are presented below (in thousands, except share amounts): Shares Weighted Average Grant Date Fair Value Balance as of December 31, 2022 892,556 $ 20.29 Granted 1,874,176 $ 12.59 Forfeited (59,958) $ 13.50 Vested (347,524) $ 21.22 Balance as of December 31, 2023 2,359,250 $ 14.21 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following weighted-average shares and share equivalents were used to calculate basic and diluted earnings per share (“EPS”) for the years ended December 31, 2023, 2022 and 2021 (in thousands, except share amounts): Year Ended December 31, 2023 2022 2021 Numerator Net and comprehensive income attributable to Dream Finders Homes, Inc. $ 295,900 $ 262,313 $ 121,133 Less: Preferred dividends, net (1) 13,482 14,513 4,845 Add: Loss prior to reorganization attributable to DFH LLC members — — 1,244 Net and comprehensive income available to common stockholders (2) $ 282,418 $ 247,800 $ 117,532 Denominator Weighted-average number of common shares outstanding - basic 93,066,564 92,745,781 92,521,482 Add: Common stock equivalent shares (3) 12,960,984 13,945,467 2,792,111 Weighted-average number of shares outstanding - diluted 106,027,548 106,691,248 95,313,593 (1) Includes a one-time increase of $0.3 million to the numerator of the computations of basic and diluted EPS for the year ended December 31, 2023 for the excess of the carrying amount over the redemption amount of the Series B preferred units. Refer to Note 12, Mezzanine and Stockholders’ Equity. (2) For the diluted EPS calculation, $13.2 million, $13.7 million and $3.5 million in preferred dividends associated with convertible preferred stock that are assumed to be converted have been added back to the numerator for the years ended December 31, 2023, 2022 and 2021, respectively. (3) Since the conversion price of the Company’s convertible preferred stock is based on an average of the closing price of Class A common stock for the 90 trading days immediately preceding the end of the current period, changes in the price of the Class A common stock may significantly affect the number of additional assumed common shares outstanding under the if-converted method for diluted EPS, even when the number of convertible preferred stock shares outstanding is unchanged. Stock-based compensation awards are excluded from the calculation of diluted EPS in the event they are antidilutive. There were 0.6 million, 0.8 million, and 0.2 million of common stock equivalent shares excluded from the diluted earnings per share calculation during the years ended December 31, 2023, 2022 and 2021, respectively, related to unvested restricted stock that were antidilutive. |
Nature of Business and Signif_4
Nature of Business and Significant Accounting Policies - Inventories (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Inventories [Abstract] | |||
Production related impairments or charges | $ 2 | $ 1.8 | $ 0 |
Nature of Business and Signif_5
Nature of Business and Significant Accounting Policies - Lot Deposits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Deposit forfeitures or impairments | $ 3.3 | $ 3 | $ 0 |
Nature of Business and Signif_6
Nature of Business and Significant Accounting Policies - Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill, Impaired [Abstract] | |||
Goodwill, impairment loss | $ 0 | $ 0 | $ 0 |
Nature of Business and Signif_7
Nature of Business and Significant Accounting Policies - Intangibles Assets (Details) | Dec. 31, 2023 |
Trademarks | |
Intangibles Asset Net of Amortization [Abstract] | |
Finite-lived intangible asset, useful life | 5 years |
Nature of Business and Signif_8
Nature of Business and Significant Accounting Policies - Estimated Useful Lives of Assets (Details) | Dec. 31, 2023 |
Furniture and fixtures | Minimum | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 2 years |
Furniture and fixtures | Maximum | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 7 years |
Office equipment | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 4 years |
Software | Minimum | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 1 year |
Software | Maximum | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 4 years |
Vehicles | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 5 years |
Buildings | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 39 years |
Nature of Business and Signif_9
Nature of Business and Significant Accounting Policies - Warranty Reserve (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Standard Product Warranty Disclosure [Abstract] | |
Warranty period on homes | 1 year |
Nature of Business and Signi_10
Nature of Business and Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Revenue Recognition | ||
Contract assets | $ 13.7 | $ 20.7 |
Contract liability | $ 1.2 | $ 2.2 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Aug. 22, 2023 | Jul. 19, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 18, 2023 | |
Line of Credit Facility [Line Items] | ||||||
Proceeds from senior unsecured notes | $ 300,000 | $ 0 | $ 0 | |||
Minimum tangible net worth | $ 607,000 | $ 385,000 | ||||
Construction loan, outstanding balance | 530,000 | 965,000 | ||||
Variable Rate, Highest Option, One | Line of Credit | Secured Overnight Financing Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread adjustment on variable rate | 0.10% | |||||
Variable Rate, Highest Option, Two | Line of Credit | Secured Overnight Financing Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread adjustment on variable rate | 0.15% | |||||
Variable Rate, Highest Option, Three | Line of Credit | Secured Overnight Financing Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread adjustment on variable rate | 0.25% | |||||
Minimum | Line of Credit | Secured Overnight Financing Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable rate | 2.50% | |||||
Maximum | Line of Credit | Secured Overnight Financing Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable rate | 3.30% | |||||
Senior Notes 2028 | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal amount | $ 300,000 | |||||
Annual interest rate | 8.25% | |||||
Proceeds from senior unsecured notes | $ 293,500 | |||||
Debt issuance costs, net of amortization | $ 6,500 | 6,100 | ||||
Senior Notes 2028 | Senior Notes | Debt Instrument, Redemption, Period One | ||||||
Line of Credit Facility [Line Items] | ||||||
Redemption price | 100% | |||||
Senior Notes 2028 | Senior Notes | Debt Instrument, Redemption, Period Two | ||||||
Line of Credit Facility [Line Items] | ||||||
Redemption price | 104.10% | |||||
Senior Notes 2028 | Senior Notes | Debt Instrument, Redemption, Period Three | ||||||
Line of Credit Facility [Line Items] | ||||||
Redemption price | 100% | |||||
Senior Notes 2028 | Senior Notes | Debt Instrument, Redemption, Period Four | ||||||
Line of Credit Facility [Line Items] | ||||||
Redemption price | 101% | |||||
Line of Credit and Notes Payable | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt issuance costs, net of amortization | $ 7,000 | $ 7,300 | ||||
Bank of America, N.A. and Other Lenders | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit maximum borrowing base | $ 1,200,000 | $ 1,100,000 | ||||
Increase limit | $ 1,600,000 |
Inventories - Summary of Invent
Inventories - Summary of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Construction in process and finished homes | $ 1,251,767 | $ 1,148,654 |
Owned land and lots | 188,482 | 229,531 |
Inventories | $ 1,440,249 | $ 1,378,185 |
Inventories - Interest (Details
Inventories - Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||
Capitalized interest as of beginning of the period | $ 27,682 | $ 16,317 |
Interest incurred | 77,278 | 52,972 |
Interest expensed | (1) | (32) |
Interest charged to homebuilding cost of sales | (77,648) | (41,575) |
Capitalized interest as of end of the period | $ 27,311 | $ 27,682 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property and Equipment [Abstract] | |||
Property and equipment, gross | $ 25,652 | $ 23,167 | |
Less: Accumulated depreciation | (18,609) | (15,830) | |
Property and equipment, net | 7,043 | 7,337 | |
Depreciation expense | 4,800 | 5,000 | $ 3,700 |
Furniture and fixtures | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 22,787 | 18,753 | |
Buildings | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 401 | 401 | |
Land | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 216 | 216 | |
Vehicles | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 92 | 64 | |
Office equipment and software | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | $ 2,156 | $ 3,733 |
Commitments and Contingencies -
Commitments and Contingencies - Summary (Details) | Dec. 31, 2023 |
Office Building | |
Loss Contingencies [Line Items] | |
Remaining lease term | 11 years |
Commitments and Contingencies_2
Commitments and Contingencies - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Selling, general and administrative expense | |||
Lease, Cost [Abstract] | |||
Operating lease cost | $ 12,378 | $ 11,547 | $ 6,403 |
Commitments and Contingencies_3
Commitments and Contingencies - Noncash Activities Related To Leases (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Leased assets obtained in exchange for new operating lease liabilities | $ 3,442,000 | $ 10,564,000 | $ 8,149,000 |
Commitments and Contingencies_4
Commitments and Contingencies - Weighted Average Lease Term and Discount Rate (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Weighted average remaining lease term | ||
Operating leases | 6 years | 6 years |
Weighted average discount rate | ||
Operating leases | 6.30% | 6.30% |
Commitments and Contingencies_5
Commitments and Contingencies - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2024 | $ 7,072 | |
2025 | 4,661 | |
2026 | 3,595 | |
2027 | 2,120 | |
2028 | 1,695 | |
Thereafter | 6,102 | |
Total lease payments | 25,245 | |
Less: Interest | 4,131 | |
Present value of lease liabilities | $ 21,114 | $ 24,661 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) $ in Millions | Dec. 31, 2023 USD ($) Vote | Dec. 31, 2022 USD ($) |
Variable Interest Entities [Abstract] | ||
Land bankers equity holders power to direct , Percentage of operating activities of land bank entity | 100% | |
Number of voting rights of land bank entities | Vote | 0 | |
Total risk of loss related to finished lot option and land bank option contracts | $ | $ 328 | $ 461.6 |
Variable Interest Entities - Ca
Variable Interest Entities - Carrying Amounts (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Variable Interest Entity [Line Items] | ||
Assets | $ 2,562,439 | $ 2,371,137 |
Liabilities | 1,476,289 | 1,570,444 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||
Variable Interest Entity [Line Items] | ||
Assets | 4,075 | 13,344 |
Liabilities | $ 1,766 | $ 4,787 |
Variable Interest Entities - In
Variable Interest Entities - Investment In The Unconsolidated VIEs (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Variable Interest Entity [Line Items] | ||
Investment in unconsolidated VIE's | $ 15,364 | $ 14,008 |
Jet Home Loans | ||
Variable Interest Entity [Line Items] | ||
Investment in unconsolidated VIE's | 9,301 | 7,102 |
Other unconsolidated VIEs | ||
Variable Interest Entity [Line Items] | ||
Investment in unconsolidated VIE's | $ 6,063 | $ 6,906 |
Contingent Consideration - Narr
Contingent Consideration - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||
Contingent consideration | $ 116,795 | $ 115,128 | |
H&H | |||
Business Acquisition [Line Items] | |||
Contingent consideration | $ 11,700 | 11,600 | |
Contingent consideration remaining term | 9 months | ||
H&H | Other Expense | |||
Business Acquisition [Line Items] | |||
Contingent consideration adjustments, expense (income) | $ 2,900 | (2,000) | $ 4,600 |
MHI Acquisition | |||
Business Acquisition [Line Items] | |||
Contingent consideration | $ 105,100 | 102,100 | |
Contingent consideration remaining term | 21 months | ||
MHI Acquisition | Other Expense | |||
Business Acquisition [Line Items] | |||
Contingent consideration adjustments, expense (income) | $ 43,300 | $ 12,400 | $ 2,200 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 101,093 | $ 66,473 | $ 26,336 |
State | 17,734 | 15,680 | 5,088 |
Total current | 118,827 | 82,153 | 31,424 |
Deferred: | |||
Federal | (19,471) | 5 | (3,305) |
State | (2,873) | (299) | (664) |
Total deferred | (22,344) | (294) | (3,969) |
Total income tax expense | $ 96,483 | $ 81,859 | $ 27,455 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Income taxes at federal statutory rate | 21% | 21% | 21% |
State and local income taxes, net of federal tax | 2.80% | 3.50% | 2.40% |
Federal tax credits | (0.60%) | (3.90%) | (5.90%) |
Non-deductible executive compensation | 1% | 1.30% | 0.80% |
Other | (0.30%) | 1.10% | 0.20% |
Effective tax rate | 23.90% | 23% | 18.50% |
Deferred tax assets: | |||
Contingent consideration | $ 14,876 | $ 4,145 | |
Incentive compensation plans | 9,232 | 246 | |
Lease liabilities | 4,951 | 5,809 | |
Other | 9,705 | 2,493 | |
Total deferred tax asset | 38,764 | 12,693 | |
Deferred tax liabilities: | |||
Right-of-use assets | (4,789) | (5,674) | |
Other | (7,106) | (2,493) | |
Total deferred tax liabilities | (11,895) | (8,167) | |
Net deferred tax asset | $ 26,869 | $ 4,526 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) Segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | Segment | 4 | ||
Revenues: | |||
Total revenues | $ 3,748,586 | $ 3,342,335 | $ 1,923,910 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Consolidated income before taxes | 404,425 | 356,156 | 162,049 |
Assets [Abstract] | |||
Assets | 2,562,439 | 2,371,137 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 172,207 | 172,207 | |
Operating Segments | |||
Revenues: | |||
Total revenues | 3,787,766 | 3,368,734 | 1,951,966 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Consolidated income before taxes | 413,879 | 362,020 | 168,670 |
Assets [Abstract] | |||
Assets | 2,716,335 | 2,459,970 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 172,207 | 172,207 | |
Operating Segments | Southeast | |||
Revenues: | |||
Total revenues | 1,521,414 | 1,237,389 | 914,765 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Consolidated income before taxes | 183,537 | 165,367 | 103,136 |
Assets [Abstract] | |||
Assets | 781,162 | 770,029 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 14,003 | 14,003 | |
Operating Segments | Mid-Atlantic | |||
Revenues: | |||
Total revenues | 633,131 | 566,632 | 464,070 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Consolidated income before taxes | 54,646 | 40,028 | 25,277 |
Assets [Abstract] | |||
Assets | 404,657 | 422,490 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 16,853 | 16,853 | |
Operating Segments | Midwest | |||
Revenues: | |||
Total revenues | 1,584,343 | 1,530,538 | 538,466 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Consolidated income before taxes | 168,115 | 164,377 | 35,585 |
Assets [Abstract] | |||
Assets | 915,199 | 1,007,604 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 141,071 | 141,071 | |
Operating Segments | Financial Services | |||
Revenues: | |||
Total revenues | 48,878 | 34,175 | 34,665 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Consolidated income before taxes | 28,915 | 21,219 | 11,782 |
Assets [Abstract] | |||
Assets | 207,385 | 170,151 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 280 | 280 | |
Operating Segments | Corporate | |||
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Consolidated income before taxes | (21,334) | (28,971) | (7,110) |
Assets [Abstract] | |||
Assets | 407,932 | 89,696 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 0 | 0 | |
Reconciling items from equity method investments | |||
Revenues: | |||
Total revenues | (39,180) | (26,399) | (28,056) |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Consolidated income before taxes | (9,454) | (5,864) | $ (6,621) |
Assets [Abstract] | |||
Assets | (153,896) | (88,833) | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | $ 0 | $ 0 |
Fair Value Disclosures - Change
Fair Value Disclosures - Change in Fair Value Measurement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair Value Recurring Basis Unobservable Input Reconciliation Liability Gain Loss Statement Of Income Extensible List Not Disclosed Flag | Fair value adjustments related to prior year acquisitions | |
Fair Value, Inputs, Level 3 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance, December 31, 2022 | $ 115,128 | |
Fair value adjustments related to prior year acquisitions | 46,590 | |
Contingent consideration payments | (44,923) | |
Ending balance, December 31, 2023 | $ 116,795 | $ 115,128 |
Fair Value Disclosures - Narrat
Fair Value Disclosures - Narrative (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Fair Value, Inputs, Level 2 | Senior Notes 2028 | Senior Notes | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of long-term debt | $ 318.2 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jan. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) lot | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2019 USD ($) | Nov. 30, 2023 renewal_options | Sep. 30, 2023 | Sep. 29, 2023 | |
Related Party Transaction [Line Items] | ||||||||
Investment company, committed capital | $ 322,100 | |||||||
Selling, general and administrative expense | $ 308,795 | $ 271,040 | $ 154,405 | |||||
Related Party Transaction, Agreement Term | 8 years | |||||||
Related Party Transaction, Agreement Renewal Options | renewal_options | 2 | |||||||
Related Party Transaction, Agreement Renewal Term | 1 year | |||||||
DF Capital | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of ownership interest | 49% | |||||||
Payments to acquire projects | $ 200 | |||||||
Outstanding lot deposits | $ 48,500 | $ 58,600 | ||||||
Number of lots | lot | 4,028 | |||||||
Fund I | ||||||||
Related Party Transaction [Line Items] | ||||||||
Investment company, committed capital | $ 36,700 | |||||||
Dream Finders Homes LLC and DFH Investors LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Investment company, committed capital | $ 1,400 | |||||||
Committed capital ratio | 3.80% | |||||||
Fund II | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of ownership interest | 72% | |||||||
Investment company, committed capital | $ 3,000 | |||||||
Committed capital ratio | 0.90% | |||||||
Jet Home Loans | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of ownership interest | 60% | 49.90% | ||||||
Ownership percentage | 10.10% | |||||||
Directors Executive Officers and Management | Fund II | ||||||||
Related Party Transaction [Line Items] | ||||||||
Investment company, committed capital | $ 33,900 | |||||||
Committed capital ratio | 10.50% | |||||||
Directors Executive Officers and Management | Rockpoint Group LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Investment company, committed capital | $ 100,000 | |||||||
Related Party | ||||||||
Related Party Transaction [Line Items] | ||||||||
Selling, general and administrative expense | $ 1,300 |
Mezzanine and Stockholders_ E_2
Mezzanine and Stockholders’ Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||||
Aug. 31, 2023 | Sep. 29, 2021 | Feb. 29, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2023 | |
Class of Stock [Line Items] | |||||||
Redemptions (in shares) | 7,143 | ||||||
Value of shares authorized to be repurchased | 25,000,000 | ||||||
Proceeds from issuance of convertible preferred stock | $ 0 | $ 0 | $ 148,500 | ||||
Subsequent Event | |||||||
Class of Stock [Line Items] | |||||||
Stock Repurchased During Period, Shares | 0 | ||||||
Series B Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Aggregate cash payments to preferred shareholders | $ 11,100 | ||||||
Preferred mezzanine equity | $ 7,100 | ||||||
Number of preferred shares owned (in shares) | 0 | ||||||
Non-cash increase in net income available to common stockholders | $ 300 | ||||||
Series A Convertible Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Temporary equity, shares issued (in shares) | 150,000 | ||||||
Liquidation preference (dollars per share) | $ 1,000 | ||||||
Temporary Equity (dollars per share) | $ 0.01 | ||||||
Proceeds from issuance of convertible preferred stock | $ 150,000 | ||||||
Cumulative dividend rate | 9% | ||||||
Percentage of liquidation preference in year four to call outstanding stock | 102% | ||||||
Percentage of liquidation preference in year five to call outstanding stock | 101% | ||||||
Period of waiting for conversion after issuance | 5 years | ||||||
Trailing period | 90 days | ||||||
Percentage of average closing price | 20% | ||||||
Conversion price (dollars per share) | $ 4 | ||||||
Percentage of conversion discount after increase | 25% | ||||||
Ownership percentage | 19.99% |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 14,098 | $ 6,796 | $ 5,233 |
Equity Incentive Plan Two Thousand and Twenty One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock repurchase program, authorized amount | 9,100 | ||
Stock-based compensation | 14,100 | 6,800 | $ 5,200 |
Nonvested award not yet recognized | $ 20,300 | $ 11,300 | |
Period for recognition | 2 years | ||
Equity Incentive Plan Two Thousand and Twenty One | Restricted Stock | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Equity Incentive Plan Two Thousand and Twenty One | Restricted Stock | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Equity Incentive Plan Two Thousand and Twenty One | Restricted Stock | Share-based Payment Arrangement, Tranche One | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting ratably increments at end of each year | 33% | ||
Equity Incentive Plan Two Thousand and Twenty One | Restricted Stock | Share-based Payment Arrangement, Tranche One | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting ratably increments at end of each year | 55% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Restricted Stock Awards (Details) - Restricted Stock | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Balance at beginning of period (in shares) | shares | 892,556 |
Granted (in shares) | shares | 1,874,176 |
Forfeited (in shares) | shares | (59,958) |
Vested (in shares) | shares | (347,524) |
Balance at end of period (in shares) | shares | 2,359,250 |
Weighted Average Grant Date Fair Value | |
Balance at beginning of period (usd per share) | $ / shares | $ 20.29 |
Granted (usd per share) | $ / shares | 12.59 |
Forfeited (usd per share) | $ / shares | 13.50 |
Vested (usd per share) | $ / shares | 21.22 |
Balance at end of period (usd per share) | $ / shares | $ 14.21 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator | |||
Net and comprehensive income attributable to Dream Finders Homes, Inc. | $ 295,900 | $ 262,313 | $ 121,133 |
Less: Preferred dividends, net | 13,482 | 14,513 | 4,845 |
Add: Loss prior to reorganization attributable to DFH LLC members | 0 | 0 | 1,244 |
Net and comprehensive income available to common stockholders | $ 282,418 | $ 247,800 | $ 117,532 |
Denominator | |||
Weighted-average number of common shares outstanding - basic (in shares) | 93,066,564 | 92,745,781 | 92,521,482 |
Add: Common stock equivalent shares (in shares) | 12,960,984 | 13,945,467 | 2,792,111 |
Weighted-average number of shares outstanding - diluted (in shares) | 106,027,548 | 106,691,248 | 95,313,593 |
Value of preferred dividends | $ 13,200 | $ 13,700 | $ 3,500 |
Antidilutive shares (in shares) | 600,000 | 800,000 | 200,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Crescent Homes Acquisition $ in Millions | Feb. 01, 2024 USD ($) |
Subsequent Events [Abstract] | |
Consideration transferred | $ 185 |
DFH Crescent, LLC | |
Subsequent Events [Abstract] | |
Percentage of ownership by former owner | 10% |