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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2024
OR
oTransition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________ to _________.
Commission file number 001-39916
___________________________________________________________
DFH_Logo 2.jpg
DREAM FINDERS HOMES, INC.
(Exact name of registrant as specified in its charter)
Delaware85-2983036
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
14701 Philips Highway, Suite 300, Jacksonville, FL
32256
(Address of principal executive offices)(Zip code)
(904) 644-7670
(Registrants Telephone Number, Including Area Code)
___________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01 per shareDFH New York Stock Exchange
___________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filer
x
Non-accelerated fileroSmaller reporting company
o
Emerging growth company
o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of October 24, 2024, there were 34,250,080 shares of the registrant’s Class A common stock, par value $0.01 per share, outstanding and 59,226,153 shares of the registrant’s Class B common stock, par value $0.01 per share, outstanding.



TABLE OF CONTENTS
2

Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. DREAM FINDERS HOMES, INC. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DREAM FINDERS HOMES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
September 30,
2024
December 31,
2023
Assets 
Cash and cash equivalents$204,906$494,145 
Restricted cash27,94254,311 
Accounts receivable30,20230,874 
Inventories2,060,168 1,440,249 
Lot deposits367,893 247,207 
Other assets105,578 80,759 
Investments in unconsolidated entities6,558 15,364 
Mortgage loans held for sale177,610  
Property and equipment, net24,898 7,043 
Right-of-use assets18,592 20,280 
Goodwill300,313 172,207 
Total assets$3,324,660 $2,562,439 
Liabilities  
Accounts payable$168,982 $134,115 
Accrued expenses186,667 207,389 
Customer deposits130,199 172,574 
Construction lines of credit991,208 530,384 
Senior unsecured notes, net294,713 293,918 
Mortgage warehouse facilities170,167  
Lease liabilities19,515 21,114 
Contingent consideration73,497 116,795 
Total liabilities$2,034,948 $1,476,289 
Commitments and contingencies (Note 5)
  
Mezzanine Equity  
Redeemable preferred stock148,500 148,500 
Redeemable noncontrolling interest21,451  
Equity  
Class A common stock, $0.01 per share, 289,000,000 authorized, 34,502,077 and 32,882,124 issued as of September 30, 2024 and December 31, 2023, respectively
345 329 
Class B common stock, $0.01 per share, 61,000,000 authorized, 59,226,153 and 60,226,153 issued as of September 30, 2024 and December 31, 2023, respectively
592 602 
Additional paid-in capital276,431 275,241 
Retained earnings844,375 648,412 
Treasury stock, at cost, 251,997 shares of Class A common stock as of September 30, 2024
(6,670) 
Total Dream Finders Homes, Inc. stockholders’ equity
1,115,073 924,584 
Noncontrolling interests4,688 13,066 
Total equity1,119,761 937,650 
Total liabilities, mezzanine equity and equity$3,324,660 $2,562,439 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

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

Table of Contents
DREAM FINDERS HOMES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Three and nine months ended September 30, 2024
(In thousands, except share amounts) (Unaudited)

Dream Finders Homes, Inc. Stockholders' Equity
Common Stock - Class ACommon Stock - Class BAdditional
Paid-in
Capital
Retained
Earnings
Treasury StockTotal
Non-Controlling
Interests
Total EquityRedeemable Preferred
Stock
Redeemable Noncontrolling Interest
Shares OutstandingAmountShares OutstandingAmountSharesAmount
Balance as of June 30, 202434,430,244$345 59,226,153$592 $271,296 $777,099 $(1,846)$4,095 $1,051,581 150,000 $148,500 $21,451 
Stock-based compensation— — 5,135— — — 5,135 — — — 
Vesting of stock-based compensation— — — — — — — — — 
Withholding of common stock for taxes— — — — — — — — — 
Repurchases of common stock(180,164)— — — (4,824)— (4,824)— — — 
Distributions— — — — (400)(400)— — — 
Preferred stock dividends declared— — (3,375)— — (3,375)— — — 
Noncontrolling interest issued in business combination— — — — — — — — — 
Net and comprehensive income— — 70,651 — 993 71,644 — — — 
Balance as of September 30, 202434,250,080$345 59,226,153$592 $276,431 $844,375 $(6,670)$4,688 $1,119,761 150,000 $148,500 $21,451 

Dream Finders Homes, Inc. Stockholders' Equity
Common Stock - Class ACommon Stock - Class BAdditional
Paid-in
Capital
Retained
Earnings
Treasury StockTotal
Non-Controlling
Interests
Total EquityRedeemable Preferred
Stock
Redeemable Noncontrolling Interest
Shares OutstandingAmountShares OutstandingAmountSharesAmount
Balance as of December 31, 202332,882,124$329 60,226,153$602 $275,241 $648,412 $ $13,066 $937,650 150,000$148,500 $ 
Stock-based compensation— — 13,660 — — — 13,660 — — 
Vesting of stock-based compensation952,6699 — (9)— — —  — — 
Withholding of common stock for taxes(332,716)(3)— (12,461)— — — (12,464)— — 
Class B common stock exchanged for Class A common stock1,000,00010 (1,000,000)(10)— — — — — — — 
Repurchases of common stock(251,997)— — — — (6,670)— (6,670)— — 
Distributions— — — — — (12,380)(12,380)— — 
Preferred stock dividends declared— — — (10,125)— — (10,125)— — 
Noncontrolling interest issued in business combination— — — — — — — — 21,451 
Net and comprehensive income— — — 206,088 — 4,002 210,090 — — 
Balance as of September 30, 202434,250,080$345 59,226,153$592 $276,431 $844,375 $(6,670)$4,688 $1,119,761 150,000$148,500 $21,451 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

Table of Contents
DREAM FINDERS HOMES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Continued)
Three and nine months ended September 30, 2023
(In thousands, except share amounts) (Unaudited)

Dream Finders Homes, Inc. Stockholders' Equity
Common Stock - Class ACommon Stock - Class BAdditional
Paid-in
Capital
Retained
Earnings
Total
Non-Controlling
Interests
Total EquityRedeemable Preferred
 Stock
Shares Outstanding
Amount
Shares Outstanding
AmountSharesAmount
Balance as of June 30, 202332,882,124$329 60,226,153$602 $270,529 $476,663 $14,501 $762,624 157,143$156,855 
Stock-based compensation— — 3,812 — — 3,812 — 
Vesting of stock-based compensation— — — — — — — 
Withholding of common stock for taxes— — — — — — — 
Distributions— — — — (2,629)(2,629)— 
Redemption of Series B preferred units— — (2,912)343 — (2,569)(7,143)(8,508)
Preferred stock dividends declared— — — (3,113)— (3,113)— 
Net and comprehensive income— — — 75,944 3,503 79,447 153 
Balance as of September 30, 202332,882,124$329 60,226,153$602 $271,429 $549,837 $15,375 $837,572 150,000$148,500 
Dream Finders Homes, Inc. Stockholders' Equity
Common Stock - Class ACommon Stock - Class BAdditional
Paid-in
Capital
Retained
Earnings
Total
Non-Controlling
Interests
Total EquityRedeemable Preferred
 Stock
Shares Outstanding
Amount
Shares Outstanding
AmountSharesAmount
Balance as of December 31, 202232,533,883$325 60,226,153$602 $264,381 $365,994 $12,970 $644,272 157,143$156,421 
Stock-based compensation— — — — 10,286 — — 10,286 — 
Vesting of stock-based compensation371,8414 — (4)— — — — 
Withholding of common stock for taxes (23,600)— — (322)— — (322)— 
Distributions— — — — (6,638)(6,638)— 
Redemption of Series B preferred units— — (2,912)343 — (2,569)(7,143)(8,508)
Preferred stock dividends declared— — — (9,863)— (9,863)— 
Net and comprehensive income— — — 193,363 9,043 202,406 587 
Balance as of September 30, 202332,882,124$329 60,226,153$602 $271,429 $549,837 $15,375 $837,572 150,000$148,500 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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DREAM FINDERS HOMES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
20242023
Cash flows from operating activities
Net and comprehensive income$210,090 $202,993 
Adjustments to reconcile net and comprehensive income to net cash (used in)/provided by operating activities
Depreciation and amortization6,948 7,983 
Gain on sale of property and equipment(120)(44)
Amortization of lease right-of-use assets5,270 5,438 
Stock-based compensation13,660 10,286 
Deferred tax expense (benefit)10,643 (5,248)
Return on investments, net of income from unconsolidated entities(3,396)11 
Contingent consideration revaluation13,793 32,608 
Payments of contingent consideration(29,259)(12,331)
Changes in operating assets and liabilities, net of effects of acquisition
Accounts receivable1,291 10,175 
Inventories(494,240)(95,623)
Lot deposits(119,077)35,978 
Other assets(8,094)8,587 
Mortgage loans held for sale(62,880) 
Accounts payable and accrued expenses(51,352)(58,683)
Customer deposits(51,179)17,890 
Lease liabilities(5,201)(5,258)
Net cash (used in)/provided by operating activities(563,103)154,762 
Cash flows from investing activities
Purchase of property and equipment(21,444)(3,906)
Proceeds from disposal of property and equipment88 201 
Investments in unconsolidated entities(2,351)(300)
Return of investments from unconsolidated entities573  
Payments for acquisitions, net of cash acquired (174,403) 
Net cash used in investing activities(197,537)(4,005)
Cash flows from financing activities
Proceeds from senior unsecured notes  300,000 
Proceeds from construction lines of credit666,176 5,410,000 
Repayments on construction lines of credit(205,352)(5,820,736)
Proceeds from mortgage warehouse facilities 544,784  
Repayments on mortgage warehouse facilities (483,761) 
Payments of debt issuance costs(7,344)(11,358)
Redemption of Series B preferred units  (11,077)
Payments of preferred stock dividends(10,125)(9,863)
Payments for common stock withheld for taxes(12,464)(322)
Repurchases of common stock(6,670) 
Distributions to noncontrolling interests(12,380)(6,638)
Payments of contingent consideration(27,832)(32,592)
Net cash provided by/(used in) financing activities445,032 (182,586)
Net decrease in cash, cash equivalents and restricted cash(315,608)(31,829)
Cash, cash equivalents and restricted cash at beginning of period
548,456 395,130 
Cash, cash equivalents and restricted cash at end of period
$232,848 $363,301 

The accompanying notes are an integral part of these condensed consolidated financial statements

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DREAM FINDERS HOMES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands)
(Unaudited)

Nine Months Ended
September 30,
20242023
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents$204,906 $330,129 
Restricted cash27,942 33,172 
Total cash, cash equivalents and restricted cash$232,848 $363,301 
Supplemental disclosures of cash payments:
Cash paid for income taxes, net of refunds $113,419 $79,299 
Supplemental disclosures of noncash activities:
Noncash investing activities
Noncontrolling interest issued in business combination$21,451 $ 
Accrued cash consideration for business combination26,126  
Total noncash investing activities $47,577 $ 

The accompanying notes are an integral part of these condensed consolidated financial statements.


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DREAM FINDERS HOMES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.    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 provides title insurance and mortgage banking solutions through its wholly owned subsidiaries, Golden Dog Title & Trust (“DF Title”) and Jet HomeLoans, LP (“Jet HomeLoans”). The Company was incorporated in the State of Delaware on September 11, 2020.
Basis of Presentation and Consolidation
The accompanying unaudited, condensed consolidated financial statements include the accounts of DFH, Inc., its wholly owned subsidiaries and any investments that may qualify for consolidation treatment. The accompanying statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for a complete set of financial statements. As such, the accompanying statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The accompanying statements include all adjustments that are of a normal, recurring nature and necessary for the fair presentation of our results for the interim periods presented, which are not necessarily indicative of results to be expected for the full year due to seasonal variations in operating results and other factors. 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 Condensed Consolidated Statements of Comprehensive Income.
On July 1, 2024, the Company acquired the remaining 40% equity interest in the previously unconsolidated mortgage joint venture, Jet HomeLoans, which is now consolidated as of that date on the Company’s condensed consolidated financial statements. Prior to the acquisition, Jet HomeLoans was accounted for as an equity method investment and, for segment reporting purposes, was presented in the Company’s Financial Services segment on a consolidated basis and reconciled to amounts reported within the Company’s condensed consolidated financial statements. Following the acquisition, Jet HomeLoans continues to be included in the Company’s Financial Services segment.
Use of Estimates
The preparation of financial statements in conformity with 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.
Mortgage Loans Held for Sale and Revenue Recognition
Mortgage loans held for sale are carried at fair value under the fair value option, with changes in fair value recorded in financial services revenues on the Condensed Consolidated Statement of Comprehensive Income. Management believes that carrying the mortgage loans held for sale at fair value and the derivative instruments used to economically hedge them enhances financial reporting by reducing volatility in reported earnings. The fair value of mortgage loans held for sale is determined by forward sale commitments with investors simultaneously when the loan is locked with the borrower. Mortgage loans held for sale are generally sold within 30-60 days of origination. Net gains and losses from the sale of mortgage loans held for sale are recognized based upon the difference between the sales proceeds and carrying value of the related loans and are recorded in financial services revenues on the Condensed Consolidated Statement of Comprehensive Income.
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The Company enters into interest rate lock commitments (“IRLCs”) when originating mortgage loans with customers who have applied for a loan and meet certain credit and underwriting criteria. The IRLCs, which may either be derivative assets or derivative liabilities based on changes in market and interest rate risk, are carried at fair value within other assets on the Company’s Condensed Consolidated Balance Sheet as of September 30, 2024. Changes in fair value of these instruments, as well as any gains or losses upon settlement, are reflected in financial services revenues on the Condensed Consolidated Statement of Comprehensive Income.
Reclassifications
Certain reclassifications have been made on the condensed consolidated financial statements for 2023 to conform to the classifications used in 2024.
Recent Accounting Pronouncements
In March 2024, the Securities and Exchange Commission (the “SEC”) issued its final rules aimed at standardizing climate-related disclosures. These rules require the disclosure of material climate-related risks, strategies to mitigate or adapt to these risks, governance practices overseeing such risks and the disclosure of substantial greenhouse gas emissions stemming from operations owned and controlled and/or indirectly influenced through purchased energy consumed in operations. Furthermore, the final rules require disclosures within financial statement notes concerning the impacts of severe weather events and other natural circumstances, contingent upon specified thresholds of materiality. Subsequent to the issuance of the final rules, on March 15, 2024, a federal appellate court imposed a temporary stay pending judicial review of these regulations, followed by a voluntary stay by the SEC on April 4, 2024, pending the conclusion of this review process. Assuming adoption, the initial annual disclosure requirements may require compliance as early as the year ending December 31, 2025 depending on filing status. The Company is currently evaluating the impact of these final rules on the condensed consolidated financial statements.
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 the fiscal year ending December 31, 2025. Early adoption is permitted, and guidance should be applied prospectively, with an option to apply guidance retrospectively. The Company is currently evaluating the impact of the adoption of ASU 2023-09 and does not expect it to have a material effect on the condensed 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 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. The Company evaluated the impact of the adoption of ASU 2023-07 on the condensed consolidated financial statements and does not expect it to have a material effect on the condensed consolidated financial statements, but will result in additional disclosures in its Annual Report on Form 10-K for the year ending December 31, 2024.
2.     Acquisitions
Crescent Homes
On February 1, 2024, the Company acquired certain assets and assumed certain liabilities, comprising the majority of the homebuilding business of Crescent Ventures, LLC (“Crescent Homes” or “Crescent”) through wholly-owned DFH subsidiaries, Dream Finders Holdings, LLC, and DFH Crescent, LLC (“DFH Crescent”). This acquisition allowed the Company to expand into the markets of Charleston and Greenville, South Carolina, and Nashville, Tennessee. The cash consideration for the Crescent acquisition was $210.4 million. Payments through September 30, 2024 were made with cash on hand and proceeds from borrowings under the Company’s revolving credit facility. Additionally, as part of the consideration, the former owner of Crescent Homes received a noncontrolling ownership in DFH Crescent and contractual rights to a portion of its future earnings upon exceeding a minimum earnings threshold.
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The purchase agreement includes certain put and call options available to the former owner and the Company upon the occurrence of certain events that are not solely in the control of the Company. As a result, the noncontrolling interest is redeemable and reported within mezzanine equity on the Company’s Condensed Consolidated Balance Sheet at the greater of the initial carrying amount adjusted for the noncontrolling interest’s share of net income (loss) or its redemption value. After achieving the minimum earnings threshold, the amount of net and comprehensive income that is attributable to the redeemable noncontrolling interest will be presented within net and comprehensive income attributable to noncontrolling interests on the Condensed Consolidated Statements of Comprehensive Income.
The acquisition was accounted for as a business combination under Accounting Standards Codification (“ASC”) Topic 805. In determining the purchase price allocation, we evaluated Crescent Homes’ assets acquired and liabilities assumed based on their estimated fair values as of February 1, 2024. Goodwill was recorded as the residual amount by which the purchase price plus the fair value of the noncontrolling interest exceeded the provisional fair value of the net assets acquired and is expected to be fully deductible for tax purposes. Goodwill consists primarily of expected synergies of combining operations, the acquired workforce, and growth opportunities, none of which qualify as separately identifiable intangible assets. The fair value of the redeemable noncontrolling interest, inclusive of the put and call options described above, was determined using an income-based approach, coupled with Monte Carlo simulations, which were impacted by various inputs including projected future cash flows, discount rates and market volatility.
The consideration for the total purchase price as of September 30, 2024 was follows (in thousands):
Cash consideration$210,449 
Fair value of the redeemable noncontrolling interest as of the acquisition date21,451 
Total consideration$231,900 
The purchase price allocation as of September 30, 2024 was as follows (in thousands):
As Originally
Reported on
March 31, 2024
Measurement
Period
Adjustments(1)
Acquired
Value
Inventories $120,682 $1,371 $122,053 
Other assets 1,790 — 1,790 
Property and equipment418 37 455 
Accounts payable(9,311)(232)(9,543)
Customer deposits (8,804)— (8,804)
Accrued expenses (2,036)(121)(2,157)
Net assets acquired $102,739 $1,055 $103,794 
Goodwill 132,861 (4,755)128,106 
Total purchase price $235,600 $(3,700)$231,900 
(1)The above measurement period adjustments were recorded during the three months ended June 30, 2024. These adjustments were related to and reflect the most current provisional valuation of the post-closing balances of the acquired net assets. The Company expects to finalize the purchase price allocation no later than one year from the acquisition date.
Jet HomeLoans
On July 1, 2024, the Company acquired the remaining 40% equity interest in the previously unconsolidated mortgage joint venture Jet HomeLoans, which is consolidated as of that date on the Company’s condensed consolidated financial statements. Cash consideration was $9.3 million, subject to customary post-closing adjustments. The acquisition was accounted for as an asset acquisition under ASC Topic 805.
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Unaudited Pro Forma Information
The following unaudited pro forma condensed consolidated results of operations are provided for illustrative purposes only and have been presented as if the Crescent and Jet HomeLoans acquisitions had occurred on January 1, 2023 (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
Unaudited Pro Forma(1)
202320242023
Total revenues$953,179 $2,941,003 $2,836,912 
Net and comprehensive income attributable to Dream Finders Homes, Inc.$87,879 $219,881 $231,655 
(1)This unaudited pro forma information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future.
For the three and nine months ended September 30, 2024, Crescent Homes contributed $123.9 million and $251.6 million in homebuilding revenues, respectively, and $21.3 million and $28.0 million in net and comprehensive income, respectively, all of which is attributable to the Company. Crescent Homes operations are included in the Mid-Atlantic segment from the date of acquisition. Refer to Note 8, Segment Reporting for information.
For the three months ended September 30, 2024, Jet HomeLoans contributed $16.1 million in financial services revenues and $6.6 million in net and comprehensive income. Following the acquisition on July 1, 2024, Jet HomeLoans’ operations continue to be included within the Financial Services segment. Refer to Note 8, Segment Reporting for information.
Contingent Consideration from Previous Business Combinations
In connection with applicable business combinations, the Company records the fair value of contingent consideration as a liability as of the acquisition date as prescribed by the underlying agreement. The initial measurement of contingent consideration is based on projected cash flows such as revenues, homebuilding gross margin, overhead expenses and pre-tax income of the acquired business and is discounted to present value using the discounted cash flow method. The remaining estimated contingent consideration payments are subsequently remeasured to fair value as of each reporting date based on the estimated future earnings of the acquired entities and the re-assessment of risk-adjusted discount rates that reflect current market conditions. Maximum potential exposure for contingent consideration is not estimable based on the contractual terms of the contingent consideration agreements, which allow for a percentage payout based on a potentially unlimited range of pre-tax income amounts.
As of September 30, 2024 and December 31, 2023, 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 $5.6 million and $11.7 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, as applicable. The Company recorded contingent consideration adjustments resulting in $0.1 million of income and $0.9 million of expense for the three and nine months ended September 30, 2024, respectively, and $0.6 million of expense and $3.8 million of expense for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024, the earnout period concluded and final payment for the contingent consideration agreement is due in the fourth quarter of 2024.
As of September 30, 2024 and December 31, 2023, the Company remeasured the fair value of contingent consideration related to the 2021 acquisition of McGuyer Homebuilders, Inc. (“MHI”) and adjusted the liability to $67.9 million and $105.1 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 $6.0 million and $12.9 million of expense for the three and nine months ended September 30, 2024, respectively, and $8.4 million and $28.4 million of expense for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024, there were 12 months remaining under the contingent consideration agreement.
See Note 9, Fair Value Disclosures for the fair value measurement of contingent consideration.
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3.    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. 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 reduced the carrying value of the 2028 Notes reported on the Condensed Consolidated Balance Sheets within senior notes unsecured, net. The net proceeds from the 2028 Notes were used to repay a portion of the then outstanding balance under the Company’s revolving credit facility. See Note 9, Fair Value Disclosures for more information.

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 100.0% 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 100.0% 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 101.0% of the aggregate principal amount of the 2028 Notes, plus any accrued and unpaid interest. As of September 30, 2024 and December 31, 2023, unamortized debt issuance costs were $5.3 million and $6.1 million, respectively.

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 or affiliate transactions. In addition, the Indenture contains certain limitations related to mergers, consolidations, and transfers of assets.

Credit Agreement
On June 6, 2024, the Company entered into an amendment to its existing revolving credit facility (as amended, the “Credit Agreement”). The amendment, among other things, (i) provides for an increase in the aggregate commitments under the revolving credit facility to $1.4 billion, subject to a borrowing base; (ii) extends the maturity date from July 17, 2026 to June 4, 2027 for certain new and existing lenders comprising $1.3 billion of the $1.4 billion of aggregate commitments under the Credit Agreement; and (iii) provides the Company with the ability to incur certain additional unsecured debt. 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 $607.0 million to $739.0 million. The Credit Agreement includes an accordion feature that allows the aggregate commitments to increase to up to $2.0 billion, subject to a borrowing base.
Under the Credit Agreement, the Company has the ability 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 or three-month interest periods and include a SOFR adjustment of 10 basis points for each interest period. 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 2.00% to 2.95%.
As of September 30, 2024 and December 31, 2023, the outstanding balance under the Credit Agreement was $990.0 million and $530.0 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 finished lots, construction in process homes, and finished homes inventory on the Condensed 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 $11.3 million and $7.0 million as of September 30, 2024 and December 31, 2023, respectively, which were included in other assets on the Condensed Consolidated Balance Sheets.
Debt issuance costs related to the 2028 Notes and the Credit Agreement that are recorded to capitalized interest are expensed in cost of sales as the homes close.
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Mortgage Warehouse Facilities

As a result of the Jet HomeLoans acquisition discussed in Note 2, Acquisitions, the Company has the following mortgage warehouse lines of credit and repurchase agreements with various financial institutions as of September 30, 2024. Amounts outstanding under the mortgage warehouse facilities are not guaranteed by us or any of our other subsidiaries and the agreements contain various affirmative and negative covenants applicable solely to Jet HomeLoans that are customary for arrangements of this type. All of the outstanding balances for the borrowings as of September 30, 2024 below were collateralized by the mortgage loans held for sale reported on the Condensed Consolidated Balance Sheets (dollars presented in thousands):

FacilityOutstanding BalanceFacility AmountInterest RateExpiration Date
Warehouse A$88,282 $90,000 6.35 %12/31/2024
Warehouse B50,453 75,000 6.85 %12/20/2024
Warehouse C31,432 100,000 7.23 %2/15/2025
Total$170,167 $265,000 
The Company was in compliance with all debt covenants as of September 30, 2024 and December 31, 2023. The Company expects to remain in compliance with all debt covenants over the next 12 months.
4.    Inventories
Inventories consist of construction in process (“CIP”) and finished homes, including capitalized interest costs incurred under certain of our debt obligations discussed in Note 3, owned land and lots and pre-acquisition land costs. CIP represents homes under construction or completed, including sold, speculative (“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. Finished lots are generally purchased just-in-time for construction, whether for spec or sold homes, and are included within owned land and lots until construction begins when the finished lot cost is transferred to CIP. 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 pre-acquisition land costs.
Inventories consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):
As of
September 30, 2024
As of
December 31, 2023
Construction in process and finished homes$1,849,736 $1,251,767 
Owned land and lots 130,674 119,675 
Pre-acquisition land costs79,758 68,807 
Inventories$2,060,168 $1,440,249 
Capitalized interest activity related to our construction lines of credit and senior unsecured notes, net is summarized in the table below for the three and nine months ended September 30, 2024 and 2023 (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024 202320242023
Capitalized interest as of beginning of the period$36,598  $27,921 $27,311 $27,682 
Interest incurred28,520  19,425 75,696 57,809 
Interest charged to homebuilding cost of sales(20,719)(19,337)(58,608)(57,482)
Capitalized interest as of end of the period$44,399  $28,009 $44,399 $28,009 
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The Company reviews the performance and outlook of its inventories for indicators of potential impairment on a quarterly basis at the community level. 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 a home in backlog or potential sales prices for a future sold home would be at a level at which the carrying value of the home may not be recoverable. There were no inventory impairment charges recorded for the three and nine months ended September 30, 2024, and $1.4 million and $2.0 million in inventory impairment charges recorded for the three and nine months ended September 30, 2023, respectively. 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. The Company recorded $1.0 million and $1.2 million of lot deposit impairments for the three and nine months ended September 30, 2024, respectively, and $1.5 million and $3.1 million of lot deposit impairments for the three and nine months ended September 30, 2023, respectively.
5.    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 condensed consolidated financial statements. When we believe that a loss is probable and estimable, we record the estimated contingency loss on our Condensed 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 condensed consolidated financial statements.
6.    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 variable interest entity (“VIE”), depending on the contractual terms of the arrangement. Additionally, in the ordinary course of business, the Company enters into option contracts with third-party land bank entities and certain unconsolidated entities for the ability to acquire rights to finished lots for the construction of homes.
The carrying amounts of the Company’s investments in unconsolidated VIEs, other than the lot option contracts discussed below were $6.6 million and $15.4 million as of September 30, 2024 and December 31, 2023, respectively. The Company’s maximum exposure to loss is limited to its investment in the entities because the Company is not obligated to provide them with any additional capital and does not guarantee any of their debt or other liabilities. Jet HomeLoans, previously an investment in unconsolidated VIEs accounted for under the equity method, is consolidated on the Company’s condensed consolidated financial statements beginning July 1, 2024. Refer to Note 1, Nature of Business and Significant Accounting Policies for more information.
Under the aforementioned lot option 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 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 entities. The Company’s risk of loss related to finished lot option and land bank option deposits and related fees was $447.7 million and $328.0 million as of September 30, 2024 and December 31, 2023, respectively.
7.    Income Taxes
The Company’s effective tax rate for the nine months ended September 30, 2024 and 2023 was estimated to be 22.0% and 24.5%, respectively. The effective tax rate decrease of 2.6% was primarily attributable to a higher number of our home closings expected to qualify for the energy efficiency tax credit under IRS §45L in the current year compared to the prior year, as well as increased tax benefits from stock-based compensation due to an overall higher Company stock price on the vesting date when compared to the grant date for certain awards.
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8.    Segment Reporting
The Company primarily operates in the homebuilding business and is organized and reported primarily by region. Our four reportable segments include the Southeast, Mid-Atlantic, Midwest and Financial Services. Our four reportable segments are comprised of the following:
Southeast (Jacksonville, Orlando and Tampa, Florida and operations in the southeast coast of Florida; Savannah, Georgia; Hilton Head and Bluffton, South Carolina; Active Adult, and Custom Homes operations in northeast Florida)
Mid-Atlantic (DC Metro; Nashville, Tennessee; Charlotte, Fayetteville, Raleigh and Wilmington, North Carolina; Charleston, Myrtle Beach, and Greenville, South Carolina)
Midwest (Austin, Dallas, Houston and San Antonio, Texas; Denver, Colorado, and Phoenix, Arizona)
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”.
The following tables summarize revenues and income before taxes by segment for the three and nine months ended September 30, 2024 and 2023, as well as total assets and goodwill by segment as of September 30, 2024 and December 31, 2023 (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
Revenues:2024202320242023
Southeast$293,300 $370,761 $914,319 $1,051,389 
Mid-Atlantic283,804 163,834 758,066 446,745 
Midwest409,153 358,907 1,191,329 1,105,725 
Financial Services20,612 12,120 54,484 33,584 
Total segment revenues1,006,869 905,622 2,918,198 2,637,443 
Reconciling items from equity method investments(1)
 (9,792)(27,344)(26,854)
Consolidated revenues$1,006,869 $895,830 $2,890,854 $2,610,589 
Three Months Ended
September 30,
Nine Months Ended
September 30,
Income before taxes:2024202320242023
Southeast$25,744 $46,646 $89,852 $119,807 
Mid-Atlantic32,668 16,300 75,602 31,466 
Midwest33,879 44,284 103,068 115,802 
Financial Services8,557 7,368 25,756 20,848 
Corporate(8,424)(8,343)(19,804)(11,943)
Total segment income before taxes92,424 106,255 274,474 275,980 
Reconciling items from equity method investments(1)
 (2,497)(5,218)(6,987)
Consolidated income before taxes$92,424 $103,758 $269,256 $268,993 
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Assets: Goodwill:
As of
September 30, 2024
As of
December 31, 2023
As of
September 30, 2024
As of
December 31, 2023
Southeast$915,037 $781,162 $14,003 $14,003 
Mid-Atlantic(2)
806,307 404,657 144,959 16,853 
Midwest1,151,556 915,199 141,071 141,071 
Financial Services208,348 207,385 280 280 
Corporate(3)
243,412 407,932   
Total segments3,324,660 2,716,335 300,313 172,207 
Reconciling items from equity method investments(1)
 (153,896)  
Consolidated$3,324,660 $2,562,439 $300,313 $172,207 
(1)As a result of the July 1, 2024 acquisition, represents reconciling amounts related to Jet HomeLoans prior to its consolidation on the Company’s condensed consolidated financial statements. Refer to Note 2, Acquisitions for more information.
(2)As of September 30, 2024, includes $128.1 million in goodwill related to the Crescent Homes acquisition.
(3)Corporate assets are comprised of, but are not limited to, operating and restricted cash, deferred tax assets, and prepaids and other assets not directly attributable to a reportable segment. In September of 2024, we purchased an aircraft for corporate use with cash on hand at a purchase price of $13.5 million.
9.    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 Company applies the fair value hierarchy to certain assets and liabilities remeasured or disclosed at fair value on a recurring basis, including mortgage loans held for sale, derivative assets, senior unsecured notes, net and contingent consideration.
The fair value of mortgage loans held for sale are based on either investor commitments or quoted secondary-market prices. Derivative assets are associated with IRLCs, whose fair values are derived from forward sale commitment prices, as well as certain unobservable inputs such as estimated costs to originate the loans and the probability that the mortgage loan will fund within the terms of the IRLC (the “pull-through rate”). Mortgage loans in process for IRLCs totaled approximately $107.7 million as of September 30, 2024 and carried a weighted average interest rate of approximately 5.4%. The estimated fair value of the 2028 Notes is based on recent trades or quoted market prices for debt of similar terms, including maturity, to achieve comparable yields. Refer to Note 2, Acquisitions for discussion of contingent consideration remeasurement.
The fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, customer deposits and mortgage warehouse facilities, approximate their carrying amounts due to the short-term nature of these instruments. The fair value of the construction lines of credit approximates their carrying amounts since they are subject to short-term floating interest rates that reflect current market rates. Fair value measurements may also be utilized on a nonrecurring basis, such as for the accounting for acquisitions or the impairment of long-lived assets and inventory.
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The following table outlines the carrying value and fair value of certain of the Company’s financial instruments (in thousands) as of September 30, 2024 and December 31, 2023:
As of
 September 30, 2024
As of
December 31, 2023
HierarchyCarrying ValueFair
 Value
Carrying Value Fair
Value
Mortgage loans held for saleLevel 2$177,610 $177,610 $ $ 
IRLCsLevel 31,955 1,955   
Senior unsecured notes, netLevel 2294,713317,469293,918318,240
Contingent considerationLevel 373,49773,497116,795116,795
The following table presents a summary of the change in fair value measurement of contingent consideration (in thousands):
Beginning balance, December 31, 2023$116,795 
Fair value adjustments related to prior year acquisitions13,793 
Contingent consideration payments(57,091)
Ending balance, September 30, 2024$73,497 
10.    Related Party Transactions
The Company generally enters into related party transactions 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 49.0% membership interest in DF Capital and periodically enters into land bank arrangements with DF Capital. DF Capital and its funds are controlled by unaffiliated parties and the Company is not the primary beneficiary of DF Capital and its funds. The Company holds limited partnership interests in certain of the funds as well as indirect ownership through membership interests in the general partners of the respective funds. From time to time, executive officers and directors may invest as limited partners in the funds as well. Amounts due to and from the funds are based on the timing and amount of capital calls as well as distributions of capital and earnings, all of which, as applicable, are made on a periodic basis over several years consistent with the typical lifecycle of any land bank financing project.
DF Residential II, LP (DF Capital’s “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. The Company, our executive officers and certain directors have investments in Fund II. As of September 30, 2024 and December 31, 2023, the Company had $39.6 million and $48.5 million, respectively, in outstanding lot deposits related to Fund II, controlling 4,726 lots and 4,028 lots, respectively.
On July 30, 2024, DF Capital initiated its first close on DF Residential III, LP (“Fund III”), which included $54.0 million in investments from the Company’s executive officers and a director. The Company’s investment in Fund III will be determined as part of the final closing. As of September 30, 2024, the Company had $17.2 million in outstanding lot deposits related to Fund III, controlling 144 lots.
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11.    Equity
Redeemable Noncontrolling Interest
On February 1, 2024, as part of the consideration for the Crescent Homes acquisition, the former owner of Crescent Homes received all of the series B units of DFH Crescent, representing a redeemable noncontrolling interest with contractual rights to a portion of DFH Crescent’s future earnings upon exceeding a minimum earnings threshold (see Note 2, Acquisitions). With the exception of certain acceleration clauses, the holder of the DFH Crescent series B units and the Company are entitled to a series of put and call options beginning on February 1, 2032. The DFH Crescent series B units have no liquidation preference, are not entitled to any dividends and have no voting rights.
Series B Preferred Units
On August 31, 2023, the Company redeemed the 7,143 previously 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.
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 any Rule 10b5-1 trading plans, 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.
The Company accounts for share repurchases of Class A common stock as treasury stock. Treasury stock is recorded as a reduction of stockholders’ equity based on the amount paid to repurchase shares, including associated costs. Treasury stock is not considered outstanding.
During the three and nine months ended September 30, 2024, under the share buyback program, the Company repurchased 180,164 and 251,997 shares of Class A common stock for an aggregate purchase price of $4.8 million and $6.7 million, respectively. As of September 30, 2024, approximately $18.3 million in shares remain available for purchase under the share buyback program. There were no shares repurchases during the year ended December 31, 2023.
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12.    Earnings Per Share
The following weighted-average shares and share equivalents were used to calculate basic and diluted earnings per share (“EPS”) for the three and nine months ended September 30, 2024 and 2023 (in thousands, except share amounts):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024202320242023
Numerator 
Net and comprehensive income attributable to Dream Finders Homes, Inc.$70,651 $76,097 $206,088 $193,950 
Less: Preferred dividends3,375 2,923 10,125 10,107 
Net and comprehensive income available to common stockholders(1)
$67,276 $73,174 $195,963 $183,843 
Denominator  
Weighted-average number of common shares outstanding - basic93,527,205 93,108,277 93,399,681 93,052,507 
Add: Common stock equivalent shares(2)
7,208,943 8,943,904 6,740,453 12,767,457 
Weighted-average number of shares outstanding - diluted100,736,148 102,052,181 100,140,134 105,819,964 
(1)For the diluted earnings per share calculation, $3.4 million and $10.1 million in preferred dividends associated with redeemable preferred stock that are assumed to be converted have been added back to the numerator for the three and nine months ended September 30, 2024, respectively, and $3.1 million and $9.9 million for the three and nine months ended September 30, 2023, respectively.
(2)Since the conversion price of the Company’s redeemable 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, while the number of redeemable 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 0.8 million and 0.6 million common stock equivalent shares excluded from the diluted earnings per share calculation for the three and nine months ended September 30, 2024, respectively. For the three and nine months ended September 30, 2023, there were no common stock equivalent shares and 0.8 million of common stock equivalent shares excluded from the diluted earnings per share calculation, respectively.
13.    Subsequent Events

On October 18, 2024, the Company entered into a definitive agreement to acquire Colorado-based title insurance underwriter, Alliant National Title Insurance Company, Inc. and a related affiliate. The closing of this transaction is subject to closing conditions, including insurance regulatory approvals.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying financial statements and related notes thereto. Unless the context otherwise requires, “Dream Finders,” ”DFH,” the “Company,” “we,” “our” and “us” refer collectively to Dream Finders Homes, Inc. and its subsidiaries.
Business Overview and Outlook
We design, build and sell homes in high-growth markets using our asset-light lot acquisition strategy. Our primary focus is on constructing and selling single-family homes across entry-level, first-time move-up, second-time move-up, and active adult markets. To fully serve our homebuyers and capture ancillary business opportunities, we have financial services operations that offer title insurance and mortgage banking solutions.
Although ticking down since earlier this year, mortgage rates and inflationary pressures remain elevated. In September, the Federal Reserve made its first cut to the Federal Funds Rate in 2024. Despite the easing of certain economic conditions, variability in demand for homes and affordability challenges persist. Our asset-light strategy positions us to remain agile in any market conditions, allowing us to strategically renegotiate lot option takedowns to align with our sales pace.
We continued to see the positive effects of our commitment to future growth, whether through organic efforts, acquisitions, or a combination of both, all while keeping an asset-light approach. This strategy is reflected in our homebuilding revenues and closings, which grew by 10% and 8%, respectively, when comparing the first nine months of 2024 and 2023. Notably, our acquisition of Crescent Homes played a significant role in these improvements. We believe this success, coupled with our increased investments in our lot pipeline, inventories and construction starts, positions us well for the future. We remain optimistic and believe that the current environment will continue to support faster inventory turnover and reinforce our shift towards spec sales for the foreseeable future. Our strategy has also allowed us to continue to pursue opportunities that contribute to our long-term outlook, including acquiring Jet HomeLoans, discussed below.
Recent Developments
On July 1, 2024, we acquired the remaining equity interest in our mortgage joint venture Jet HomeLoans, which is consolidated on the Company’s condensed consolidated financial statements as of that date. Jet HomeLoans continues to be included in the Company’s Financial Services segment.
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Results of Consolidated Operations
The following table summarizes our results of operations and other financial data (in thousands, except per share amounts) for the periods indicated:
Three Months Ended
September 30,
(unaudited)
Nine Months Ended
September 30,
(unaudited)
2024202320242023
Income before taxes:
Homebuilding$92,291 $107,230 $268,522 $267,075 
Financial services8,557 4,871 20,538 13,861 
Other(1)
(8,424)(8,343)(19,804)(11,943)
Income before taxes 92,424 103,758 269,256 268,993 
Income tax expense
(20,780)(24,158)(59,166)(66,000)
Net and comprehensive income71,644 79,600 210,090 202,993 
Net and comprehensive income attributable to Dream Finders Homes, Inc.$70,651 $76,097 $206,088 $193,950 
Other Financial Data:
Basic EPS(2)
$0.72 $0.79 $2.10 $1.98 
Diluted EPS(2)
$0.70 $0.75 $2.06 $1.83 
EBITDA (in thousands)(3)
$132,950 $131,542 $388,128 $351,040 
EBITDA margin %(3)(4)
13.2 %14.7 %13.4 %13.4 %
Return on participating equity(5)
30.4 %38.9 %
Condensed Consolidated Balance Sheet Data (as of period end):
Cash and cash equivalents$204,906 $330,129 
Construction lines of credit991,208 555,512 
Senior unsecured notes, net294,713 293,604 
Mortgage warehouse facilities170,167 — 
Total mezzanine equity169,951 148,500 
Total equity1,119,761 837,572 
(1)Represents amounts within our corporate component (“Corporate”).
(2)Refer to Note 12, Earnings Per Share to the condensed consolidated financial statements for disclosures related to the calculation of EPS. Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the redeemable preferred stock and the associated preferred dividends.
(3)EBITDA is a non-GAAP financial measure. For definition of this non-GAAP financial measure and a reconciliation to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”
(4)Calculated as a percentage of total revenues.
(5)Return on participating equity is calculated as net income attributable to DFH, less redeemable preferred stock distributions, divided by average beginning and ending total Dream Finders Homes, Inc. stockholders’ equity (“participating equity”) for the trailing twelve months.

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Results of Homebuilding Operations
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
The following table sets forth our results of homebuilding operations and balance sheet data (in thousands) for the periods indicated:
Three Months Ended
September 30,
(unaudited)
20242023Change% Change
Homebuilding revenues $986,257 $893,502 $92,755 10 %
Homebuilding cost of sales797,110 709,286 87,824 12 %
Selling, general and administrative expense(1)
101,886 78,514 23,372 30 %
Contingent consideration revaluation(2)
5,948 9,026 (3,078)(34)%
Other income, net(876)84 (960)(1143)%
Total income before taxes related to homebuilding operations(1)(2)
$82,189 $96,592 $(14,403)(15)%
Other Financial and Operating Data:
Home closings1,889 1,798 91 %
Average sales price of homes closed(3)
$518,553 $501,536 $17,017 %
Net new orders1,680 1,535 145 %
Cancellation rate13.8 %14.9 %(1.1)%(7)%
Homebuilding gross margin (in thousands)(4)
$189,147 $184,216 $4,931 %
Homebuilding gross margin %(4)(5)
19.2 %20.6 %(1.4)%(7)%
Adjusted homebuilding gross margin (in thousands)(6)
$272,117 $254,172 $17,945 %
Adjusted homebuilding gross margin %(5)(6)
27.6 %28.4 %(0.9)%(3)%
Active communities as of period end(7)
235 219 16 %
Backlog - units3,996 5,025 (1,029)(20)%
Backlog - value (in thousands)$2,004,091 $2,410,182 $(406,091)(17)%
Net homebuilding debt to net capitalization(6)
45.6 %34.5 %11.1 %32 %
(1)Selling, general and administrative expense, which is comprised of expense from the homebuilding segments and Corporate, (“SG&A”) includes $9 million and $7 million of Corporate SG&A for the three months ended September 30, 2024 and 2023, respectively. Corporate amounts are included as they primarily relate to our homebuilding business.
(2)Contingent consideration revaluation, which is comprised of amounts from the homebuilding segments and Corporate, (“contingent consideration”) includes $1 million and $4 million of Corporate contingent consideration expense for the three months ended September 30, 2024 and 2023, respectively. Corporate amounts are included as they relate to our homebuilding business.
(3)Average sales price of homes closed is calculated based on homebuilding revenues, adjusted for the impact of percentage of completion revenues, and excluding deposit forfeitures and land sales, over homes closed.
(4)Gross margin is homebuilding revenues less homebuilding cost of sales.
(5)Calculated as a percentage of homebuilding revenues.
(6)Adjusted gross margin and net homebuilding debt to net capitalization are non-GAAP financial measures. For definitions of these non-GAAP financial measures and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”
(7)A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five homesites remaining to sell.


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The following tables summarize home closings and average sales price (“ASP”) of homes closed by homebuilding segment for the three months ended September 30, 2024 and 2023, as well as active communities as of September 30, 2024 and 2023:

Three Months Ended
September 30, 2024
As of
September 30, 2024
SegmentHome ClosingsASP
Active Communities
Southeast592 $494,163 56 
Mid-Atlantic603 461,320 62 
Midwest694 589,087 117 
Total1,889 $518,553 235 

Three Months Ended
September 30, 2023
As of
September 30, 2023
SegmentHome ClosingsASP
Active Communities
Southeast828 $467,896 58 
Mid-Atlantic388 407,798 41 
Midwest582 611,886 120 
Total1,798 $501,536 219 

The following tables present income before taxes (in thousands) and homebuilding gross margin (or “gross margin”) percentage by segment for the three months ended September 30, 2024 and 2023:

Three Months Ended
September 30,
20242023
Segment
Income Before Taxes
Gross Margin %
Income Before Taxes
Gross Margin %
Southeast$25,744 19.6 %$46,646 20.2 %
Mid-Atlantic32,668 20.3 16,300 19.0 
Midwest33,879 18.1 44,284 21.8 
Total$92,291 19.2 %$107,230 20.6 %

Homebuilding Revenues. The increase in homebuilding revenues was primarily attributable to 1,889 home closings for the three months ended September 30, 2024, an increase of 91 homes, or 5%, from 1,798 home closings for the three months ended September 30, 2023. 223 home closings with an ASP of $554,231 were contributed by the Crescent Homes acquisition. The consolidated ASP of homes closed increased 3% when comparing the three months ended September 30, 2024 to the three months ended September 30, 2023. Excluding Crescent Homes, 42% of our closings were in the Midwest segment with an ASP of $589,087, which is higher relative to our other homebuilding segments. The increased use of sales incentives during the third quarter of 2024 had a partially offsetting impact on the increase in homebuilding revenues.
Homebuilding Cost of Sales and Homebuilding Gross Margin. The higher homebuilding cost of sales and homebuilding gross margin were primarily due to the increase in home closings for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The decrease in homebuilding gross margin as a percentage of homebuilding revenues when comparing the three months ended September 30, 2024 and 2023 was primarily attributable to higher land and financing costs, partially offset by direct cost reductions and, to a lesser extent, continued improvements in cycle times.