Hello, everyone. Thank you for joining us and welcome to Smith Douglas Homes First Quarter 2026 Earnings Call and Webcast. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your keypad to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Joe Thomas, SVP of Accounting and Finance. Joe, please go ahead. Good morning, and welcome to the Earnings Conference Call for Smith Douglas Homes. We issued a press release this morning outlining our results for the first quarter of 2026, which we will discuss on today's call and which can be found on our website at investors.smithdouglas.com or by selecting the Investor Relations link at the bottom of our homepage. Please note this call will be simultaneously webcast on the Investor Relations section of our website. Before the call begins, I would like to remind everyone that certain statements made on this call, which are not historical facts, including statements concerning future financial and operating goals and performance, are forward-looking statements. Actual results could differ materially from such statements due to known and unknown risks, uncertainties, and other important factors as detailed in the company's SEC filings. Except as required by law, the company undertakes no duty to update these forward-looking statements. Additionally, reconciliations of non-GAAP financial measures discussed on this call to the most comparable GAAP measures can be found in our press release located on our website and our SEC filings. Hosting the call this morning are Greg Bennett, the company's CEO and Vice Chairman, and Russ Devendorf, our Executive Vice President and CFO. I'd now like to turn the call over to Greg. Good morning, thank you for joining us today to review our results for first quarter of 2026 and provide an update on our operations. Smith Douglas Homes generated $4.3 million in pre-tax income for the quarter, net income of $0.06 per share. We delivered 624 homes, which came in at the high end of our guidance range, while home closing gross margin exceeded expectations at 19.6% on a GAAP basis. For the quarter, we generated 981 net new orders, up 28% from a year ago and a new quarterly record for the company. While order activity remained choppy throughout the quarter, we experienced a sequential improvement in our sales pace each month of the quarter, culminating in a sales pace of 4 homes per community in the month of March. Financing incentives continued to be a key selling tool as buyers remain motivated to own a home, provided they can secure a monthly mortgage payment that fits their budget. We're encouraged by the price elasticity we experienced during the quarter as incremental adjustments in pricing led to an uptick in demand. We view this as an indicator that underlying demand remains intact across our markets despite broader macroeconomic uncertainty. From an operational standpoint, we remain focused on pace over price velocity, which means maintaining a consistent cadence of starts, driving efficient inventory turns, and driving towards a more presale-oriented backlog. Our average build time was 57 days during the quarter, consistent with prior periods, and we continue to view our ability to deliver homes quickly and reliably with an offering of home choice and personalization as a key competitive advantage. Our land-light strategy also remains central to how we operate. By relying on third-party lot developers, we're able to allocate capital efficiently and maintain flexibility through varying market conditions. We believe this approach positions us well to manage risk while continuing to scale the business. We also made progress on our growth initiatives during the quarter. Community count expanded to 108 active communities across our markets, up 24% from a year ago, and we continue to ramp operations in our new markets such as Dallas, Chattanooga, Greenville, and Alabama Gulf Coast. Our experience in Houston continues to demonstrate that our operating model translates well beyond our legacy footprint, and we remain focused on executing a disciplined and opportunistic expansion strategy over time. As we move through the spring selling season, we're encouraged by sales orders generated during the quarter, which helps rebuild backlog and provide momentum heading into the second quarter. We have continued to see encouraging traffic and order activity early in the second quarter, although demand remains variable week to week. We will continue to evaluate pricing and incentives at the community level and adjust as needed to maintain the pace required to support our operating model. While macro conditions remain dynamic, employment trends have been relatively resilient, and we continue to see motivated and engaged buyers in our markets. We believe our focus on attainable pricing, personalization, and value put us in a good position to compete for these buyers and drive market share gains over time. Finally, I'd like to thank all of our team members for the hard work during this quarter. We challenged everyone to focus on getting off to a strong start this year, and our results this quarter showed they were up to the challenge. With that, I'd like to turn the call over to Russ, who will provide more color on our financial results this quarter and give an update on our outlook. Thanks, Greg, and good morning. I'll highlight our results for the first quarter and then conclude my remarks with an update on what we are seeing so far this year and our outlook for the second quarter. We finished the first quarter with $206.4 million in revenue on 624 closings at the high end of our guidance range, with an average sales price of $331,000. Our home closings gross margin was 19.6% on a GAAP basis, and adjusted home closing gross margin was 20.3%, which adds back impairments, interest in cost of sales, and purchase accounting adjustments. During the quarter, gross margin benefited by 170 basis points from the reduction of land development accruals on the closeout of several communities. Our margins continue to reflect the use of incentives and targeted pricing adjustments to support affordability and maintain sales pace. During the quarter, closing costs, price discounts, and the cost of forward commitments totaled 730 basis points, which compared to 430 basis points in the year-ago period and 680 basis points sequentially from the fourth quarter of 2025. Selling General and Administrative Expenses for the quarter were $35.9 million, or approximately 17.4% of revenue, up $2.9 million compared to the same period last year, reflecting continued investment on our growth markets as well as the impact of lower average sales price. Pre-tax income for the quarter was $4.3 million, resulting in net income of $0.06 per share. Given the nature of our Up-C organizational structure, our reported net income reflects the allocation of earnings between Smith Douglas Homes Corp. and the non-controlling interest of Smith Douglas Holdings LLC. Because a significant portion of our earnings is attributable to LLC members and not taxed at the corporate level, the income tax impact reflected in our financial statements can differ from more traditional C corporations. For that reason, we also present adjusted net income, which assumes a blended federal and state effective tax rate of 26.6% as if we operated as a fully public C corporation, which we believe provides a more meaningful comparison to peers. For the quarter, adjusted net income was $3.2 million compared to $14.7 million in the same period last year. Turning to orders, we generated 981 net new home orders during the quarter, an increase of 28% versus the year-ago period. We ended the quarter with 869 homes in backlog with an average sales price of $332,000. In addition to backlog, we also had 42 home reservations at the end of the quarter. These reservations allow our buyers to take advantage of buying a built-to-order home while also benefiting from a guaranteed mortgage rate when they close. We expect most of these reservations to convert to new home orders in the second quarter. Turning to the balance sheet, we remain in a strong financial position. We ended the quarter with $28 million of cash and $68.5 million of total debt, with approximately $195 million available under our revolving credit facility. Our debt-to-book capitalization was 13.6%, and net debt to net book capitalization was 8.5%, reflecting our continued conservative approach to leverage. Our land-light strategy remains a core component of our operating model, with the majority of our lots controlled through option agreements, allowing us to maintain flexibility and deploy capital efficiently. As Greg previously mentioned, and I explained on our fourth quarter call, I want to reiterate that our pace over price velocity continues to guide how we manage the business. In the current environment, our focus remains on maintaining absorption and inventory turns, even if that requires some pressure on margins in the short term. We believe maintaining sales pace allows us to preserve market share, generate cash flow, and continue investing in our community pipeline, which ultimately drives scale and stronger returns over the full housing cycle. From a broader macro perspective, the housing market continues to operate in a challenging environment, driven primarily by affordability pressures and elevated mortgage rates. Recent economic data has been mixed, and geopolitical developments continue to contribute to uncertainty. We are also monitoring labor market trends closely as employment remains a key driver of housing demand. Our capital allocation priorities remain unchanged. We will continue to prioritize investing in our land pipeline and community growth while maintaining a conservative balance sheet, and we will also remain opportunistic with share repurchases. During the first quarter, we began executing on our share repurchase authorization and continued to repurchase shares into the second quarter. Including repurchases completed in April, we have repurchased approximately $10 million of stock at an average price of $13.28 per share. We believe these repurchases represent an attractive and disciplined use of capital without limiting the financial flexibility to support our long-term growth strategy. For the second quarter, we currently expect closings between 725 and 800 homes, average sales price between $325,000 and $330,000, and gross margin between 17% and 17.5%. Given the continued variability in demand conditions, we are not providing full year guidance at this time. We believe the primary risks to our outlook remain tied to macroeconomic conditions, including mortgage rates, consumer confidence, and employment trends. That said, we believe our affordable product offering, land-light strategy, and disciplined operating model position us well to continue gaining market share over time. With that, I'll turn the call over to the operator for instructions on Q&A. We will now begin the Q&A session. A reminder, if you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Rehaut with JPMorgan. Michael, your line is open. Please go ahead. Hey guys. It's Nick Cara on for Michael. Good morning. Thanks for taking the question. I wanted to start by asking on the gross margin piece, you called out some moving pieces, but would really appreciate any extra color that you have either on the incentive environment and pricing, you know, concerning like ASPs for the first quarter for the lower end of your guide. As well as on the cost side would be really helpful, any color you can provide on construction costs, labor, et cetera. Guidance on a GAAP basis. Came in at the high end of guidance on a GAAP basis, and we had 170 basis points, as I mentioned, that, and it's the way land development works. When we close out communities, we typically have a reserve in land development for anything that, you know, over the next 3 to 6 months, may come in, you know, from a cost perspective. We had closed out some communities in the fourth quarter, you know, towards the end of last year. Those accruals that we had got reversed in the quarter. That contributed to a 170 basis point positive impact to margin. If you back that out, we would have been right around, I think 18.1% was, which I think still was right in line with guidance or in the high end of our guidance range. Then from just some additional costs, as we mentioned, there's 730 basis points that were impacted by, like I said, impairments, not impairments, excuse me. Closing costs, the incentives for forward commitments, so the cost there and price discounts. Just to remind everybody, the price discounts and the forward incentives, that's a reduction to revenue. ASP, that kind of drives ASP down a little bit, and then closing costs run through our cost of goods. That, that was up sequentially, as I mentioned, and up year-over-year. You know, from a, just from a cost perspective, you know, we're actually getting some benefit on the direct cost side. That's coming in a little bit better year-over-year. The big, the big driver still for us in kind of margin degradation is the lot cost. Lot costs were as a percentage of revenue, it's up about 300 basis points versus last year. That's just the impact of, you know, the higher basis for land deals that we entered into in the last couple of years. Got it. Helpful. Thank you. Then anything you could provide, you know, I think you mentioned in your prepared remarks that demand is still looking a little choppy week to week. Any color you can provide on that, either on a sequential basis, you know, just a couple of weeks in, but relative to March or anything you could provide on April to date, that'd be helpful from a demand perspective? Yeah, thanks for the question. We, you know, we're seeing seasonal traffic. We had good strong traffic through March. April has been a slight decline, but still seasonally good. You know, as we've gone through all the spring break and all the disruptions there, it's held pretty steady, maybe down 6%-8% over what we were seeing earlier. Got it. Super helpful. Appreciate it, guys. I'll pass it on. Thanks. Your next question comes from the line of Mike Dahl with RBC Capital. Mike, your line is open. Please go ahead. Hi, everyone. You've actually got Stephen Mea on for Mike Dahl today. Thanks for taking my questions. Sure. I was hoping we could talk a little bit on the SG&A side of things. I totally understand y'all are in a big kind of growth phase, and there's, you know, life cycle charges, and there's, you're opening up your new divisions and kind of getting all heads in place in there. I was just kind of wondering if you could give us a little more of an overview on where you are in those life cycles. Is that gonna keep ramping, or is that something that might start to moderate a little bit in the coming quarters? Just kind of a qualitative overview there. Thanks. Sure. Yeah, I think as a percentage of revenue, it should definitely start to moderate. Because when you look at the gross dollars, we were only up $2 million-$3 million, you know, in that range. It's more a reflection of, you know, our ASP is coming down. Again, part of that is, you know, increased incentives. Like I mentioned, forwards and price discounts are pushing that ASP down, it's pushing that top-line revenue. Some of that% increase is because of the top-line revenue. You know, it is, you know, the gross dollars, you know, the increase is actually not that bad in my, you know, from our perspective, because we did open, as you recall. Dallas was a new division last year. We divisionalized Chattanooga. We're opening up the Gulf Coast, which we hope to have some sales here in the next few months. We've got a lot of, you know, new fresh G&A that's hitting the books without any volume. That again just reflects our continued, you know, growth and scale. When you start to see, you know, some of that revenue come through, I think it'll moderate, right? You know, again, even if you go back a couple years, Greenville's a fairly new division. We divisionalized central Georgia, we have expanded the footprint, you know, again in the drive for additional scale. it's just, you know, it's kind of a timing thing. No, totally makes sense. Appreciate the response. Secondly, understanding that you're not providing full year guidance, but if there's anything y'all could share with us on areas where you may have a little more visibility, like your thoughts on your perhaps pace or cadence of community counts and how you're looking at kind of hopping on the previous question incentives, within the guide and just kind of more broadly going forward would be helpful. Thank you. Yeah, we, we don't like to give full year now. I mean, maybe as we, as we wrap up the second quarter and we're kind of halfway through the year, we will give some more clarity. I mean, it's not like we don't have, you know, our internal targets. It's just given the environment, we just don't think it's prudent to provide any, you know, full year guidance. I mean, again, especially when it comes to margin or income. I mean, it's such a wild card. You know, we're gonna continue to push pace. We feel pretty good, especially coming off of March and the quarter. I mean, we had a really good beat, you know, exceeded our internal expectations on sales. You know, that's a reflection of us doing, you know, some additional price discovery in our communities, really driving our sales folks, you know, credit to them in the field for really pushing on pace. Turned out to be a good quarter in sales, which obviously the increase in backlog, it's gonna you know, set us up for, you know, hopefully it starts to set us up for a good back half of the year in terms of closings. I think I mentioned on the last call, you know, we were expecting anywhere from, you know, 10%-20% in community count growth for the year. You can kind of translate that into, you know, what you might expect or as you run your model, what you might expect for closings. Clearly we're focused on growing closings year-over-year. We've got some pretty good internal targets, but you can kind of back into the numbers based on what I just told you. That's logical. Thanks. Thanks for all the color. Sure. Your next question comes from the line of Trevor Allinson with Wolfe Research. Trevor, your line is open. Please go ahead. Hi. Good morning. Thank you for taking my questions. First one's on your expectation for vertical costs going forward. Obviously, oil price is up quite a bit. Fuel price is up. Some building product materials have seen price increase announcements. What are you expecting for vertical costs going forward? In terms of some of these price increase announcements from the manufacturers, are you currently taking on any of those price increases, or have you been able to successfully push back against those? Thanks for the question. We, we've been pretty successful in, you know, pushing a lot of those increases off. We, we're, you know, our costs are down year-over-year. We know that if this fuel situation stays higher for longer, we're gonna get, you know, hit with fuel surcharges and some of those things. We show up diligent every day to work on our cost and our efficiency. We'll continue to do that. You know, the market's not allowing us price and, you know, that message is going through to our trade and our suppliers to say, "Look, you know, we don't have ability to take price, we can't pass that through." We're holding a pretty tough line on that. Okay. Makes sense. Appreciate that color. Then on your lot portfolio, I mean, clearly the majority of your lots are held off balance sheet. Can you talk about what portion of those lots are held by land banks and then shed any light on the structure of your land bank agreements, perhaps in terms of deposit rates, option maintenance fees, as well as your ability to potentially walk away from deals that no longer pencil? Thanks. Sure. Of the total portfolio, we have about 30% of our lots under option are with land bankers. There's about 40% of our lots under option are with developers. There's 70%. The balance, the other 30%, are still deals that are with the underlying land seller. Where we have a contract that we may be in various stages of due diligence, but we control it with, you know, varying deposits. And usually those are pretty small. Just from a land bank perspective and a structure perspective, we are pretty much on average, it's about a 10% deposit that we have with the land bankers. Then there's typically like a walkaway fee that if you bust out of the option, then you pay another 10% walkaway fee. That's we disclose that in our financials. We don't on all of our new land bank deals, we do not cross-collateralize. We have some finished lot bank where we'll stick some lots when we have some bulky takedowns on active communities that we'll put into a finished lot bank and we may, you know, within a division, cross-collateralize. Honestly it's. That's we don't view that as any real issue. It's pretty simple the way we think about it. Yep. Thank you for that, Russ Devendorf. I appreciate all the color. Good luck moving forward. Thank you. Your next question comes from the line of Ryan Gilbert with BTIG. Ryan, your line is open. Please go ahead. Hi. Thanks. Good morning, guys. On the 2Q26 margin guidance, can you talk about how much of the step down is from higher incentives in the quarter versus higher lot costs, or if there's anything else that we should call out? We're assuming the incentives are probably about flat sequentially. You know, maybe up or down 10, 20 basis points. We're still seeing the same. It's been pretty consistent. We're seeing the same percentage of forwards, the use of forwards. That's probably, you know, pretty consistent. It's really. You know, I think there's a little step down in ASP. You know, that again is probably coming from the forwards. It's lot cost. You know, again, I think lot cost, you're gonna continue to see that trend year-over-year where that's, you know, about 300 basis points up. It's lot cost is driving it, you know, part of the variable in there is, you know, how much to the earlier question, what Greg said, you know, how much are we able to hold on, you know, vertical costs. Right now we've done a pretty good job year-over-year. The average sticks and bricks costs are down a bit, but, you know, there's some variability there. Okay. Got it. Can you update us on what you're seeing in terms of, I guess, spot land prices for the deals that you're signing up today, and then if you're getting any relief on pricing, how long that would take to flow through into your income statement? Yeah. It's starting to turn. I think we've been mentioning this for the last couple of quarters. We're definitely seeing land prices start to moderate. We're starting to feel like we have more negotiating power, right? Starting to flip from a seller's market to a buyer's market, and that... You know, obviously any new deals that we put under contract, you know, in the typical fashion, you know, excluding, you know, where we can pick up some finished lots from others that have walked. You know, it takes 18 months to flow through typically, right? Because you got development for one year, and then you've got, you know, several months of vertical construction, so it takes some time. We don't expect the increase in lot cost to moderate for at least a couple of years, right? At any material level. When we went public, we knew. We were guiding everybody. I mean, lot costs were going up just because we knew what we were doing deals at. Now you're starting to see that reverse a little bit. That's also, as we talked about on our call and our pace over price philosophy, that's why it's real important for us to continue to move inventory through the pipeline so that we don't get, you know, gummed up with these lots. We can continue to move it through the pipeline so we can start taking advantage of a reset in land basis, so land prices. That's kind of how we're thinking about it. Got it. Makes sense. Yeah Just one more from me. One last thing. Yeah. One last thing there. Yeah. Joe just pointed it out, and he's right. Like, this is part of the reason why we think it's a reasonable opportunity to enter some of these new markets, because we're able to, you know, start fresh and take advantages of some of these reset bases. Got it. Yeah. That makes, that makes sense. Yeah, just one more for me. It seems like you and the other publics and I guess the industry overall based on the starts number earlier this morning, it seems like there's a re-acceleration in starts. I'm just wondering how inventory looks in your markets, and if you're seeing any impact from, I guess, the recent increase in starts volume. There hasn't been anything that we've seen materially different or that we're hearing from our divisions. I know some of the builders. I mean, I think when you look year- over- year, a lot of the public's spec counts are down. You know, they may be starting, you know, and that could just be relative to maybe some better, you know, slightly better sales. I mean, we had better sales than expected this first quarter. We were up pretty good. Obviously our starts are gonna be up. No, from an overall pure inventory standpoint, not seeing any real impact there. Okay, great. Thanks so much. Your next question comes from the line of Natalie Kulasekere from Zelman & Associates. Natalie, your line is open. Please go ahead. Hey, good morning. Thank you for taking my question. Could you talk a little bit about how your incentives trended as the quarter progressed? I know you said it was 730 basis points for the whole quarter on average, but I'm just wondering if March was higher than January and February and, you know, if you had to kind of push incentives to achieve that pace over price, you know, for sales per community. Yeah. I don't have the exact numbers in front of me. Keep in mind, the 730 basis points, that's incentives and discounts that would've mostly come through in, you know, Q3, Q4 of last year that are hitting the books. From incentives on sales through the quarter, yeah, I would just generally say that as we ramped up our pace and, you know, pushed for a little bit more price discovery, you know, we probably saw it up a little bit. Honestly we were I think we were pleasantly surprised that it wasn't a huge hit. It does show that there is some, you know, price elasticity. You can see it ties into, you know, increase in volume. All right, thank you. What share of your closings this quarter were driven by spec sales and, you know, where are you in terms of getting to a more presale-heavy business? Yeah, I mean, that's That presale is a huge a huge driver or a huge focus of ours. Because, you know, traditionally, you're gonna make more money on the, on presales. You know, because of our business model, we really focus on personalization and choice for our buyer, and we have a quick turn, you know, from a cycle time perspective. Really for us, we're trying to drive that message to the divisions, you know. We do think that ultimately that's gonna help drive higher margins, but it also gives our buyers a different buying experience than when you go to some other entry-level builders that are more, you know, hey, you get, you know, vanilla, chocolate, strawberry type of choice. We've been averaging, you know, it's probably still, you know, 40/60 presale versus spec every week. More importantly, we're getting the contract. We saw an uptick in getting a sale on a spec home before it hits what we call line in the sand. Kind of before it hits drywall stage. That's really today very important because, you know, we're still using, forward commitments, incentives and, you know, to put an interest rate lock out there for more than 60 days is almost cost-prohibitive. The incentives are still a big driver for some of these buyers in figuring out payment. Even if we have those starts, you know, as long as we're within kind of 60 days and they can get some choice before we hit drywall stage, you know, getting that sale before drywall stage is important. We're doing a pretty good job there. I'd say we're probably 70%-80% before drywall stage is got a sale. Our spec inventory has been coming down. You know, it's still a battle, but that's, you know, that's our focus is driving more presale going forward. All right, thank you. Sure. Your next question comes from the line of Rafe Jadrosich from Bank of America. Rafe, your line is open. Please go ahead. Hi, good morning. Thanks for taking my question. Sure. Sure. I know you walked through it a little, but the gross margin, sure it's good to see the backlog sort of stabilize and stack up, step up here. The gross margin sequentially flat quarter-over-quarter in 1Q. Can you help me understand the accrual call-out that you had there and bridge maybe on a like for like basis 1Q to 2Q? We had 170 basis points roughly of a benefit because we reversed some land development accruals on closeout communities. These were several communities that closed out in kind of Q3, Q4. Our internal policy is, you know, we start to ratchet down accruals over, you know, 3 to 6 months, just in case there's any stragglers or any costs out there once we close a community. That was 170 basis points to margin. Basically, if you just look operationally, take our margin for the quarter, back out 170 basis points, and that's kind of where you would start with your, you know, your gross margin to take out the noise. You know, we had a little bit of impairment in there, so, you know, strip that out. I think that was 30. I don't know how many basis points that accounted for. 70. 70 basis points. There was 70 basis points of impairment that was a negative impact to margin. You know, again, you wanna strip that out. When you see our filing, you'll be able. I think it's in the notes. It's in the back half of the press release. When you look at the adjusted margins, you'll be able to see some of that stuff. That's why when you strip out all the noise, I think sequentially we're basically calling for about a 50 basis point decline in margin from Q1 to Q2. Again, there was a lot there, but we can walk through any detail if it's. If once you see the numbers, you have any confusion? Okay. That, that's very helpful and makes sense. That's the sequential from 1Q to 2Q, that's. You still have land inflation, but incentives sort of flash and that's getting to the. That's right. Yeah. Okay. Then on the G&A side, you said something that was really interesting, obviously the dollars have stepped up here and can continue to grow, but you're expanding communities. You're also moving into new markets. Of the markets that you operate in today, what would you consider to be, like, at scale versus what you're still trying to get the scale up and are sort of below where you'd expect it to be longer term? Yeah. Thanks, Rafe. I'll take that. We're in still infancy, I would say, in Greenville. We're the same in Dallas, Fort Worth, Gulf Coast. You know, we're kind of over that hump in Chattanooga. Made a lot of growth strides there in the last year. Central Georgia would be another that we're still building scale in. It's just kind of a spin-off of Atlanta, but without any real community count as we spun that off. Those are, again, not to scale would be Central Georgia, Greenville, Dallas, Fort Worth, and Gulf Coast. Yeah. What I'd add to that as well is while we have, you know, we always are targeting a minimum of two, what we call R teams, you know, and that's roughly 208 starts per R team. We wanna have a minimum two R teams in every division. We're not quite there in a couple of our legacy divisions like Charlotte. You know, it's Nashville, we're not there yet. At a minimum, we wanna get there. That's just the minimum, but we really feel like in some of those legacy divisions, we should be closer to three R teams, 600 closings, specifically Raleigh. I do think Charlotte can get there, 600+. We're not there yet. Nashville should be, you know, 400+. Obviously Atlanta and Houston right now are, you know, two big, you know, from a permit count, right? Two of the largest markets that we're in. Atlanta, because we peeled out Chattanooga, which was really kind of North, you know, Georgia, pulled back a little bit. Again, Atlanta proper should be, you know, close to 1,000, you know, units on a run rate. Houston for us, you know, we entered that. We're making a lot of good strides in getting them what I would say is like Smith Douglas-ized, you know, from a turns and they've been great. You know, we're only doing 400 ± closings there. I mean, that should be double, right? Within 5 years, you know, I mean, that's such a big market. We've had some headwinds, that should be double. You know, what's really shining for us is our Alabama division. You know, they're at pretty good scale between Birmingham and Huntsville. You know, kind of ±600. We've got some work to do in scaling up some of the legacy divisions. Like Greg said, you know, a lot of these new ones are just getting going. That's why you see the G&A, right? When you look at the G&A relative to the community count increase, right? Our community count was up 24%, our G&A was only up $2.9 million on gross dollar basis. To me, that's pretty efficient. Great. That's really helpful. Thank you. Yep. Your next question comes from the line of Jay McCanless from Citizens Bank. Jay, your line is open. Please go ahead. Hey, good morning, guys. First question I had, you know, we've seen some articles in the mainstream press about affordability being even worse in some of the larger cities now, which is forcing some migration out. I guess my question is, are you guys seeing better demand in your smaller markets, whether it's, you know, absorption, traffic, however you want to measure it, versus maybe some of the larger markets like a Raleigh and Atlanta? Yeah, look, Alabama has done really well, you know, and I would consider that relative, obviously, you know, Birmingham, Huntsville, relative to a Houston, for instance. Yeah, we've seen, you know, some better demand trends. Again, you know, Texas is its own animal. Yeah. I think it's also just we're so used to in the Alabama markets, you know, they didn't have the kind of, you know, spike up, you know, post-COVID. I mean, it was good, but it wasn't like you had some of these other markets. I almost feel like we're just used to hand-to-hand combat there and, you know, it's just the way we operate. Yeah, we saw some better demand there. It's. Outside of that, like there's nothing that I would say really sticks out with our footprint. I think we're in some pretty good markets, you know, kind of in the Southeast and Central U.S. is, which is, you know, that's by design. Nothing really that I can say sticks out. I don't know, Greg, if you- You know, the only thing, Jay, I'll add to that is the in-migration in some of the bigger metro locations we're in is down. I mean, that's been reported a lot. You know, you feel that a little more, and some of those smaller markets are not as sensitive to that Got it. Okay. Thanks, guys. The second question I had, ARMs, are you guys still trying to push on those? Is that still having good success with customers? Maybe what your ARM percentage was this quarter? We shifted really towards the end of the quarter and into April. We moved from a 4.99% incentive that we were kind of marketing across the footprint, you know, 30-year fixed. Just to change it up a little bit and the costs were kind of almost in line. We moved to a 3.99% 5/1 ARM towards the end of the quarter and, you know, really into April. If you go to our website, I think that's what you'll see at the top of the page. We're still offering both. We're marketing the 3.99%. A lot of it really is it's more a traffic driver. It's also designed to give our salespeople as much flexibility, right? Because with a 3.99% 5/1 ARM, the buyers can qualify off of that payment that calculates off the 3.99%. For our buyer, that's definitely helpful. We kind of give them some optionality there. We're just trying, you know, seeing what the market's doing, you know, trying to at least, you know, compete at that level, and give buyers as much affordable options as possible. We're seeing more usage of 4.99s percent. Yeah. 4.99%, the 30-year fixed 4.99% is still probably taking the most of the incentive. Okay. Got it. Great. Thanks, guys. Appreciate it. Yep. Thanks, Jay. We have reached the end of the Q&A session. I will now turn the call back to Greg Bennett for closing remarks. Thank you for joining us on our Q1 Results Call. I hope everyone has a great day. This concludes today's call. Thank you for attending. You may now disconnect.