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D.R. Horton Q3 Earnings & Revenues Top, Home Closings Down Y/Y
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Key Takeaways
Q3 EPS of $3.36 beat estimates by 15.9%, but fell 18% YoY as home closings and prices declined.
Backlog value dropped 19% YoY to $5.3B, while net sales orders were flat and cancellations eased to 17%.
DHI narrowed FY25 guidance, now targeting up to $34.2B in revenues and 85,500 home closings.
D.R. Horton, Inc. (DHI - Free Report) reported better-than-expected third-quarter fiscal 2025 (ended June 30, 2025) results, with earnings and total revenues topping Zacks Consensus Estimate but decreasing on a year-over-year basis.
The continued housing market softness due to declining consumer confidence and affordability concerns marred the company’s quarterly performance, resulting in lower home closings, alongside decreased average selling price (ASP). Besides, such a weak market scenario also impacted the backlog level of the company. Furthermore, soft contributions from the Rental operations and the Financial Services segment added to the downtrend.
Although the company is actively engaging in offering necessary sales incentives to drive traffic and incremental sales, it is adversely impacting the bottom line. This, alongside elevated selling, general and administrative expenses, is hurting the margins.
Nonetheless, the company’s strong liquidity, low leverage and national scale offer significant operational and financial flexibility. Its disciplined approach to capital allocation, combined with its flexible lot supply and affordable product offerings, positions D.R. Horton to maximize returns across its communities while adapting to evolving market conditions.
Shares of this Arlington, TX-based homebuilder gained 9% following the earnings release on Tuesday.
DHI’s Earnings, Revenue & Margin Discussion
DHI reported adjusted earnings of $3.36 per share, which topped the Zacks Consensus Estimate of $2.90 by 15.9%. The reported figure was down 18% year over year from adjusted earnings per share (EPS) of $4.10.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
Total revenues (Homebuilding, Forestar, Rental and Financial Services) were $9.23 billion, down 7% year over year. Contrarily, the reported figure surpassed the analysts’ expectation of $8.78 billion by 5.1%. The consolidated pre-tax profit margin was 14.7% in the quarter under review, down from 18.1% a year ago.
Segment Details of D.R. Horton
Homebuilding revenues of $8.58 billion decreased 7% from the prior-year quarter. Home sales were $8.56 billion (above our projection of $8.3 billion), down 7.3% year over year. Home closings were down 4% from the prior-year quarter to 23,160 homes.
Net sales orders inched up 0.3% year over year to 23,071 (down from our projection of 23,887 units). The value of net orders decreased 3% year over year to $8.4 billion from $8.7 billion. The cancellation rate (on gross sales orders) was 17%, down from 18% a year ago.
The sales order backlog of homes at the end of the fiscal third quarter was 14,075 homes, down 16% year over year. Moreover, the value of the backlog was down 19% from the prior-year period to $5.3 billion.
Financial Services’ revenues decreased 6% from the year-ago level to $227.8 million (up from our expectation of $221 million).
Forestar contributed $390.5 million (up from our projection of $323.2 million) to total quarterly revenues with 3,605 lots sold, indicating growth from $318.4 million in revenues generated a year ago on 3,255 lots sold.
The Rental business generated revenues of $380.7 million for the quarter (we had projected $343.6 million), down from $413.7 million a year ago.
Balance Sheet Details of DHI
D.R. Horton’s cash, cash equivalents and restricted cash totaled $2.66 billion as of June 30, 2025, compared with $4.54 billion at the end of fiscal 2024. It had $2.9 billion of available capacity on the revolving credit facility as of June 30. Total liquidity was $5.5 billion.
At the end of June 2025, DHI had 38,400 homes in inventory, of which 25,000 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 601,400 lots at the end of the fiscal third quarter. Of these, 24% were owned and 76% were controlled through land and lot purchase contracts.
At the end of the fiscal third quarter, debt totaled $7.2 billion, with a debt-to-total capital of 23.2%. The trailing 12-month return on equity was 16.1%.
D.R. Horton repurchased 26.2 million shares of common stock for $3.6 billion during the first nine months of fiscal 2025. As of June 30, 2025, the company's remaining stock repurchase authorization was $4 billion.
DHI’s Fiscal 2025 Guidance Updated
D.R. Horton now expects consolidated revenues to be in the range of $33.7-$34.2 billion compared with the previously expected range of $33.3-$34.8 billion. This compares with $36.8 billion in fiscal 2024.
Homes closed are anticipated to be within 85,000-85,500 homes compared with the previously expected range of 85,000-87,000 units. This compares with 89,690 homes closed in fiscal 2024.
The cash flow provided by operations is still expected to be more than $3 billion. The income tax rate is still expected to be approximately 24%.
PulteGroup Inc. (PHM - Free Report) has reported better-than-expected second-quarter 2024 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate.
During the quarter, home sale revenues decreased 4.1% year over year to $4.27 billion, with the number of homes closed dropping 5.7% to 7639 units from the year-ago level. Net new home orders declined 7.4% year over year to 7,083 units. Moreover, PulteGroup’s backlog, which represents orders yet to be closed, was 10,779 units, down from 12,982 units a year ago. Currently, PulteGroup is adjusting home production and land investments to current market conditions while preparing to capitalize on future demand growth.
KB Home (KBH - Free Report) reported second-quarter fiscal 2025 results wherein earnings and total revenues surpassed the Zacks Consensus Estimate. However, both metrics decreased on a year-over-year basis.
The quarter’s result reflects the softness in the housing market as homebuyers are still navigating through affordability concerns due to high mortgage rates. Owing to these market uncertainties and a lower net orders level at the end of the quarter, KB Home lowered its fiscal 2025 guidance. Although market conditions have softened, it remains focused on managing assets efficiently. Going forward, KB Home aims to maintain pricing clarity, enhance buyer value and support margins and returns.
Lennar Corporation (LEN - Free Report) reported mixed results for the second quarter of fiscal 2025, wherein its adjusted earnings missed the Zacks Consensus Estimate while total revenues topped the same. On the contrary, year over year, both metrics tumbled.
The quarter’s performance was adversely impacted by the softness in the housing market due to ongoing affordability challenges and a decline in consumer confidence. However, Lennar is consistently executing strategies to counter the market uncertainties by driving housing starts, sales and closings to ensure long-term business efficiencies. Also, Lennar’s efforts to incentivize sales to enable affordability are expected to drive volumes further and foster consumer confidence.
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D.R. Horton Q3 Earnings & Revenues Top, Home Closings Down Y/Y
Key Takeaways
D.R. Horton, Inc. (DHI - Free Report) reported better-than-expected third-quarter fiscal 2025 (ended June 30, 2025) results, with earnings and total revenues topping Zacks Consensus Estimate but decreasing on a year-over-year basis.
The continued housing market softness due to declining consumer confidence and affordability concerns marred the company’s quarterly performance, resulting in lower home closings, alongside decreased average selling price (ASP). Besides, such a weak market scenario also impacted the backlog level of the company. Furthermore, soft contributions from the Rental operations and the Financial Services segment added to the downtrend.
Although the company is actively engaging in offering necessary sales incentives to drive traffic and incremental sales, it is adversely impacting the bottom line. This, alongside elevated selling, general and administrative expenses, is hurting the margins.
Nonetheless, the company’s strong liquidity, low leverage and national scale offer significant operational and financial flexibility. Its disciplined approach to capital allocation, combined with its flexible lot supply and affordable product offerings, positions D.R. Horton to maximize returns across its communities while adapting to evolving market conditions.
Shares of this Arlington, TX-based homebuilder gained 9% following the earnings release on Tuesday.
DHI’s Earnings, Revenue & Margin Discussion
DHI reported adjusted earnings of $3.36 per share, which topped the Zacks Consensus Estimate of $2.90 by 15.9%. The reported figure was down 18% year over year from adjusted earnings per share (EPS) of $4.10.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
D.R. Horton, Inc. price-consensus-eps-surprise-chart | D.R. Horton, Inc. Quote
Total revenues (Homebuilding, Forestar, Rental and Financial Services) were $9.23 billion, down 7% year over year. Contrarily, the reported figure surpassed the analysts’ expectation of $8.78 billion by 5.1%. The consolidated pre-tax profit margin was 14.7% in the quarter under review, down from 18.1% a year ago.
Segment Details of D.R. Horton
Homebuilding revenues of $8.58 billion decreased 7% from the prior-year quarter. Home sales were $8.56 billion (above our projection of $8.3 billion), down 7.3% year over year. Home closings were down 4% from the prior-year quarter to 23,160 homes.
Net sales orders inched up 0.3% year over year to 23,071 (down from our projection of 23,887 units). The value of net orders decreased 3% year over year to $8.4 billion from $8.7 billion. The cancellation rate (on gross sales orders) was 17%, down from 18% a year ago.
The sales order backlog of homes at the end of the fiscal third quarter was 14,075 homes, down 16% year over year. Moreover, the value of the backlog was down 19% from the prior-year period to $5.3 billion.
Financial Services’ revenues decreased 6% from the year-ago level to $227.8 million (up from our expectation of $221 million).
Forestar contributed $390.5 million (up from our projection of $323.2 million) to total quarterly revenues with 3,605 lots sold, indicating growth from $318.4 million in revenues generated a year ago on 3,255 lots sold.
The Rental business generated revenues of $380.7 million for the quarter (we had projected $343.6 million), down from $413.7 million a year ago.
Balance Sheet Details of DHI
D.R. Horton’s cash, cash equivalents and restricted cash totaled $2.66 billion as of June 30, 2025, compared with $4.54 billion at the end of fiscal 2024. It had $2.9 billion of available capacity on the revolving credit facility as of June 30. Total liquidity was $5.5 billion.
At the end of June 2025, DHI had 38,400 homes in inventory, of which 25,000 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 601,400 lots at the end of the fiscal third quarter. Of these, 24% were owned and 76% were controlled through land and lot purchase contracts.
At the end of the fiscal third quarter, debt totaled $7.2 billion, with a debt-to-total capital of 23.2%. The trailing 12-month return on equity was 16.1%.
D.R. Horton repurchased 26.2 million shares of common stock for $3.6 billion during the first nine months of fiscal 2025. As of June 30, 2025, the company's remaining stock repurchase authorization was $4 billion.
DHI’s Fiscal 2025 Guidance Updated
D.R. Horton now expects consolidated revenues to be in the range of $33.7-$34.2 billion compared with the previously expected range of $33.3-$34.8 billion. This compares with $36.8 billion in fiscal 2024.
Homes closed are anticipated to be within 85,000-85,500 homes compared with the previously expected range of 85,000-87,000 units. This compares with 89,690 homes closed in fiscal 2024.
The cash flow provided by operations is still expected to be more than $3 billion. The income tax rate is still expected to be approximately 24%.
DHI’s Zacks Rank & Recent Peer Releases
D.R. Horton currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PulteGroup Inc. (PHM - Free Report) has reported better-than-expected second-quarter 2024 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate.
During the quarter, home sale revenues decreased 4.1% year over year to $4.27 billion, with the number of homes closed dropping 5.7% to 7639 units from the year-ago level. Net new home orders declined 7.4% year over year to 7,083 units. Moreover, PulteGroup’s backlog, which represents orders yet to be closed, was 10,779 units, down from 12,982 units a year ago. Currently, PulteGroup is adjusting home production and land investments to current market conditions while preparing to capitalize on future demand growth.
KB Home (KBH - Free Report) reported second-quarter fiscal 2025 results wherein earnings and total revenues surpassed the Zacks Consensus Estimate. However, both metrics decreased on a year-over-year basis.
The quarter’s result reflects the softness in the housing market as homebuyers are still navigating through affordability concerns due to high mortgage rates. Owing to these market uncertainties and a lower net orders level at the end of the quarter, KB Home lowered its fiscal 2025 guidance. Although market conditions have softened, it remains focused on managing assets efficiently. Going forward, KB Home aims to maintain pricing clarity, enhance buyer value and support margins and returns.
Lennar Corporation (LEN - Free Report) reported mixed results for the second quarter of fiscal 2025, wherein its adjusted earnings missed the Zacks Consensus Estimate while total revenues topped the same. On the contrary, year over year, both metrics tumbled.
The quarter’s performance was adversely impacted by the softness in the housing market due to ongoing affordability challenges and a decline in consumer confidence. However, Lennar is consistently executing strategies to counter the market uncertainties by driving housing starts, sales and closings to ensure long-term business efficiencies. Also, Lennar’s efforts to incentivize sales to enable affordability are expected to drive volumes further and foster consumer confidence.