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D.R. Horton's Q1 Earnings & Revenues Beat, Net Sales Orders Up Y/Y
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Key Takeaways
DHI's Q1 EPS and revenues beat estimates, though both declined year over year amid softer housing demand.
Net sales orders and backlog rose year over year, signaling resilient buyer interest despite headwinds.
Strong liquidity, low leverage and buybacks position DHI to navigate affordability-driven market volatility.
D.R. Horton, Inc. (DHI - Free Report) reported better-than-expected first-quarter fiscal 2026 (ended Dec. 31, 2025) results, with earnings and total revenues beating the Zacks Consensus Estimate. However, on a year-over-year basis, both metrics declined.
The continued housing market softness due to declining consumer confidence and affordability concerns marred the company’s quarterly performance, resulting in lower home closings. Besides, intensive sales incentives to curb affordability issues pressured the bottom line of DHI. The company expects affordability constraints and cautious consumer sentiment to continue to impact new housing demand.
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 grew 2.7% following the earnings release on Tuesday.
DHI’s Earnings, Revenue & Margin Discussion
DHI reported earnings of $2.03 per share, which topped the Zacks Consensus Estimate of $1.96 by 3.6%. But the reported figure was down 22.2% year over year from earnings per share (EPS) of $2.61.
Total revenues (Homebuilding, Forestar, Rental and Financial Services) were $6.89 billion, down 9.5% year over year. Contrarily, the reported figure surpassed the analysts’ expectation of $6.71 billion by 2.7%.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
The consolidated pre-tax profit margin was 11.6% in the quarter, down from 14.6% a year ago.
Segment Details of D.R. Horton
Homebuilding revenues of $6.53 billion decreased 9% from the prior-year quarter. Home sales were $6.51 billion, down 8.9% year over year. Home closings were down 6.5% from the prior-year quarter to 17,818 homes.
Net sales orders improved 2.6% year over year to 18,300 units. The value of net orders inched up 0.1% year over year to $6.66 billion. The cancellation rate (on gross sales orders) was 18%, at par year over year.
As of Dec. 31, 2025, the sales order backlog of homes was 11,376, up 3.4% year over year. Moreover, the value of the backlog was up 0.3% from the prior-year period to $4.31 billion.
Financial Services’ revenues grew 1.3% from the year-ago level to $184.6 million.
Forestar contributed $273 million to total quarterly revenues with 1,944 lots sold. In the year-ago quarter, this segment contributed $250.4 million to total revenues on 2,333 lots sold.
The Rental business generated revenues of $109.5 million for the quarter, down from $217.8 million a year ago.
Financial Details of DHI
D.R. Horton’s cash, cash equivalents and restricted cash totaled $2.55 billion as of Dec. 31, 2025, compared with $3.03 billion at the end of fiscal 2025. Total liquidity as of the fiscal first quarter was $6.6 billion.
At the end of the first quarter of fiscal 2026, the company had 30,400 homes in inventory, of which 20,000 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 590,500 lots at the end of the fiscal first quarter. Of these, 25% were owned and 75% were controlled through land and lot purchase contracts.
At the end of the fiscal first quarter, the debt-to-total capital ratio was 18.8%. The trailing 12-month return on equity was 13.7%.
During the fiscal quarter, D.R. Horton repurchased 4.4 million shares of common stock for $669.7 million. As of Dec. 31, 2025, the company's remaining stock repurchase authorization was $2.6 billion.
D.R. Horton Reiterates Fiscal 2026 Guidance
The company expects consolidated revenues to be in the range of $33.5-$35 billion. This compares with $34.25 billion in fiscal 2025.
Homes closed are anticipated to be within 86,000-88,000, compared with 84,863 in fiscal 2025.
The cash flow provided by operations is expected to be at least $3 billion. The income tax rate is expected to be approximately 24.5%.
DHI’s Zacks Rank & Recent Homebuilding Releases
D.R. Horton currently carries a Zacks Rank #5 (Strong Sell).
KB Home (KBH - Free Report) reported fourth-quarter fiscal 2025 results. The quarter’s earnings and total revenues surpassed the Zacks Consensus Estimate but decreased on a year-over-year basis.
KB Home’s quarterly performance remained under pressure amid a challenging economic and geopolitical environment, with low consumer confidence, affordability concerns and a still-high mortgage rate continuing to constrain demand. In response to these headwinds, management has adopted a measured outlook for the first quarter and full fiscal year 2026. For the first quarter of fiscal 2026, the company is expecting housing revenues to be in the $1.05-$1.15 billion band, down from $1.39 billion reported in the year-ago period. It expects deliveries to be in the range of 2,300-2,500 homes compared with 2,770 homes delivered in the year-ago period.
Lennar Corporation (LEN - Free Report) reported mixed results for the fourth quarter of fiscal 2025, wherein its adjusted earnings missed the Zacks Consensus Estimate, while total revenues beat the same. Meanwhile, both metrics tumbled on a year-over-year basis.
Lennar’s quarterly performance was hurt by a still-challenging housing market, as affordability issues and buyer uncertainty kept demand weak. A six-week government shutdown and softer market conditions added further pressure. In response, the company remained focused on maintaining volumes, adapting to evolving conditions, reducing costs and supporting long-term housing demand rather than reacting to short-term volatility. For the first quarter of fiscal 2026, Lennar expects deliveries to be in the range of 17,000-18,000 homes compared with 17,834 homes delivered in the year-ago period.
A Stock With the Favorable Combination
Here is a firm in the Zacks Construction sector, which per our model, has the right combination of elements to post an earnings beat in the upcoming quarter to be reported.
AAON, Inc. (AAON - Free Report) has an Earnings ESP of +11.73% and a Zacks Rank of 3.
AAON’s earnings topped estimates in two of the last four quarters and missed on the remaining two occasions, with a negative average surprise of 3.3%. AAON’s earnings for the fourth quarter of 2025 are expected to rise 50% year over year.
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D.R. Horton's Q1 Earnings & Revenues Beat, Net Sales Orders Up Y/Y
Key Takeaways
D.R. Horton, Inc. (DHI - Free Report) reported better-than-expected first-quarter fiscal 2026 (ended Dec. 31, 2025) results, with earnings and total revenues beating the Zacks Consensus Estimate. However, on a year-over-year basis, both metrics declined.
The continued housing market softness due to declining consumer confidence and affordability concerns marred the company’s quarterly performance, resulting in lower home closings. Besides, intensive sales incentives to curb affordability issues pressured the bottom line of DHI. The company expects affordability constraints and cautious consumer sentiment to continue to impact new housing demand.
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 grew 2.7% following the earnings release on Tuesday.
DHI’s Earnings, Revenue & Margin Discussion
DHI reported earnings of $2.03 per share, which topped the Zacks Consensus Estimate of $1.96 by 3.6%. But the reported figure was down 22.2% year over year from earnings per share (EPS) of $2.61.
Total revenues (Homebuilding, Forestar, Rental and Financial Services) were $6.89 billion, down 9.5% year over year. Contrarily, the reported figure surpassed the analysts’ expectation of $6.71 billion by 2.7%.
D.R. Horton, Inc. Price, Consensus and EPS Surprise
D.R. Horton, Inc. price-consensus-eps-surprise-chart | D.R. Horton, Inc. Quote
The consolidated pre-tax profit margin was 11.6% in the quarter, down from 14.6% a year ago.
Segment Details of D.R. Horton
Homebuilding revenues of $6.53 billion decreased 9% from the prior-year quarter. Home sales were $6.51 billion, down 8.9% year over year. Home closings were down 6.5% from the prior-year quarter to 17,818 homes.
Net sales orders improved 2.6% year over year to 18,300 units. The value of net orders inched up 0.1% year over year to $6.66 billion. The cancellation rate (on gross sales orders) was 18%, at par year over year.
As of Dec. 31, 2025, the sales order backlog of homes was 11,376, up 3.4% year over year. Moreover, the value of the backlog was up 0.3% from the prior-year period to $4.31 billion.
Financial Services’ revenues grew 1.3% from the year-ago level to $184.6 million.
Forestar contributed $273 million to total quarterly revenues with 1,944 lots sold. In the year-ago quarter, this segment contributed $250.4 million to total revenues on 2,333 lots sold.
The Rental business generated revenues of $109.5 million for the quarter, down from $217.8 million a year ago.
Financial Details of DHI
D.R. Horton’s cash, cash equivalents and restricted cash totaled $2.55 billion as of Dec. 31, 2025, compared with $3.03 billion at the end of fiscal 2025. Total liquidity as of the fiscal first quarter was $6.6 billion.
At the end of the first quarter of fiscal 2026, the company had 30,400 homes in inventory, of which 20,000 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 590,500 lots at the end of the fiscal first quarter. Of these, 25% were owned and 75% were controlled through land and lot purchase contracts.
At the end of the fiscal first quarter, the debt-to-total capital ratio was 18.8%. The trailing 12-month return on equity was 13.7%.
During the fiscal quarter, D.R. Horton repurchased 4.4 million shares of common stock for $669.7 million. As of Dec. 31, 2025, the company's remaining stock repurchase authorization was $2.6 billion.
D.R. Horton Reiterates Fiscal 2026 Guidance
The company expects consolidated revenues to be in the range of $33.5-$35 billion. This compares with $34.25 billion in fiscal 2025.
Homes closed are anticipated to be within 86,000-88,000, compared with 84,863 in fiscal 2025.
The cash flow provided by operations is expected to be at least $3 billion. The income tax rate is expected to be approximately 24.5%.
DHI’s Zacks Rank & Recent Homebuilding Releases
D.R. Horton currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
KB Home (KBH - Free Report) reported fourth-quarter fiscal 2025 results. The quarter’s earnings and total revenues surpassed the Zacks Consensus Estimate but decreased on a year-over-year basis.
KB Home’s quarterly performance remained under pressure amid a challenging economic and geopolitical environment, with low consumer confidence, affordability concerns and a still-high mortgage rate continuing to constrain demand. In response to these headwinds, management has adopted a measured outlook for the first quarter and full fiscal year 2026. For the first quarter of fiscal 2026, the company is expecting housing revenues to be in the $1.05-$1.15 billion band, down from $1.39 billion reported in the year-ago period. It expects deliveries to be in the range of 2,300-2,500 homes compared with 2,770 homes delivered in the year-ago period.
Lennar Corporation (LEN - Free Report) reported mixed results for the fourth quarter of fiscal 2025, wherein its adjusted earnings missed the Zacks Consensus Estimate, while total revenues beat the same. Meanwhile, both metrics tumbled on a year-over-year basis.
Lennar’s quarterly performance was hurt by a still-challenging housing market, as affordability issues and buyer uncertainty kept demand weak. A six-week government shutdown and softer market conditions added further pressure. In response, the company remained focused on maintaining volumes, adapting to evolving conditions, reducing costs and supporting long-term housing demand rather than reacting to short-term volatility. For the first quarter of fiscal 2026, Lennar expects deliveries to be in the range of 17,000-18,000 homes compared with 17,834 homes delivered in the year-ago period.
A Stock With the Favorable Combination
Here is a firm in the Zacks Construction sector, which per our model, has the right combination of elements to post an earnings beat in the upcoming quarter to be reported.
AAON, Inc. (AAON - Free Report) has an Earnings ESP of +11.73% and a Zacks Rank of 3.
AAON’s earnings topped estimates in two of the last four quarters and missed on the remaining two occasions, with a negative average surprise of 3.3%. AAON’s earnings for the fourth quarter of 2025 are expected to rise 50% year over year.