D.R. Horton Inc
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +12.62%.
Did DHI Beat Earnings? Q2 2025 Results
D.R. Horton delivered a disappointing fiscal second quarter, missing Wall Street expectations on both the top and bottom lines as a sluggish spring selling season weighed heavily on results. The nation's largest homebuilder posted diluted EPS of $2.58, falling short of the $2.65 consensus estimate by 2.48%, while revenue came in at $7.73 billion, a 3.71% miss against forecasts and a sharp 15.1% decline from the year-ago period. The core culprit was a pronounced slowdown in buyer activity, with Executive Chairman David Auld pointing to continued affordability constraints and declining consumer confidence that kept prospective buyers on the sidelines; net sales orders fell 15% to 22,437 homes, and the cancellation rate edged higher to 16%. Net income dropped 31% to $810.40 million as the company leaned on incentives to move inventory, with over 8,400 completed homes sitting unsold. Looking ahead, management trimmed its full-year outlook, now guiding for consolidated revenues of $33.30 billion to $34.80 billion and home closings of 85,000 to 87,000, while still committing to roughly $4.00 billion in share repurchases.
- Slower-than-expected spring selling season due to continued affordability constraints and declining consumer confidence
- Net sales orders and homebuilding revenues decreased 15% from prior year
- Home sales gross margin of 21.8% at midpoint of guidance range
- Cancellation rate increased to 16% from 15% year-over-year
- Operators increasing sales incentives to drive traffic and incremental sales
- 65% of homes closed were on lots developed by Forestar or third parties
“For the second fiscal quarter of 2025, the D.R. Horton team delivered solid results, highlighted by earnings per diluted share of $2.58. Consolidated pre-tax income for the quarter was $1.1 billion on revenues of $7.7 billion, with a pre-tax profit margin of 13.8%. We leveraged our operational results and strong balance sheet to return $1.4 billion to shareholders through share repurchases and dividends during the quarter, and we have reduced our outstanding share count by 7% from a year ago.”
DR Horton CEO, on the earnings call
Forward Guidance & Outlook
D.R. Horton updated its fiscal 2025 guidance: consolidated revenues of $33.3 billion to $34.8 billion; homes closed of 85,000 to 87,000; consolidated cash flow from operations greater than $3.0 billion; share repurchases of approximately $4.0 billion. The company reiterated its income tax rate guidance of approximately 24.0% and dividend payments of approximately $500 million. Additional third quarter guidance was to be provided on the conference call.
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Figures from SEC filings and company reports. Not investment advice.