D.R. Horton Inc
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −0.53%.
Did DHI Beat Earnings? Q4 2025 Results
D.R. Horton delivered a mixed fiscal fourth quarter, beating revenue expectations while falling short on the bottom line, as persistent affordability headwinds weighed on profitability across its core homebuilding operations. The nation's largest homebuilder posted diluted EPS of $3.04, missing the $3.29 consensus estimate by 7.60%, while revenue of $9.68 billion edged 2.50% above expectations but still marked a 3.3% decline from a year ago. The earnings shortfall traced directly to elevated sales incentives the company deployed to sustain order volumes in a higher-rate environment, compressing pre-tax profit margins to 12.4% from 17.1% in the prior-year quarter. Net income fell 29% year-over-year to $905.30 million. On a more constructive note, net sales orders rose 5% to 20,078 homes, and the company raised its quarterly dividend 13% to $0.45 per share. Looking ahead, management guided fiscal 2026 revenues of $33.50 billion to $35.00 billion, with incentives expected to remain elevated depending on market conditions, even as notable investors signal longer-term confidence in U.S. housing fundamentals.
- Net sales orders increased 5% to 20,078 homes in Q4
- 65% of homes closed in fiscal 2025 were on lots developed by Forestar or third parties, up from 63%
- Disciplined balance of pace, price and incentives to meet demand
- Cancellation rate improved to 20% from 21% in prior year quarter
- Approximately 43,000 first-time homebuyers served in fiscal 2025
- Homebuilding return on inventory of 20.1% for fiscal 2025
“The D.R. Horton team completed our 24th consecutive year as America's largest builder by volume, and we are proud to have provided homeownership to nearly 85,000 individuals and families during fiscal 2025, including approximately 43,000 first-time homebuyers. Consolidated pre-tax income for the year totaled $4.7 billion on $34.3 billion of revenues, resulting in a pre-tax profit margin of 13.8%. We generated $3.4 billion of cash from operations in fiscal 2025 and leveraged our strong financial position to return $4.8 billion to shareholders through repurchases and dividends.”
DR Horton CEO, on the earnings call
Forward Guidance & Outlook
For fiscal 2026, D.R. Horton guided consolidated revenues of $33.5 billion to $35.0 billion, homes closed by homebuilding operations of 86,000 to 88,000, an income tax rate of approximately 24.5%, consolidated operating cash flow of at least $3.0 billion, share repurchases of approximately $2.5 billion, and dividend payments of approximately $500 million. Management expects sales incentives to remain elevated in fiscal 2026, with the extent depending on market conditions throughout the year. New home demand continues to be impacted by ongoing affordability constraints and cautious consumer sentiment.
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Figures from SEC filings and company reports. Not investment advice.