Forestar Group Reports Q3 2025 Revenues Up 23% to $390.5M, Net Income Down 15%

Forestar Group Inc. reported a 23% increase in Q3 2025 revenues to $390.5 million, up from $318.4 million in the same quarter of the previous year. However, net income decreased by 15% to $32.9 million, or $0.65 per diluted share. The number of residential lots sold increased by 11% to 3,605 lots, and lots contracted for sale surged 26% to 25,700 lots. Forestar has adjusted its annual lot delivery forecast to between 14,500 and 15,000 lots and maintained its revenue guidance of $1.50 billion to $1.55 billion for fiscal 2025.

Forestar Group Inc. (FOR) reported a 23% increase in Q3 2025 revenues to $390.5 million, up from $318.4 million in the same quarter of the previous year. However, net income decreased by 15% to $32.9 million, or $0.65 per diluted share. The number of residential lots sold increased by 11% to 3,605 lots, and lots contracted for sale surged 26% to 25,700 lots. Forestar has adjusted its annual lot delivery forecast to between 14,500 and 15,000 lots and maintained its revenue guidance of $1.50 billion to $1.55 billion for fiscal 2025 [1].

The company attributed the revenue increase to higher lot sales and a more favorable pricing mix. Despite the revenue growth, net income declined due to lower gross margins and the absence of prior-year asset sale gains. The gross profit margin decreased to 20.4% from 22.5% in the prior year quarter, with management attributing part of the decrease to the closeout of "one community with an unusually low margin" [1].

Forestar's SG&A expense increased to $37.4 million, or 9.6% of revenue, up from 9.2% last year. This increase was primarily driven by the expansion of the operating platform, including entering seven new markets and increasing the community count by 16% [1].

The company also reported strong liquidity, with $792 million in total liquidity, including $189 million in unrestricted cash and $603 million in undrawn revolver capacity. Total debt stands at $873 million, with a net debt to capital ratio of 28.9% [1].

Forestar's Chief Operating Officer, Mark Walker, noted that while new home sales have been slower than last year due to affordability constraints and weaker consumer confidence, mortgage rate buy-down incentives offered by builders are helping to spur demand for new homes, particularly at more affordable price points. The company remains focused on developing lots for entry-level and first-time buyers, which is the largest segment of the new home market [1].

Forestar Group Inc. continues to navigate a challenging market environment, but its strong liquidity and operational flexibility position it well to capitalize on future growth opportunities. The company's strategic focus on capital efficiency, inventory turnover, and targeting entry-level buyers is likely to support its long-term growth prospects.

References:
[1] https://www.fool.com/earnings/call-transcripts/2025/07/22/forestar-for-q3-2025-earnings-call-transcript/