KB Home 2025 Q3 Earnings Misses Revenue Growth, Earnings Drop 30.2%

KB Home (KBH) reported its fiscal 2025 Q3 earnings on September 24, 2025. The homebuilder delivered results that fell below revenue expectations and posted a decline in key profitability metrics.

The company’s total revenue declined 7.5% to $1.62 billion in Q3 2025, missing growth expectations. While the company exceeded diluted EPS guidance, both net income and EPS saw significant declines, with earnings falling below the previous year’s performance.

Revenue
KB Home’s revenue for the quarter was driven primarily by its homebuilding operations, which accounted for nearly all of the $1.62 billion in total revenue. Homebuilding revenue totaled $1.61 billion, while financial services contributed a smaller portion of $6.01 million. The drop in total revenue reflects a challenging market environment, despite strong operational efficiencies reported by management.

Earnings/Net Income
KB Home’s earnings declined across the board. The company’s net income fell 30.2% year-over-year to $109.83 million, while its diluted EPS dropped 21.9% to $1.64 in Q3 2025 compared to $2.10 in the prior-year period. The earnings contraction underscores the ongoing pressure on margins in the housing sector.

Price Action
KB Home’s stock edged up 0.60% in the latest trading day but continued to face downward pressure in the broader timeframe. Over the past full trading week, the stock declined 4.08%, and it has fallen 3.66% month-to-date, reflecting market uncertainty around the housing market and company performance.

Post-Earnings Price Action Review
Jeff Mezger, Chairman and Chief Executive Officer, highlighted KB Home’s strong Q3 performance, noting revenue of $1.62 billion and diluted EPS of $1.61, exceeding guidance. He emphasized strong balance sheet flexibility, significant shareholder returns through $188 million in share repurchases, and an 11% book value per share increase. Operational achievements included reduced build times and lower direct costs while maintaining customer satisfaction. Mezger expressed optimism about the housing market’s long-term outlook, driven by demographics and undersupply, and a cautious approach to inventory sales. He outlined a strategic pivot to increase built-to-order homes to 70%, leveraging higher margins and backlog visibility. The CEO underscored disciplined cost management, transparency in pricing, and a focus on optimizing assets for returns.

Guidance
KB Home projected Q4 2025 housing revenues of $1.65 billion (midpoint of $1.6B–$1.7B) and full-year 2025 housing revenues of $6.15 billion (midpoint of $6.1B–$6.2B). The company expects Q4 2025 average selling prices between $465,000 and $475,000 and a full-year average of $483,000. Adjusted housing gross profit margin guidance for Q4 2025 is 18%–18.4%, with 19.2%–19.3% for the full year. SG&A expenses are expected to range between 9.3%–9.7% of housing revenues for Q4 and 10.2%–10.3% for the full year. Home building operating income margin guidance for Q4 is 8.5%–8.9%, with a full-year target of ~8.9%.

Additional News
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