KB Home 2025 Q3 Earnings Net Income Falls 30.2%

KB Home reported its fiscal 2025 Q3 earnings on Oct 09th, 2025, with mixed results across key financial metrics. The company missed its expected performance, as both revenue and earnings declined from the prior year. In response to weaker net orders in Q1, KB Home revised its full-year revenue guidance downward, signaling caution for the remainder of 2025.

Revenue
The company's total revenue for Q3 2025 declined by 7.5% to $1.62 billion, compared to $1.75 billion in the same period last year. Within the revenue breakdown, the Homebuilding segment contributed the lion’s share at $1.61 billion, while the Financial services segment added a modest $6.01 million. Together, these segments accounted for the full $1.62 billion in total revenue, marking a notable contraction in both core and ancillary business lines.

Earnings/Net Income
KB Home’s net income for Q3 2025 fell to $109.83 million, a 30.2% drop from $157.33 million in the prior-year period. The company’s earnings per share also decreased by 21.9% to $1.64, down from $2.10 in Q3 2024. The decline in profitability reflects broader challenges in the homebuilding sector, including weaker demand and higher costs. These results indicate a challenging operating environment for the company.

Price Action
KB Home’s stock price has underperformed across multiple time frames following the earnings report. Over the latest trading day, the shares fell 3.82%, while the decline expanded to 11.03% over the past full trading week. Month-to-date, the stock has tumbled 12.64%, signaling investor concern about the company's near-term prospects and revised guidance.

Post Earnings Price Action Review
Jeffrey Mezger, Chairman and CEO, highlighted that consumer affordability concerns and broader macroeconomic and geopolitical uncertainties have dampened homebuying activity during the Spring selling season. Despite strong community traffic, demand has lagged historical averages. In response, the company adjusted its community strategies mid-February to enhance value, which has started to yield better buyer engagement. While the company missed its first-quarter sales targets, recent weeks have seen improved weekly sales and a return to normal absorption rates. Mezger expressed cautious optimism and noted the team’s confidence in managing market volatility while maintaining customer satisfaction.

Guidance
KB Home has lowered its 2025 full-year revenue guidance to a range of $6.60 billion to $7.00 billion, a reduction from previously communicated expectations. The company now anticipates an average selling price between $480,000 and $495,000, along with a housing gross profit margin of 19.2% to 20.0%. It also forecasts a homebuilding operating income margin of approximately 9.4%, selling, general and administrative expenses between 10.0% and 10.4% of housing revenues, and an effective tax rate of about 24%. The company expects to end the year with approximately 250 active communities.

Additional News
In the three weeks following the earnings report, KB Home made no major strategic announcements or management changes. The company remained focused on its core operations without disclosing any new mergers or acquisitions. There were no new dividend or share buyback declarations during this period either. While the company’s guidance adjustments signaled a shift in expectations, no significant external developments were reported that would indicate an imminent change in strategic direction. Investors remained focused on the housing market’s evolving dynamics and the company’s ability to adapt to ongoing affordability challenges.