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Did D.R. Horton beat or miss consensus estimates last quarter?

What is D.R. Horton's gross profit margin?

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What factors drove the changes in D.R. Horton's revenue and profit?

What does D.R. Horton do and what are its main business segments?

- **Revenue & Profit Growth**: FY2025 pretax income of $4.7 billion (+13.8% margin) on $34.3 billion in revenues.
- **Shareholder Returns**: $4.8 billion returned via buybacks/dividends, with FY2026 guide for $3 billion+ cash flow.
- **Affordability Focus**: Home prices $365,600 (30% below national average), with 73% of buyers using 3.99% mortgage buydowns.
- **Gross Margin Challenges**: Q4 20.0% gross margin (down 180bps) due to incentives and litigation, Q1 2026 guide flat to slightly up.
- **Inventory Efficiency**: Homes in inventory down 21% YoY to 29,600, with 13% community count growth supporting FY2026 deliveries.

**【CEO Summary Section】**
- Delivered 85,000 homes in FY2025, with consolidated pretax income of $4.7 billion and a 13.8% pretax profit margin.
- Generated $3.4 billion in operating cash flow, returning $4.8 billion to shareholders through buybacks and dividends.
- Home sales average price of $365,600 remains 30% below the national average, emphasizing affordability strategy.
- FY2026 guidance: $33.5-35 billion in revenues, 86,000-88,000 homes closed, and $3 billion+ in operating cash flow.

**【CFO Financial Commentary】**
- Q4 net income: $905.3 million ($3.04 EPS) on $9.7 billion in revenues.
- FY2025 net income: $3.6 billion ($11.57 EPS) on $34.3 billion in revenues.
- Q4 home sales gross margin: 20.0%, down 180bps sequentially due to $113 million in litigation costs.
- FY2026 capital allocation: $2.5 billion in buybacks, $500 million in dividends, and $8.5 billion in land investments.

**【Q&A Highlights】**
- **Gross Margin Trends**: Q1 2026 guide of 20.0-20.5% reflects elevated incentives and flat stick/brick costs, with no repeat of Q4 litigation costs.
- **Incentives & Demand**: Q4 net sales orders +5% YoY to 20,078 homes, driven by 3.99% mortgage buydowns used in 73% of closings.
- **Inventory Management**: Reduced homes in inventory by 21% YoY to 29,600, with 9,300 unsold homes (800+ aged >6 months).
- **Market Outlook**: 13% community count growth positions for FY2026 deliveries, but cautious on spring selling season dependency.
- **Margins & Costs**: Lot costs +8% YoY, stick/brick flat sequentially, with hope for mid-single-digit savings in FY2026.

D.R. Horton, Inc. (DHI) Q4 2025 Earnings Call Transcript

- **Strong Q3 Results**: Revenue $9.2B (+3% QoQ), EPS $3.36, home sales gross margin 21.8% (vs. guidance). 23,160 homes closed with 54% sold in quarter.
- **Incentive Strategy**: Elevated incentives (e.g., 3.99% FHA rate) to maintain pace, Q4 gross margin guided to 21-21.5%.
- **Capital Return**: $4.6B returned to shareholders in FY24, targeting $4.2-4.4B in FY25 buybacks.
- **Operational Efficiency**: Construction cycle times down 2 weeks YoY, 7,300 completed specs at quarter end.
- **Rental Growth**: Rental segment pretax income $55M, Forestar lot development revenue $391M.

**【CEO Summary Section】**
- **Revenue and Profit Growth**: Q3 2025 revenue of $9.2 billion, up 3% sequentially, with pretax income of $1.4 billion and EPS of $3.36. Home sales gross margin of 21.8% exceeded guidance.
- **Market Strategy**: Maintained disciplined pace vs. price approach, with 54% of Q3 closings sold in the same quarter. Increased incentives (e.g., 3.99% FHA rate) to drive traffic, expecting higher incentive costs in Q4.
- **Capital Efficiency**: 12-month operating cash flow of $2.9 billion, returning $4.6 billion to shareholders via buybacks and dividends. Target $4.2-4.4 billion in FY25 buybacks.
- **Operational Metrics**: 23,160 homes closed, average price $369,600 (down 3% YoY). Construction cycle times improved 2 weeks YoY. Inventory of 38,400 homes, with 25,000 unsold (7,300 completed).

**【CFO Financial Commentary】**
- **Financial Performance**: GAAP net income $1 billion, Non-GAAP EPS $3.36. Homebuilding SG&A expenses $647 million (7.8% of revenue), up 70bps YoY due to 12% community count growth.
- **Balance Sheet**: $5.5 billion liquidity, $7.2 billion debt (23.2% leverage). Target long-term leverage ~20%. FY25 tax rate ~24%.
- **Rental Segment**: $55 million pretax income from 1,065 single-family and 328 multifamily rentals. Forestar (majority-owned lot developer) reported $391 million revenue, 63% of owned lots under contract with DHI.
- **Mortgage Operations**: 81% of closings handled by DHI Mortgage, with 64% first-time buyers and average FICO 720.

**【Q&A Highlights】**
- **Incentive Trends**: Q3 incentives were 'choppy' but stable, with recent sales showing higher costs. Q4 gross margin guided to 21-21.5% vs. Q3's 21.8%. Competitive pressures vary by market, but DHI maintains margin discipline.
- **Consumer Dynamics**: Average FICO score down 5pts YoY to 720, LTV up. 64% first-time buyers, 80%+ broker attachment rate. No significant impact from student loan repayments.
- **Community Growth**: Community count up 12% YoY, but expects moderation to mid-single digits in FY26. Focus on inventory efficiency and reducing completed specs.
- **Cost Trends**: Stick & brick costs down 2% YoY, lot costs up mid-single digits. Long-term stick & brick improvement expected from design efficiency.
- **Tariffs & Lumber**: Canadian softwood lumber tariffs may impact, but DHI has substitution options. Labor availability remains strong, supporting cycle time improvements.


D.R. Horton, Inc. (DHI) Q3 2025 Earnings Call Transcript

- **Q2 Results**: $7.7B revenue, $1.1B net income (24.3% return on inventory), despite 15% YoY decline in home sales. 
- **Margin Management**: 21.8% homebuilding margin (down 90bps QoQ) due to incentives; Q3 guide 21-21.5%. 
- **Share Buybacks**: $4B FY25 buyback (7% YTD reduction), prioritizing returns over growth. 
- **Tariff Risk**: 20% lumber from Canada; potential FY26 impact if tariffs materialize. 
- **Efficiency Focus**: 17.4% ROE, top 15% S&P 500; 8.9% SG&A ratio reflects platform expansion. 
- **Inventory Turn**: 36,900 homes in pipeline, 8,400 completed specs (down 2,000 QoQ). Construction cycle times 3 weeks faster YoY.

**【CEO Summary Section】**
- Q2 2025 revenue of $7.7 billion, down 15% YoY due to slower spring selling season and affordability constraints.
- Net income of $1.1 billion (24.3% return on inventory), with 17.4% ROE and 12.2% ROA, ranking in top 15% of S&P 500 companies.
- Homebuilding pretax margin of 21.8%, down 90bps QoQ due to higher incentives. Q3 margin expected 21-21.5%.
- Inventory management: 36,900 homes in pipeline (23,500 unsold), with 8,400 completed specs (down 2,000 QoQ). Construction cycle times improved 3 weeks YoY.
- Share buybacks: $2.4 billion YTD (7% share reduction), with $4 billion guided for FY25.

**【CFO Financial Commentary】**
- Home sales revenue $7.2 billion (19,276 homes closed), down 15% YoY. Average price $372,500, flat QoQ but down 1% YoY.
- Net sales orders 22,437 homes ($8.4 billion value), down 15% YoY. Cancellation rate 16% (15% YoY). 
- SG&A expenses $643 million (8.9% of revenue), up 170bps YoY due to platform expansion (5% employee growth, 10% community count increase). 
- Land and development spend $2 billion (70% on land, 30% on finished lots), with 613,000 owned/control lots. 
- Liquidity $5.8 billion (2.5B cash, 3.3B credit capacity). Moody's upgraded to A3, with 20% long-term leverage target.

**【Q&A Highlights】**
- **Incentives & Margin**: Q3 gross margin guide 21-21.5% reflects elevated incentives (rate buydowns). 63% of buyers first-time homebuyers. 
- **Tariffs & Costs**: Lumber 20% sourced from Canada; tariffs may impact FY26. Lumber costs flat QoQ, land costs +3% QoQ. 
- **Inventory Strategy**: Reduced spec homes by 2,000 QoQ, focusing on faster turnover. Q3 starts expected to accelerate. 
- **SG&A Efficiency**: Longer-term target for lower SG&A ratio, but near-term focus on volume leverage. 
- **Share Repurchases**: $4 billion FY25 buyback (double FY24), prioritizing capital returns over unit growth.


D.R. Horton (DHI)-17 Apr 25-2025 Q2 Earnings call transcript

- **Q1 2025 Results**: $7.6 billion revenue, $2.61 EPS (down 7% YoY) driven by higher incentives and lower sales orders.
- **Financial Strength**: 19.1% ROE, 13.4% ROA; $647M operating cash flow, $1.2B returned to shareholders.
- **Q2 Guidance**: $7.7-$8.2B revenue, 20,000-20,500 homes closed, 21.5%-22% gross margin.
- **Key Trends**: Affordable product focus, 8.9% SG&A growth, 10% community expansion.
- **Risks**: Higher mortgage rates, inventory management, rental segment margin challenges.
- **Strategic Moves**: Accelerated buybacks ($2.6-$2.8B FY25), 20% long-term leverage target.


**【CEO Summary Section】**
- Q1 2025 revenue reached $7.6 billion, with diluted EPS of $2.61, down 7% YoY due to higher incentive costs and lower net sales orders.
- Homebuilding pretax return on inventory for trailing 12 months was 26.7%, with ROE at 19.1% and ROA at 13.4%.
- Q2 2025 guidance: $7.7-$8.2 billion in revenue, 20,000-20,500 homes closed, and home sales gross margin of 21.5%-22%.
- Focus on affordable products, smaller floor plans, and incentives like mortgage buydowns to drive demand in limited affordable inventory markets.

**【CFO Financial Commentary】**
- Q1 2025 operating cash flow was $647 million, with $1.2 billion returned to shareholders via share repurchases and dividends.
- Full-year 2025 share repurchase guidance updated to $2.6-$2.8 billion, alongside $500 million in dividends.
- Consolidated leverage at 17% (target 20% long-term), with $6.5 billion in liquidity.
- Homebuilding SG&A expenses increased 6% YoY to 8.9% of revenue, driven by platform expansion (8% employee growth, 10% community count increase).

**【Q&A Key Highlights】**
- **Gross Margin Outlook**: Q2 2025 margin expected to decline to 21.5%-22% due to higher incentive costs, with visibility limited beyond Q2.
- **Inventory Management**: Q1 ended with 36,200 homes in inventory (-15% YoY), 25,700 unsold homes (flat YoY), and 10,400 completed homes.
- **Rental Segment**: Q1 pretax income of $12 million on $218 million revenue, with focus on monetizing single-family rental communities before leasing stabilization.
- **Policy Risks**: Management remains cautious on new administration policies (tariffs, GSEs), but prioritizes affordability through risk-transfer contracts and third-party lot development.
- **Labor & Materials**: Access to labor and materials stable, with no near-term inflation concerns despite higher mortgage rates.
- **Market Differentiation**: Texas and Florida saw inventory buildup, but overall market execution balanced margin and pace at community level.


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