What were the key takeaways from D.R. Horton’s earnings call?

What guidance did D.R. Horton's management provide for the next earnings period?

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

What were the key takeaways from D.R. Horton's earnings call?

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

What is the revenue and EPS growth rate for D.R. Horton year over year?

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

What is the market's earnings forecast for D.R. Horton next quarter?

- **Revenue resilience**: $6.9B Q1 revenue, 3% sales orders growth despite market headwinds. 
- **Gross margin volatility**: 20.4% Q1 gross margin (20% ex-warranty), Q2 guide of 19-19.5%. 
- **Capital efficiency**: $3.6B operating cash flow, 18.6% pretax return on inventory. 
- **Affordability focus**: 64% of closings to first-time buyers, 64% price below national median. 
- **Liquidity strength**: $6.6B total liquidity, $2.5B buyback target for 2026. 
- **Policy positioning**: Leading in purpose-built SFR, avoiding institutional buyer competition. 
- **Cycle time improvement**: 2-week YoY reduction in median cycle time, reducing inventory drag.

**【CEO Summary Section】**
- Consolidated pretax income of $798 million on $6.9 billion in revenue, with a pretax profit margin of 11.6%. 
- Home sales gross margin of 20.4%, up 40 basis points sequentially due to warranty cost recovery. 
- 3% increase in net sales orders to 18,300 homes, with average sales price flat year-over-year at $364,000. 
- Capital allocation focus: $3.6 billion in operating cash flow, $4.4 billion returned to shareholders via buybacks and dividends. 
- Homebuilding pretax return on inventory of 18.6%, top 20% of S&P 500 companies for ROA over 3/5/10 years. 
- 64% of mortgage closings to first-time buyers, with incentives expected to remain elevated in 2026. 
- Inventory management: 30,400 homes in inventory (20,000 unsold), 7,300 completed homes (down 2,000 QoQ). 
- Median cycle time reduced by 2 weeks year-over-year, enabling faster inventory turnover. 

**【CFO Financial Commentary】**
- GAAP net income of $595 million, EPS of $2.03 (down 18% YoY). 
- Homebuilding SG&A expenses decreased 1% YoY but rose as a % of revenue to 9.7% (vs 8.9% prior year). 
- Operating cash flow of $498 million, total liquidity of $6.6 billion. 
- Share buybacks of $670 million (4.4M shares), dividend payments of $132 million. 
- Q2 2026 guidance: $7.3-7.8B revenue, 19,700-20,200 homes closed, 19-19.5% home sales gross margin. 
- Full year 2026: $33.5-35B revenue, 86,000-88,000 homes closed, $3B+ operating cash flow. 

**【Q&A Key Highlights】**
- **SG&A Expenses**: Bill Wheat stated Q1 SG&A as % of revenue rose due to lower closings, but expects leverage as volume grows. 
- **Incentives Impact**: Jessica Hansen noted Q1 incentives increased sequentially, driving 3% YoY sales growth but compressing gross margin. Q2 guide reflects $19-19.5% margin. 
- **Land Costs**: Michael Murray reported no broad land price declines, but some term flexibility with developers. 
- **Policy Response**: Paul Romanowski emphasized focus on affordable housing, with 64% of closings to first-time buyers. 
- **ARM Usage**: <10% of financed homes use ARMs, with limited impact on financial services margins. 
- **Rental Business**: Shifting to forward sales model for SFR, avoiding institutional buyer competition. 
- **Tariffs**: No material impact on stick/brick costs. 
- **Spring Demand**: Early signs of rate-driven activity, but cautious on sustainability. 
- **Share Buybacks**: Reiterated $2.5B buyback target despite FHFA scrutiny, citing balanced approach to growth and returns.

D.R. Horton, Inc. (DHI) Q1 2026 Earnings Call Transcript

- **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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