Forestar Group (FOR) investor relations material

Executive summary

• Q3 net income was $32.9M ($0.65 per share) on $390.5M revenue, up 23% year-over-year, with 3,605 lots sold and lots under contract rising 26% to 25,700, representing $2.3B in future revenue.

• Owned and controlled 102,300 lots at quarter-end, operating in 64 markets across 23 states.

• Maintained strong liquidity and disciplined inventory investment amid affordability constraints and weaker consumer confidence.

• Strategic relationship with D.R. Horton supports demand stability; D.R. Horton holds a 62% ownership stake.

• Focused on entry-level and first-time buyer segments, with stabilized land development costs and improved cycle times.

Financial highlights

• Q3 revenue was $390.5M (up 23% year-over-year); net income was $32.9M (down from $38.7M); nine-month revenue was $991.9M (up 4%), net income $81.0M (down from $121.8M).

• Gross profit margin was 20.4% (21.1% excluding a low-margin community), compared to 22.5% last year.

• Return on equity for the trailing twelve months was 10.1%; book value per share increased 11% to $33.04.

• SG&A expense was $37.4M (9.6% of revenue) in Q3, up from 9.2% last year, driven by expansion and a 16% increase in community count.

• Average sales price per lot was $106,600 in Q3 (up from $94,000); $104,500 for nine months (up from $96,300).

Outlook and guidance

• Fiscal 2025 revenue guidance maintained at $1.5B–$1.55B; lot delivery guidance lowered to 14,500–15,000 lots due to market conditions.

• Plan to invest ~$1.9B in land acquisition and development in fiscal 2025, subject to market conditions.

• Targeting 5% market share in the U.S. single-family residential lot development industry and aims to diversify customer base.

• Gross margin expected to remain in the 21–23% range, with current quarter at the lower end due to mix.

• Management expects continued headwinds from affordability constraints and cautious buyers, but is confident in long-term demand and market share gains.