D.R. Horton (DHI) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 net income was $844.9 million ($2.61 per diluted share), with consolidated revenues of $7.6 billion and pre-tax income of $1.1 billion, reflecting a 1% revenue decline and 11% drop in net income year-over-year.

• Home sales revenue was $7.1 billion on 19,059 homes closed; net sales orders were 17,837 homes valued at $6.7 billion, with a 1% decrease in homes and 2% decrease in value year-over-year.

• Returned $1.2 billion to shareholders in Q1 through $1.1 billion in share repurchases and $128.5 million in dividends, reducing share count by 4% year-over-year.

• Book value per share increased 13% year-over-year to $78.53.

• Maintained strong liquidity and capital efficiency, with a focus on affordable housing and operational flexibility.

Financial highlights

• Pre-tax income was $1.1 billion with a pre-tax profit margin of 14.6%; homebuilding revenue fell 2% to $7.2 billion.

• Home sales gross margin was 22.7%, down from 22.9% prior year, due to higher incentives; lot cost increased 3% sequentially.

• Homebuilding SG&A expenses rose to 8.9% of revenues, up from 8.3% prior year.

• Return on equity was 19.1% and return on assets 13.4% for the trailing twelve months.

• Net cash provided by operating activities was $646.7 million for the quarter.

Outlook and guidance

• FY2025 guidance: consolidated revenues of $36.0–$37.5 billion, 90,000–92,000 homes closed, and cash flow from operations above FY2024; income tax rate expected at ~24%.

• Q2 FY2025: revenue expected at $7.7–$8.2 billion, homes closed 20,000–20,500, home sales gross margin 21.5–22%.

• Share repurchases for FY2025 guided to $2.6–$2.8 billion; annual dividend payments expected to be ~$500 million.

• Incentive levels expected to remain elevated, with a focus on affordable product offerings and inventory management.

• Strong liquidity and balance sheet flexibility expected to support operations through changing economic conditions.