Hovnanian Enterprises (HOV) Q3 2026 earnings summary

Executive summary

• Third quarter fiscal 2026 revenues were $705.7 million, down from $800.6 million in Q3 2025, with adjusted homebuilding gross margin at 14.6% versus 17.3% last year.

• Adjusted income before income taxes was a $2 million loss, compared to $40 million in Q3 2025, due to joint venture delivery delays and lower JV income.

• Net loss available to common stockholders was $4.5 million for the quarter, compared to net income of $13.9 million in the prior year.

• Dollar value of consolidated domestic backlog increased 5% year-over-year, reflecting resilient demand despite a modest decline in total contracts.

• Management remains focused on transitioning to newer communities, inventory discipline, and execution amid affordability challenges and elevated mortgage rates.

Financial highlights

• Q3 2026 total revenues were $705.7 million, with homebuilding gross margin before interest and land charges at 14.6%.

• Adjusted EBITDA was $32 million, within guidance, but down from $77.1 million year-over-year.

• SG&A ratio was 12.3% for the quarter, better than guidance but up from 11.3% last year.

• Net loss per diluted share was $0.70 for the quarter, compared to earnings of $1.99 per share in the prior year.

• Total liquidity at quarter-end was $379.8 million, including $249.1 million in cash and $125 million in borrowing capacity.

Outlook and guidance

• Q4 2026 revenue expected between $800 million and $900 million, with adjusted homebuilding gross margin guidance of 15.0%–16.5%.

• SG&A expected at 10.5%–11.5% of revenue; adjusted EBITDA guidance is $50–$65 million; adjusted pre-tax income at $15–$30 million.

• Joint venture income forecasted at $10–$20 million; ASP expected to gradually increase as product mix shifts toward move-up buyers.

• Community count expected to rise in Q4 and into 2027 as new communities come online.

• Guidance assumes stable market conditions and excludes certain non-recurring items.