KB Home (KBH) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenues were $1.39 billion, down 5% year-over-year, with 2,770 homes delivered (9% decrease), net income of $109.6 million, and diluted EPS of $1.49; average selling price rose 4% to $500,700.

• Net orders fell 17% to 2,772, backlog value declined 21% to $2.2 billion, and backlog homes dropped 23% year-over-year.

• Price reductions, incentives, and targeted sales strategies were implemented to address affordability and demand challenges, leading to a late-quarter rebound in net orders.

• Investments in land and land development increased 57% year-over-year to $920 million, supporting a 7% rise in community count to 257.

• Book value per share increased 12% year-over-year to over $57.

Financial highlights

• Housing gross profit margin was 20.2% (down from 21.5%); adjusted margin was 20.3%.

• Homebuilding operating income margin was 9.2% (down from 10.8%); SG&A expense ratio increased to 11%.

• Total liquidity at quarter-end was $1.25 billion, including $268 million cash and $982 million available credit.

• Debt-to-capital ratio increased to 30.5% from 29.4% at year-end 2024.

• Financial services pretax income dropped 35% to $7.5 million.

Outlook and guidance

• FY2025 housing revenues expected at $6.6–$7.0 billion; average selling price guidance at $480,000–$495,000.

• Q2 2025 housing revenues projected at $1.45–$1.55 billion; average selling price ~$488,000.

• Homebuilding operating income margin for 2025 projected at ~9.4%; housing gross margin at 19.2%–20.0%.

• Effective tax rate guidance for 2025 is approximately 24%.

• Community count expected to remain around 250–260 through Q3 and ~250 by year-end.