KB Home (KBH) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenues were $1.53 billion, down 10–11% year-over-year, with net income at $107.9 million and diluted EPS of $1.50, reflecting softer market conditions and affordability concerns.

• Delivered 3,120 homes in Q2, exceeding guidance but down 11% year-over-year; average selling price rose slightly to $488,700.

• Returned $200 million to shareholders via repurchasing 3.7 million shares in Q2; book value per share increased 10% to $58.64.

• Operational focus on reducing build times, lowering direct costs, and optimizing asset returns amid subdued demand and affordability challenges.

• Revised full-year 2025 guidance downward due to softer demand, lower net orders, and persistent affordability headwinds.

Financial highlights

• Q2 total revenues: $1.53 billion; homebuilding revenues: $1.52 billion; net income: $107.9 million; diluted EPS: $1.50.

• Adjusted housing gross profit margin: 19.7% (down 150 bps year-over-year); homebuilding operating income margin: 8.6% (down from 11.1%).

• SG&A ratio: 10.7% of housing revenues, up 60 bps year-over-year.

• Liquidity: $1.19 billion, including $308.9 million in cash and $881.7 million in undrawn revolver.

• Debt-to-capital ratio increased to 32.2% from 29.4% at year-end.

Outlook and guidance

• FY2025 housing revenues expected between $6.3–$6.5 billion; Q3 projected at $1.5–$1.7 billion.

• FY2025 average selling price: $480,000–$490,000; Q3 ASP: $470,000–$480,000.

• FY2025 homebuilding operating income margin: 8.6%–9.0%; Q3: 7.6%–8.2%.

• Housing gross profit margin for 2025 expected at 19.0%–19.4%; SG&A: 10.2%–10.6%.

• Expect to maintain ~250 active communities for the rest of 2025; 13,200 deliveries targeted for FY2025.