KB Home (KBH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues rose 10–11% year-over-year to $1.75 billion, with net income up 5% to $157.3 million and diluted EPS up 13% to $2.04, driven by higher home deliveries and average selling prices.

• Deliveries increased 8% to 3,631 homes, with average selling price up 3% to $480,900; book value per share rose 13% to $54.37.

• Net orders were flat year-over-year, but order value rose 2% and cancellation rates improved; backlog value declined 14% to $2.92 billion.

• Land acquisition and development investment rose over 50% year-over-year to nearly $850 million in Q3; year-to-date investment at $2.1 billion.

• Repurchased 1.87–1.9 million shares for $150 million in Q3; $800 million remains under repurchase authorization.

Financial highlights

• Housing gross profit margin was 20.6% (20.7% adjusted), down from 21.5% year-over-year, mainly due to product/geographic mix.

• Homebuilding operating income was $189 million (margin 10.8%), and SG&A expense ratio improved to 9.8%.

• Financial services pretax income grew 11% to $11.0 million, driven by higher joint venture income.

• Stockholders' equity rose to $3.99 billion; book value per share up 13% to $54.37.

• Total liquidity was $1.46 billion, including $374.9 million in cash and $1.08 billion in available credit.

Outlook and guidance

• Q4 2024 housing revenues expected between $1.94–$2.04 billion, with average selling price around $510,000.

• Q4 homebuilding operating income margin projected at 11.4–11.8%, and housing gross profit margin at 21.0–21.4%.

• Full-year 2024 housing revenues expected at $6.85–$6.95 billion, with average selling price of $490,000 and ROE of ~16.5%.

• 2025 housing revenues projected at approximately $7.5 billion, driven by community count, backlog, and absorption pace.

• Ending community count expected in the range of 250–255.