Meritage Homes (MTH) Q4 2025 earnings summary

Executive summary

• Fourth quarter 2025 saw 3,755 home closings and $1.4 billion in home closing revenue, both down year-over-year due to lower volume, average sales price, affordability challenges, and increased incentives; net sales orders declined 2% year-over-year and absorption pace fell to 3.2 net sales per month.

• Full year 2025 sales orders were flat at 14,650 homes, with a 15% increase in community count to 336, offsetting slower demand and a 9% decline in absorption pace.

• Maintained a competitive advantage with a strong supply of move-in ready homes, a 60-day closing guarantee, and ample spec inventory.

• Returned $179 million to shareholders in Q4 and $416 million for FY2025 via buybacks and dividends, reducing outstanding shares by 6%.

• Net earnings for Q4 were $84 million ($1.20 per diluted share), down 51% year-over-year; adjusted diluted EPS was $1.67, both within guidance.

Financial highlights

• Q4 2025 home closing revenue was $1.4 billion, down 12% year-over-year due to 7% lower closing volume and a 5% decrease in ASP to $375,000.

• Adjusted home closing gross margin was 19.3% in Q4, excluding $38.9 million in non-recurring charges; Q4 gross margin was 16.5%.

• Adjusted diluted EPS for Q4 was $1.67, down 30% year-over-year; full year adjusted diluted EPS was $7.05, down from $10.79 in 2024.

• SG&A as a percentage of revenue was 10.6% in Q4 and 10.7% for the year, up from 10.1% in 2024.

• Cash at year-end was $775 million, with net debt to capital at 16.9%.

Outlook and guidance

• 2026 guidance projects closings and home closing revenue in line with 2025, assuming stable market conditions.

• Q1 2026 guidance: 3,000–3,300 closings, $1.13–$1.24 billion revenue, 18–19% gross margin, 24% tax rate, and $0.87–$1.13 diluted EPS.

• Community count expected to grow 5–10% in 2026 from year-end 2025 levels.

• Committed to $400 million in share buybacks in 2026, with $100 million targeted per quarter.