NVR (NVR) Q2 2024 earnings summary

Executive summary

• Revenues for Q2 2024 increased 12% year-over-year to $2.61 billion, driven by an 11% rise in home settlements and higher backlog turnover.

• Net income for Q2 2024 was $400.9 million, down 1% year-over-year, while diluted EPS rose 4% to $120.69.

• Homebuilding gross margin declined to 23.6% from 24.3% due to higher lot and closing costs.

• New orders rose 3% and average sales price increased 3% to $458,800; cancellation rate climbed to 12.9%.

• Backlog grew 3% in units and 6% in dollar value year-over-year, reaching 11,597 units and $5.45 billion.

Financial highlights

• Six-month 2024 revenues reached $4.95 billion, up 10% year-over-year; net income was $795.2 million, up 6%.

• Homebuilding settlements for Q2 were 5,659 units, up 11% year-over-year; average settlement price was $450,200.

• SG&A expense as a percentage of revenue fell to 5.5% in Q2 2024 from 6.5% a year ago.

• Effective tax rate increased to 24.9% in Q2 2024 from 14.3% in Q2 2023, mainly due to lower stock option tax benefits.

• Cash and cash equivalents at June 30, 2024 were approximately $2.5 billion.

Outlook and guidance

• Management expects affordability issues, inflation, and interest rate volatility to weigh on future demand.

• Company believes it is well positioned to capitalize on market volatility due to a strong balance sheet and disciplined lot acquisition.