NVR (NVR) Q3 2024 earnings summary

Executive summary

• Consolidated revenues for Q3 2024 rose 6% year-over-year to $2.73 billion, with net income of $429.3 million and diluted EPS up 4% to $130.50 per share.

• Homebuilding gross margin declined to 23.4% from 24.3% year-over-year, impacted by higher lot and closing costs.

• New orders increased 19% year-over-year, while the average sales price of new orders decreased 1%.

• Backlog grew 9% in units and 11% in dollar value compared to Q3 2023.

• Nine-month 2024 net income grew 4% to $1.22 billion, with revenues up 8% to $7.68 billion year-over-year.

Financial highlights

• Homebuilding revenues increased 7% to $2.68 billion; mortgage banking fees were $55.3 million.

• Gross profit margin for homebuilding was 23.4% in Q3 2024, down from 24.3% in Q3 2023.

• SG&A expenses rose by $7.1 million, but as a percentage of revenue decreased to 5.6%.

• Effective tax rate increased to 20.3% from 19.7% year-over-year.

• Diluted EPS for the nine months ended September 30, 2024 was $367.20, up 7% year-over-year.

Outlook and guidance

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

• Cost pressures from building materials, labor, and land are expected to impact profit margins.

• The company believes its strong balance sheet and disciplined lot acquisition strategy position it well for market volatility.

• Management notes forward-looking statements are subject to risks including economic conditions, interest rates, regulation, and supply chain factors.