10-QPeriod: Q3 FY2021

HORTON D R INC /DE/ Quarterly Report for Q3 Ended Jun 30, 2021

Filed July 23, 2021For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported strong financial performance for the nine months ended June 30, 2021, with consolidated revenues increasing by 41% year-over-year to $19.7 billion and net income attributable to D.R. Horton, Inc. rising by 84% to $2.8 billion. This growth was driven by robust demand in the housing market, fueled by historically low interest rates and limited housing inventory. The company saw significant increases in homebuilding revenues, homes closed, and average selling prices. Despite supply chain disruptions and labor market tightness leading to longer construction cycles, DHI managed its sales pace to align with production and saw a healthy increase in home sales gross margin. The company's financial services segment also performed well, with revenues up 65% and pre-tax income more than doubling, reflecting the strong captive market provided by its homebuilding operations. Forestar, DHI's lot development subsidiary, also experienced substantial revenue and income growth. DHI maintained a strong balance sheet with a low debt-to-total capital ratio of 24.2%, demonstrating financial flexibility to navigate market conditions and return capital to shareholders through dividends and stock repurchases.

Financial Highlights

38 data points
Beta

Revenue

$7.28B

28.4% Gross Margin

Net Income

$1.12B

15.3% Net Margin

EPS (Diluted)

$3.06

Total Assets

$21.79B

Cash & Equivalents

$1.97B

Free Cash Flow

$104.90M

Financial Statements
Beta
Revenue$7.28B
Cost of Revenue$5.21B
Gross Profit$2.07B
SG&A Expenses$655.70M
Net Income$1.12B
EPS (Basic)$3.10
EPS (Diluted)$3.06
Shares Outstanding (Basic)359.70M
Shares Outstanding (Diluted)364.00M

Key Highlights

  • 1Consolidated revenues surged 41% to $19.7 billion for the nine months ended June 30, 2021, compared to $13.9 billion in the prior year period.
  • 2Net income attributable to D.R. Horton, Inc. increased significantly by 84% to $2.8 billion for the nine months ended June 30, 2021.
  • 3Homebuilding revenues rose 41% to $19.0 billion for the nine months ended June 30, 2021, driven by a 33% increase in homes closed.
  • 4Home sales gross margin improved to 24.9% for the nine months ended June 30, 2021, up from 21.3% in the prior year period, indicating effective pricing and cost management.
  • 5The company's financial services segment saw pre-tax income increase by 111% to $262.1 million for the nine months ended June 30, 2021.
  • 6DHI maintained a strong financial position with a debt-to-total capital ratio of 24.2% at June 30, 2021.
  • 7Net sales orders value increased by 33% to $21.7 billion for the nine months ended June 30, 2021, reflecting strong demand for DHI's homes.

Frequently Asked Questions

The primary drivers were strong demand in the housing market, fueled by historically low interest rates and limited housing supply. This led to increased homebuilding revenues, a higher number of homes closed, and improved average selling prices for D.R. Horton's homes. The financial services and lot development segments also contributed positively to the overall growth.

The company faced disruptions in the supply chain and tightness in the labor market, which led to longer construction cycles. To manage this, D.R. Horton intentionally slowed its home sales pace to better align with its production levels, selling homes later in the construction cycle to ensure more certainty regarding closing dates.

D.R. Horton maintained a strong balance sheet with a low debt-to-total capital ratio of 24.2% as of June 30, 2021. The company is also actively returning capital to shareholders through the payment of quarterly dividends and significant repurchases of its common stock.

The company expects to continue restricting its sales order pace in the fourth fiscal quarter due to the stage of completion of its homes in inventory, production schedules, and capacity. This strategy aims to align sales with production and manage the sales process more effectively amidst current market dynamics.