10-QPeriod: Q2 FY2024

HORTON D R INC /DE/ Quarterly Report for Q2 Ended Mar 31, 2024

Filed April 23, 2024For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported strong financial results for the quarter and six months ended March 31, 2024. The company experienced significant growth in home sales revenues and the number of homes closed, driven by increased demand and improved market conditions. Key operational highlights include a substantial increase in net sales orders, indicating robust future demand, alongside a growing homebuilding inventory and a strong lot position controlled through purchase contracts. The company also saw improved home sales gross margins and maintained efficient selling, general, and administrative expenses. Forestar, the residential lot development subsidiary, also delivered strong revenue and pre-tax income growth. DHI Mortgage demonstrated increased loan origination volume and improved revenue and profitability. The company's balance sheet remains solid, with a healthy stockholders' equity and controlled debt-to-total capital ratio. DHI continues to return capital to shareholders through dividends and share repurchases. Despite elevated interest rates and inflationary pressures, DHI's management expresses confidence in its ability to navigate market conditions due to its affordable product offerings, extensive lot supply, and strategic focus on operational efficiency and capital management.

Financial Highlights

38 data points
Beta

Revenue

$9.11B

25.6% Gross Margin

Net Income

$1.18B

13.0% Net Margin

EPS (Diluted)

$3.52

Total Assets

$34.40B

Cash & Equivalents

$3.09B

Free Cash Flow

-$340.40M

Financial Statements
Beta
Revenue$9.11B
Cost of Revenue$6.77B
Gross Profit$2.33B
SG&A Expenses$880.60M
Net Income$1.18B
EPS (Basic)$3.54
EPS (Diluted)$3.52
Shares Outstanding (Basic)330.90M
Shares Outstanding (Diluted)333.30M

Key Highlights

  • 1Homebuilding revenues increased 13% to $8.5 billion for the quarter and 11% to $15.8 billion for the six months, driven by a 15% and 13% increase in homes closed, respectively.
  • 2Net sales orders increased by 14% (quarter) and 22% (six months), indicating strong future demand, with an average selling price of net sales orders up 2% year-over-year.
  • 3Home sales gross margin improved to 23.2% for the quarter and 23.1% for the six months, reflecting better cost management relative to selling prices.
  • 4Forestar, the residential lot development segment, saw revenues increase by 11% (quarter) and 23% (six months), with pre-tax income up significantly by 64% (quarter) and 73% (six months).
  • 5Financial services revenues increased by 4% (quarter) and 18% (six months), with pre-tax income showing strong growth of 39% for the six-month period.
  • 6Consolidated pre-tax income increased by 23% (quarter) and 10% (six months) year-over-year, reflecting overall operational strength.
  • 7The company maintained a strong balance sheet with stockholders' equity of $23.8 billion and a debt-to-total capital ratio of 20.0% as of March 31, 2024.

Frequently Asked Questions

D.R. Horton demonstrated strong financial performance across its segments. Homebuilding revenues grew significantly due to increased home closings, while Forestar and Financial Services also reported substantial revenue and profit growth. Overall consolidated revenues and pre-tax income showed healthy increases compared to the prior year.

The company is actively managing its inventory, with an increase in homes in inventory and owned lots. A significant portion of its land and lot position, 77%, is controlled through purchase contracts, and the company prioritizes acquiring finished lots from Forestar and other developers to limit internal development. This strategy aims to enhance capital efficiency and returns.

Despite elevated interest rates and inflation, D.R. Horton notes solid demand for new homes, supported by limited housing supply and favorable demographics. The company is adapting by using incentives and pricing adjustments and believes it is well-positioned due to its affordable product offerings and lot supply. Supply chain disruptions have largely subsided, and construction cycle times have returned to historical norms.

The company continues to return capital through regular quarterly cash dividends, recently declared at $0.30 per common share. Additionally, D.R. Horton repurchased approximately $800.5 million of its common stock during the six months ended March 31, 2024, under its active share repurchase program.