10-QPeriod: Q3 FY2025

HORTON D R INC /DE/ Quarterly Report for Q3 Ended Jun 30, 2025

Filed July 23, 2025For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported its financial results for the third quarter of fiscal year 2025, revealing a decrease in revenues and net income compared to the prior year period. Consolidated revenues declined by 7% to $9.2 billion, and net income attributable to D.R. Horton, Inc. decreased by 24% to $1.0 billion. Diluted earnings per share also saw a reduction, falling 18% to $3.36. This performance reflects ongoing challenges in the housing market, including affordability constraints and cautious consumer sentiment, leading to increased sales incentives and a slight decline in home sales gross margin to 21.8%. Despite the sequential decline, the company maintained a strong inventory and land position, with 76% of lots controlled through purchase contracts. Homebuilding revenues saw a 7% decrease, with homes closed down 4% and average closing prices down 3%. Forestar, the lot development subsidiary, experienced revenue growth of 23%, although pre-tax income declined. The company ended the quarter with a solid balance sheet and liquidity, demonstrating its ability to navigate market fluctuations while continuing capital return to shareholders through stock repurchases and dividends.

Financial Highlights

38 data points
Beta

Revenue

$9.23B

23.9% Gross Margin

Net Income

$1.03B

11.2% Net Margin

EPS (Diluted)

$3.36

Total Assets

$36.40B

Cash & Equivalents

$2.66B

Free Cash Flow

$692.60M

Financial Statements
Beta
Revenue$9.23B
Cost of Revenue$7.02B
Gross Profit$2.21B
SG&A Expenses$944.30M
Net Income$1.03B
EPS (Basic)$3.37
EPS (Diluted)$3.36
Shares Outstanding (Basic)304.10M
Shares Outstanding (Diluted)304.90M

Key Highlights

  • 1Consolidated revenues for the three months ended June 30, 2025, decreased 7% to $9.2 billion, compared to $10.0 billion in the prior year period.
  • 2Net income attributable to D.R. Horton, Inc. for the quarter decreased 24% to $1.0 billion, resulting in diluted earnings per share of $3.36, down 18% from $4.10 in the prior year.
  • 3Homebuilding revenues decreased 7% to $8.6 billion, with homes closed down 4% and the average closing price down 3%.
  • 4Home sales gross margin decreased to 21.8% from 24.0% in the prior year, attributed to increased sales incentives and rising home costs.
  • 5Forestar, the residential lot development subsidiary, saw its revenues increase by 23% to $390.5 million, though pre-tax income declined.
  • 6The company maintained a robust land and lot position, with 76% of lots controlled through purchase contracts.
  • 7Stockholders' equity stood at $24.1 billion, with book value per common share increasing to $80.46.

Frequently Asked Questions

The primary driver for the decrease in net income was a decline in homebuilding revenues and a reduction in the home sales gross margin. This was influenced by factors such as affordability constraints impacting new home demand, leading to increased sales incentives like mortgage rate buydowns.

D.R. Horton continues to prioritize a flexible lot supply, with 76% of its lots controlled through purchase contracts. The company is managing its inventory levels and home pricing, including offering incentives, based on local market demand. They are also prioritizing the purchase of finished lots from Forestar and other developers when possible.

The company expects to maintain an elevated level of sales incentives and may increase them further, depending on market conditions and changes in mortgage interest rates, to support demand and affordability for homebuyers.

Forestar, D.R. Horton's residential lot development subsidiary, experienced a 23% increase in revenue to $390.5 million. However, its pre-tax income decreased to $43.6 million from $51.6 million in the prior year, attributed to lower gross margins on lot sales and higher SG&A costs as a percentage of revenues.