01—Abstract
Summary
Summary of the 10-Q filed April 4, 2025. Cited figures are marked; the original filing is the authoritative source.
Lennar Corporation's first-quarter 2025 Form 10-Q (quarter ended February 28, 2025, filed April 4, 2025) reports net earnings attributable to Lennar of $519.5 milliona, or $1.96 per share, compared with $719.3 million, or $2.57 per share, in the prior-year quarter.
Revenues were $7.63 billionb versus $7.31 billion. Homebuilding sales of homes reached $7.24 billion, with 17,834 homes delivered at an average sales price of $408,000, and the gross margin on home sales was 18.7% versus 21.8% a year earlier. Results were affected by $62.5 million of realized and unrealized losses on technology investments, and the company described a challenging housing market with affordability and credit constraints and rising incentives.
The quarter was dominated by structural changes. On February 7, 2025, Lennar completed the taxable spin-off of Millrose Properties, Inc., distributing about 80% of its stock and contributing $5.6 billionc of land assets (about 87,000 homesites) and $1.0 billion of cash. Lennar retains about 20% of Millrose, carried at $1.2 billion, and expects to dispose of it later in the year.
On February 10, 2025, it acquired Rausch Coleman Homes for cash funded from working capital. Total assets fell to $34.99 billiond from $41.31 billion at November 30, 2024, and total equity fell to $22.87 billion from $28.02 billion, largely reflecting the spin-off. Liquidity is solid: homebuilding cash and cash equivalents were $2.28 billion, with no borrowings under the $3.0 billion revolving credit facility.
Operating cash flow was negative at $(289) million, driven by $758 million of increased deposits and pre-acquisition costs tied to option contracts, including with Millrose. The company repurchased $775 million of stock and paid $132 million in dividends. For the second quarter of 2025, management expects to sell 22,500 to 23,500 homes, deliver 19,500 to 20,500 homes, and achieve a margin of approximately 18%.
02—Key points
Key Highlights
- Net earnings attributable to Lennar were $519.5 million, or $1.96 per diluted share, versus $719.3 million, or $2.57 per share, in Q1 2024; excluding technology investment mark-to-market losses, earnings were $566.7 million, or $2.14 per share.
- Completed the taxable spin-off of Millrose Properties, Inc. on February 7, 2025, contributing $5.6 billion of land and $1.0 billion of cash; Lennar retains about a 20% stake carried at $1.2 billion.
- Gross margin on home sales was 18.7% versus 21.8% in the prior-year quarter, with management citing higher land costs and lower revenue per square foot.
- Homebuilding deliveries rose to 17,834 homes from 16,798, while the average sales price fell to $408,000 from $413,000.
- Operating cash flow was $(289) million, reflecting a $758 million increase in deposits and pre-acquisition costs on real estate and a $513 million increase in inventories.
- Homebuilding cash of $2.28 billion and no borrowings under the $3.0 billion Credit Facility; homebuilding debt to total capital was 8.9%.
- Repurchased $775 million of common stock and paid $132 million in dividends; $2.7 billion remained authorized under the repurchase program at February 28, 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed April 4, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $7.63B$7.31B | +4.4% |
| SG&A Expenses | $615.74M— | — |
| Operating Expenses | $6.94B$6.41B | +8.2% |
| Net Income | $519.53M$719.33M | −27.8% |
| EPS (Basic) | $1.96$2.57 | −23.7% |
| EPS (Diluted) | $1.96$2.57 | −23.7% |
| Shares Outstanding (Basic) | 262.73M276.95M | −5.1% |
| Shares Outstanding (Diluted) | 262.73M276.95M | −5.1% |
05—Questions
Frequently Asked Questions
What did Lennar's Millrose spin-off mean for the company's balance sheet?
Total assets declined to $34.99 billion from $41.31 billion at November 30, 2024, and total equity fell to $22.87 billion from $28.02 billion. The filing says the spin-off reduced retained earnings by about $4.8 billion, and Lennar contributed $5.6 billion of land assets and $1.0 billion of cash to Millrose. Lennar still holds about 20% of Millrose, carried at $1.2 billion, which it expects to dispose of later in the year.
Why did gross margins decline?
Gross margin on home sales was 18.7% (18.8% excluding $7.8 million of purchase accounting) versus 21.8% a year earlier. Management attributed the decline to higher land costs year over year and lower revenue per square foot, partly offset by lower construction costs.
What is the outlook for the second quarter of 2025?
Management expects to sell 22,500 to 23,500 homes and deliver 19,500 to 20,500 homes in the second quarter of 2025, with a margin of approximately 18%, depending on market conditions. It said it is prioritizing sales and closings to generate cash flow even at reduced profitability.
Why was operating cash flow negative, and how is the company funding itself?
Operating cash flow was $(289) million, driven by a $758 million increase in deposits and pre-acquisition costs as Lennar raised its share of controlled homesites, including option contracts with Millrose, and by a $513 million inventory increase. Homebuilding cash was $2.28 billion, and the company had no borrowings under its $3.0 billion revolving Credit Facility at quarter-end.
What were the main drags on Lennar Other and Multifamily results?
Lennar Other posted an operating loss of $89.3 million, primarily from $62.5 million of realized and unrealized losses on technology investments, including a $28.4 million realized loss on sales of shares in Blend Labs, SmartRent, Sonder and Sunnova. Multifamily was breakeven, compared with an operating loss of $15.5 million a year earlier.
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