Hovnanian Enterprises, Inc. (NYSE:HOV) is one of the Best Housing Stocks to Buy According to Hedge Funds. On September 11, the company announced that its wholly owned subsidiary, K. Hovnanian Enterprises, Inc., priced an offering of $450 million aggregate principal amount of 8.000% Senior Notes due 2031 and $450 million aggregate principal amount of 8.375% Senior Notes due 2033 in the private placement. Elsewhere, Hovnanian Enterprises, Inc. (NYSE:HOV) released its Q3 2025 results, wherein it met or exceed ...

MATAWAN, N.J., Sept. 11, 2025 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE: HOV) (the “Company”) announced today that its wholly owned subsidiary, K. Hovnanian Enterprises, Inc. (“K. Hovnanian”), priced an offering of $450 million aggregate principal amount of 8.000% Senior Notes due 2031 and $450 million aggregate principal amount of 8.375% Senior Notes due 2033 in a private placement (collectively, the “Notes”). The Notes will be guaranteed by the Company and substantially all of its subsidiaries ...

MATAWAN, N.J., Sept. 10, 2025 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE: HOV) (the “Company”) announced today that its wholly owned subsidiary, K. Hovnanian Enterprises, Inc. (“K. Hovnanian”), intends to offer, subject to market conditions $450 million aggregate principal amount of Senior Notes due 2031 and $450 million aggregate principal amount of Senior Notes due 2033 in a private placement (collectively, the “Notes”). The Notes will be guaranteed by the Company and substantially all of its s ...

[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) Presents the company's financial statements, management's analysis, market risk disclosures, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%20l.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, operations, equity, and cash flows, with detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details changes in cash, inventories, investments, assets, liabilities, and equity from October 2024 to July 2025 Condensed Consolidated Balance Sheets (in thousands) | Metric | July 31, 2025 | October 31, 2024 | Change | Percentage Change | | :----------------------------------- | :----------------------------- | :------------------------------ | :-------------------- | :------------------ | | Cash and cash equivalents | $146,592 | $209,976 | $(63,384) | -30.19% | | Total inventories | $1,692,932 | $1,644,804 | $48,128 | 2.93% | | Investments in unconsolidated JVs | $218,356 | $142,910 | $75,446 | 52.79% | | Total assets | $2,629,352 | $2,605,574 | $23,778 | 0.91% | | Total liabilities | $1,793,989 | $1,805,225 | $(11,236) | -0.62% | | Total stockholders' equity | $835,363 | $800,349 | $35,014 | 4.37% | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Reports revenue, expenses, net income, and EPS for the three and nine months ended July 31, 2025, versus prior year Condensed Consolidated Statements of Operations (3 Months Ended July 31, in thousands) | Metric | 2025 | 2024 | Change | Percentage Change | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | :-------------------- | :------------------ | | Total revenues | $800,583 | $722,704 | $77,879 | 10.78% | | Total expenses | $792,292 | $636,133 | $156,159 | 24.55% | | Net income | $16,615 | $72,919 | $(56,304) | -77.21% | | Basic EPS | $2.14 | $10.61 | $(8.47) | -79.83% | | Diluted EPS | $1.99 | $9.75 | $(7.76) | -79.59% | Condensed Consolidated Statements of Operations (9 Months Ended July 31, in thousands) | Metric | 2025 | 2024 | Change | Percentage Change | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | :-------------------- | :------------------ | | Total revenues | $2,160,677 | $2,025,280 | $135,397 | 6.68% | | Total expenses | $2,104,640 | $1,864,241 | $240,399 | 12.89% | | Net income | $64,532 | $147,659 | $(83,127) | -56.29% | | Basic EPS | $8.55 | $20.85 | $(12.30) | -58.99% | | Diluted EPS | $7.94 | $19.15 | $(11.21) | -58.54% | [Condensed Consolidated Statements of Changes in Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines changes in total stockholders' equity, including net income, dividends, and share repurchases Condensed Consolidated Statements of Changes in Equity (in thousands) | Metric | October 31, 2024 | July 31, 2025 | Change | | :----------------------------------- | :------------------------------ | :--------------------------- | :-------------------- | | Total Stockholders' Equity | $800,349 | $835,363 | $35,014 | | Net Income (9 months ended July 31, 2025) | N/A | $64,532 | N/A | | Preferred Dividends Declared (9 months ended July 31, 2025) | N/A | $(8,007) | N/A | | Share Repurchases (9 months ended July 31, 2025) | N/A | $(30,302) | N/A | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities for the nine months ended July 31, 2025 Condensed Consolidated Statements of Cash Flows (9 Months Ended July 31, in thousands) | Cash Flow Activity | 2025 | 2024 | Change | | :------------------------------------------ | :------------------ | :------------------ | :-------------------- | | Net cash provided by (used in) operating activities | $19,205 | $(92,184) | $111,389 | | Net cash used in investing activities | $(60,635) | $(40,295) | $(20,340) | | Net cash used in financing activities | $(30,517) | $(161,169) | $130,652 | | Net decrease in cash and cash equivalents | $(71,947) | $(293,648) | $221,701 | | End of period cash and cash equivalents | $194,814 | $183,871 | $10,943 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed disclosures on accounting policies, stock compensation, debt, segments, and fair value measurements [1. Basis of Presentation](index=9&type=section&id=1.%20Basis%20of%20Presentation) Explains the unaudited nature of financial statements, U.S. GAAP compliance, and reliance on management estimates - The financial statements are unaudited and prepared under U.S. GAAP for interim reporting, relying on management estimates and assumptions[25](index=25&type=chunk) [2. Stock Compensation](index=9&type=section&id=2.%20Stock%20Compensation) Details new performance-based incentive programs and a decrease in stock-based compensation expense - New performance-based **2025 LTIP** and **2025 PSUs** were approved in fiscal 2025, with vesting conditions tied to performance periods[26](index=26&type=chunk) Stock-based Compensation Expense (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | Change | Percentage Change | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :-------------------- | :------------------ | | Stock-based compensation expense | $6,200 | $9,200 | $(3,000) | -32.61% | Stock-based Compensation Expense (9 Months Ended July 31, in thousands) | Metric | 2025 | 2024 | Change | Percentage Change | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :-------------------- | :------------------ | | Stock-based compensation expense | $14,100 | $20,200 | $(6,100) | -30.20% | [3. Interest](index=10&type=section&id=3.%20Interest) Reports decreased interest costs incurred and capitalized interest, with all interest qualifying for capitalization Interest Costs (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Interest incurred | $28,523 | $28,087 | $88,210 | $94,578 | | Cost of sales interest expensed | $(26,868) | $(22,316) | $(66,162) | $(63,757) | | Other interest expensed | $(7,149) | $(6,262) | $(25,811) | $(25,682) | | Interest capitalized at end of period | $48,139 | $54,592 | $48,139 | $54,592 | - During the three and nine months ended July 31, 2025 and 2024, inventory under development exceeded debt, allowing all related interest incurred to qualify for capitalization[30](index=30&type=chunk) [4. Reduction of Inventory to Fair Value](index=10&type=section&id=4.%20Reduction%20of%20Inventory%20to%20Fair%20Value) Highlights increased inventory impairments and land option write-offs, affecting Northeast and West segments Inventory Impairments and Land Option Write-Offs (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Inventory impairments and land option write-offs | $16,045 | $3,099 | $20,141 | $3,638 | | Inventory impairments | $7,600 | $2,700 | $8,800 | $2,700 | | Aggregate write-offs (options, engineering, capitalized interest) | $8,400 | $400 | $11,300 | $900 | | Lots walked away from | 4,059 | 1,277 | 8,956 | 2,547 | - The impairments for fiscal 2025 were identified in one community in the Northeast segment and three communities in the West segment[33](index=33&type=chunk) [5. Variable Interest Entities](index=11&type=section&id=5.%20Variable%20Interest%20Entities) Discusses land option contracts, VIE assessment, and increased cash deposits for land and lot options - The company analyzes option purchase contracts for VIEs but has not consolidated any, as it is not the primary beneficiary[38](index=38&type=chunk) Cash Deposits and Purchase Price for Land and Lot Options (in thousands) | Metric | July 31, 2025 | October 31, 2024 | Change | | :-------------------- | :------------ | :--------------- | :-------------------- | | Total cash deposits | $312,100 | $264,800 | $47,300 | | Total purchase price | $3,400,000 | $3,000,000 | $400,000 | [6. Warranty Costs](index=11&type=section&id=6.%20Warranty%20Costs) Details warranty accruals and an increase in the warranty reserve balance due to additions exceeding charges Warranty Reserve Activity (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Balance, beginning of period | $91,800 | $85,177 | $89,391 | $98,919 | | Additions – Selling, general and administrative | $2,818 | $2,262 | $7,912 | $6,850 | | Additions – Cost of sales | $2,294 | $2,787 | $6,512 | $7,637 | | Charges incurred during the period | $(2,417) | $(2,546) | $(8,772) | $(28,139) | | Changes to pre-existing reserves | $1,955 | $418 | $1,407 | $2,831 | | Balance, end of period | $96,450 | $88,098 | $96,450 | $88,098 | - The majority of charges incurred in the first nine months of fiscal 2024 were for a construction defect litigation settlement[40](index=40&type=chunk) [7. Commitments and Contingent Liabilities](index=12&type=section&id=7.%20Commitments%20and%20Contingent%20Liabilities) Addresses ongoing litigation, environmental regulations, and a specific lawsuit regarding contamination - The company is involved in litigation, mainly construction defect claims, with estimated losses included in reserves[41](index=41&type=chunk) - The company faces a lawsuit from the NJDEP regarding contamination at Hickory Manor, seeking over **$5.3 million** in costs and disgorgement of profits[44](index=44&type=chunk) [8. Cash Equivalents, Restricted Cash and Customers' Deposits](index=12&type=section&id=8.%20Cash%20Equivalents,%20Restricted%20Cash%20and%20Customers'%20Deposits) Reports changes in homebuilding and financial services restricted cash and cash equivalents Restricted Cash and Cash Equivalents (in thousands) | Metric | July 31, 2025 | October 31, 2024 | Change | | :------------------------------------ | :------------ | :--------------- | :-------------------- | | Homebuilding: Restricted cash and cash equivalents | $12,155 | $7,875 | $4,280 | | Financial Services: Restricted cash and cash equivalents | $30,839 | $42,300 | $(11,461) | - Homebuilding customers' deposits are significantly higher than restricted cash balances because deposits are not always restricted or can be released by pledging letters of credit/surety bonds[48](index=48&type=chunk) [9. Leases](index=13&type=section&id=9.%20Leases) Covers operating lease costs, cash payments, and a decrease in right-of-use assets and lease liabilities Lease Costs and Payments (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating lease costs | $2,876 | $2,743 | $8,708 | $8,131 | | Cash payments on lease liabilities | $2,520 | $2,224 | $8,092 | $6,604 | Right-of-Use Assets and Lease Liabilities (in thousands) | Metric | July 31, 2025 | October 31, 2024 | Change | | :-------------------- | :------------ | :--------------- | :-------------------- | | ROU assets | $22,654 | $28,765 | $(6,111) | | Lease liabilities | $25,874 | $30,868 | $(4,994) | - A lease modification to shorten the term resulted in a **$7.7 million** decrease in ROU assets and lease liabilities during the nine months ended July 31, 2025[50](index=50&type=chunk) [10. Mortgage Loans Held for Sale](index=14&type=section&id=10.%20Mortgage%20Loans%20Held%20for%20Sale) Discusses mortgage loan originations, hedging, decreased loans held for sale, and increased loan origination reserves Mortgages Held for Sale (in thousands) | Metric | July 31, 2025 | October 31, 2024 | Change | | :------------------------------------ | :------------ | :--------------- | :-------------------- | | Mortgages held for sale pledged against warehouse lines | $128,900 | $145,700 | $(16,800) | Loan Origination Reserves (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Loan origination reserves, end of period | $2,889 | $2,094 | $2,889 | $2,094 | [11. Mortgages](index=14&type=section&id=11.%20Mortgages) Details decreased nonrecourse mortgage loans and outstanding borrowings under Master Repurchase Agreements Mortgage Metrics (in thousands) | Metric | July 31, 2025 | October 31, 2024 | Change | | :------------------------------------ | :------------ | :--------------- | :-------------------- | | Nonrecourse mortgage loans, net | $53,524 | $90,675 | $(37,151) | | Weighted-average interest rate | 8.1% | 8.7% | -0.6% | | Aggregate borrowings outstanding under Master Repurchase Agreements | $110,000 | $131,400 | $(21,400) | - K. Hovnanian Mortgage entered into a new secured Master Repurchase Agreement with PlainsCapital Bank on June 6, 2025, providing up to **$75.0 million**[59](index=59&type=chunk) - The company believes it was in compliance with the covenants under the Master Repurchase Agreements as of July 31, 2025[60](index=60&type=chunk) [12. Senior Notes and Credit Facilities](index=15&type=section&id=12.%20Senior%20Notes%20and%20Credit%20Facilities) Reports a decrease in total senior notes and credit facilities, including a gain on debt extinguishment Senior Notes and Credit Facilities (in thousands) | Metric | July 31, 2025 | October 31, 2024 | Change | | :------------------------------------ | :------------ | :--------------- | :-------------------- | | Total senior notes and credit facilities, net | $861,922 | $896,218 | $(34,296) | | 13.5% Senior Notes due February 1, 2026 | $0 | $26,588 | $(26,588) | | Senior Secured 1.75 Lien Term Loan Credit Facility | $175,000 | $175,000 | $0 | | Senior Secured Revolving Credit Facility (borrowing capacity) | $125,000 | $125,000 | $0 | - On April 30, 2025, K. Hovnanian redeemed the remaining **$26.6 million** of its 13.5% Senior Notes due 2026, resulting in a **$0.4 million** gain on extinguishment of debt[65](index=65&type=chunk) - The company's debt instruments do not contain financial maintenance covenants but include restrictive covenants, and the company believes it was in compliance as of July 31, 2025[63](index=63&type=chunk) [13. Per Share Calculation](index=18&type=section&id=13.%20Per%20Share%20Calculation) Shows a significant decrease in basic and diluted earnings per share due to lower net income Per Share Calculation (in thousands, except EPS) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income available to common stockholders | $13,946 | $70,250 | $56,525 | $139,652 | | Basic earnings per share | $2.14 | $10.61 | $8.55 | $20.85 | | Diluted earnings per share | $1.99 | $9.75 | $7.94 | $19.15 | [14. Preferred Stock](index=18&type=section&id=14.%20Preferred%20Stock) Describes outstanding preferred stock and consistent preferred dividends paid for the periods - The company has **5,600 shares** of 7.625% Series A preferred stock outstanding, with a liquidation preference of **$25,000 per share**[75](index=75&type=chunk) Preferred Dividends Paid (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Preferred dividends paid | $2,669 | $2,669 | $8,007 | $8,007 | [15. Common Stock](index=19&type=section&id=15.%20Common%20Stock) Explains common stock classes, a shareholder rights plan, and increased share repurchases - Class A common stock has **one vote per share**, while Class B has **ten votes per share**, and Class A dividends are **110% of Class B**[77](index=77&type=chunk) - A shareholder rights plan, effective until August 14, 2027, is designed to preserve NOL carryforwards by preventing ownership changes under Section 382[78](index=78&type=chunk) Common Stock Repurchases | Metric | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :------- | | Shares repurchased | 257,908 | 188,800 | 69,108 | | Market value of repurchases (in millions) | $30.1 | $26.5 | $3.6 | | Average price per share | $116.70 | $140.31 | $(23.61) | [16. Income Taxes](index=20&type=section&id=16.%20Income%20Taxes) Reports decreased income tax expense, federal tax offset by NOLs, and monitoring of new tax legislation Income Tax Expense (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income tax expense | $7,187 | $24,350 | $25,663 | $51,565 | - Federal tax expense is offset by existing NOL carryforwards and is not paid in cash[82](index=82&type=chunk) - The OBBBA, enacted July 4, 2025, repeals energy efficient home credits for homes closing after June 30, 2026, but is not expected to have a material impact on current financial statements[83](index=83&type=chunk) [17. Operating and Reporting Segments](index=20&type=section&id=17.%20Operating%20and%20Reporting%20Segments) Details performance across homebuilding segments (Northeast, Southeast, West) and financial services - The company's reportable segments include Northeast, Southeast, West homebuilding operations and a financial services segment[86](index=86&type=chunk)[91](index=91&type=chunk) - Evaluation of segment performance is based primarily on income (loss) before income taxes[89](index=89&type=chunk) Segment Revenue (in thousands) | Segment | 3 Months Ended July 31, 2025 Revenue | 3 Months Ended July 31, 2024 Revenue | 9 Months Ended July 31, 2025 Revenue | 9 Months Ended July 31, 2024 Revenue | | :--------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Northeast | $289,180 | $255,332 | $830,209 | $645,859 | | Southeast | $104,747 | $115,964 | $231,025 | $350,761 | | West | $377,185 | $330,980 | $1,029,524 | $970,671 | | Financial services | $28,566 | $18,888 | $66,826 | $51,323 | Segment Income (Loss) before Taxes (in thousands) | Segment | 3 Months Ended July 31, 2025 Income (Loss) before taxes | 3 Months Ended July 31, 2024 Income (Loss) before taxes | 9 Months Ended July 31, 2025 Income (Loss) before taxes | 9 Months Ended July 31, 2024 Income (Loss) before taxes | | :--------------------- | :------------------------------------------------------ | :------------------------------------------------------ | :------------------------------------------------------ | :------------------------------------------------------ | | Northeast | $41,447 | $40,006 | $112,658 | $107,645 | | Southeast | $11,639 | $20,449 | $21,752 | $62,391 | | West | $(6,284) | $21,009 | $15,275 | $77,198 | | Financial services | $13,851 | $6,526 | $25,783 | $15,467 | [18. Investments in Unconsolidated Homebuilding and Land Development Joint Ventures](index=21&type=section&id=18.%20Investments%20in%20Unconsolidated%20Homebuilding%20and%20Land%20Development%20Joint%20Ventures) Discusses increased investments in joint ventures, gains from contributions, and changes in share of net income - Investments in and advances to unconsolidated joint ventures increased by **$75.4 million** to **$218.4 million** at July 31, 2025, compared to October 31, 2024[8](index=8&type=chunk)[189](index=189&type=chunk) - During the first quarter of fiscal 2025, the company contributed four active selling communities to a new unconsolidated joint venture, resulting in a **$22.7 million** gain[97](index=97&type=chunk) Our Share of Net Income from Joint Ventures (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Our share of net income | $15,511 | $10,698 | $33,759 | $36,814 | [19. Recent Accounting Pronouncements](index=24&type=section&id=19.%20Recent%20Accounting%20Pronouncements) Evaluates the impact of new FASB ASUs on segment, income tax, and income statement expense disclosures - ASU 2023-07 (Reportable Segment Disclosures) is effective for annual periods after December 15, 2023, and interim periods after December 31, 2024, with no expected material impact[105](index=105&type=chunk) - ASU 2023-09 (Income Tax Disclosures) is effective for annual periods after December 15, 2024, and is being evaluated for potential impact[106](index=106&type=chunk) - ASU 2024-03 (Disaggregation of Income Statement Expenses) is effective for annual periods after December 15, 2026, and interim periods after December 15, 2027, and is being evaluated[107](index=107&type=chunk) [20. Fair Value of Financial Instruments](index=24&type=section&id=20.%20Fair%20Value%20of%20Financial%20Instruments) Applies a fair-value hierarchy to mortgage loans, senior notes, credit facilities, and inventory impairments Fair Value of Financial Instruments (in thousands) | Metric | Fair Value Hierarchy | July 31, 2025 | October 31, 2024 | | :-------------------- | :------------------- | :------------ | :--------------- | | Mortgage loans held for sale | Level 2 | $130,545 | $148,925 | Fair Value of Debt Instruments (in thousands) | Debt Instrument | Fair Value Hierarchy | July 31, 2025 | October 31, 2024 | | :----------------------------- | :------------------- | :------------ | :--------------- | | 8.0% Senior Secured 1.125 Lien Notes | Level 2 | $227,070 | $231,068 | | 11.75% Senior Secured 1.25 Lien Notes | Level 2 | $465,062 | $474,561 | | 5.0% Senior Notes due 2040 | Level 3 | $15,595 | $11,485 | | Senior Secured 1.75 Lien Term Loan Credit Facility | Level 3 | $184,571 | $190,041 | Fair Value of Assets (in thousands) | Asset | Fair Value Hierarchy | 3 Months Ended July 31, 2025 Total Losses | 9 Months Ended July 31, 2025 Total Losses | | :------------------- | :------------------- | :---------------------------------------- | :---------------------------------------- | | Land and land options held for future development or sale | Level 3 | $(7,630) | $(8,846) | [21. Transactions with Related Parties](index=27&type=section&id=21.%20Transactions%20with%20Related%20Parties) Reports decreased services from an engineering firm owned by a relative of the Chairman and CEO Services from Related Engineering Firm (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Services from related engineering firm | $100 | $300 | $500 | $900 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial condition and operating results, covering market conditions, revenue, expenses, and liquidity [Overview](index=28&type=section&id=Overview) Summarizes market conditions, sales strategies, gross margin trends, liquidity, and land investments - Mortgage rates remained persistently high, leading to challenging affordability for homebuyers, prompting aggressive pricing and incentives[121](index=121&type=chunk) - The company utilized quick move-in homes (QMI homes) and mortgage interest rate buydown assistance to meet buyer needs and ease the impact of rising interest rates[123](index=123&type=chunk) Key Performance Indicators (in millions, except homes and EPS) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Sale of homes revenues | $769.1 | $687.4 | $2,066.3 | $1,948.0 | | Homes delivered | 1,431 | 1,255 | 3,970 | 3,601 | | Average price per home | $537,421 | $547,748 | $520,473 | $540,958 | | Gross margin percentage | 11.7% | 19.1% | 13.5% | 18.9% | | Net income | $16.6 | $72.9 | $64.5 | $147.7 | | Basic EPS | $2.14 | $10.61 | $8.55 | $20.85 | | Net contracts | 1,211 | 1,192 | 3,814 | 3,831 | | Net contracts per active selling community | 9.8 | 9.5 | 30.8 | 30.4 | | Contract backlog (homes) | 1,491 | 2,041 | N/A | N/A | | Contract backlog (dollars in millions) | $838.8 | $1,158.8 | N/A | N/A | [Total Revenues](index=30&type=section&id=Total%20Revenues) Details the increase in total revenues driven by home sales and financial services, offset by land sales fluctuations Total Revenues by Category (in thousands) | Revenue Category | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | Dollar Change | Percentage Change | | :------------------------------ | :--------------------------- | :--------------------------- | :------------ | :------------------ | | Homebuilding: Sale of homes | $769,050 | $687,424 | $81,626 | 11.9% | | Homebuilding: Land sales and other revenues | $2,967 | $16,392 | $(13,425) | (81.9)% | | Financial services | $28,566 | $18,888 | $9,678 | 51.2% | | Total revenues | $800,583 | $722,704 | $77,879 | 10.8% | Total Revenues by Category (9 Months Ended July 31, in thousands) | Revenue Category | 2025 | 2024 | Dollar Change | Percentage Change | | :------------------------------ | :--------------------------- | :--------------------------- | :------------ | :------------------ | | Homebuilding: Sale of homes | $2,066,278 | $1,947,989 | $118,289 | 6.1% | | Homebuilding: Land sales and other revenues | $27,573 | $25,968 | $1,605 | 6.2% | | Financial services | $66,826 | $51,323 | $15,503 | 30.2% | | Total revenues | $2,160,677 | $2,025,280 | $135,397 | 6.7% | [Homebuilding: Sale of Homes](index=31&type=section&id=Homebuilding:%20Sale%20of%20Homes) Explains increased home sales revenue from higher deliveries, despite a lower average sales price Homebuilding Sales Metrics (3 Months Ended July 31) | Metric | 2025 | 2024 | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :------- | | Housing revenues | $769,050 | $687,424 | 11.9% | | Homes delivered | 1,431 | 1,255 | 14.0% | | Average sales price | $537,421 | $547,748 | (1.9)% | Homebuilding Sales Metrics (9 Months Ended July 31) | Metric | 2025 | 2024 | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :------- | | Housing revenues | $2,066,278 | $1,947,989 | 6.1% | | Homes delivered | 3,970 | 3,601 | 10.2% | | Average sales price | $520,473 | $540,958 | (3.8)% | - The increase in deliveries was primarily due to an increase in the backlog conversion ratio, while the decrease in average price resulted from the geographic and community mix of deliveries[134](index=134&type=chunk) [Homebuilding: Land Sales and Other Revenues](index=32&type=section&id=Homebuilding:%20Land%20Sales%20and%20Other%20Revenues) Reports fluctuations in land sales and other revenues, influenced by land parcel mix and interest income - Land sales and other revenues decreased by **$13.4 million** for the three months ended July 31, 2025, but increased by **$1.6 million** for the nine months ended July 31, 2025[137](index=137&type=chunk) - The decrease in other revenues was due to lower rates on cash and cash equivalent accounts during the first three quarters of fiscal 2025[137](index=137&type=chunk) [Homebuilding: Cost of Sales](index=32&type=section&id=Homebuilding:%20Cost%20of%20Sales) Attributes decreased gross margin percentage to increased incentives and mortgage interest rate buydowns Homebuilding Gross Margin (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Homebuilding gross margin | $90,122 | $131,202 | $278,233 | $369,954 | | Homebuilding gross margin percentage | 11.7% | 19.1% | 13.5% | 18.9% | | Homebuilding gross margin percentage, before cost of sales interest expense and land charges | 17.3% | 22.1% | 17.6% | 22.2% | - The decrease in gross margin percentage was primarily due to increased use of incentives and concessions, including additional mortgage interest rate buydowns, to make homes more affordable[142](index=142&type=chunk) - The company is focused on increasing sales pace over achieving a higher gross margin in the current homebuilding environment[128](index=128&type=chunk) [Homebuilding: Inventory Impairments and Land Option Write-Offs](index=34&type=section&id=Homebuilding:%20Inventory%20Impairments%20and%20Land%20Option%20Write-Of%20s) Highlights a significant increase in inventory impairments and land option write-offs in specific segments Inventory Impairments and Land Option Write-Offs (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Inventory impairments and land option write-offs | $16,000 | $3,100 | $20,100 | $3,600 | | Inventory impairments | $7,600 | $2,700 | $8,800 | $2,700 | - The impairments for fiscal 2025 were recorded for two communities in the Northeast segment and three communities in the West segment[145](index=145&type=chunk) [Homebuilding: Selling, General and Administrative](index=34&type=section&id=Homebuilding:%20Selling,%20General%20and%20Administrative) Explains increased SGA expenses due to higher advertising costs and compensation from headcount growth Homebuilding SGA Expenses (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Homebuilding SGA expenses | $55,800 | $51,000 | $161,100 | $146,400 | - The increase in SGA was primarily due to higher selling overhead from increased advertising costs and total compensation expense from headcount growth and annual merit increases[146](index=146&type=chunk) [Homebuilding: Key Performance Indicators](index=34&type=section&id=Homebuilding:%20Key%20Performance%20Indicators) Discusses increased net contracts per community but decreased contract backlog due to quick move-in sales Net Contracts per Active Selling Community | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net contracts per active selling community | 9.8 | 9.5 | 30.8 | 30.4 | Contract Backlog | Metric | July 31, 2025 | July 31, 2024 | Dollar Change (in thousands) | Percentage Change | | :------------------------------------ | :------------ | :------------ | :--------------------------- | :------------------ | | Contract backlog (dollars) | $838,812 | $1,158,768 | $(319,956) | (27.6)% | | Contract backlog (number of homes) | 1,491 | 2,041 | (550) | (26.9)% | - The decrease in contract backlog was primarily driven by an increase in sales of QMI homes and improved contract backlog conversion[152](index=152&type=chunk) Cancellation Rate (%) | Quarter | 2025 Cancellation Rate (%) | 2024 Cancellation Rate (%) | | :------ | :------------------------- | :------------------------- | | First | 16% | 14% | | Second | 15% | 14% | | Third | 19% | 17% | [Homebuilding: Operations by Segment](index=36&type=section&id=Homebuilding:%20Operations%20by%20Segment) Analyzes varied segment performance, with Northeast growth, Southeast decline, and West revenue increase but profit decrease Segment Revenue (in thousands) | Segment | 3 Months Ended July 31, 2025 Revenue | 3 Months Ended July 31, 2024 Revenue | 9 Months Ended July 31, 2025 Revenue | 9 Months Ended July 31, 2024 Revenue | | :-------- | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Northeast | $289,180 | $255,332 | $830,209 | $645,859 | | Southeast | $104,747 | $115,964 | $231,025 | $350,761 | | West | $377,185 | $330,980 | $1,029,524 | $970,671 | Segment Income (Loss) before Taxes (in thousands) | Segment | 3 Months Ended July 31, 2025 Income (Loss) before taxes | 3 Months Ended July 31, 2024 Income (Loss) before taxes | 9 Months Ended July 31, 2025 Income (Loss) before taxes | 9 Months Ended July 31, 2024 Income (Loss) before taxes | | :-------- | :------------------------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------- | | Northeast | $41,447 | $40,006 | $112,658 | $107,645 | | Southeast | $11,639 | $20,449 | $21,752 | $62,391 | | West | $(6,284) | $21,009 | $15,275 | $77,198 | - Northeast's income before taxes increased due to higher homebuilding revenue and a **$4.0 million** increase in income from unconsolidated joint ventures[155](index=155&type=chunk) - West's income before taxes decreased significantly due to a **$2.3 million** increase in SGA, an **$8.6 million** increase in inventory impairments and land option write-offs, and a significant decrease in gross margin percentage[163](index=163&type=chunk)[165](index=165&type=chunk) [Financial Services](index=38&type=section&id=Financial%20Services) Reports increased financial services income driven by more closed loans and a wider basis point spread Financial Services Income before Income Taxes (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income before income taxes | $13,900 | $6,500 | $25,800 | $15,500 | - The increase in financial services income was primarily due to an increase in closed loans and a wider basis point spread between originated loans and their implied sale rate[167](index=167&type=chunk) Loan Type Percentage of Total Loans (9 Months Ended July 31) | Loan Type | 2025 Percentage of Total Loans | 2024 Percentage of Total Loans | | :--------------------------------- | :----------------------------- | :----------------------------- | | FHA/VA loans | 41.0% | 34.1% | | Conforming conventional loans | 58.0% | 65.3% | [Corporate General and Administrative](index=38&type=section&id=Corporate%20General%20and%20Administrative) Details decreased corporate G&A expenses, primarily due to lower stock compensation expense Corporate General and Administrative Expenses (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Corporate general and administrative expenses | $35,000 | $38,500 | $97,200 | $108,100 | - The decrease was primarily due to lower stock compensation expense, including a benefit from a decrease in the company's stock price impacting phantom stock awards[168](index=168&type=chunk) [Income from Unconsolidated Joint Ventures](index=38&type=section&id=Income%20from%20Unconsolidated%20Joint%20Ventures) Explains increased three-month income from joint ventures due to profit-sharing, but decreased nine-month income from losses Income from Unconsolidated Joint Ventures (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income from unconsolidated joint ventures | $15,500 | $10,700 | $33,800 | $36,800 | - The three-month increase was due to recognizing a higher share of income from two unconsolidated joint ventures where partners achieved certain return hurdles[169](index=169&type=chunk) - The nine-month decrease was primarily due to losses from two unconsolidated joint ventures (one new, one not delivering homes) and the prior-year consolidation of a joint venture[169](index=169&type=chunk) [Income Taxes](index=39&type=section&id=Income%20Taxes) Reports decreased income tax expense, with federal tax offset by NOL carryforwards and not paid in cash Income Tax Expense (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income tax expense | $7,200 | $24,400 | $25,700 | $51,600 | - Federal tax expense is offset by existing NOL carryforwards and is not paid in cash[170](index=170&type=chunk) [Capital Resources and Liquidity](index=39&type=section&id=Capital%20Resources%20and%20Liquidity) Assesses total liquidity, positive operating cash flow, debt management, and changes in inventory - Total liquidity at July 31, 2025, was **$277.9 million**, comprising **$146.6 million** in homebuilding cash and **$125.0 million** in revolving credit capacity[171](index=171&type=chunk) - Cash from operations for the first three quarters of fiscal 2025 was **$19.2 million**, a significant improvement from the prior year[173](index=173&type=chunk) - The company spent **$660.0 million** on land purchases and development, redeemed **$26.6 million** of senior notes, and repurchased **$30.1 million** of common stock during the first three quarters of fiscal 2025[126](index=126&type=chunk)[173](index=173&type=chunk) - Total inventory (excluding consolidated inventory not owned) decreased by **$70.6 million**, while consolidated inventory not owned increased by **$118.7 million** due to land banking and model financing[190](index=190&type=chunk)[191](index=191&type=chunk) [Inflation](index=45&type=section&id=Inflation) Discusses the impact of the 2.7% annual inflation rate on home sales prices and mitigation through fixed-price contracts - The annual inflation rate in the United States was **2.7%** in July 2025, a slight increase from October 2024 but significantly down from its peak in June 2022[199](index=199&type=chunk) - Long-term inflation increases home sales prices due to higher costs for land, materials, and labor, posing a risk if these increases outpace potential purchasers' incomes[199](index=199&type=chunk) - Short-term inflation impact is mitigated by fixed-price contracts with subcontractors and material suppliers, typically for 3-12 months[200](index=200&type=chunk) [Critical Accounting Policies](index=45&type=section&id=Critical%20Accounting%20Policies) Identifies key accounting policies, including inventories, joint ventures, warranty reserves, and income taxes, with no recent changes - Critical accounting policies include inventories, unconsolidated joint ventures, warranty and construction defect reserves, and income taxes[201](index=201&type=chunk) - No significant changes to critical accounting policies have occurred since October 31, 2024[201](index=201&type=chunk) [Safe Harbor Statement](index=45&type=section&id=Safe%20Harbor%20Statement) Provides a safe harbor for forward-looking statements, noting potential material differences due to various risks - All non-historical statements are considered 'Forward-Looking Statements' under the Private Securities Litigation Reform Act of 1995[202](index=202&type=chunk) - Actual results may differ materially from forward-looking statements due to various risks and uncertainties, including economic conditions, material shortages, interest rate fluctuations, and regulatory changes[202](index=202&type=chunk)[206](index=206&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements[205](index=205&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details limited exposure to variable interest rate risk and hedging strategies for mortgage operations - Substantially all long-term debt requires fixed interest payments, limiting exposure to variable rates[207](index=207&type=chunk) - Interest rate risk on mortgage loans held for sale is not significant due to frequent repricing and hedging with forward commitments[207](index=207&type=chunk) Long-Term Debt as of July 31, 2025 (in thousands) | Long-Term Debt | Total | FV at 7/31/2025 | | :------------------------------------------------ | :----------- | :-------------- | | Fixed rate debt | $854,968 | $892,298 | | Weighted average interest rate | 10.21% | N/A | [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures, with no material changes to internal controls - Disclosure controls and procedures were evaluated as effective as of July 31, 2025[209](index=209&type=chunk) - No material changes occurred in internal control over financial reporting during the quarter ended July 31, 2025[210](index=210&type=chunk) [PART II. Other Information](index=48&type=section&id=PART%20II.%20Other%20Information) Contains information on legal proceedings, equity sales, other disclosures, exhibits, and signatures [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 7 of the financial statements for detailed information on legal proceedings - Legal proceedings information is detailed in Note 7 of the Condensed Consolidated Financial Statements[212](index=212&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no unregistered equity sales, an increased stock repurchase program, and no repurchases in Q3 2025 - No unregistered sales of equity securities occurred[213](index=213&type=chunk) - The Board authorized an increase to the Class A common stock repurchase program, with **$26.4 million** available as of July 31, 2025[214](index=214&type=chunk) - No common stock repurchases were made during the third quarter of fiscal 2025[215](index=215&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) States no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the three months ended July 31, 2025[216](index=216&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) Lists all filed exhibits, including corporate governance documents, stock agreements, and certifications - Exhibits include amendments to the Rights Agreement (e.g., Amendment No. 3 dated January 11, 2024), corporate bylaws, and various stock certificates[219](index=219&type=chunk) - Form of 2025 Associate Performance Share Unit Agreements (EBIT and EBIT ROI for Class A, Class B, and Phantom) are listed as exhibits[219](index=219&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer (Rule 13a-14(a)/15d-14(a) and Section 1350) are included[222](index=222&type=chunk) [Signatures](index=51&type=section&id=Signatures) Confirms the report's signing by the Chairman, CEO, President, and CFO on August 29, 2025 - The report was signed by Ara K. Hovnanian, Chairman of the Board, CEO, and President, and Brad O'Connor, CFO, on August 29, 2025[224](index=224&type=chunk)

Summary of Hovnanian Enterprises (HOV) FY Conference Call Company Overview - **Company**: Hovnanian Enterprises (HOV) - **Industry**: Homebuilding - **Presentation Date**: August 27, 2025 Key Points on the Housing Market - The U.S. housing market has experienced significant cyclicality since 1959, with a current shortfall of approximately 5.5 million housing starts compared to the historical average of 1.4 million starts per year [3][4] - Post-COVID, many homeowners are reluctant to sell due to lower mortgage rates locked in previously, leading to a decrease in existing home supply, which has fallen below 1 million homes [5][6] - The current mortgage rate stands at 6.58%, which is historically lower but has caused market slowdowns due to a sudden increase in rates in 2022 [8][9] Company Performance and Strategy - Hovnanian is among the top 20 homebuilders in the U.S., delivering around 6,000 homes annually, with plans for growth [9] - The company controls 40,000 lots, a significant increase from 29,000 two years ago, indicating future growth potential [12][29] - The company has shifted its sales strategy to focus more on spec homes (quick move-in homes), which now account for approximately 80% of sales, compared to 40% previously [24][25] Financial Performance - For the third quarter, revenues increased by 11% year-over-year, but margins decreased by nearly 500 basis points due to incentives offered for mortgage rate buy downs [15][16] - The company expects fourth-quarter revenues to remain stable, with a slight decline in gross margin due to continued high costs of incentives [48] Market Dynamics and Challenges - The homebuilding industry faces challenges such as regulatory hurdles in land approval processes, which can delay new community developments [60][61] - The company has adopted a land-light strategy, controlling lots primarily through options, which reduces risk and capital requirements [29][30][32] Valuation and Debt Management - Hovnanian's price-to-earnings (PE) ratio is at the bottom compared to peers, suggesting the company may be undervalued despite strong operational performance [36][39] - The company has improved its debt-to-capital ratio from over 146% in 2020 to 47.9% recently, indicating a stronger balance sheet [46][47] Future Outlook - The company aims to refinance its secured debt to unsecured debt to improve liquidity and reduce borrowing costs [44][66] - Hovnanian anticipates continued growth in community count and controlled lots, with a focus on maintaining a diversified product offering to cater to different market segments [27][14] Additional Insights - The company has a strategy to use joint ventures for communities that require significant capital investment, particularly in active adult communities [50][51] - Customer preferences have shifted towards mortgage rate buy downs over price reductions as higher rates persist, impacting sales strategies [75]

Core Insights - Hovnanian Enterprises, Inc. has been operating in the U.S. housing market for over 65 years, currently active in 13 states [1] Company Overview - Hovnanian Enterprises, Inc. is a long-established homebuilder in the United States, with a significant presence across multiple states [1]

Company Overview - Hovnanian Enterprises, Inc. is one of the largest homebuilders in the United States, founded in 1959 and headquartered in Matawan, New Jersey [4] - The company operates in multiple states including Arizona, California, Delaware, Florida, Georgia, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia [4] - Hovnanian's homes are marketed under the trade name K. Hovnanian Homes, and it is also a significant builder of active lifestyle communities through its subsidiaries [4] Event Participation - Hovnanian Enterprises will present at the Midwest IDEAS Investor Conference on August 27, 2025, at 3:45 pm ET [1] - The presentation will be available via webcast on the conference host's website and the investor relations section of Hovnanian's website [1] IDEAS Investor Conferences - The IDEAS Investor Conferences aim to provide a platform for quality companies to present their investment merits to investment professionals [2] - These conferences are sponsored by investors for the benefit of regional investment communities, with sponsors managing over $200 billion in assets [2]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $800 million, meeting the midpoint of guidance, with an 11% year-over-year increase due to higher deliveries [7][10] - Adjusted gross margin was 17.3%, slightly below guidance, while SG&A ratio improved to 11.3%, better than expected [7][12] - Adjusted EBITDA reached $77 million, exceeding the high end of guidance, and adjusted pretax income was $40 million, at the top of the guidance range [7][8] Business Line Data and Key Metrics Changes - The company experienced a year-over-year decline in adjusted gross margin primarily due to increased incentives for affordability, which were 11.6% of the average sales price, up 390 basis points from the previous year [11][22] - Contracts for the third quarter increased by 1% year-over-year, with variability in monthly sales [12][13] - The average contracts per community were 9.8, higher than the quarterly average since 2008, but still below pre-2020 levels [13][14] Market Data and Key Metrics Changes - The company noted that economic uncertainty and high mortgage rates have led to consumers delaying home purchases, impacting overall sales [21][22] - Despite challenges, the company raised net prices in 21% of its communities, particularly in better-performing markets like Delaware and New Jersey [21][22] Company Strategy and Development Direction - The company is focusing on a land-light strategy, increasing the percentage of lots controlled via option to 86%, the highest ever [31] - The strategy includes burning through lower-margin lots to clear the way for new acquisitions that meet historical return metrics [47] - The company aims to grow its community count sequentially and is actively engaging with land sellers to negotiate new land parcels [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction in meeting or exceeding guidance despite a challenging operating environment, emphasizing a focus on pace over price [9][47] - The company anticipates continued use of mortgage rate buy downs to enhance affordability for homebuyers [22][38] - Future guidance for Q4 2025 includes total revenues between $750 million and $850 million, with adjusted gross margin expected to be lower due to increased costs [39][40] Other Important Information - The company ended Q3 2025 with $278 million in liquidity, well above targeted levels, and has made significant progress in reducing debt [33][34] - Interest expense as a percentage of total revenues increased to 4.2% year-over-year, primarily due to land banking arrangements [35] Q&A Session Summary Question: Improvement in order activity in July - Management indicated that the improvement was largely driven by macroeconomic factors rather than specific company actions, with increased incentives playing a minor role [50][51] Question: August activity month to date - Management noted that activity has remained choppy following the July improvement [52][53] Question: Gross margin guidance and asset management - Management explained that the headwinds from underperforming assets are influenced by geography and market conditions, with a focus on burning through lower-margin lots [55][56] Question: Debt restructuring opportunities - Management is exploring refinancing secured debt into unsecured debt as market conditions improve [61][62] Question: Price increases in communities - Management noted that entry-level markets are tougher, but there has been success in active adult and move-up buyer segments [67][68]

Core Viewpoint - Hovnanian's quarterly earnings significantly missed expectations, with earnings per share (EPS) of $1.99 compared to the consensus estimate of $3.51, marking a 43.30% earnings surprise [1][2] Financial Performance - The company reported revenues of $800.58 million for the quarter ended July 2025, which was 0.7% below the Zacks Consensus Estimate and an increase from $722.7 million year-over-year [2] - Over the last four quarters, Hovnanian has consistently failed to meet consensus EPS and revenue estimates [2] Stock Performance - Hovnanian shares have increased by approximately 11.3% since the beginning of the year, outperforming the S&P 500's gain of 8.7% [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates of $2.57 for the upcoming quarter and $12.04 for the current fiscal year [7] - The Zacks Rank for Hovnanian is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Building Products - Home Builders industry, to which Hovnanian belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another competitor in the same industry, Lennar, is expected to report a significant decline in earnings, with a projected EPS of $2.14, reflecting a year-over-year decrease of 45.1% [9]

Review of Financial Results Third Quarter Fiscal 2025 【0367 Forward-Looking Statements All statements in this presentation that are not historical facts should be considered as "Forward-Looking Statements" within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, ncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future r ...