Core Insights - KB Home reported revenue of $1.62 billion for the quarter ended August 2025, reflecting a 7.5% decline year-over-year, while EPS was $1.61 compared to $2.04 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $1.6 billion by 1.5%, and the EPS surpassed the consensus estimate of $1.50 by 7.33% [1] Financial Performance Metrics - Backlog units stood at 4,333, slightly below the average estimate of 4,411 from four analysts [4] - Total home deliveries were 3,393, exceeding the average estimate of 3,351 [4] - Net orders were recorded at 2,950, compared to the average estimate of 2,986 [4] - The average selling price was $487.5 million, higher than the estimated $474.39 million [4] - Ending community count was 264, surpassing the average estimate of 253 [4] - Backlog value was $1.99 billion, below the average estimate of $2.23 billion [4] - Total revenues from homebuilding were $1.61 billion, matching the average estimate and showing a 7.5% decline year-over-year [4] - Financial services revenue was $6.01 million, exceeding the estimate of $5.74 million but down 9.3% from the previous year [4] - Operating income from homebuilding was $131.16 million, above the average estimate of $124.81 million [4] Stock Performance - KB Home shares returned -1.2% over the past month, while the Zacks S&P 500 composite increased by 3.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Group 1 - The article does not provide any specific content or data related to a company or industry [1]

Group 1 - KB Home reported quarterly earnings of $1.61 per share, exceeding the Zacks Consensus Estimate of $1.5 per share, but down from $2.04 per share a year ago, representing an earnings surprise of +7.33% [1] - The company posted revenues of $1.62 billion for the quarter ended August 2025, surpassing the Zacks Consensus Estimate by 1.50%, but down from $1.75 billion year-over-year [2] - Over the last four quarters, KB Home has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Group 2 - The stock has underperformed the market, losing about 5% since the beginning of the year compared to the S&P 500's gain of 13.2% [3] - The current consensus EPS estimate for the coming quarter is $2.04 on $1.88 billion in revenues, and for the current fiscal year, it is $6.48 on $6.4 billion in revenues [7] - The Zacks Industry Rank for Building Products - Home Builders is currently in the bottom 6% of over 250 Zacks industries, indicating potential challenges for the sector [8] Group 3 - The estimate revisions trend for KB Home was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - The company reported total revenues of over $1.6 billion and diluted earnings per share of $1.61, with a gross margin of 18.9% excluding inventory-related charges, exceeding guidance [7][30] - Adjusted housing gross profit margin was 18.9%, which is 180 basis points lower than the previous year due to pricing pressure and higher land costs [31] - The company grew its book value per share to over $60, an 11% year-over-year increase [5][39] Business Line Data and Key Metrics Changes - The company delivered 3,393 homes in the quarter, exceeding guidance, while net orders totaled 2,950, a 4% decline [30][31] - The average selling price decreased 1% to $475,700, with lower prices in the central and southeast regions offset by increases in the west coast and southwest regions [31] - Home building operating income decreased to $131 million, or 8.1% of home building revenues [32] Market Data and Key Metrics Changes - The company experienced stability in demand, with a cancellation rate stable at 17% and a monthly absorption pace per community of 3.8 net orders [9][13] - Mortgage interest rates declined by approximately 60 basis points, equating to about $30,000 of additional purchasing power at the average sales price [16] - The company opened 32 new communities during the quarter, marking the highest performance in community openings in over a year [17] Company Strategy and Development Direction - The company aims to return to a historical range of built-to-order homes, which has averaged close to 70%, from around 50% currently [10] - The focus is on optimizing assets to generate the highest returns while balancing pace and price relative to local market conditions [9][11] - The company plans to maintain a disciplined approach to land acquisition, having canceled contracts for approximately 6,800 lots that no longer met underwriting criteria [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed a favorable long-term outlook for the housing market driven by demographics and ongoing undersupply of homes [8] - The company expects to generate housing revenues of $1.65 billion in the fourth quarter and $6.15 billion for the fiscal year [12] - Management noted that while the backlog will be down, it positions the company for similar pull-throughs based on the backlog heading into 2026 [77] Other Important Information - The company returned more than $490 million in capital to shareholders this year, including $440 million in share repurchases [5][27] - The company maintains a strong balance sheet with total liquidity of $1.2 billion and a debt to capital ratio of 33.2% [38][37] - The company was recognized as the only home builder on Time Magazine's 2025 list of the world's best companies, highlighting employee satisfaction [28] Q&A Session Summary Question: Order ASP and its decline - Management indicated that the sequential decline in order ASP is largely driven by mix effects, with more deliveries from lower ASP regions [42][43] Question: Demand and conversion of traffic - Management noted steady traffic but did not see a significant uptick in orders yet, with buyers possibly in a wait-and-see mode regarding mortgage rates [46][48] Question: Fourth quarter gross margin expectations - Management clarified that the strong third quarter gross margin was due to construction performance, not delivery timing [51][52] Question: Revenue outlook for next year - Management refrained from providing specific guidance for next year but indicated expectations for improved affordability and community count [58] Question: Shift back to built-to-order model - Management acknowledged incremental improvements in the built-to-order mix and expected to return to a 70/30 ratio at higher margins over time [64][63]

Financial Data and Key Metrics Changes - The company reported total revenues of over $1.6 billion and diluted earnings per share of $1.61, with a gross margin of 18.9% excluding inventory-related charges, exceeding guidance [7][30] - Adjusted housing gross profit margin was 18.9%, which is 180 basis points lower than the previous year due to pricing pressure and higher land costs [31][34] - The company grew its book value per share to over $60, an 11% year-over-year increase [5][39] Business Line Data and Key Metrics Changes - The company delivered 3,393 homes in the quarter, exceeding the midpoint of guidance, while net orders totaled 2,950, a 4% decline [30][31] - The average selling price decreased 1% to $475,700, with lower prices in the central and southeast regions offset by increases in the west coast and southwest [31][32] - The company maintained SG&A expenses at 10% of housing revenues, a 20 basis point increase from a year ago [32] Market Data and Key Metrics Changes - The company experienced stability in demand, with a cancellation rate stable at 17% and a monthly absorption pace per community of 3.8 net orders [9][13] - Mortgage interest rates declined by approximately 60 basis points, equating to about $30,000 of additional purchasing power for buyers [16] - The company opened 32 new communities during the quarter, marking the highest performance in community openings in over a year [17] Company Strategy and Development Direction - The company aims to return to a historical range of built-to-order homes, which has averaged close to 70% over more than a decade, from around 50% currently [10][63] - The focus is on optimizing assets to generate the highest returns while balancing pace and price based on local market conditions [9][11] - The company plans to continue its share repurchase program and maintain a disciplined approach to land investments [25][38] Management's Comments on Operating Environment and Future Outlook - Management expressed a favorable long-term outlook for the housing market driven by demographics and ongoing undersupply of homes [8][26] - The company anticipates generating $1.65 billion in housing revenues for the fourth quarter and $6.15 billion for the fiscal year [12] - Management noted that the current operating environment remains challenging but believes the company is well-positioned to navigate it [30][40] Other Important Information - The company has returned over $490 million in capital to shareholders this year, including $440 million in share repurchases [5][27] - The company maintains a strong balance sheet with total liquidity of $1.2 billion [37][38] - The company canceled contracts to purchase approximately 6,800 lots during the third quarter, representing about 45 communities that no longer met underwriting criteria [24] Q&A Session Summary Question: Order ASP and its decline - The decline in order ASP is largely driven by mix effects, with more deliveries coming from lower ASP regions [42][43] Question: Demand and conversion of traffic - Management noted that while traffic remains steady, there hasn't been a significant uptick in orders yet, as buyers may be in a wait-and-see mode [46][48] Question: Fourth quarter gross margin expectations - The gross margin beat in the third quarter was due to strong construction performance, with expectations for a slight decline in the fourth quarter due to mix effects [51][52] Question: Revenue outlook for next year - Management did not provide specific guidance for next year but indicated an expectation for improved affordability and community count, which should positively impact revenue [58][59] Question: Direct cost reductions - Direct costs have been lowered across the board, with significant reductions in lumber costs contributing to overall cost management [68][70]

Financial Data and Key Metrics Changes - The company reported total revenues of over $1.6 billion and diluted earnings per share of $1.61, with a gross margin of 18.9%, exceeding guidance [6][29] - Adjusted housing gross profit margin was 18.9%, which is 180 basis points lower than the previous year due to pricing pressure and higher land costs [30] - Book value per share increased to over $60, reflecting an 11% year-over-year increase [7][38] Business Line Data and Key Metrics Changes - The company delivered 3,393 homes in the quarter, exceeding guidance, while net orders totaled 2,950, a 4% decline [29][30] - The average selling price decreased by 1% to $475,700, with regional variations impacting overall pricing [30] - The company maintained SG&A expenses at 10% of housing revenues, with a slight increase from the previous year due to decreased operating leverage [31] Market Data and Key Metrics Changes - The company experienced stability in demand, with a cancellation rate of 17% and a monthly absorption pace of 3.8 net orders per community [8][13] - Mortgage interest rates declined by approximately 60 basis points, equating to about $30,000 of additional purchasing power for buyers [15] - The company opened 32 new communities during the quarter, contributing to a 4% year-over-year increase in active communities [16] Company Strategy and Development Direction - The company aims to return to a historical range of built-to-order homes, which has averaged close to 70% over more than a decade, from around 50% currently [9] - The focus is on optimizing assets to generate the highest returns while balancing pace and price based on local market conditions [8][10] - The company plans to continue its share repurchase program and maintain a disciplined approach to land investments [25][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for the housing market, driven by demographics and ongoing undersupply [7] - The company anticipates generating housing revenues of $1.65 billion in the fourth quarter and $6.15 billion for the fiscal year [11] - Management noted that while the backlog is expected to decrease, it positions the company for similar pull-throughs based on the backlog heading into 2026 [80] Other Important Information - The company repurchased more than $188 million of shares in the third quarter, contributing to total repurchases of approximately $440 million year-to-date [5][26] - The company has a healthy lot position, owning or controlling over 65,000 lots, with a focus on markets positioned for long-term growth [23][25] - The average cash down payment remained stable at 16%, with a household income of over $130,000 for customers using the company's joint venture for financing [21] Q&A Session Summary Question: Order ASP and its decline - The decline in order ASP is largely driven by mix effects, with more deliveries from lower ASP regions [41][43] Question: Demand and conversion of traffic - Management noted steady traffic but indicated that buyers may be in a wait-and-see mode regarding mortgage rates [48] Question: Fourth quarter gross margin expectations - The fourth quarter gross margin is expected to be influenced by mix and delivery timing, with a focus on maintaining margins [51][66] Question: Built-to-order strategy and profitability - The company is gradually shifting back to a built-to-order model, with significant margin differentials compared to speculative homes [64][65] Question: Direct cost reductions - Direct costs have been reduced across various components, with lumber costs being a significant factor [72][73]

Financial Data and Key Metrics Changes - The company reported total revenues of over $1.6 billion and diluted earnings per share of $1.61, with a gross margin of 18.9% excluding inventory-related charges, exceeding guidance [5][29]. - Adjusted housing gross profit margin was 18.9%, which is 180 basis points lower than the previous year due to pricing pressure and higher land costs [30]. - The company grew its book value per share to over $60, an 11% year-over-year increase [6][36]. Business Line Data and Key Metrics Changes - The company delivered 3,393 homes in the quarter, exceeding the midpoint of guidance, while net orders totaled 2,950, a 4% decline [28][29]. - The average selling price decreased 1% to $475,700, with lower prices in the central and southeast regions offset by increases in the west coast and southwest regions [29]. - The company maintained SG&A expenses at 10% of housing revenues, with a slight increase from the previous year due to decreased operating leverage [30]. Market Data and Key Metrics Changes - The company experienced stability in demand throughout the third quarter, with a cancellation rate stable at 17% [12][16]. - Mortgage interest rates declined by approximately 60 basis points, equating to about $30,000 of additional purchasing power at the average sales price [14]. - The company opened 32 new communities during the quarter, marking the highest performance in community openings in over a year [12][16]. Company Strategy and Development Direction - The company aims to return to a historical range of built-to-order homes, which has averaged close to 70% over more than a decade, from around 50% currently [9][61]. - The focus is on optimizing assets to generate the highest returns while balancing pace and price based on local market conditions [8][10]. - The company plans to continue its share repurchase program and maintain a disciplined approach to land investments, having invested $514 million in land acquisition and development in the third quarter [25][26]. Management's Comments on Operating Environment and Future Outlook - Management expressed a favorable long-term outlook for the housing market, driven by demographics and ongoing undersupply of homes [6][14]. - The company is cautious about the current environment, emphasizing the importance of managing costs and aligning overhead structure with delivery volume [5][30]. - Management indicated that the fourth quarter is typically a slower period, and they do not intend to aggressively pursue inventory sales [10][11]. Other Important Information - The company has returned more than $490 million in capital to shareholders this year, including approximately $440 million in share repurchases [4][26]. - The company maintains a strong balance sheet with total liquidity of $1.2 billion, including $331 million in cash [34][35]. - The company was recognized as the only home builder on Time Magazine's 2025 list of the world's best companies, highlighting employee satisfaction [27]. Q&A Session Summary Question: Order ASP decline and its implications - Management noted that the sequential decline in order ASP is largely driven by mix effects, with more deliveries coming from lower ASP regions [40][41]. Question: Demand and conversion of traffic to sales - Management indicated that while traffic remains steady, there has not been a significant uptick in orders, with buyers potentially waiting for further rate decreases [46]. Question: Gross margin expectations for the fourth quarter - Management clarified that strong construction performance contributed to the gross margin beat in the third quarter, and they are being thoughtful about fourth-quarter expectations [49][50]. Question: Built-to-order strategy and profitability - Management confirmed that they are seeing incremental improvement in the built-to-order mix and expect to return to a 70/30 ratio at higher margins over time [61][62]. Question: Inventory-related charges and land environment - Management discussed the current land environment and their ability to find new lots for future growth, emphasizing a selective approach to land investments [75].

Trade Policy Developments - The U.S. administration has initiated investigations under Section 232 of the Trade Expansion Act, targeting imports of robotics, industrial machinery, and medical devices, which could lead to new tariffs ranging from 10% to 25% [3][6] - Companies like Intuitive Surgical (ISRG) have acknowledged these tariffs as a "material risk" to their 2025 earnings, potentially impacting healthcare costs and global supply chains [3][6] Monetary Policy Insights - Federal Reserve Bank of San Francisco President Mary Daly indicated that the U.S. economy still requires monetary support, with inflation moderate at around 2.4-2.5% excluding tariffs, while cautioning against further rate cuts [4][6] Housing Market Trends - KB Home (KBH) has revised its full-year 2025 revenue forecast downward to between $6.30 billion and $6.50 billion, citing a weaker-than-expected spring selling season and declining consumer confidence [5][6] Banking Sector Movements - Citigroup (C) has agreed to sell a 25% equity stake in its Mexican retail banking unit, Banamex, to local businessman Fernando Chico Pardo, marking progress in its divestiture strategy [7][6] Geopolitical Commentary - Brazilian President Luiz Inácio Lula da Silva emphasized the need for global cooperation and condemned the situation in Gaza, while also praising China's energy transition efforts [8][6]

Investor Presentation Third Quarter 2025 1 Forward-Looking Statements 2 Items in this presentation, and statements by KB Home management in relation to this presentation or otherwise, may be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current (at the time made) expectations and projections about future events and are subject to risks, uncertainties, and assumptions about our operations, economic and market f ...

[Executive Summary & CEO Commentary](index=1&type=section&id=Executive%20Summary%20%26%20CEO%20Commentary) KB Home reported strong Q3 2025 financial results, exceeding guidance with **$1.62 billion** in revenue and **$1.61** diluted EPS, alongside significant capital returns and operational improvements [Third Quarter 2025 Highlights](index=1&type=section&id=Third%20Quarter%202025%20Highlights) KB Home reported solid financial results for the third quarter ended August 31, 2025, meeting or exceeding guidance across key metrics, with revenues totaling **$1.62 billion** and diluted earnings per share of **$1.61**, alongside **$188.5 million** in common stock repurchases Third Quarter 2025 Highlights | Metric | Q3 2025 | Q3 2024 | | :----- | :------ | :------ | | Revenues (Billions USD) | 1.62 | 1.75 | | Diluted EPS (USD) | 1.61 | 2.04 | | Common Stock Repurchased (Millions USD) | 188.5 | - | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) Jeffrey Mezger, Chairman and CEO, highlighted outstanding operational execution, including reduced build times and costs, a consistent sales approach, improving affordability, and a healthy balance sheet supporting future growth and substantial capital returns to stockholders, totaling over **$490 million** in the first nine months - Achieved solid financial results, meeting or exceeding guidance ranges across key metrics[3](index=3&type=chunk) - Outstanding operational execution, making meaningful progress in reducing both build times and costs[3](index=3&type=chunk) - Returned more than **$490 million** to stockholders in the first nine months of the fiscal year through share repurchases and dividends, representing approximately **11%** of shares outstanding[3](index=3&type=chunk) [Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) The company's financial performance for Q3 and YTD 2025 showed decreased revenues and net income, with declining margins across homebuilding and financial services [Three Months Ended August 31, 2025](index=1&type=section&id=Three%20Months%20Ended%20August%2031,%202025) For the third quarter, KB Home experienced a decrease in revenues and net income compared to the prior year, with homebuilding operating income and gross profit margins declining due to price reductions, higher relative land costs, and geographic mix, partly offset by lower construction costs, while financial services pretax income also decreased Consolidated Financial Highlights (Three Months Ended August 31) | Metric | 2025 | 2024 | Change (YoY) | | :----- | :--- | :--- | :----------- | | Total Revenues (Millions USD) | 1,620.5 | 1,752.6 | -7.5% | | Net Income (Millions USD) | 109.8 | 157.3 | -30.2% | | Diluted EPS (USD) | 1.61 | 2.04 | -21.1% | | Effective Tax Rate (%) | 23.3% | 24.2% | -0.9 pp | Homebuilding Operating Performance (Three Months Ended August 31) | Metric | 2025 | 2024 | Change (YoY) | | :----- | :--- | :--- | :----------- | | Homebuilding Operating Income (Millions USD) | 131.2 | 189.0 | -30.6% | | Homebuilding Operating Income Margin (%) | 8.1% | 10.8% | -2.7 pp | | Adjusted Homebuilding Operating Income Margin (excl. inventory charges) (%) | 8.8% | 10.9% | -2.1 pp | | Housing Gross Profit Margin (%) | 18.2% | 20.6% | -2.4 pp | | Adjusted Housing Gross Profit Margin (excl. inventory charges) (%) | 18.9% | 20.7% | -1.8 pp | | SG&A as % of Housing Revenues (%) | 10.0% | 9.8% | +0.2 pp | Financial Services Pretax Income (Three Months Ended August 31) | Metric | 2025 | 2024 | Change (YoY) | | :----- | :--- | :--- | :----------- | | Financial Services Pretax Income (Millions USD) | 8.7 | 11.0 | -21.0% | [Nine Months Ended August 31, 2025](index=2&type=section&id=Nine%20Months%20Ended%20August%2031,%202025) For the first nine months of fiscal 2025, total revenues decreased to **$4.54 billion**, and net income fell to **$327.3 million**, resulting in a **23%** decline in diluted earnings per share, with homes delivered also down **9%** year-over-year, while the average selling price increased Consolidated Financial Highlights (Nine Months Ended August 31) | Metric | 2025 | 2024 | Change (YoY) | | :----- | :--- | :--- | :----------- | | Total Revenues (Billions USD) | 4.54 | 4.93 | -7.9% | | Net Income (Millions USD) | 327.3 | 464.4 | -29.5% | | Diluted EPS (USD) | 4.60 | 5.94 | -22.6% | | Homes Delivered | 9,283 | 10,191 | -9.0% | | Average Selling Price (USD) | 487,500 | 481,400 | +1.3% | [Operational Metrics](index=2&type=section&id=Operational%20Metrics) Key operational metrics for Q3 2025 indicate a decrease in net orders and backlog, mixed regional performance in homes delivered and average selling prices, and a slight increase in community count [Net Orders and Backlog](index=2&type=section&id=Net%20Orders%20and%20Backlog) Net orders for the third quarter decreased by **4%** year-over-year, with monthly net orders per community also declining, and the cancellation rate increased to **17%**, while the ending backlog in both homes and value saw significant reductions compared to the prior year Net Orders and Backlog (Three Months Ended August 31) | Metric | 2025 | 2024 | Change (YoY) | | :----- | :--- | :--- | :----------- | | Net Orders | 2,950 | 3,085 | -4.4% | | Monthly Net Orders per Community | 3.8 | 4.1 | -7.3% | | Cancellation Rate (% of gross orders) (%) | 17% | 15% | +2.0 pp | | Ending Backlog Homes | 4,333 | 5,724 | -24.3% | | Ending Backlog Value (Billions USD) | 1.99 | 2.92 | -31.9% | [Homes Delivered and Average Selling Price by Region](index=7&type=section&id=Homes%20Delivered%20and%20Average%20Selling%20Price%20by%20Region) Homes delivered decreased by **7%** in Q3 2025, with regional variations including declines in the West Coast and Central regions, an increase in the Southeast, and flat performance in the Southwest, while average selling prices showed mixed trends across regions Homes Delivered by Region (Three Months Ended August 31) | Region | 2025 | 2024 | Change (YoY) | | :----- | :--- | :--- | :----------- | | West Coast | 972 | 1,150 | -15.5% | | Southwest | 681 | 681 | 0.0% | | Central | 943 | 1,073 | -12.1% | | Southeast | 797 | 727 | +9.6% | | Total | 3,393 | 3,631 | -6.6% | Average Selling Price by Region (Three Months Ended August 31) | Region | 2025 | 2024 | Change (YoY) | | :----- | :--- | :--- | :----------- | | West Coast (USD) | 684,000 | 661,400 | +3.4% | | Southwest (USD) | 492,700 | 459,300 | +7.3% | | Central (USD) | 329,400 | 347,500 | -5.3% | | Southeast (USD) | 380,200 | 412,200 | -7.7% | | Total (USD) | 475,700 | 480,900 | -1.1% | [Community Count](index=2&type=section&id=Community%20Count) The average community count for the third quarter increased by **3%** to **259**, and the ending community count rose by **4%** to **264**, indicating a slight expansion in the company's operational footprint Community Count (Q3 2025 vs. Q3 2024) | Metric | 2025 | 2024 | Change (YoY) | | :----- | :--- | :--- | :----------- | | Average Community Count | 259 | 251 | +3.2% | | Ending Community Count | 264 | 254 | +3.9% | [Balance Sheet and Capital Management](index=2&type=section&id=Balance%20Sheet%20and%20Capital%20Management) The company's balance sheet reflects increased inventories, decreased land investments, and a higher debt-to-capital ratio, while capital management includes significant share repurchases [Key Balance Sheet Items](index=2&type=section&id=Key%20Balance%20Sheet%20Items) As of August 31, 2025, inventories increased by **6%** from November 30, 2024, and **3%** year-over-year, while investments in land and land development decreased, and the total lot portfolio declined by **15%** from year-end 2024 and **6%** year-over-year, with stockholders' equity decreasing primarily due to common stock repurchases and cash dividends Key Balance Sheet Items (as of August 31, 2025) | Metric | August 31, 2025 | November 30, 2024 | Change (vs. Nov 30, 2024) | | :----- | :-------------- | :---------------- | :------------------------ | | Inventories (Billions USD) | 5.84 | 5.53 | +5.6% | | Investments in Land & Land Development (Billions USD) | 1.95 | 2.10 | -7.1% | | Lots Owned or Under Contract | 65,251 | 76,750 | -15.0% | | Stockholders' Equity (Billions USD) | 3.90 | 4.06 | -3.9% | | Book Value per Share (USD) | 60.25 | - | +11% (YoY) | [Liquidity and Debt](index=2&type=section&id=Liquidity%20and%20Debt) KB Home maintained total liquidity of **$1.16 billion**, comprising cash and available credit, while notes payable increased, leading to a higher debt to capital ratio compared to the end of the previous fiscal year Liquidity and Debt (as of August 31, 2025) | Metric | August 31, 2025 | November 30, 2024 | Change (vs. Nov 30, 2024) | | :----- | :-------------- | :---------------- | :------------------------ | | Total Liquidity (Billions USD) | 1.16 | - | - | | Cash and Cash Equivalents (Millions USD) | 330.6 | 598.0 | -44.8% | | Available Revolving Credit Facility (Millions USD) | 831.7 | - | - | | Notes Payable (Billions USD) | 1.94 | 1.69 | +14.8% | | Debt to Capital Ratio (%) | 33.2% | 29.4% | +3.8 pp | [Shareholder Returns](index=1&type=section&id=Shareholder%20Returns) The company continued its commitment to shareholder returns, repurchasing **$188.5 million** of common stock in Q3 2025 and a total of **$438.5 million** in the first nine months of the fiscal year, contributing to over **$490 million** returned to stockholders, including dividends Common Stock Repurchases | Period | Shares Repurchased | Cost (Millions USD) | Average Price per Share (USD) | | :----- | :----------------- | :------------------ | :---------------------------- | | Q3 2025 | 3.3 million | 188.5 | 57.12 | | 9 Months Ended Aug 31, 2025 | 7.8 million | 438.5 | 56.30 | - As of August 31, 2025, the Company had **$261.5 million** remaining under its current common stock repurchase authorization[13](index=13&type=chunk) [Financial Guidance](index=3&type=section&id=Financial%20Guidance) KB Home provided its full year 2025 outlook, projecting housing revenues between **$6.10 billion** and **$6.20 billion** with anticipated operating income and gross profit margins [Full Year 2025 Outlook](index=3&type=section&id=Full%20Year%202025%20Outlook) KB Home provided guidance for its 2025 full year, projecting housing revenues between **$6.10 billion** and **$6.20 billion**, with an average selling price of approximately **$483,000**, and anticipates a homebuilding operating income margin of about **8.9%** and a housing gross profit margin between **19.2%** and **19.3%**, assuming no inventory-related charges Full Year 2025 Guidance | Metric | Guidance | | :----- | :------- | | Housing Revenues (Billions USD) | $6.10 to $6.20 | | Average Selling Price (USD) | ~$483,000 | | Homebuilding Operating Income as % of Revenues (excl. inventory charges) (%) | ~8.9% | | Housing Gross Profit Margin (excl. inventory charges) (%) | 19.2% to 19.3% | | SG&A as % of Housing Revenues (%) | 10.2% to 10.3% | | Effective Tax Rate (%) | ~23% | | Ending Community Count | ~260 | [Supplemental Financial Data](index=5&type=section&id=Supplemental%20Financial%20Data) This section provides detailed consolidated statements of operations and balance sheets, along with supplemental homebuilding information and non-GAAP financial measure reconciliations [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations provide detailed financial performance for the three and nine months ended August 31, 2025 and 2024, covering total revenues, homebuilding and financial services segment results, pretax income, income tax expense, net income, and earnings per share | | Three Months Ended August 31, | | Nine Months Ended August 31, | | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Total revenues (Thousands USD) | 1,620,474 | 1,752,608 | 4,541,836 | 4,930,187 | | Homebuilding operating income (Thousands USD) | 131,163 | 188,950 | 389,965 | 534,809 | | Financial services pretax income (Thousands USD) | 8,686 | 10,953 | 24,373 | 35,793 | | Total pretax income (Thousands USD) | 143,228 | 207,429 | 424,968 | 603,213 | | Net income (Thousands USD) | 109,828 | 157,329 | 327,268 | 464,413 | | Diluted EPS (USD) | 1.61 | 2.04 | 4.60 | 5.94 | | Diluted Weighted Average Shares Outstanding | 67,737 | 76,630 | 70,643 | 77,565 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets present the company's financial position as of August 31, 2025, and November 30, 2024, detailing assets, liabilities, and stockholders' equity for both homebuilding and financial services segments | | August 31, 2025 | November 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents (Thousands USD) | 330,586 | 597,973 | | Inventories (Thousands USD) | 5,838,816 | 5,528,020 | | Total assets (Thousands USD) | 6,985,572 | 6,936,169 | | **Liabilities and stockholders' equity** | | | | Notes payable (Thousands USD) | 1,943,582 | 1,691,679 | | Stockholders' equity (Thousands USD) | 3,902,363 | 4,060,616 | | Total liabilities and stockholders' equity (Thousands USD) | 6,985,572 | 6,936,169 | [Homebuilding Supplemental Information](index=7&type=section&id=Homebuilding%20Supplemental%20Information) This section provides additional details on homebuilding revenues, costs, and operational metrics, including regional breakdowns for homes delivered, net orders, net order value, and backlog data for the three and nine months ended August 31, 2025 and 2024 Homebuilding Revenues (Three Months Ended August 31) | Metric | 2025 | 2024 | | :----- | :--- | :--- | | Housing Revenues (Thousands USD) | 1,613,975 | 1,745,979 | | Land Revenues (Thousands USD) | 487 | — | | Total Homebuilding Revenues (Thousands USD) | 1,614,462 | 1,745,979 | Homebuilding Costs and Expenses (Three Months Ended August 31) | Metric | 2025 | 2024 | | :----- | :--- | :--- | | Construction and Land Costs (Housing) (Thousands USD) | 1,320,611 | 1,385,563 | | Selling, General and Administrative Expenses (Thousands USD) | 162,152 | 171,466 | | Total Homebuilding Costs and Expenses (Thousands USD) | 1,483,299 | 1,557,029 | Regional Net Orders (Three Months Ended August 31) | Region | 2025 | 2024 | Change (YoY) | | :----- | :--- | :--- | :----------- | | West Coast | 870 | 958 | -9.2% | | Southwest | 459 | 616 | -25.4% | | Central | 795 | 871 | -8.8% | | Southeast | 826 | 640 | +29.1% | | Total | 2,950 | 3,085 | -4.4% | [Non-GAAP Financial Measures Reconciliation](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) This section provides a reconciliation of the company's housing gross profit margin (GAAP) to its adjusted housing gross profit margin (non-GAAP), with the adjusted measure excluding inventory impairment and land option contract abandonment charges to offer a clearer view of profitability and enable comparisons Adjusted Housing Gross Profit Margin Reconciliation (Three Months Ended August 31) | Metric | 2025 | 2024 | | :----- | :--- | :--- | | Housing Gross Profits (GAAP) (Thousands USD) | 293,364 | 360,416 | | Add: Inventory-related charges (Thousands USD) | 11,338 | 1,177 | | Adjusted Housing Gross Profits (Thousands USD) | 304,702 | 361,593 | | Housing Gross Profit Margin (GAAP) (%) | 18.2% | 20.6% | | Adjusted Housing Gross Profit Margin (Non-GAAP) (%) | 18.9% | 20.7% | - Adjusted housing gross profit margin is a non-GAAP measure that isolates the impact of housing inventory impairment and land option contract abandonment charges, providing a more comparable profitability metric for investors[27](index=27&type=chunk) [Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides an overview of KB Home, details on the Q3 2025 earnings conference call, and important forward-looking and cautionary statements [About KB Home](index=3&type=section&id=About%20KB%20Home) KB Home is a leading US homebuilder operating in **49** markets, known for building nearly **700,000** quality homes over **65** years, emphasizing personalized homebuying experiences, affordability, and sustainability as a leader in ENERGY STAR certified homes - One of the largest and most trusted homebuilders in the United States, operating in **49** markets[11](index=11&type=chunk) - Built nearly **700,000** quality homes in over **65** years and ranked 1 customer-ranked national homebuilder[11](index=11&type=chunk) - Industry leader in sustainability, achieving high residential energy-efficiency ratings and delivering more ENERGY STAR certified homes than any other builder[11](index=11&type=chunk) [Conference Call](index=3&type=section&id=Conference%20Call) A conference call to discuss the 2025 third quarter earnings was scheduled for September 24, 2025, at 2:00 p.m. Pacific Time, with details available on the company's investor relations website - Conference call to discuss 2025 third quarter earnings broadcast live on September 24, 2025, at 2:00 p.m. Pacific Time[10](index=10&type=chunk) [Forward-Looking and Cautionary Statements](index=3&type=section&id=Forward-Looking%20and%20Cautionary%20Statements) This section contains important disclosures regarding forward-looking statements, highlighting that actual events and results may differ materially from forecasts due to various risk factors, including general economic conditions, capital market conditions, material and trade costs, interest rate changes, and government policies - Statements in the press release that are predictive in nature or concern future market and economic conditions, business prospects, or financial performance are 'forward-looking statements' under the Private Securities Litigation Reform Act of 1995[12](index=12&type=chunk) - Actual events and results may differ materially from forward-looking statements due to factors such as general economic conditions, capital market conditions, material and trade costs, changes in interest rates, and government actions affecting the housing market[12](index=12&type=chunk)[14](index=14&type=chunk) - The company does not have a specific policy or intent of updating or revising forward-looking statements[12](index=12&type=chunk)