Financial Data and Key Metrics Changes - The company reported record second quarter revenue of $1.2 billion, a 5% increase year-over-year [7] - Pre-tax income decreased by 18% to $160.1 million, largely due to a decline in gross margins to 25% [7][14] - Gross margins were reported at 25%, down from 28% a year ago, and return on equity was 17% [4][10] - Earnings per diluted share decreased to $4.42 from $5.12, a 14% decline [15] Business Line Data and Key Metrics Changes - New contracts for the second quarter decreased by 8% year-over-year, with a monthly sale pace of three homes per community [5][12] - The company closed a record 2,348 homes in the second quarter, a 6% increase compared to the previous year [6][7] - The average closing price for the second quarter was $479,000, a 1% decrease from the previous year [14] Market Data and Key Metrics Changes - New contracts in the Northern Region decreased by 13%, while the Southern Region saw a decrease of 4% [8] - Deliveries in the Southern Region increased by 8%, while Northern Region deliveries increased by 2% [8] - 59% of deliveries came from the Southern Region, with 41% from the Northern Region [8] Company Strategy and Development Direction - The company plans to continue using mortgage rate buy downs to drive traffic and sales despite their impact on profitability [5][6] - The company is optimistic about long-term fundamentals in the housing market due to undersupply and growing household formations [6][10] - The company aims to grow its community count by about 5% from 2024, ending the second quarter with 234 communities [7][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges due to higher interest rates affecting consumer confidence [5][6] - The company remains optimistic about its business, citing a strong balance sheet and quality land position [10] - Management noted that while conditions are challenging, they are not as severe as in past downturns, with a current assessment of the market at a "C to C+" level [32] Other Important Information - The company ended the quarter with $3.1 billion in equity, a 17% increase year-over-year, and a debt to capital ratio of 18% [10] - The company has a total of 50,500 owned and controlled lots, equating to about a five to six year supply [9][10] - The company repurchased $50 million of its stock during the quarter, with $150 million remaining under its current authorization [20] Q&A Session Summary Question: Commentary on market trends by geography and price point - Management noted volatility in the market, with Midwest markets outperforming the Carolinas slightly, and mixed conditions in Florida [25][26] Question: Insights on margin normalization and headwinds - Management indicated that margins may level off but could face pressure from higher rates and tariffs [39][42] Question: Order trends and incentives - Management observed an uptick in traffic in June, attributing it to organic demand rather than increased incentives [44][66] Question: Operational comments on Southern markets - Management confirmed that Texas margins are currently better than Florida, but both have seen some normalization [55] Question: Inventory levels and demand - Management stated that while new home inventory is up, their ability to offer rate buy downs gives them a competitive edge over existing homes [58] Question: Future growth plans in Northern markets - Management expressed bullishness about growth opportunities in the Midwest and plans to invest further in those markets [88][89]

Core Insights - M/I Homes reported $1.16 billion in revenue for the quarter ended June 2025, a year-over-year increase of 4.8% [1] - The earnings per share (EPS) for the same period was $4.42, down from $5.12 a year ago, indicating a decline [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.12 billion by 4.24%, while the EPS fell short of the consensus estimate of $4.43 by 0.23% [1] Financial Performance Metrics - Average home closing price was $479 thousand, slightly below the average estimate of $479.99 thousand [4] - Total homes delivered were 2,348, surpassing the average estimate of 2,213 [4] - New contracts totaled 2,078, which was below the estimated average of 2,200 [4] - The average sales price of homes in backlog was $553 thousand, exceeding the average estimate of $547.64 thousand [4] - The number of active communities was 230, above the average estimate of 227 [4] - Aggregate sales value of homes in backlog was $1.43 billion, lower than the average estimate of $1.55 billion [4] - Homes in backlog numbered 2,577, compared to the estimated average of 2,835 [4] - Financial services revenue was $31.45 million, exceeding the average estimate of $28.5 million, representing a year-over-year change of +2.2% [4] - Homebuilding revenue was $1.12 billion, above the estimated average of $1.06 billion, reflecting a year-over-year increase of +4.9% [4] Stock Performance - Shares of M/I Homes returned +10% over the past month, outperforming the Zacks S&P 500 composite's +5.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Group 1 - M/I Homes reported quarterly earnings of $4.42 per share, slightly missing the Zacks Consensus Estimate of $4.43 per share, and down from $5.12 per share a year ago, representing an earnings surprise of -0.23% [1] - The company posted revenues of $1.16 billion for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 4.24%, and up from $1.11 billion year-over-year [2] - M/I Homes has surpassed consensus revenue estimates three times over the last four quarters, while it has only exceeded EPS estimates once in the same period [2] Group 2 - The stock has underperformed the market, losing about 7.2% since the beginning of the year, compared to the S&P 500's gain of 7.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $4.19 on revenues of $1.1 billion, and for the current fiscal year, it is $17.00 on revenues of $4.36 billion [7] Group 3 - The Zacks Industry Rank indicates that the Building Products - Home Builders sector is currently in the bottom 21% of over 250 Zacks industries, suggesting potential challenges for stocks in this category [8] - The estimate revisions trend for M/I Homes was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

[Financial & Operational Highlights](index=1&type=section&id=2025%20Second%20Quarter%20Highlights) M/I Homes reported decreased Q2 2025 profitability despite record revenue and increased home deliveries, as new contracts and backlog value declined Q2 2025 Profitability Overview | Metric | Q2 2025 ($) | Q2 2024 ($) | | :--- | :--- | :--- | | Pre-tax Income | $160.1 million | $194.1 million | | Net Income | $121.2 million | $146.7 million | | Diluted EPS | $4.42 | $5.12 | Q2 2025 Operational Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue ($) | $1.2 billion | - | +5% | | Homes Delivered (Units) | 2,348 | 2,224 | +6% | | New Contracts (Units) | 2,078 | 2,255 | -8% | | Backlog Value ($) | $1.43 billion | $1.82 billion | -22% | | Backlog Units (Units) | 2,577 | 3,422 | -25% | | Cancellation Rate (%) | 13% | 10% | +3 p.p. | - Shareholders' equity reached a record **$3.1 billion**, a **12%** increase from a year ago, with book value per share at **$117**[7](index=7&type=chunk) - The company repurchased **$50 million** of its common stock during the second quarter[7](index=7&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management acknowledged challenging market conditions but expressed confidence in industry fundamentals, highlighting a strong balance sheet and strategic investment plans - Management described market conditions as "choppy and challenging" but remains confident due to strong housing industry fundamentals and the company's ability to navigate the environment[6](index=6&type=chunk) - The company maintains a very strong balance sheet with **$800 million** in cash, zero borrowings under its **$650 million** credit facility, and a homebuilding debt-to-capital ratio of **18%**[6](index=6&type=chunk)[8](index=8&type=chunk) - M/I Homes is strategically investing in operations and is on track to grow its average community count by approximately **5%** in 2025[8](index=8&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) Financial statements show increased Q2 revenue but decreased operating income, with a robust balance sheet and lower cash from operations [Summary Statement of Income](index=3&type=section&id=Summary%20Statement%20of%20Income) Q2 2025 total revenue increased, but net income decreased due to lower gross margin and higher SG&A, with diluted EPS declining Q2 Ended June 30 | Metric (Q2 Ended June 30) | 2025 ($ Millions) | 2024 ($ Millions) | | :--- | :--- | :--- | | Total Revenue | $1,162.6 | $1,109.8 | | Gross Margin | $286.6 | $309.3 | | Operating Income | $155.7 | $186.8 | | Net Income | $121.2 | $146.7 | | Diluted EPS ($) | $4.42 | $5.12 | Six Months Ended June 30 | Metric (Six Months Ended June 30) | 2025 ($ Millions) | 2024 ($ Millions) | | :--- | :--- | :--- | | Total Revenue | $2,138.7 | $2,156.5 | | Net Income | $232.5 | $284.8 | | Diluted EPS ($) | $8.40 | $9.90 | [Summary Balance Sheet](index=4&type=section&id=Summary%20Balance%20Sheet) As of June 30, 2025, the balance sheet shows strong total assets and shareholders' equity, with increased inventory and an improved debt-to-capital ratio As of June 30 | Metric (As of June 30) | 2025 ($ Millions) | 2024 ($ Millions) | | :--- | :--- | :--- | | Total Cash & Equivalents | $800.4 | $837.5 | | Total Inventory | $3,286.6 | $2,938.5 | | Total Assets | $4,740.0 | $4,340.1 | | Total Debt - Homebuilding | $695.7 | $694.4 | | Shareholders' Equity | $3,082.1 | $2,741.1 | | Book Value per Share ($) | $117.01 | $100.03 | - The homebuilding debt-to-capital ratio improved from **20%** to **18%** year-over-year[15](index=15&type=chunk)[16](index=16&type=chunk) [Supplemental Financial and Operating Data](index=5&type=section&id=Supplemental%20Financial%20and%20Operating%20Data) For H1 2025, cash from operating activities decreased, while land/lot purchases increased, and financial services pre-tax income showed growth Six Months Ended June 30 | Metric (Six Months Ended June 30) | 2025 ($ Millions) | 2024 ($ Millions) | | :--- | :--- | :--- | | Cash from Operating Activities | $102.6 | $143.3 | | Land/lot purchases | $247.7 | $226.8 | | Land development spending | $240.6 | $263.9 | | Financial services pre-tax income | $30.6 | $26.7 | [Non-GAAP Financial Results](index=5&type=section&id=Non-GAAP%20Financial%20Results) Adjusted EBITDA, a non-GAAP measure, declined for both Q2 and the six-month period in 2025, reflecting an overall decrease in profitability Adjusted EBITDA | Period | 2025 ($ Millions) | 2024 ($ Millions) | | :--- | :--- | :--- | | Q2 Adjusted EBITDA | $169.4 | $199.8 | | H1 Adjusted EBITDA | $323.4 | $386.6 | [Regional Operating Performance](index=6&type=section&id=Regional%20Operating%20Performance) New contracts declined in both regions in Q2 2025, while homes delivered increased, but backlog units and value significantly decreased year-over-year - New contracts declined in both regions for Q2 and H1 2025, with the Northern region showing a larger percentage drop (**13%** in Q2, **10%** in H1)[22](index=22&type=chunk) - Backlog units at June 30, 2025, decreased by **21%** in the Northern region and **28%** in the Southern region compared to the prior year, however, the average sales price in backlog increased in both regions[22](index=22&type=chunk) Total Lots by Region | Region | Total Lots 2025 (Units) | Total Lots 2024 (Units) | Change (%) | | :--- | :--- | :--- | :--- | | Northern | 15,814 | 17,034 | -7% | | Southern | 34,650 | 32,418 | +7% | | **Total** | **50,464** | **49,452** | **+2%** | [Company Information and Forward-Looking Statements](index=2&type=section&id=Company%20Information%20and%20Forward-Looking%20Statements) M/I Homes is a leading national homebuilder operating across multiple US regions, and will host a conference call, cautioning on forward-looking statements and associated risks - M/I Homes is one of the nation's leading homebuilders of single-family homes with operations in Ohio, Indiana, Illinois, Minnesota, Michigan, Florida, Texas, North Carolina, and Tennessee[9](index=9&type=chunk) - The company will host a live conference call to discuss earnings and warns that statements in the release are forward-looking and subject to risks detailed in its Form 10-K[8](index=8&type=chunk)[10](index=10&type=chunk)

Core Viewpoint - M/I Homes, Inc. reported solid second quarter results for 2025, achieving record revenue and homes delivered despite challenging market conditions, while also highlighting a decrease in net income and new contracts compared to the previous year [3][5]. Financial Performance - Pre-tax income for Q2 2025 was $160.1 million, down 18% from $194.1 million in Q2 2024. Net income was $121.2 million ($4.42 per diluted share), compared to $146.7 million ($5.12 per diluted share) in the same quarter last year [3][7]. - For the first half of 2025, pre-tax income totaled $306.2 million, a decrease from $374.4 million in the first half of 2024. Net income for this period was $232.5 million ($8.40 per diluted share), down from $284.8 million ($9.90 per diluted share) in 2024 [3][9]. Operational Highlights - Homes delivered in Q2 2025 increased by 6% to 2,348 homes, setting a second quarter record, while total homes delivered for the first half of 2025 decreased by 1% to 4,324 homes [4][7]. - New contracts in Q2 2025 were 2,078, reflecting an 8% decrease from 2,255 in Q2 2024. For the first half of 2025, new contracts totaled 4,370, a 9% decrease from 4,802 in the same period of 2024 [4][15]. Backlog and Inventory - As of June 30, 2025, the backlog had a total sales value of $1.43 billion, down 22% from $1.82 billion a year ago. The number of backlog units decreased by 25% to 2,577 homes, with an average sales price of $553,000 [4][16]. - The company had a record 234 communities as of June 30, 2025, compared to 211 communities a year earlier [4][5]. Financial Position - The company maintained a strong balance sheet with zero borrowings under its $650 million unsecured credit facility and a cash position of $800 million. The homebuilding debt-to-capital ratio was 18%, and the net debt-to-capital ratio was negative 3% [5][11]. - Shareholders' equity reached a record $3.1 billion, representing a 12% increase from the previous year, with a book value per share of $117 [7][11].

Core Viewpoint - Analysts expect M/I Homes (MHO) to report quarterly earnings of $4.43 per share, reflecting a year-over-year decline of 13.5%, with revenues projected at $1.12 billion, a slight increase of 0.5% from the previous year [1]. Earnings Estimates - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating a reassessment of projections by covering analysts [1][2]. Revenue Projections - Analysts estimate 'Revenue- Financial services revenue' at $28.50 million, down 7.4% year-over-year [4]. - 'Revenue- Homebuilding revenue- Housing revenue' is projected to be $1.06 billion, reflecting a decrease of 0.9% compared to the previous year [4]. Key Metrics - The 'Average home closing price' is expected to be $479.99 thousand, slightly lower than the year-ago value of $482.00 thousand [5]. - 'Homes delivered - Total' is projected at 2,213, down from 2,224 year-over-year [5]. - 'New contracts - Total' is expected to be 2,200, compared to 2,255 in the previous year [5]. Backlog and Active Communities - The 'Average sales price of homes in backlog - Total Homebuilding Regions' is forecasted to reach $547.64 thousand, up from $533.00 thousand in the same quarter last year [6]. - The number of active communities is expected to reach 227, compared to 215 in the same quarter last year [6]. - The 'Aggregate sales value of homes in backlog - Total Homebuilding Regions' is estimated at $1.55 billion, down from $1.82 billion year-over-year [7]. - 'Homes in backlog' is projected to be 2,835, compared to 3,422 in the previous year [7]. Stock Performance - Over the past month, M/I Homes shares have increased by 10.7%, outperforming the Zacks S&P 500 composite's increase of 5.4% [7].

Group 1 - M/I Homes (MHO) closed at $121.03, with a +2.01% increase from the previous day, outperforming the S&P 500's daily gain of 0.28% [1] - Over the past month, M/I Homes shares gained 7.97%, surpassing the Construction sector's gain of 5.19% and the S&P 500's gain of 4.37% [1] Group 2 - M/I Homes is scheduled to release its earnings report on July 23, 2025, with an anticipated EPS of $4.43, reflecting a 13.48% decline compared to the same quarter last year [2] - The consensus estimate for revenue is $1.12 billion, indicating a 0.49% increase compared to the same quarter last year [2] Group 3 - For the full year, analysts expect earnings of $17 per share and revenue of $4.36 billion, representing changes of -13.75% and -3.29% from the previous year, respectively [3] Group 4 - Recent revisions to analyst forecasts for M/I Homes are important as they indicate changing near-term business trends, with positive revisions suggesting optimism about the business outlook [4] Group 5 - The Zacks Rank system, which includes estimate changes, has a track record of outperformance, with 1 stocks generating an average annual return of +25% since 1988 [6] - M/I Homes currently holds a Zacks Rank of 3 (Hold), with the consensus EPS projection remaining stagnant over the past 30 days [6] Group 6 - M/I Homes has a Forward P/E ratio of 6.98, which is lower than the industry average Forward P/E of 9.91, indicating that M/I Homes is trading at a discount compared to its peers [7] - The Building Products - Home Builders industry ranks in the bottom 22% of all industries, with a current Zacks Industry Rank of 195 [7]

Company Overview - M/I Homes, Inc. (MHO) is a homebuilder operating in the US, focusing on residential homes across various states including Ohio, Indiana, Illinois, Minnesota, Michigan, Florida, Texas, North Carolina, and Tennessee, with a total of 226 communities in 17 different locations [1] Investment Philosophy - The investment philosophy emphasizes identifying mispriced securities by understanding the financial drivers of a company, often revealed through a DCF model valuation, allowing for a comprehensive assessment of a stock's risk-to-reward profile [1]

Company Performance - M/I Homes (MHO) stock increased by 1.24% to $118.08, outperforming the S&P 500's daily gain of 0.48% [1] - Prior to the latest trading session, M/I Homes shares had risen by 9.67%, exceeding the Construction sector's gain of 6.17% and the S&P 500's gain of 5.13% [1] Upcoming Earnings - The earnings report for M/I Homes is anticipated on July 23, 2025, with projected earnings per share (EPS) of $4.43, reflecting a 13.48% decrease from the same quarter last year [2] - Revenue is expected to be $1.12 billion, indicating a 0.49% increase compared to the same quarter of the previous year [2] Full Year Projections - For the full year, Zacks Consensus Estimates project earnings of $17 per share and revenue of $4.36 billion, representing changes of -13.75% and -3.29% from the prior year, respectively [3] Analyst Estimates - Recent modifications to analyst estimates for M/I Homes are crucial as they reflect changing business trends, with positive revisions indicating analysts' confidence in performance and profit potential [4] Zacks Rank and Valuation - M/I Homes currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining unchanged over the past month [6] - The company is trading at a Forward P/E ratio of 6.86, which is a discount compared to its industry's Forward P/E of 10.41 [6] Industry Context - The Building Products - Home Builders industry, part of the Construction sector, has a Zacks Industry Rank of 212, placing it in the bottom 15% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Overview - M/I Homes, Inc. (MHO) is currently experiencing significant activity in the options market, particularly with the July 18, 2025 $100.00 Call option showing some of the highest implied volatility among equity options [1] Implied Volatility Insights - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant price change for M/I Homes shares [2] - High implied volatility may also signal an upcoming event that could lead to a substantial rally or sell-off [2] Analyst Sentiment - M/I Homes holds a Zacks Rank of 4 (Sell) within the Building Products - Home Builders industry, which is positioned in the bottom 9% of the Zacks Industry Rank [3] - Over the past 60 days, the Zacks Consensus Estimate for the current quarter has increased from $4.39 per share to $4.43, indicating a slight positive adjustment in earnings expectations [3] Trading Strategy Implications - The high implied volatility surrounding M/I Homes could indicate a developing trading opportunity, as options traders often seek to sell premium on options with elevated implied volatility [4] - This strategy aims to benefit from the decay of options value, with the expectation that the underlying stock will not move as much as initially anticipated by the market [4]