Meritage Homes(MTH) - 2025 Q1 - Quarterly Results

Financial Performance - Meritage Homes closed 3,416 homes in Q1 2025, a decrease of 3% from 3,507 homes in Q1 2024, with home closing revenue of $1.34 billion, down 8% year-over-year[4] - Net earnings for Q1 2025 were $122.81 million, a 34% decrease from $186.02 million in Q1 2024, resulting in diluted EPS of $1.69, down 33% year-over-year[4] - Total homes closed in Q1 2025 were 3,416, generating revenue of $1.34 billion, down from 3,507 homes and $1.47 billion in Q1 2024, representing a 2.6% decrease in homes closed and a 8.5% decrease in revenue[23] - Net earnings for Q1 2025 were $122.8 million, a decrease of 34% compared to $186.0 million in Q1 2024[21] Sales and Orders - The average sales price for home closings was $393,000, a 6% decrease from $418,000 in the previous year, while home order value decreased by 4% to $1.56 billion[4] - Homes ordered in Q1 2025 totaled 3,876 with a value of $1.56 billion, compared to 3,991 homes valued at $1.63 billion in Q1 2024, indicating a 2.9% decrease in orders[23] - The order backlog as of March 31, 2025, was 2,004 homes valued at $812.4 million, down from 3,033 homes valued at $1.24 billion in the same period last year, reflecting a 33.9% decrease in backlog value[23] Operational Metrics - Ending backlog units fell by 34% to 2,004 units, with a backlog value of $812.36 million, down 35% from the previous year[4] - The company achieved a home closing gross margin of 22.0%, a decrease of 380 basis points from 25.8% in the prior year, attributed to increased financing incentives and higher lot costs[8] - Selling, general and administrative expenses as a percentage of home closing revenue increased to 11.3% in Q1 2025 from 10.4% in Q1 2024, due to higher technology and start-up costs[10] - Active communities increased to 290 in Q1 2025 from 275 in Q1 2024, showing a growth of 5.5%[23] Debt and Cash Management - Meritage Homes issued $500 million in new debt during the quarter, maintaining a net debt-to-capital ratio of 13.7%[7] - The debt-to-capital ratio increased to 26.1% in Q1 2025 from 20.6% in Q1 2024, indicating a rise in leverage[28] - The company reported cash and cash equivalents of $1 billion as of March 31, 2025, compared to $652 million at the end of 2024[10] - The company reported a net cash used in operating activities of $42.6 million in Q1 2025, a significant decline from $81.9 million provided in Q1 2024[21] - The company issued $497.2 million in senior notes during Q1 2025, contributing to a net cash provided by financing activities of $414.1 million[21] Future Outlook - For full year 2025, Meritage Homes is guiding home closing volume between 16,250 and 16,750 units, with expected revenue of $6.6 to $6.9 billion[12] - Meritage Homes Corporation is focused on expanding its market share and anticipates growth in home closing volume and revenue for the full year 2025[31] - The company added nearly 2,200 net new lots in Q1 2025, bringing total lots owned or controlled to approximately 84,200[10]