Financial Performance - In Q2 2025, net earnings attributable to the company were $477.4 million, or $1.81 per diluted share, down from $954.3 million, or $3.45 per diluted share in Q2 2024[150]. - Total revenues for Q2 2025 were $8.38 billion, compared to $8.77 billion in Q2 2024, reflecting a decrease of approximately 4.4%[151][153]. - The company's operating earnings for Q2 2025 were $817.9 million, a decrease from $1.44 billion in Q2 2024[150][153]. - Revenues from home sales decreased by 7% in Q2 2025 to $7.8 billion from $8.4 billion in Q2 2024, primarily due to a 9% decrease in average sales price[155]. - Gross margins on home sales were $1.4 billion, or 17.8%, in Q2 2025, compared to $1.9 billion, or 22.6%, in Q2 2024, driven by increased land costs[156]. - Selling, general and administrative expenses rose to $688.8 million in Q2 2025, up from $629.6 million in Q2 2024, increasing as a percentage of revenues from 7.5% to 8.8%[157]. - Gross margins for the six months ended May 31, 2025, were $2.7 billion, or 18.2%, compared to $3.4 billion, or 22.2%, in the same period of 2024[164]. - Operating loss for the Lennar Other segment was $142.2 million in the six months ended May 31, 2025, compared to a loss of $67.4 million in the same period of 2024, primarily due to technology investment losses[168]. Home Deliveries and Sales - The company anticipates selling and delivering between 22,000 and 23,000 homes in Q3 2025, with an expected average sales price between $380,000 and $385,000[147]. - For the full year 2025, the company expects to deliver at the low end of the previously stated range of 86,000 to 88,000 homes[147]. - New home deliveries increased to 20,131 homes in Q2 2025 from 19,690 homes in Q2 2024, indicating a 2% growth in delivery volume[155]. - Total home deliveries for the three months ended May 31, 2025, were 20,131 homes, a 2.2% increase from 19,690 homes in the same period of 2024, with a total dollar value of $7,839,327 thousand[172]. - The company experienced a total of 37,965 home deliveries for the six months ended May 31, 2025, compared to 36,488 homes in the same period of 2024, with a dollar value of $15,120,856 thousand[173]. - New orders for homes totaled 22,601 for the three months ended May 31, 2025, a 6.1% increase from 21,293 homes in the same period of 2024, with a total dollar value of $8,575,263 thousand[176]. - The cancellation rate for new orders was 14% for Q2 2025, slightly up from 13% in Q2 2024[177]. - The backlog of homes at May 31, 2025, was 15,538 homes, with a total dollar value of $6,484,490 thousand, down from 17,873 homes valued at $8,233,335 thousand in 2024[178]. Market Conditions and Strategy - The company is focusing on a land-light balance sheet strategy to improve capital efficiency and predictability in land banking[145]. - Construction costs have decreased over the past two and a half years, contributing to expectations of margin stabilization[144]. - The company is investing in technology-enabled solutions to enhance productivity and efficiencies across its operations[146]. - The company reported a margin expectation of approximately 18% for Q3 2025, depending on market conditions[147]. - The company noted that the increase in home deliveries in the South Central segment was primarily due to the Rausch acquisition, which expanded the number of active communities[183]. Acquisitions and Investments - The company completed the acquisition of Rausch Coleman Homes on February 10, 2025, enhancing its market presence[154]. - The acquisition of Rausch, a residential homebuilder, on February 10, 2025, expanded the company's market presence into Arkansas, Oklahoma, Alabama, and Kansas/Missouri[207]. - The company completed a spin-off of Millrose on February 7, 2025, distributing approximately 80% of Millrose's stock to stockholders and contributing $5.6 billion in land assets and $1.0 billion in cash[206]. Financial Services and Debt - The Financial Services segment originated $4.877 billion in mortgages in Q2 2025, a slight decrease from $4.998 billion in Q2 2024, with a consistent mortgage capture rate of 85%[191]. - Cash and cash equivalents decreased to $1.5 billion at May 31, 2025, down from $5.0 billion at November 30, 2024, and $3.9 billion at May 31, 2024[194]. - Cash used in operating activities totaled ($1.4) billion for the six months ended May 31, 2025, compared to $610 million provided in the same period of 2024, impacted by increased inventories and decreased accounts payable[196]. - Cash provided by investing activities was $183 million for the six months ended May 31, 2025, compared to cash used of ($275) million in the same period of 2024[198]. - Cash used in financing activities totaled $2.3 billion for the six months ended May 31, 2025, down from $3.0 billion in the same period of 2024, primarily due to stock repurchases and debt repayments[201]. - As of May 31, 2025, Homebuilding debt to total capital increased to 11.0% from 7.5% on November 30, 2024, primarily due to a decrease in stockholders' equity and outstanding borrowings[204]. - The average debt outstanding for Homebuilding was $2,528,378 thousand with an average interest rate of 4.9% for the six months ended May 31, 2025[208]. - The company issued $700 million in 5.20% senior notes due 2030, with proceeds used to pay off $500 million of 4.75% senior notes due May 2025[209]. - As of May 31, 2025, the company had total commitments of $3,025,000 thousand under its Credit Facility, with a maximum borrowing capacity of $3,500,000 thousand[211]. - The company maintained a minimum consolidated tangible net worth of $16,545,782 thousand, exceeding the covenant requirement of $10,000,000 thousand as of May 31, 2025[212]. Shareholder Returns and Equity - The company declared a quarterly cash dividend of $0.50 per share on both Class A and Class B common stock, payable on July 18, 2025[217]. - During the six months ended May 31, 2025, treasury shares increased by 10.6 million shares due to the repurchase of 9.9 million shares of Class A and Class B common stock[215]. - As of May 31, 2025, the company had equity investments in 54 active Homebuilding and land unconsolidated entities, an increase from 51 entities at November 30, 2024[222]. Joint Ventures and Strategic Investments - Total JV debt as of May 31, 2025, is $1,419,805,000, with principal maturities of $224,027,000 in 2025, $168,836,000 in 2026, $420,179,000 in 2027, and $612,922,000 thereafter[224]. - Multifamily segment total JV debt is $2,428,055,000, with principal maturities of $221,597,000 in 2025, $1,134,528,000 in 2026, $777,565,000 in 2027, and $315,555,000 thereafter[229]. - The company has a 40% interest in FivePoint Holdings, LLC, which manages three large multi-use properties in California[224]. - As of May 31, 2025, the company had strategic technology investments in unconsolidated entities totaling $235.1 million, down from $239.3 million as of November 30, 2024[231]. - The company controlled 520,065 homesites as of May 31, 2025, representing 98% of total homesites, compared to 339,556 homesites (79%) in the previous year[233]. - Borrowings under Financial Services' warehouse repurchase facilities totaled $1.2 billion under residential facilities and $80.4 million under LMF Commercial facilities as of May 31, 2025[239]. - The company retained the right to receive a portion of payments related to carried interests from the Rialto investment, with an investment totaling $132.9 million as of May 31, 2025[230]. - There was a decrease of $515 million in borrowings under Financial Services' warehouse repurchase facilities and a decrease of $449 million in land purchase contract obligations[235]. - The average interest rate for fixed-rate senior notes and other debt payable is 5.0%, with variable-rate borrowings at an average interest rate of 2.8%[241].
Lennar(LEN_B) - 2025 Q2 - Quarterly Report