PulteGroup(PHM) - 2025 Q2 - Quarterly Results

markdown [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) PulteGroup reported second-quarter 2025 net income of $608 million, or $3.03 per diluted share, a decrease from $809 million, or $3.83 per share, in the prior year, navigating a competitive market by aligning production with demand, achieving a gross margin of 27.0%, and returning $300 million to shareholders via share repurchases, while maintaining a strong financial position with a debt-to-capital ratio of 11.4% and a cash balance of $1.3 billion despite a 4% decrease in home sale revenues to $4.3 billion and a 6% drop in closings Q2 2025 Key Financial Metrics vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $608 million | $809 million | -24.8% | | Diluted EPS | $3.03 | $3.83 | -20.9% | | Home Sale Revenues | $4.3 billion | $4.4 billion | -4% | | Closings (units) | 7,639 | 8,097 | -6% | | Home Sale Gross Margin | 27.0% | 29.9% | -290 bps | | Net New Orders (units) | 7,083 | 7,649 | -7% | - CEO Ryan Marshall noted that despite challenges from high interest rates and economic concerns, the company saw a positive consumer response to interest rate pullbacks and has aligned its production and land investment to serve current demand while positioning for future growth[4](index=4&type=chunk)[5](index=5&type=chunk) - The company continued its capital return program, repurchasing **3.0 million common shares** for **$300 million** in the second quarter, with year-to-date spending of **$600 million** on repurchasing **5.8 million shares**[3](index=3&type=chunk)[10](index=10&type=chunk) - PulteGroup ended the quarter with a strong balance sheet, featuring **$1.3 billion in cash** and a debt-to-capital ratio lowered to **11.4%**[6](index=6&type=chunk)[10](index=10&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's performance, financial position, and cash flows, with total revenues of $8.30 billion and net income of $1.13 billion for the six months ended June 30, 2025, total assets of $17.59 billion supported by $12.57 billion in shareholders' equity, and $421.7 million in cash generated from operating activities, while significant cash was used for share repurchases [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, total revenues decreased to $4.40 billion from $4.60 billion year-over-year, primarily due to a 4% decline in home sale revenues, consequently, net income fell to $608.5 million from $809.1 million in Q2 2024, resulting in diluted EPS of $3.03 compared to $3.83, with the prior year's results including a notable pre-tax insurance benefit and a tax benefit Consolidated Statements of Operations Highlights ($000's) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $4,403,755 | $4,599,655 | $8,296,406 | $8,548,815 | | Income before income taxes | $807,156 | $1,048,312 | $1,488,294 | $1,916,955 | | Net income | $608,483 | $809,133 | $1,131,282 | $1,472,109 | | Diluted earnings per share | $3.03 | $3.83 | $5.60 | $6.93 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, PulteGroup's total assets were $17.59 billion, a slight increase from $17.36 billion at the end of 2024, with the company's cash position decreasing to $1.27 billion from $1.65 billion, while house and land inventory grew to $13.22 billion, and shareholders' equity increased to $12.57 billion, reflecting retained earnings Condensed Consolidated Balance Sheet Highlights ($000's) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total cash, cash equivalents, and restricted cash | $1,267,326 | $1,653,680 | | House and land inventory | $13,216,008 | $12,692,820 | | Total Assets | $17,587,811 | $17,363,763 | | Notes payable | $1,623,065 | $1,618,586 | | Total Liabilities | $5,012,869 | $5,241,799 | | Total Shareholders' equity | $12,574,942 | $12,121,964 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash from operating activities was $421.7 million, a decrease from $657.3 million in the same period of 2024, mainly due to a larger increase in inventory, with the company using $768.9 million in financing activities, dominated by $600 million in share repurchases, resulting in a net decrease in cash of $386.4 million for the period Consolidated Cash Flow Highlights - Six Months Ended June 30 ($000's) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $421,733 | $657,264 | | Net cash used in investing activities | ($39,182) | ($66,201) | | Net cash used in financing activities | ($768,905) | ($994,274) | | **Net decrease in cash** | **($386,354)** | **($403,211)** | - Key uses of cash in financing activities for the first six months of 2025 included **$600 million for share repurchases** and **$90.1 million for dividend payments**[23](index=23&type=chunk) [Segment Data](index=7&type=section&id=Segment%20Data) The company's operations are divided into Homebuilding and Financial Services, with the Homebuilding segment's pre-tax income declining to $764.4 million in Q2 2025, and the Financial Services segment also seeing a decrease in pre-tax income to $42.8 million, impacted by lower closing volumes, while Homebuilding operations experienced a drop in closings and new orders across most regions [Homebuilding Operations](index=7&type=section&id=Homebuilding%20Operations) The Homebuilding segment's income before taxes for Q2 2025 was $764.4 million, down from $984.9 million in Q2 2024, with closings decreasing by 6% to 7,639 units, while net new orders fell 7% to 7,083 units, and the average selling price saw a slight increase to $559,000, with the quarter-end unit backlog standing at 10,779 homes valued at $6.8 billion, compared to 12,982 homes valued at $8.1 billion a year ago Q2 2025 Homebuilding Closings by Region (Units) | Region | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Northeast | 451 | 378 | +19.3% | | Southeast | 1,402 | 1,499 | -6.5% | | Florida | 1,882 | 2,150 | -12.5% | | Midwest | 1,272 | 1,196 | +6.4% | | Texas | 1,218 | 1,472 | -17.3% | | West | 1,414 | 1,402 | +0.9% | | **Total** | **7,639** | **8,097** | **-5.7%** | Q2 2025 Net New Orders by Region (Units) | Region | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Northeast | 384 | 400 | -4.0% | | Southeast | 1,405 | 1,396 | +0.6% | | Florida | 1,773 | 1,746 | +1.5% | | Midwest | 1,272 | 1,265 | +0.6% | | Texas | 1,042 | 1,275 | -18.3% | | West | 1,207 | 1,567 | -23.0% | | **Total** | **7,083** | **7,649** | **-7.4%** | - The unit backlog at the end of Q2 2025 was **10,779 homes** with a value of **$6.8 billion**, down from 12,982 homes valued at $8.1 billion a year ago[9](index=9&type=chunk)[28](index=28&type=chunk) [Financial Services Operations](index=7&type=section&id=Financial%20Services%20Operations) The Financial Services segment reported pre-tax income of $42.8 million for Q2 2025, a decrease from $63.4 million in the prior-year quarter, primarily due to lower home closing volumes, with the mortgage capture rate remaining strong at 84.8%, slightly down from 86.5% in Q2 2024, and origination principal largely flat year-over-year - Pre-tax income for the Financial Services segment was **$42.8 million** in Q2 2025, compared to $63.4 million in Q2 2024[9](index=9&type=chunk)[25](index=25&type=chunk) Q2 Mortgage Originations | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Origination Volume (loans) | 4,984 | 5,105 | | Origination Principal | $2,164,755,000 | $2,140,103,000 | | Capture Rate | 84.8% | 86.5% | [Supplemental Information and Non-GAAP Reconciliation](index=9&type=section&id=Supplemental%20Information%20and%20Non-GAAP%20Reconciliation) This section provides supplemental data on interest capitalization and a reconciliation of non-GAAP measures, with the company's debt-to-capital ratio improving to 11.4% at the end of Q2 2025, and the net debt-to-capital ratio standing at 2.8%, reflecting the company's low leverage [Supplemental Data (Interest)](index=9&type=section&id=Supplemental%20Data%20(Interest)) In the second quarter of 2025, PulteGroup capitalized $26.1 million of interest and expensed $29.0 million, with the total interest in inventory at the end of the period being $136.6 million, a decrease from $149.4 million at the same time last year Interest Incurred and Expensed ($000's) | Description | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Interest capitalized | $26,129 | $29,284 | | Interest expensed | ($29,046) | ($28,023) | [Reconciliation of Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) PulteGroup's debt-to-capital ratio improved to 11.4% as of June 30, 2025, down from 11.8% at the end of 2024, with the net debt-to-capital ratio at 2.8%, calculated by subtracting total cash from notes payable, which compares to a net cash position (negative 0.3% ratio) at year-end 2024, indicating a slight increase in net leverage but still a very strong balance sheet Debt-to-Capital Ratios Reconciliation ($000's) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Notes payable | $1,623,065 | $1,618,586 | | Shareholders' equity | $12,574,942 | $12,121,964 | | **Debt-to-capital ratio** | **11.4%** | **11.8%** | | Total net debt | $355,739 | ($35,094) | | **Net debt-to-capital ratio** | **2.8%** | **(0.3)%** |