M/I Homes(MHO) - 2025 Q2 - Quarterly Results

Financial & Operational Highlights 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] - The company repurchased $50 million of its common stock during the second quarter[7] Management Commentary 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] - The company maintains a very strong balance sheet with $800 million in cash, zero borrowings under its $650 million credit facility, and a homebuilding debt-to-capital ratio of 18%[6][8] - M/I Homes is strategically investing in operations and is on track to grow its average community count by approximately 5% in 2025[8] Financial Statements Financial statements show increased Q2 revenue but decreased operating income, with a robust balance sheet and lower cash from operations Summary Statement of Income Q2 2025 total revenue increased, but net income decreased due to lower gross margin and higher SG&A, with diluted EPS declining Q2 Ended June 30 | Metric (Q2 Ended June 30) | 2025 ($ 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 | $9.90 | Summary Balance Sheet As of June 30, 2025, the balance sheet shows strong total assets and shareholders' equity, with increased inventory and an improved debt-to-capital ratio As of June 30 | Metric (As of June 30) | 2025 ($ 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 | $100.03 | - The homebuilding debt-to-capital ratio improved from 20% to 18% year-over-year[15][16] Supplemental Financial and Operating Data For H1 2025, cash from operating activities decreased, while land/lot purchases increased, and financial services pre-tax income showed growth Six Months Ended June 30 | Metric (Six Months Ended June 30) | 2025 ($ 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 | $26.7 | Non-GAAP Financial Results Adjusted EBITDA, a non-GAAP measure, declined for both Q2 and the six-month period in 2025, reflecting an overall decrease in profitability Adjusted EBITDA | Period | 2025 ($ Millions) | 2024 ($ Millions) | | :--- | :--- | :--- | | Q2 Adjusted EBITDA | $169.4 | $199.8 | | H1 Adjusted EBITDA | $323.4 | $386.6 | Regional Operating Performance 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] - 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] 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 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] - 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][10]