NVR(NVR) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements This section provides NVR, Inc.'s unaudited condensed consolidated financial statements and comprehensive notes for the specified periods Condensed Consolidated Balance Sheets (unaudited) The unaudited balance sheets reflect a decrease in total assets and shareholders' equity, primarily due to reduced cash - Total assets decreased by approximately $441.6 million from December 31, 2024, to June 30, 2025, primarily driven by a significant reduction in homebuilding cash and cash equivalents[10] Condensed Consolidated Balance Sheets (unaudited) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $5,939,339 | $6,380,988 | | Homebuilding Cash and cash equivalents | $1,726,865 | $2,561,339 | | Homebuilding Inventory | $2,170,040 | $2,058,707 | | Mortgage Banking Mortgage loans held for sale, net | $415,974 | $355,209 | | Total Liabilities | $2,094,208 | $2,170,916 | | Homebuilding Senior notes | $910,145 | $911,118 | | Total Shareholders' Equity | $3,845,131 | $4,210,072 | Condensed Consolidated Statements of Income (unaudited) The unaudited income statements indicate a significant decrease in net income and diluted earnings per share across all periods - Net income decreased by 17% for the three months ended June 30, 2025, and by 20% for the six months ended June 30, 2025, compared to the respective prior year periods[16] - Diluted EPS decreased by 10% for the three months ended June 30, 2025, and by 14% for the six months ended June 30, 2025, compared to the respective prior year periods[16] Condensed Consolidated Statements of Income (unaudited) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Homebuilding Revenues | $2,548,267 | $2,547,891 | $4,898,712 | $4,834,068 | | Homebuilding Income | $417,517 | $488,536 | $787,001 | $930,214 | | Mortgage Banking Income | $29,616 | $45,032 | $62,136 | $74,046 | | Net Income | $333,737 | $400,904 | $633,313 | $795,173 | | Basic earnings per share | $114.52 | $128.21 | $214.78 | $251.94 | | Diluted earnings per share | $108.54 | $120.69 | $203.20 | $237.05 | Condensed Consolidated Statements of Cash Flows (unaudited) The unaudited cash flow statements show a notable decrease in operating cash flow and increased cash used in investing activities - Net cash provided by operating activities decreased by approximately 36% year-over-year for the six months ended June 30, 2025[19] - Net cash used in investing activities significantly increased from $11.1 million in 2024 to $50.3 million in 2025, primarily due to higher investments in unconsolidated joint ventures[19] Condensed Consolidated Statements of Cash Flows (unaudited) | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net cash provided by operating activities | $242,886 | $379,150 | | Net cash used in investing activities | $(50,264) | $(11,145) | | Net cash used in financing activities | $(1,027,364) | $(1,054,503) | | Net decrease in cash, restricted cash, and cash equivalents | $(834,742) | $(686,498) | | Cash, restricted cash, and cash equivalents, end of period | $1,829,925 | $2,528,946 | Notes to Condensed Consolidated Financial Statements (unaudited) This section provides detailed explanatory notes supporting the condensed consolidated financial statements 1. Significant Accounting Policies This note outlines NVR's key accounting policies, including revenue recognition and the evaluation of new accounting standards - Homebuilding revenue is recognized on the settlement date when control is transferred to customers[22] - The company is evaluating the impact of new FASB ASUs 2024-03 (Expense Disaggregation Disclosures) and 2023-09 (Improvements to Income Tax Disclosures), with ASU 2023-09 not expected to have a material impact[23][24][26] Contract Liabilities | Contract Liabilities | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------- | :----------------------------- | :------------------------------- | | Customer deposits | $295,145 | $322,926 | 2. Variable Interest Entities ("VIEs") This note details NVR's involvement with Variable Interest Entities through Lot Purchase Agreements and associated financial risks - NVR typically acquires finished building lots from third-party land development entities under Lot Purchase Agreements (LPAs), which are considered variable interests in VIEs, and NVR does not consolidate these VIEs[27][28] - Pre-tax impairment charges on lot deposits were approximately $13.2 million for Q2 2025 and $21.3 million for H1 2025, compared to a net expense reversal of $1.3 million for Q2 2024 and $8.8 million for H1 2024[29] Variable Interest Entities | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Lots controlled under LPAs | 162,100 | N/A | | Contract land deposits, net | $837,845 | $726,675 | | Allowance for losses on contract land deposits | $(76,393) | $(58,597) | | Total risk of loss | $842,047 | $735,397 | 3. Joint Ventures This note describes NVR's limited use of joint ventures for lot acquisition and related investment and commitments - NVR uses joint venture limited liability corporations (JVs) on a limited basis to obtain finished lots, acting as a non-controlling member with risk limited to investment/commitments[32][34] Joint Ventures | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Aggregate investment in JVs | $65,500 | $29,300 | | Lots expected from JVs | 7,300 | N/A | | Additional JV funding commitments | $13,300 | N/A | 4. Land Under Development This note outlines NVR's direct acquisition and development of raw land parcels and related carrying values - NVR directly acquires raw land parcels for development on a limited basis[38] - During Q2 2025, NVR sold a land parcel for approximately $32.7 million and entered into an LPA for the option to purchase finished lots from the developer[39] Land Under Development | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Carrying value of land under development | $39,450 | $65,394 | | Finished lots to be developed | 2,350 | N/A | 5. Capitalized Interest This note explains NVR's policy for capitalizing interest costs related to land development and joint venture investments - NVR capitalizes interest costs to land under development and joint venture investments during active development[41] Capitalized Interest | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Interest capitalized, end of period | $556 | $206 | $556 | $206 | | Interest incurred | $7,257 | $6,962 | $14,989 | $13,841 | | Interest charged to interest expense | $(6,985) | $(6,898) | $(14,439) | $(13,724) | 6. Earnings per Share This note provides details on the calculation of basic and diluted earnings per share, including weighted average shares Earnings per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Weighted average number of shares outstanding used to calculate basic EPS | 2,914,319 | 3,126,831 | 2,948,719 | 3,156,247 | | Weighted average number of shares and share equivalents outstanding used to calculate diluted EPS | 3,074,869 | 3,321,654 | 3,116,757 | 3,354,519 | | Anti-dilutive securities | 8,690 | 4,864 | 8,660 | 4,894 | 7. Shareholders' Equity This note details changes in shareholders' equity, including retained earnings, treasury stock, and significant share repurchases - The company repurchased 65,834 shares ($475.8 million) during Q2 2025 and 142,954 shares ($1.06 billion) during H1 2025[48][46] Shareholders' Equity | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Shareholders' Equity | $3,845,131 | $4,210,072 | | Retained earnings | $15,680,266 | $15,046,953 | | Treasury stock at cost | $(14,921,245) | $(13,868,724) | 8. Product Warranties This note describes NVR's product warranty and liability reserves for estimated future construction and product defect expenses - NVR establishes warranty and product liability reserves for estimated future expenses related to construction and product defects[52] Product Warranties | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Warranty reserve, end of period | $127,440 | $143,341 | $127,440 | $143,341 | | Provision | $20,665 | $23,273 | $37,899 | $42,221 | | Payments | $(23,017) | $(23,061) | $(43,554) | $(45,163) | 9. Segment Disclosures This note provides financial information for NVR's four homebuilding segments and one mortgage banking segment - NVR operates four homebuilding segments (Mid Atlantic, North East, Mid East, South East) and one mortgage banking segment[54][56] Segment Revenues | Segment Revenues | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Homebuilding Mid Atlantic | $1,128,874 | $1,133,685 | $2,211,109 | $2,151,155 | | Homebuilding North East | $308,929 | $287,334 | $597,755 | $543,004 | | Homebuilding Mid East | $449,953 | $433,996 | $862,362 | $850,947 | | Homebuilding South East | $660,511 | $692,876 | $1,227,486 | $1,288,962 | | Mortgage Banking | $50,547 | $64,566 | $103,134 | $111,852 | | Total consolidated revenues | $2,598,814 | $2,612,457 | $5,001,846 | $4,945,920 | Segment Profit | Segment Profit | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Homebuilding Mid Atlantic | $191,390 | $209,166 | $378,223 | $399,130 | | Homebuilding North East | $57,964 | $54,372 | $113,075 | $101,229 | | Homebuilding Mid East | $61,729 | $63,588 | $115,338 | $129,989 | | Homebuilding South East | $51,518 | $94,442 | $97,248 | $185,847 | | Mortgage Banking | $30,825 | $46,234 | $64,531 | $75,890 | | Total segment profit | $393,426 | $467,802 | $768,415 | $892,085 | 10. Fair Value This note details the fair value measurements for NVR's financial instruments, including senior notes and derivative instruments - NVRM uses derivative instruments (rate lock commitments and forward sale contracts) to mitigate interest rate risk, marking them to fair value through earnings[72] Senior Notes | Financial Instrument | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------- | :----------------------------- | :------------------------------- | | Senior Notes (Fair Value) | $838,476 | $811,161 | | Senior Notes (Carrying Value) | $910,145 | $911,118 | Derivative Instruments (Net) | Derivative Instruments (Net) | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------- | :----------------------------- | :------------------------------- | | Net rate lock commitments | $46,804 | $9,196 | | Net forward sales contracts | $(11,422) | $5,700 | 11. Debt This note outlines NVR's debt structure, including Senior Notes, revolving credit facility, and mortgage repurchase agreement - NVR has $900 million in Senior Notes outstanding, maturing in May 2030, bearing 3.00% interest[81][84] - A $300 million senior unsecured revolving credit facility was amended in March 2025, extending maturity to March 2030, with no borrowings outstanding as of June 30, 2025[85][86] - NVRM has a $150 million revolving mortgage repurchase agreement, extended through July 2026, with no borrowings outstanding as of June 30, 2025[87][88] 12. Commitments and Contingencies This note addresses NVR's commitments and contingencies, stating that current litigation is not expected to have a material adverse effect - Management believes current litigation will not have a material adverse effect on financial position, results of operations, or cash flows[89] 13. Leases This note details NVR's operating and finance lease arrangements, including associated lease expenses and terms - NVR has operating and finance leases for offices, production facilities, model homes, and equipment, with remaining lease terms up to 15.2 years[90] Lease Expense | Lease Expense | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Operating lease expense | $10,547 | $9,514 | $20,864 | $18,861 | | Finance lease expense | $1,887 | $1,006 | $3,671 | $1,681 | | Short-term lease expense | $8,380 | $8,179 | $16,687 | $16,079 | | Total lease expense | $20,814 | $18,699 | $41,222 | $36,621 | 14. Income Taxes This note provides information on NVR's effective tax rate and factors influencing its changes, such as stock option benefits - The increase in the effective tax rate for 2025 periods is primarily due to a lower income tax benefit from excess tax benefits from stock option exercises[94] Effective Tax Rate | Effective Tax Rate | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective tax rate | 25.4% | 24.9% | 25.4% | 20.8% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on NVR's financial condition and operational results for the three and six months ended June 30, 2025, compared to 2024 Forward-Looking Statements This section cautions that the report contains forward-looking statements subject to various known and unknown risks and uncertainties - The report contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[95] - Risk factors include general economic conditions, interest rate changes, financing access, competition, land/raw material costs, labor shortages, and governmental regulation[95] Business Environment and Current Outlook This section discusses the challenging business environment, including affordability issues, and NVR's strategic positioning for market volatility - Demand for new homes in Q2 2025 was negatively impacted by affordability issues, rising inventory, declining consumer confidence, and economic volatility[97] - The company expects continued margin pressure due to affordability issues and cost pressures but believes its strong balance sheet and disciplined lot acquisition strategy position it well for future market volatility[97] Business This section describes NVR's core homebuilding business, operating segments, and disciplined lot acquisition strategy via LPAs - NVR's primary business is the construction and sale of single-family detached homes, townhomes, and condominiums, primarily on a pre-sold basis, supported by mortgage banking and title services[98] - The company operates in four homebuilding segments: Mid Atlantic, North East, Mid East, and South East[98][99] - NVR's lot acquisition strategy focuses on acquiring finished lots from third-party developers via LPAs with forfeitable deposits, minimizing direct land ownership risks[99] Lot Control Method | Lot Control Method | Lots Controlled (as of June 30, 2025) | | :-------------------------- | :------------------------------------ | | LPAs with third parties | 162,100 | | Joint Ventures (JVs) | 6,950 | | Land Under Development | 2,350 | | Total Controlled Lots | 171,400 | Key Financial Results This section summarizes NVR's key financial results, highlighting decreases in net income, diluted EPS, and new orders - The average sales price for New Orders remained relatively flat year-over-year in Q2 2025[107] Key Financial Results | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :-------------------------- | :--------------------- | :--------------------- | :--------- | | Consolidated Revenues | $2,598,814 | $2,612,457 | -0.5% | | Net Income | $333,737 | $400,904 | -16.8% | | Diluted EPS | $108.54 | $120.69 | -10.0% | | Homebuilding Gross Profit Margin | 21.5% | 23.6% | -2.1 ppt | | New Orders (units) | 5,379 | 6,067 | -11.3% | | New Order Cancellation Rate | 16.5% | 12.9% | +3.6 ppt | Homebuilding Operations This section provides an overview of NVR's consolidated and segment-specific homebuilding operational performance Consolidated Homebuilding - Three Months Ended June 30, 2025 and 2024 Consolidated homebuilding operations for Q2 2025 show flat revenues, decreased gross profit margin, and lower new orders - Homebuilding revenues remained flat in Q2 2025 compared to Q2 2024[109] - Gross profit margin decreased to 21.5% from 23.6% due to higher lot costs, pricing pressure, and a $13.2 million lot deposit impairment charge[109] - New Orders decreased 11% due to a 2% decrease in active communities and a 10% lower sales absorption rate[110] - SG&A expense increased by $8 million and as a percentage of revenue to 5.9% from 5.5%, driven by higher sales and marketing expenses and increased headcount[111] Consolidated Homebuilding - Six Months Ended June 30, 2025 and 2024 Consolidated homebuilding operations for H1 2025 reflect increased revenues, decreased gross profit margin, and reduced backlog - Homebuilding revenues increased 1% in H1 2025, driven by a 3% increase in average settlement price, partially offset by a 1% decrease in units settled[112] - Gross profit margin decreased to 21.7% from 24.0% due to higher lot costs, pricing pressure, and a $21.3 million lot deposit impairment charge (compared to an $8.8 million expense reversal in H1 2024)[112] - New Orders decreased 11% and average sales price decreased 1%, impacted by a 4% decrease in active communities and an 8% lower sales absorption rate[113] - Backlog decreased by 13% in units (to 10,069) and dollars (to $4.75 billion) as of June 30, 2025, compared to June 30, 2024, primarily due to lower new orders[115] - The cancellation rate increased to 16% in H1 2025 from 13% in H1 2024[116] Reportable Segments This section provides a comparative overview of NVR's homebuilding segment performance, including new orders and gross profit margins New Orders by Segment | Segment | Q2 2025 New Orders (Units) | Q2 2024 New Orders (Units) | H1 2025 New Orders (Units) | H1 2024 New Orders (Units) | | :---------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Mid Atlantic | 1,930 | 2,297 | 3,796 | 4,579 | | North East | 424 | 478 | 801 | 1,005 | | Mid East | 1,072 | 1,262 | 2,170 | 2,525 | | South East | 1,953 | 2,030 | 3,957 | 4,007 | | Total | 5,379 | 6,067 | 10,724 | 12,116 | Gross Profit Margin by Segment | Segment | Q2 2025 Gross Profit Margin (%) | Q2 2024 Gross Profit Margin (%) | H1 2025 Gross Profit Margin (%) | H1 2024 Gross Profit Margin (%) | | :---------------- | :------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Mid Atlantic | 23.5% | 24.7% | 23.8% | 25.2% | | North East | 26.2% | 26.5% | 26.3% | 26.4% | | Mid East | 21.0% | 21.8% | 20.7% | 22.2% | | South East | 18.7% | 22.2% | 19.2% | 23.3% | Total Lots Controlled by Segment | Segment | June 30, 2025 Total Lots Controlled | December 31, 2024 Total Lots Controlled | | :---------------- | :---------------------------------- | :------------------------------------ | | Mid Atlantic | 55,700 | 50,900 | | North East | 17,500 | 17,000 | | Mid East | 25,300 | 24,100 | | South East | 72,900 | 70,400 | | Total | 171,400 | 162,400 | Mid Atlantic Segment The Mid Atlantic segment experienced decreased profit and gross profit margins, alongside a reduction in new orders - Q2 2025 segment profit decreased 9% due to lower gross profit margins (23.5% vs 24.8%) caused by higher lot costs and pricing pressure[127] - Q2 2025 New Orders decreased 16%, primarily due to a 21% decrease in active communities, partially offset by a 7% higher sales absorption rate[128] - H1 2025 segment profit decreased 5% due to lower gross profit margins (23.8% vs 25.2%), despite a 3% increase in segment revenues[129] North East Segment The North East segment reported increased profit and revenues, driven by higher average settlement prices despite fewer new orders - Q2 2025 segment profit increased 7% due to an 8% increase in segment revenues, driven by an 11% increase in average settlement price[131] - Q2 2025 New Orders decreased 11%, impacted by a 16% decrease in active communities, but average sales price increased 5% due to a shift to higher-priced communities[132] - H1 2025 segment profit increased 12% due to a 10% increase in segment revenue, favorably impacted by an 11% increase in average settlement price[133] Mid East Segment The Mid East segment saw decreased profit due to lower gross margins and reduced new orders, despite increased revenues - Q2 2025 segment profit decreased 3% due to lower gross profit margins (21.0% vs 21.8%), despite a 4% increase in segment revenues[136] - Q2 2025 New Orders decreased 15%, affected by a 7% decrease in active communities and a 9% lower sales absorption rate, but average sales price increased 5%[137] - H1 2025 segment profit decreased 11% due to lower gross profit margins (20.7% vs 22.2%), impacted by higher lot and operating costs and pricing pressure[138] South East Segment The South East segment experienced a substantial profit decrease, driven by lower gross margins, reduced revenues, and higher SG&A - Q2 2025 segment profit decreased 45% due to lower gross profit margins (18.7% vs 22.2%), a 5% decrease in revenues, and 19% higher SG&A expenses[140] - Gross profit margins were negatively impacted by higher lot costs, increased operating costs, pricing pressure, and $2.4 million higher lot deposit impairment charges[140] - Q2 2025 New Orders decreased 4%, impacted by a 23% lower absorption rate, despite a 25% increase in active communities[141] - H1 2025 segment profit decreased 48% due to similar factors as Q2, including a 5% revenue decrease and 20% higher SG&A expenses[142] Homebuilding Segment Reconciliations to Consolidated Homebuilding Operations This section reconciles segment profit to consolidated income before tax, detailing various adjustments and corporate allocations - Reconciling items between segment profit and consolidated income before tax include contract land deposit adjustments, equity-based compensation, corporate capital allocation, unallocated corporate overhead, consolidation adjustments, and corporate interest income/expense[145] Reconciling Items | Reconciling Item | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :------------------------------------ | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Contract land deposit reserve adjustment | $(13,153) | $1,325 | $(21,270) | $8,791 | | Equity-based compensation expense | $(16,604) | $(16,899) | $(33,944) | $(33,398) | | Corporate capital allocation | $91,898 | $82,494 | $179,525 | $159,555 | | Unallocated corporate overhead | $(34,364) | $(33,816) | $(90,333) | $(85,520) | | Corporate interest income | $20,276 | $34,171 | $45,475 | $73,764 | | Corporate interest expense | $(6,675) | $(6,670) | $(13,806) | $(13,265) | Mortgage Banking Segment The Mortgage Banking segment, NVRM, exclusively serves homebuilding customers, showing decreased profit despite stable loan closing volume - NVRM, a wholly-owned subsidiary, exclusively serves homebuilding customers and sells almost all mortgage loans to secondary markets on a servicing-released basis[148] - Q2 2025 segment profit decreased 33% due to a 22% decrease in mortgage banking fees, primarily from lower gains on sales of loans[149] - H1 2025 segment profit decreased 15% due to an 8% decrease in mortgage banking fees[150] Mortgage Banking Segment | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Loan closing volume (principal) | $1,555,280 | $1,530,081 | $2,988,201 | $2,908,090 | | Segment profit | $30,825 | $46,234 | $64,531 | $75,890 | | Mortgage banking income before tax | $29,616 | $45,032 | $62,136 | $74,046 | | Capture rate | 87% | 86% | 87% | 86% | | Net gain on sale of loans | $39,868 | $53,695 | $82,519 | $91,150 | Seasonality This section discusses NVR's historical seasonal trends for new orders and settlements, noting recent market condition impacts - NVR historically experiences higher New Order activity in the first half of the year and higher home settlements, revenue, and net income in the second half[151] - Recent market conditions have affected typical seasonal trends, making quarterly results not necessarily indicative of full-year performance[151] Effective Tax Rate This section details NVR's effective tax rate, highlighting the increase due to reduced stock option tax benefits and expected volatility - The increase in the effective tax rate for 2025 periods is primarily due to a lower income tax benefit from stock option exercises ($3.5 million in Q2 2025 vs $6.8 million in Q2 2024; $6.2 million in H1 2025 vs $50.6 million in H1 2024)[152] - Tax rate volatility is expected to continue due to equity-based awards and deferred compensation plan distributions[153] Effective Tax Rate | Effective Tax Rate | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------- | :------ | :------ | :------ | :------ | | Effective tax rate | 25.4% | 24.9% | 25.4% | 20.8% | Liquidity and Capital Resources This section outlines NVR's liquidity and capital resources, including cash, credit facilities, and significant share repurchase activities - NVR funds operations primarily from cash holdings and operating cash flows, supplemented by a revolving credit facility and mortgage repurchase facility[154] - Material cash requirements include debt service ($900 million Senior Notes due 2030), $598.9 million for existing LPAs, and obligations under operating and finance leases[155] - NVR repurchased 142,954 shares for $1.05 billion in H1 2025 under its common stock repurchase program[156][163] - Cash flows for H1 2025 show a net decrease of $834.7 million, with $242.9 million from operating activities, $50.3 million used in investing, and $1.03 billion used in financing[161][162][163] Liquidity Metric (as of June 30, 2025) | Liquidity Metric (as of June 30, 2025) | Amount (in thousands) | | :------------------------------------- | :-------------------- | | Cash and cash equivalents | $1,800,000 | | Unused committed capacity (revolving credit facility) | $289,700 | | Unused committed capacity (mortgage repurchase facility) | $150,000 | | Available under share repurchase authorizations | $563,400 | Critical Accounting Estimates This section confirms no material changes to NVR's critical accounting estimates since the prior annual report - There have been no material changes to critical accounting estimates as previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[164] Item 3. Quantitative and Qualitative Disclosure About Market Risk This section states that there have been no material changes in NVR's market risks during the six months ended June 30, 2025, referring to the Annual Report on Form 10-K for further details - No material changes in market risks occurred during the six months ended June 30, 2025[165] Item 4. Controls and Procedures This section confirms that NVR's management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures, concluding they were effective as of June 30, 2025 - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[166] - No material changes to internal control over financial reporting occurred in the last fiscal quarter[166] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section states that NVR is involved in various litigation matters in the ordinary course of business, but management believes these are not expected to have a material adverse effect - Ongoing litigation is not expected to materially adversely affect NVR's financial position, results of operations, or cash flows[168] Item 1A. Risk Factors This section indicates that there have been no material changes to the risk factors previously disclosed in NVR's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors were reported since the December 31, 2024, Annual Report on Form 10-K[169] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details NVR's common stock repurchase activity during the second quarter of 2025, including the full utilization of a previous authorization and the approval of a new $750 million repurchase authorization - NVR fully utilized its $750 million share repurchase authorization (announced December 11, 2024) during Q2 2025[170] - A new $750 million share repurchase authorization was approved by the Board of Directors on May 6, 2025, with no expiration date[170] Common Stock Repurchase Activity | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----------------- | :------------------------------- | :--------------------------- | | April 1 - 30, 2025 | 22,084 | $7,129.12 | | May 1 - 31, 2025 | 22,242 | $7,179.79 | | June 1 - 30, 2025 | 21,508 | $7,173.20 | | Total Q2 2025 | 65,834 | $7,160.64 | Item 5. Other Information This section confirms that no director or officer of the company adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2025[171] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including amendments to repurchase agreements, certifications from the CEO and CFO, and XBRL-related documents - Exhibits include the Fourth Amendment to Second Amended and Restated Master Repurchase Agreement, CEO and CFO certifications (Sections 302 and 906 of Sarbanes-Oxley Act), and XBRL Instance Document and Taxonomy Extension Documents[172] SIGNATURE This section contains the signature block, confirming that the report was duly caused to be signed on behalf of NVR, Inc. by Daniel D. Malzahn, Senior Vice President, Chief Financial Officer and Treasurer, on August 6, 2025 - The report was signed by Daniel D. Malzahn, Senior Vice President, Chief Financial Officer and Treasurer, on August 6, 2025[176]