PulteGroup(PHM) - 2025 Q3 - Quarterly Results

Third Quarter 2025 Financial Results Overview Key Financial Highlights PulteGroup's Q3 2025 net income decreased to $586 million, with home sale revenues down 2% to $4.2 billion Third Quarter 2025 Key Financial Highlights | Metric | Q3 2025 | Q3 2024 | | :------------------------- | :---------- | :---------- | | Net Income | $586 million | $698 million | | Diluted EPS | $2.96 | $3.35 | | Home Sale Revenues | $4.2 billion | $4.3 billion | | Home Sale Gross Margin | 26.2% | 28.8% | | SG&A Expense (% of revenue) | 9.4% | 9.4% | | Closings | 7,529 homes | (5% decrease) | | Average Sales Price | $564,000 | (3% increase) | | Net New Orders | 6,638 homes | (6% decrease) | | Value of Net New Orders | $3.6 billion | $3.9 billion | | Unit Backlog | 9,888 homes | | | Value of Backlog | $6.2 billion | | | Common Shares Repurchased | $300 million | | CEO Commentary CEO Ryan Marshall emphasized disciplined capital allocation and strong cash flow, positioning for future growth - PulteGroup remains disciplined in its long-term operating and financial strategies, managing production volumes and capital allocation to drive high returns over the housing cycle[3] - The company generated strong cash flow from operations and returned $344 million to shareholders through dividends and share repurchases in Q3[3] - PulteGroup's diversified business platform is enabling strong financial results and positioning the business for growth when buyer demand improves, despite impacts from weaker consumer confidence and affordability challenges[4] Operational Performance Q3 2025 home closings decreased 5%, net new orders declined 6%, with financial services income also falling Q3 2025 Operational Performance | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :-------------------------- | :---------- | :---------- | :----------- | | Closings (units) | 7,529 | 7,924 | -5% | | Average Sales Price | $564,000 | $548,000 | +3% | | Net New Orders (units) | 6,638 | 7,031 | -6% | | Value of Net New Orders | $3.6 billion | $3.9 billion | -7.7% | | Average Community Count | 1,002 | 954 | +5% | | Backlog (units) | 9,888 | 12,089 | -18.2% | | Value of Backlog | $6.2 billion | $7.69 billion | -19.4% | | Financial Services Pre-tax Income | $44 million | $55 million | -20% | | Mortgage Capture Rate | 84% | 87% | -3 percentage points | - The higher average sales price in Q3 2025 was driven by a shift in the geographic mix of homes closed compared to the prior year[4] - PulteGroup repurchased 2.4 million common shares for $300 million in Q3 2025, and 8.2 million shares for $900 million through the first nine months of 2025[9] Consolidated Financial Statements Consolidated Statements of Operations PulteGroup's consolidated statements of operations show a decrease in total revenues and net income for both the three and nine months ended September 30, 2025, compared to the prior year Consolidated Statements of Operations (Q3 2025 vs Q3 2024) | Metric | Q3 2025 ($000s) | Q3 2024 ($000s) | Change (YoY) | | :--------------------------------- | :-------------- | :-------------- | :----------- | | Home sale revenues | $4,248,375 | $4,343,227 | -2.2% | | Land sale and other revenues | $53,169 | $19,284 | +175.7% | | Financial Services revenues | $103,255 | $113,831 | -9.3% | | Total revenues | $4,404,799 | $4,476,342 | -1.6% | | Home sale cost of revenues | $(3,133,548) | $(3,091,267) | +1.4% | | SG&A expenses | $(400,681) | $(406,897) | -1.5% | | Income before income taxes | $767,788 | $906,196 | -15.2% | | Net income | $585,834 | $697,914 | -16.1% | | Diluted earnings per share | $2.96 | $3.35 | -11.6% | | Cash dividends declared per share | $0.22 | $0.20 | +10.0% | Consolidated Statements of Operations (9 Months Ended Sep 30, 2025 vs 2024) | Metric | 9M 2025 ($000s) | 9M 2024 ($000s) | Change (YoY) | | :--------------------------------- | :-------------- | :-------------- | :----------- | | Home sale revenues | $12,265,619 | $12,610,981 | -2.7% | | Land sale and other revenues | $140,345 | $96,327 | +45.7% | | Financial Services revenues | $295,241 | $317,848 | -7.1% | | Total revenues | $12,701,205 | $13,025,156 | -2.5% | | Home sale cost of revenues | $(8,968,112) | $(8,897,835) | +0.8% | | SG&A expenses | $(1,184,472) | $(1,125,637) | +5.2% | | Income before income taxes | $2,256,082 | $2,823,151 | -20.1% | | Net income | $1,717,115 | $2,170,023 | -20.9% | | Diluted earnings per share | $8.55 | $10.28 | -16.8% | | Cash dividends declared per share | $0.66 | $0.60 | +10.0% | Condensed Consolidated Balance Sheets As of September 30, 2025, PulteGroup's total assets increased slightly to $17.85 billion from $17.36 billion at year-end 2024 Condensed Consolidated Balance Sheets (as of Sep 30, 2025 vs Dec 31, 2024) | Asset/Liability/Equity | Sep 30, 2025 ($000s) | Dec 31, 2024 ($000s) | Change | | :---------------------------------- | :------------------- | :------------------- | :----- | | Cash and equivalents | $1,451,532 | $1,613,327 | -10.0% | | Total cash, cash equivalents, and restricted cash | $1,479,557 | $1,653,680 | -10.5% | | House and land inventory | $13,351,977 | $12,692,820 | +5.2% | | Total Assets | $17,850,979 | $17,363,763 | +2.8% | | Accounts payable | $731,104 | $727,995 | +0.4% | | Customer deposits | $470,745 | $512,580 | -8.2% | | Financial Services debt | $404,223 | $526,906 | -23.3% | | Notes payable | $1,623,338 | $1,618,586 | +0.3% | | Total Liabilities | $5,024,942 | $5,241,799 | -4.2% | | Shareholders' equity | $12,826,037 | $12,121,964 | +5.8% | Consolidated Statements of Cash Flows For the nine months ended September 30, 2025, net cash provided by operating activities remained strong at $1.1 billion, slightly down from the prior year Consolidated Statements of Cash Flows (9 Months Ended Sep 30, 2025 vs 2024) | Cash Flow Activity | 9M 2025 ($000s) | 9M 2024 ($000s) | Change | | :---------------------------------- | :-------------- | :-------------- | :----- | | Net income | $1,717,115 | $2,170,023 | -20.9% | | Net cash provided by operating activities | $1,100,122 | $1,113,184 | -1.2% | | Net cash used in investing activities | $(64,104) | $(108,350) | -40.9% | | Net cash used in financing activities | $(1,210,141) | $(1,398,875) | -13.5% | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $(174,123) | $(394,041) | -55.8% | | Share repurchases | $(900,000) | $(879,999) | +2.3% | | Dividends paid | $(133,658) | $(126,560) | +5.6% | Segment Performance Data Homebuilding Segment The Homebuilding segment experienced a decrease in home sale revenues and income before income taxes for both the three and nine months ended September 30, 2025 Home Sale Revenues and Closings Home sale revenues for the Homebuilding segment decreased by 2.2% in Q3 2025 and 2.7% for the nine months ended September 30, 2025 Homebuilding Revenues and Closings (Q3 2025 vs Q3 2024) | Metric | Q3 2025 ($000s/units) | Q3 2024 ($000s/units) | Change (YoY) | | :-------------------------- | :-------------------- | :-------------------- | :----------- | | Home sale revenues | $4,248,375 | $4,343,227 | -2.2% | | Total Homebuilding revenues | $4,301,544 | $4,362,511 | -1.4% | | Income before income taxes | $723,430 | $851,270 | -15.0% | | Closings - units (Total) | 7,529 | 7,924 | -5.0% | | Closings - units (Northeast) | 408 | 391 | +4.3% | | Closings - units (Southeast) | 1,444 | 1,340 | +7.8% | | Closings - units (Florida) | 1,932 | 1,984 | -2.6% | | Closings - units (Midwest) | 1,313 | 1,194 | +10.0% | | Closings - units (Texas) | 1,073 | 1,485 | -27.7% | | Closings - units (West) | 1,359 | 1,530 | -11.2% | | Average selling price | $564 | $548 | +2.9% | Net New Orders and Backlog Net new orders for the Homebuilding segment decreased by 6% in units and 7.7% in dollar value in Q3 2025 Homebuilding Net New Orders and Backlog (Q3 2025 vs Q3 2024) | Metric | Q3 2025 (units/$000s) | Q3 2024 (units/$000s) | Change (YoY) | | :-------------------------- | :-------------------- | :-------------------- | :----------- | | Net new orders - units (Total) | 6,638 | 7,031 | -5.6% | | Net new orders - units (Northeast) | 371 | 385 | -3.6% | | Net new orders - units (Southeast) | 1,354 | 1,340 | +1.0% | | Net new orders - units (Florida) | 1,721 | 1,681 | +2.4% | | Net new orders - units (Midwest) | 1,144 | 1,233 | -7.2% | | Net new orders - units (Texas) | 938 | 1,134 | -17.3% | | Net new orders - units (West) | 1,110 | 1,258 | -11.8% | | Net new orders - dollars | $3,639,690 | $3,928,860 | -7.4% | | Unit backlog (Total) | 9,888 | 12,089 | -18.2% | | Dollars in backlog | $6,234,554 | $7,694,761 | -19.0% | Financial Services Segment The Financial Services segment reported a decrease in income before income taxes for both the three and nine months ended September 30, 2025 Financial Services Income Before Income Taxes | Period | 2025 ($000s) | 2024 ($000s) | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Three Months Ended Sep 30 | $44,358 | $54,926 | -19.3% | | Nine Months Ended Sep 30 | $123,013 | $159,283 | -22.7% | - Lower pre-tax income in Financial Services was primarily driven by lower closing volumes in homebuilding operations and a decrease in mortgage capture rate to 84% from 87% in the prior year[8] Supplemental Financial Information Mortgage Originations Mortgage origination volume and principal decreased in Q3 2025 compared to the prior year, reflecting the broader slowdown in homebuilding closings Mortgage Originations (Q3 2025 vs Q3 2024) | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :------------------ | :------ | :------ | :----------- | | Origination volume | 4,782 | 5,005 | -4.4% | | Origination principal | $2,054,441 | $2,103,197 | -2.3% | | Capture rate | 84.4% | 86.7% | -2.3 percentage points | Mortgage Originations (9 Months Ended Sep 30, 2025 vs 2024) | Metric | 9M 2025 | 9M 2024 | Change (YoY) | | :------------------ | :------ | :------ | :----------- | | Origination volume | 14,037 | 14,442 | -2.7% | | Origination principal | $6,085,214 | $5,998,347 | +1.4% | | Capture rate | 85.1% | 85.9% | -0.8 percentage points | Interest in Inventory The interest capitalized into inventory decreased for both the three and nine months ended September 30, 2025, while interest expensed increased Interest in Inventory (Q3 2025 vs Q3 2024) | Metric | Q3 2025 ($000s) | Q3 2024 ($000s) | Change (YoY) | | :-------------------------- | :-------------- | :-------------- | :----------- | | Interest capitalized | $26,139 | $26,443 | -1.1% | | Interest expensed | $(31,199) | $(29,708) | +5.0% | | Interest in inventory, end of period | $131,564 | $146,097 | -9.9% | Interest in Inventory (9 Months Ended Sep 30, 2025 vs 2024) | Metric | 9M 2025 ($000s) | 9M 2024 ($000s) | Change (YoY) | | :-------------------------- | :-------------- | :-------------- | :----------- | | Interest capitalized | $78,360 | $86,346 | -9.2% | | Interest expensed | $(86,756) | $(79,327) | +9.4% | | Interest in inventory, end of period | $131,564 | $146,097 | -9.9% | Reconciliation of Non-GAAP Financial Measures PulteGroup provides debt-to-capital and net debt-to-capital ratios as non-GAAP financial measures to indicate overall leverage - PulteGroup calculates total net debt by subtracting total cash, cash equivalents, and restricted cash from notes payable[33] - These non-GAAP measures are used as indicators of overall leverage and are considered useful for evaluating comparability and profitability within the homebuilding industry[33] Debt-to-Capital Ratios | Metric | Sep 30, 2025 ($000s) | Dec 31, 2024 ($000s) | Change | | :-------------------------- | :------------------- | :------------------- | :----- | | Notes payable | $1,623,338 | $1,618,586 | +0.3% | | Shareholders' equity | $12,826,037 | $12,121,964 | +5.8% | | Total capital | $14,449,375 | $13,740,550 | +5.2% | | Debt-to-capital ratio | 11.2% | 11.8% | -0.6 percentage points | | Total net debt | $143,781 | $(35,094) | N/A | | Total net capital | $12,969,818 | $12,086,870 | +7.3% | | Net debt-to-capital ratio | 1.1% | (0.3)% | +1.4 percentage points | Corporate Information Conference Call Details PulteGroup scheduled a conference call to discuss its third quarter 2025 results for Tuesday, October 21, 2025, at 8:30 a.m. Eastern Time, accessible via its corporate website - A conference call discussing Q3 2025 results was scheduled for Tuesday, October 21, 2025, at 8:30 a.m. Eastern Time[10] - Interested investors can access the live webcast via PulteGroup's corporate website at **www.pultegroupinc.com**[10](index=10&type=chunk) Forward-Looking Statements The release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially - The release includes forward-looking statements identifiable by terms like 'believe,' 'expect,' 'intend,' 'estimate,' and 'anticipate,' which discuss future events or expectations[11] - These statements are subject to risks and uncertainties, including interest rate changes, availability of mortgage financing, economic conditions (inflation, consumer confidence), supply shortages, cost of labor and materials, land availability and cost, and governmental regulation[12] - Other risks include declines in inventory value, competition, technological developments (e.g., AI in homebuilding), insurance costs, adverse capital market conditions, and cybersecurity incidents[12][13] About PulteGroup PulteGroup, Inc. is one of America's largest homebuilding companies, operating in over 45 markets - PulteGroup, Inc. (NYSE: PHM) is one of America's largest homebuilding companies, based in Atlanta, Georgia, with operations in over 45 markets[14] - The company's brand portfolio includes Centex, Pulte Homes, Del Webb, DiVosta Homes, American West, and John Wieland Homes and Neighborhoods, allowing it to serve diverse buyer groups[14] - PulteGroup's stated purpose is "building incredible places where people can live their dreams"[14]