M/I Homes(MHO) - 2025 Q3 - Quarterly Results

Executive Summary & Business Highlights Third Quarter 2025 Key Financial Highlights M/I Homes reported a decrease in pre-tax income and net income for Q3 2025 compared to Q3 2024, with an inventory charge impacting results, yet achieved a record in homes delivered and increased shareholders' equity and book value per share | Metric | Q3 2025 | Q3 2024 | Change (%) | | :----------------------- | :------ | :------ | :--------- | | Pre-tax Income | $139.8M | $188.7M | -25.9% | | Net Income | $106.5M | $145.4M | -26.8% | | Diluted EPS | $3.92 | $5.10 | -23.1% | | Revenue | $1.1B | $1.11B | -1.0% | | Inventory Charge (pre-tax) | $7.6M | $0 | N/A | | Shareholders' Equity | $3.1B | $2.8B | +10.7% | | Book Value Per Share | $120 | $104.59 | +14.7% | Third Quarter 2025 Key Operational Highlights Operational performance in Q3 2025 showed a record in homes delivered, but new contracts and backlog units decreased year-over-year, reflecting a challenging market despite community count expansion | Metric | Q3 2025 | Q3 2024 | Change (%) | | :------------------- | :------ | :------ | :--------- | | Homes Delivered | 2,296 | 2,271 | +1% | | New Contracts | 1,908 | 2,023 | -6% | | Backlog Units | 2,189 | 3,174 | -31% | | Backlog Sales Value | $1.21B | $1.73B | -30% | | Average Sales Price (Backlog) | $553,000 | $544,000 | +1.7% | | Communities | 233 | 217 | +7.4% | | Cancellation Rate | 12% | 10% | +2 ppts | CEO Commentary & Strategic Position CEO Robert H. Schottenstein acknowledged challenging housing market conditions but highlighted a solid quarter with strong pre-tax income and return on equity, expressing confidence in long-term housing fundamentals and an excellent financial position - CEO Robert H. Schottenstein noted a solid quarter despite challenging housing market conditions, achieving $140 million of pre-tax income (12% of revenue) and a 16% return on equity[5] - The company's financial position is strong, evidenced by a Moody's credit rating upgrade to Ba1 and the extension of its unsecured credit facility to 2030, increasing borrowing capacity from $650 million to $900 million, with zero borrowings at quarter-end[5][6][7] - M/I Homes ended the quarter with a homebuilding debt-to-capital ratio of 18% and a net debt-to-capital ratio of negative 1%, positioning it well for the fourth quarter of 2025[7] Company Overview & Investor Relations M/I Homes, Inc. is a leading single-family homebuilder operating in multiple states across the Midwest, South, and Southeast US, providing investor contact information and details on its earnings conference call - M/I Homes, Inc. is a leading homebuilder with operations in 16 markets across Ohio, Indiana, Illinois, Minnesota, Michigan, Florida, Texas, North Carolina, and Tennessee[8] - An earnings conference call was broadcast live on October 22, 2025, with a replay available on the company's website through October 2026[7] Summary Statement of Income (Unaudited) Three Months Ended September 30, 2025 vs 2024 For the third quarter of 2025, M/I Homes experienced a slight decrease in total revenue, primarily due to lower housing revenue, with gross margin and operating income declining, impacted by an impairment charge, leading to significant reductions in net income and diluted EPS | Metric | Q3 2025 (in thousands) | Q3 2024 (in thousands) | Change (%) | | :-------------------------- | :--------------------- | :--------------------- | :--------- | | New contracts | 1,908 | 2,023 | -5.7% | | Homes delivered | 2,296 | 2,271 | +1.1% | | Total revenue | $1,131,791 | $1,142,909 | -1.0% | | Cost of sales - operations | $854,122 | $833,468 | +2.5% | | Cost of sales - impairment | $7,583 | — | N/A | | Gross margin | $270,086 | $309,441 | -12.7% | | Operating income | $135,271 | $181,993 | -25.7% | | Income before income taxes | $139,819 | $188,673 | -25.9% | | Net income | $106,490 | $145,449 | -26.8% | | Diluted EPS | $3.92 | $5.10 | -23.1% | Nine Months Ended September 30, 2025 vs 2024 For the first nine months of 2025, total revenue slightly decreased, while cost of sales increased, leading to a lower gross margin, with operating income, income before income taxes, net income, and diluted EPS all seeing declines compared to the same period in 2024 | Metric | YTD 2025 (in thousands) | YTD 2024 (in thousands) | Change (%) | | :-------------------------- | :---------------------- | :---------------------- | :--------- | | New contracts | 6,278 | 6,825 | -8.0% | | Homes delivered | 6,620 | 6,653 | -0.5% | | Total revenue | $3,270,476 | $3,299,393 | -0.9% | | Cost of sales - operations | $2,453,405 | $2,397,329 | +2.3% | | Cost of sales - impairment | $7,583 | — | N/A | | Gross margin | $809,488 | $902,064 | -10.2% | | Operating income | $431,912 | $542,103 | -20.3% | | Income before income taxes | $446,034 | $563,051 | -20.8% | | Net income | $338,970 | $430,256 | -21.3% | | Diluted EPS | $12.32 | $14.99 | -17.8% | Summary Balance Sheet and Other Information (Unaudited) Assets Overview As of September 30, 2025, M/I Homes reported an increase in total assets, driven primarily by a significant rise in total inventory, particularly in lots, land, and land development, and homes under construction, with cash and cash equivalents also seeing a modest increase | Asset Category | Sep 30, 2025 (in thousands) | Sep 30, 2024 (in thousands) | Change (%) | | :-------------------------------- | :-------------------------- | :-------------------------- | :--------- | | Total cash, cash equivalents and restricted cash | $734,174 | $719,920 | +2.0% | | Mortgage loans held for sale | $239,585 | $242,812 | -1.3% | | Total Inventory | $3,412,830 | $3,132,694 | +8.9% | | Lots, land and land development | $1,743,476 | $1,558,300 | +11.9% | | Homes under construction | $1,457,843 | $1,401,260 | +4.0% | | Total Assets | $4,769,544 | $4,459,857 | +6.9% | Liabilities and Shareholders' Equity Total liabilities remained relatively stable year-over-year, with a slight decrease in total debt, while shareholders' equity significantly increased, contributing to a stronger capital base | Liability/Equity Category | Sep 30, 2025 (in thousands) | Sep 30, 2024 (in thousands) | Change (%) | | :-------------------------------- | :-------------------------- | :-------------------------- | :--------- | | Total Debt - Homebuilding Operations | $695,980 | $694,702 | +0.2% | | Total Debt | $927,959 | $930,143 | -0.2% | | Total Liabilities | $1,620,095 | $1,614,501 | +0.3% | | Shareholders' Equity | $3,149,449 | $2,845,356 | +10.7% | | Total Liabilities and Shareholders' Equity | $4,769,544 | $4,459,857 | +6.9% | Key Financial Ratios The company improved its homebuilding debt to capital ratio and increased its book value per common share, reflecting a stronger financial structure | Ratio | Sep 30, 2025 | Sep 30, 2024 | Change (ppts) | | :-------------------------- | :----------- | :----------- | :------------ | | Book value per common share | $120.44 | $104.59 | +15.2% | | Homebuilding debt to capital ratio | 18% | 20% | -2 ppts | Selected Supplemental Financial and Operating Data (Unaudited) Cash Flow Activities In Q3 2025, M/I Homes generated positive cash flow from operating activities, a significant improvement from a net outflow in Q3 2024, though cash used in financing activities increased substantially | Cash Flow Activity | Q3 2025 (in thousands) | Q3 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | :---------------------- | :---------------------- | | Cash provided by (used in) operating activities | $43,414 | $(67,942) | $146,056 | $75,341 | | Cash used in investing activities | $(15,452) | $(17,496) | $(30,698) | $(45,037) | | Cash used in financing activities | $(94,186) | $(32,100) | $(202,754) | $(43,188) | Land and Lot Activity Land/lot purchases decreased in Q3 2025 compared to the prior year, while land development spending remained relatively stable, and land sale revenue and gross profit increased | Land Activity | Q3 2025 (in thousands) | Q3 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :---------------------- | :--------------------- | :--------------------- | :---------------------- | :---------------------- | | Land/lot purchases | $115,372 | $138,711 | $363,106 | $365,553 | | Land development spending | $181,320 | $180,753 | $421,927 | $444,659 | | Land sale revenue | $1,724 | $1,550 | $12,933 | $11,753 | | Land sale gross profit | $163 | $72 | $4,151 | $3,318 | Financial Services Pre-Tax Income Pre-tax income from financial services showed a healthy increase for both the three and nine months ended September 30, 2025, indicating strong performance in this segment | Metric | Q3 2025 (in thousands) | Q3 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :---------------------- | :---------------------- | | Financial services pre-tax income | $16,598 | $12,936 | $47,180 | $39,648 | Non-GAAP Financial Results (Unaudited) Adjusted EBITDA Reconciliation Adjusted EBITDA, a non-GAAP measure, decreased for both the three and nine months ended September 30, 2025, reflecting the decline in net income, despite adjustments for taxes, interest, depreciation, and non-cash charges | Metric | Q3 2025 (in thousands) | Q3 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :---------------------- | :---------------------- | | Net income | $106,490 | $145,449 | $338,970 | $430,256 | | Provision for income taxes | $33,329 | $43,224 | $107,064 | $132,795 | | Interest income - net | $(8,118) | $(10,089) | $(23,885) | $(30,542) | | Interest amortized to cost of sales | $7,651 | $7,632 | $22,779 | $23,872 | | Depreciation and amortization | $5,116 | $4,816 | $14,797 | $13,890 | | Non-cash charges | $12,108 | $6,750 | $20,224 | $14,099 | | Adjusted EBITDA | $156,576 | $197,782 | $479,949 | $584,370 | Regional Operating Data New Contracts by Region New contracts decreased overall in Q3 2025 and YTD 2025, primarily driven by a significant decline in the Northern region, while the Southern region saw a modest increase in Q3 | Region | Q3 2025 | Q3 2024 | Q3 Change (%) | YTD 2025 | YTD 2024 | YTD Change (%) | | :------- | :------ | :------ | :------------ | :------- | :------- | :------------- | | Northern | 742 | 890 | (17)% | 2,680 | 3,054 | (12)% | | Southern | 1,166 | 1,133 | 3% | 3,598 | 3,771 | (5)% | | Total | 1,908 | 2,023 | (6)% | 6,278 | 6,825 | (8)% | Homes Delivered by Region Total homes delivered increased slightly in Q3 2025, with the Southern region showing growth, offsetting a decline in the Northern region, while year-to-date deliveries remained flat | Region | Q3 2025 | Q3 2024 | Q3 Change (%) | YTD 2025 | YTD 2024 | YTD Change (%) | | :------- | :------ | :------ | :------------ | :------- | :------- | :------------- | | Northern | 942 | 1,015 | (7)% | 2,735 | 2,809 | (3)% | | Southern | 1,354 | 1,256 | 8% | 3,885 | 3,844 | 1% | | Total | 2,296 | 2,271 | 1% | 6,620 | 6,653 | —% | Backlog by Region Backlog units and sales value decreased significantly across both Northern and Southern regions as of September 30, 2025, compared to the prior year, although the average sales price per unit increased | Region | Sep 30, 2025 Units | Sep 30, 2025 Sales Value (millions) | Sep 30, 2025 Avg Sales Price | Sep 30, 2024 Units | Sep 30, 2024 Sales Value (millions) | Sep 30, 2024 Avg Sales Price | | :------- | :----------------- | :---------------------------------- | :--------------------------- | :----------------- | :---------------------------------- | :--------------------------- | | Northern | 1,081 | $609 | $563,000 | 1,493 | $803 | $538,000 | | Southern | 1,108 | $602 | $544,000 | 1,681 | $923 | $549,000 | | Total | 2,189 | $1,211 | $553,000 | 3,174 | $1,726 | $544,000 | Land Position Summary by Region M/I Homes' total land position, including owned and under contract lots, slightly decreased year-over-year, with the Northern region seeing an increase in total lots while the Southern region experienced a decrease | Region | Sep 30, 2025 Owned Lots | Sep 30, 2025 Lots Under Contract | Sep 30, 2025 Total Lots | Sep 30, 2024 Owned Lots | Sep 30, 2024 Lots Under Contract | Sep 30, 2024 Total Lots | | :------- | :---------------------- | :------------------------------- | :---------------------- | :---------------------- | :------------------------------- | :---------------------- | | Northern | 7,140 | 10,843 | 17,983 | 6,528 | 10,885 | 17,413 |\ | Southern | 17,268 | 15,374 | 32,642 | 17,114 | 17,678 | 34,792 | | Total | 24,408 | 26,217 | 50,625 | 23,642 | 28,563 | 52,205 | Forward-Looking Statements Disclaimer on Forward-Looking Statements This section contains a standard disclaimer regarding forward-looking statements, emphasizing that actual results may differ materially due to various risks and uncertainties, and the company disclaims any duty to publicly update these statements - The press release includes forward-looking statements subject to risks and uncertainties, such as economic environment, interest rates, resource availability, competition, and governmental regulations[9] - Actual results may differ materially from expectations, and the company undertakes no duty to publicly update these statements[9]