NVR(NVR) - 2025 Q3 - Quarterly Results

Overall Financial Performance NVR, Inc. reported a decline in net income, diluted EPS, and consolidated revenues for both the third quarter and the first nine months of 2025 compared to the prior year Third Quarter 2025 Financial Highlights NVR, Inc. reported a decrease in net income and diluted earnings per share for the third quarter of 2025 compared to the same period in 2024, alongside a slight reduction in consolidated revenues | Metric | Q3 2025 | Q3 2024 | Change (%) | | :----------------------- | :---------- | :---------- | :--------- | | Net Income | $342.7 Million | $429.3 Million | -20% | | Diluted EPS | $112.33 | $130.50 | -14% | | Consolidated Revenues | $2.61 Billion | $2.73 Billion | -4.4% | Nine Months Ended September 30, 2025 Financial Highlights For the first nine months of 2025, NVR, Inc. experienced a decrease in consolidated revenues, net income, and diluted earnings per share compared to the same period in 2024 | Metric | 9M 2025 | 9M 2024 | Change (%) | | :----------------------- | :---------- | :---------- | :--------- | | Consolidated Revenues | $7.61 Billion | $7.68 Billion | -1% | | Net Income | $976.0 Million | $1.22 Billion | -20% | | Diluted EPS | $315.33 | $367.20 | -14% | Segment Performance The homebuilding segment experienced declines in key operational and financial metrics, while the mortgage banking segment also reported reduced loan production and income Homebuilding Segment The homebuilding segment saw declines in new orders, settlements, and backlog units, along with a decrease in revenues and gross profit margin, primarily due to higher lot costs, pricing pressure, and land deposit impairments Homebuilding Operational Metrics Key operational metrics for the homebuilding segment showed a decrease in new orders and settlements, an increase in cancellation rates, and a reduction in backlog units and dollar value | Metric | Q3 2025 | Q3 2024 | Change (%) | | :-------------------------- | :------ | :------ | :--------- | | New Orders (units) | 4,735 | 5,650 | -16% | | Avg Sales Price (New Orders)| $464,800| $450,700| +3% | | Cancellation Rate | 19% | 15% | +4 percentage points | | Settlements (units) | 5,639 | 5,908 | -5% | | Avg Settlement Price | $454,000| $453,200| Flat | | Metric | Sep 30, 2025 | Sep 30, 2024 | Change (%) | | :-------------------------- | :----------- | :----------- | :--------- | | Backlog (units) | 9,165 | 11,339 | -19% | | Backlog (dollar) | $4.39 Billion | $5.29 Billion | -17% | Homebuilding Financial Performance Homebuilding revenues decreased, and the gross profit margin declined due to increased lot costs, pricing pressures, and contract land deposit impairments. Income before tax also saw a significant reduction | Metric | Q3 2025 | Q3 2024 | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | | Homebuilding Revenues | $2.56 Billion | $2.68 Billion | -4% | | Gross Profit Margin | 21.0% | 23.4% | -2.4 percentage points | | Income Before Tax | $411.4 Million | $503.7 Million | -18% | - Gross profit margin was negatively impacted by higher lot costs, pricing pressure due to continued affordability challenges, and contract land deposit impairments totaling approximately $18.9 million[5] Mortgage Banking Segment The mortgage banking segment reported a decrease in closed loan production and a slight decline in income before tax for the third quarter of 2025 | Metric | Q3 2025 | Q3 2024 | Change (%) | | :-------------------------- | :---------- | :---------- | :--------- | | Mortgage Closed Loan Production | $1.54 Billion | $1.66 Billion | -7% | | Income Before Tax | $32.7 Million | $34.9 Million | -6% | Effective Tax Rate The effective tax rate increased for both the three and nine-month periods ended September 30, 2025, primarily due to a lower income tax benefit from stock option exercises Effective Tax Rate Analysis The effective tax rate increased for both the three and nine-month periods ended September 30, 2025, primarily due to a lower income tax benefit from excess tax benefits from stock option exercises | Period | 2025 Effective Tax Rate | 2024 Effective Tax Rate | | :-------------------- | :---------------------- | :---------------------- | | Three Months Ended Sep 30 | 22.8% | 20.3% | | Nine Months Ended Sep 30 | 24.5% | 20.6% | - The increase in the effective tax rate is primarily attributable to a lower income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $13.4 million (Q3 2025) and $19.7 million (9M 2025), compared to $23.1 million (Q3 2024) and $73.7 million (9M 2024)[7] Consolidated Financial Statements This section presents the consolidated statements of income and balance sheets, reflecting overall financial performance and position Consolidated Statements of Income The consolidated statements of income show a decline in revenues, net income, and earnings per share for both the three and nine months ended September 30, 2025, compared to the prior year | | Three Months Ended September 30, | | | Nine Months Ended September 30, | | | :---------------------------------- | :--- | :--- | :--- | :--- | :--- | | | 2025 ($ thousands) | 2024 ($ thousands) | 2025 ($ thousands) | 2024 ($ thousands) | | Homebuilding: | | | | | | Revenues | $2,560,343 | $2,677,640 | $7,459,055 | $7,511,708 | | Other income | 22,000 | 33,746 | 73,800 | 110,796 | | Cost of sales | (2,021,398) | (2,051,087) | (5,856,756) | (5,724,916) | | Selling, general and administrative | (142,736) | (149,777) | (457,023) | (443,493) | | Interest expense | (6,855) | (6,855) | (20,721) | (20,214) | | Homebuilding income | 411,354 | 503,667 | 1,198,355 | 1,433,881 | | Mortgage Banking: | | | | | | Mortgage banking fees | 49,162 | 55,311 | 152,296 | 167,163 | | Interest income | 4,881 | 4,728 | 13,180 | 13,492 | | Other income | 1,400 | 1,414 | 3,794 | 3,918 | | General and administrative | (22,397) | (26,317) | (73,515) | (75,026) | | Interest expense | (327) | (191) | (900) | (556) | | Mortgage banking income | 32,719 | 34,945 | 94,855 | 108,991 | | Income before taxes | 444,073 | 538,612 | 1,293,210 | 1,542,872 | | Income tax expense | (101,385) | (109,289) | (317,209) | (318,376) | | Net income | $342,688 | $429,323 | $976,001 | $1,224,496 | | Basic earnings per share ($) | $119.26 | $139.65 | $333.86 | $391.37 | | Diluted earnings per share ($) | $112.33 | $130.50 | $315.33 | $367.20 | | Basic weighted average shares outstanding (in thousands) | 2,874 | 3,074 | 2,923 | 3,129 | | Diluted weighted average shares outstanding (in thousands) | 3,051 | 3,290 | 3,095 | 3,335 | Consolidated Balance Sheets The consolidated balance sheets show a decrease in total assets and total liabilities from December 31, 2024, to September 30, 2025, with a corresponding reduction in total shareholders' equity | ASSETS | September 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------------------------------------- | :------------------- | :------------------ | | Homebuilding: | | | | Cash and cash equivalents | $1,932,167 | $2,561,339 | | Restricted cash | 44,034 | 42,172 | | Receivables | 41,377 | 32,622 | | Inventory: | | | | Lots and housing units, covered under sales agreements with customers | 1,758,906 | 1,727,243 | | Unsold lots and housing units | 313,971 | 237,177 | | Land under development | 38,017 | 65,394 | | Building materials and other | 20,531 | 28,893 | | Total Inventory | 2,131,425 | 2,058,707 | | Contract land deposits, net | 868,308 | 726,675 | | Property, plant and equipment, net | 102,479 | 95,619 | | Operating lease right-of-use assets | 87,116 | 78,340 | | Reorganization value in excess of amounts allocable to identifiable assets, net | 41,580 | 41,580 | | Other assets | 291,748 | 251,178 | | Total Homebuilding Assets | 5,540,234 | 5,888,232 | | Mortgage Banking: | | | | Cash and cash equivalents | 39,280 | 49,636 | | Restricted cash | 8,123 | 11,520 | | Mortgage loans held for sale, net | 341,579 | 355,209 | | Property and equipment, net | 8,081 | 7,373 | | Operating lease right-of-use assets | 25,252 | 23,482 | | Reorganization value in excess of amounts allocable to identifiable assets, net | 7,347 | 7,347 | | Other assets | 65,562 | 38,189 | | Total Mortgage Banking Assets | 495,224 | 492,756 | | Total assets | $6,035,458 | $6,380,988 | | LIABILITIES AND SHAREHOLDERS' EQUITY | September 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :------------------------------------------------------- | :------------------- | :------------------ | | Homebuilding: | | | | Accounts payable | $361,209 | $332,772 | | Accrued expenses and other liabilities | 344,658 | 441,300 | | Customer deposits | 277,351 | 322,926 | | Operating lease liabilities | 93,191 | 83,939 | | Senior notes | 909,654 | 911,118 | | Total Homebuilding Liabilities | 1,986,063 | 2,092,055 | | Mortgage Banking: | | | | Accounts payable and other liabilities | 55,249 | 53,433 | | Operating lease liabilities | 27,384 | 25,428 | | Total Mortgage Banking Liabilities | 82,633 | 78,861 | | Total liabilities | 2,068,696 | 2,170,916 | | Shareholders' equity: | | | | Common stock | 206 | 206 | | Additional paid-in capital | 3,131,980 | 3,031,637 | | Deferred compensation trust | (16,710) | (16,710) | | Deferred compensation liability | 16,710 | 16,710 | | Retained earnings | 16,022,954 | 15,046,953 | | Less treasury stock at cost | (15,188,378) | (13,868,724) | | Total shareholders' equity | 3,966,762 | 4,210,072 | | Total liabilities and shareholders' equity | $6,035,458 | $6,380,988 | Operating Activity & Key Metrics This section details regional homebuilding performance, including new orders, settlements, and backlog, alongside other key operational data Homebuilding Operating Metrics by Region Regional operating data indicates varied performance across NVR's markets, with overall declines in new orders and settlements, and a reduction in backlog units across most regions New Orders, Net of Cancellations New orders decreased across all regions in Q3 2025 compared to Q3 2024, with varying changes in average prices. The Mid Atlantic region saw the largest unit decline | Region | Q3 2025 Units | Q3 2025 Avg Price ($ thousands) | Q3 2024 Units | Q3 2024 Avg Price ($ thousands) | 9M 2025 Units | 9M 2025 Avg Price ($ thousands) | 9M 2024 Units | 9M 2024 Avg Price ($ thousands) | | :------------- | :------------ | :-------------------- | :------------ | :-------------------- | :------------ | :-------------------- | :------------ | :-------------------- | | Mid Atlantic | 1,714 | $529.7 | 2,206 | $514.7 | 5,510 | $525.1 | 6,785 | $522.2 | | North East | 433 | $647.1 | 536 | $616.4 | 1,234 | $664.6 | 1,541 | $617.2 | | Mid East | 931 | $431.9 | 1,105 | $400.2 | 3,101 | $425.0 | 3,630 | $404.8 | | South East | 1,657 | $368.6 | 1,803 | $354.1 | 5,614 | $361.8 | 5,810 | $363.9 | | Total | 4,735 | $464.8 | 5,650 | $450.7 | 15,459 | $456.8 | 17,766 | $454.7 | Settlements Settlements decreased in Q3 2025 compared to Q3 2024, with mixed average price changes across regions. The Mid Atlantic region also saw the largest unit decrease in settlements | Region | Q3 2025 Units | Q3 2025 Avg Price ($ thousands) | Q3 2024 Units | Q3 2024 Avg Price ($ thousands) | 9M 2025 Units | 9M 2025 Avg Price ($ thousands) | 9M 2024 Units | 9M 2024 Avg Price ($ thousands) | | :------------- | :------------ | :-------------------- | :------------ | :-------------------- | :------------ | :-------------------- | :------------ | :-------------------- | | Mid Atlantic | 2,008 | $517.9 | 2,229 | $514.9 | 6,159 | $527.8 | 6,394 | $515.9 | | North East | 420 | $694.6 | 495 | $606.9 | 1,365 | $651.7 | 1,445 | $583.6 | | Mid East | 1,200 | $423.8 | 1,219 | $411.1 | 3,295 | $416.1 | 3,343 | $404.5 | | South East | 2,011 | $357.9 | 1,965 | $370.5 | 5,428 | $358.8 | 5,474 | $368.5 | | Total | 5,639 | $454.0 | 5,908 | $453.2 | 16,247 | $459.1 | 16,656 | $451.0 | Backlog Backlog units and dollar value decreased across all regions as of September 30, 2025, compared to the prior year, despite an increase in average backlog price | Region | Sep 30, 2025 Units | Sep 30, 2025 Avg Price ($ thousands) | Sep 30, 2024 Units | Sep 30, 2024 Avg Price ($ thousands) | | :------------- | :----------------- | :------------------------- | :----------------- | :------------------------- | | Mid Atlantic | 3,419 | $539.7 | 4,485 | $531.4 | | North East | 924 | $676.0 | 1,124 | $646.5 | | Mid East | 1,851 | $431.3 | 2,263 | $411.5 | | South East | 2,971 | $379.1 | 3,467 | $369.8 | | Total | 9,165 | $479.5 | 11,339 | $469.5 | Other Key Operating Data This section provides additional operational insights, including average active communities, cancellation rates, lots controlled, mortgage banking performance, and common stock information | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Average active communities | 450 | 422 | 426 | 427 | | New order cancellation rate | 19.4% | 14.5% | 17.1% | 13.5% | | Lots controlled at end of period | N/A | N/A | 175,300 | 151,800 | | Mortgage banking loan closings ($ thousands)| $1,539,781 | $1,656,507 | $4,527,982 | $4,564,597 | | Mortgage banking capture rate | 86% | 86% | 86% | 86% | | Shares outstanding at end of period (units) | N/A | N/A | 2,860,899 | 3,064,790 | | Number of shares repurchased | 35,224 | 42,629 | 178,178 | 192,655 | | Aggregate cost of shares repurchased ($ thousands) | $276,405 | $357,450 | $1,331,212 | $1,493,362 | Company Information & Disclosures This section provides an overview of NVR's business operations and important disclaimers regarding forward-looking statements About NVR NVR, Inc. operates as a homebuilding and mortgage banking company, building homes under several trade names across numerous metropolitan areas in sixteen states and Washington, D.C - NVR, Inc. operates in two business segments: homebuilding and mortgage banking[8] - The homebuilding segment sells and builds homes under the Ryan Homes, NVHomes, and Heartland Homes trade names[8] - NVR operates in thirty-six metropolitan areas across sixteen states and Washington, D.C.[8] Forward-Looking Statements The release contains forward-looking statements subject to various known and unknown risks and uncertainties that could cause actual results to differ materially from projections - Statements in the release may constitute 'forward-looking statements' under the Private Securities Litigation Reform Act of 1995 and other securities acts[9] - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or performance to be materially different from expressed or implied expectations[9] - Risk factors include general economic and business conditions, interest rate changes, access to financing, increased regulation in mortgage banking, competition, availability and cost of land and raw materials, labor shortages, and governmental regulation[9]