M/I Homes(US:MHO)2025-10-24 15:24Financial Performance - Total revenue for Q3 2025 was $1.13 billion, with homebuilding revenue at $1.10 billion, reflecting a 1% decrease compared to Q3 2024[124] - Net income for Q3 2025 was $106.5 million, or $3.92 per diluted share, down 27% from $145.4 million, or $5.10 per diluted share, in Q3 2024[124] - Income before income taxes decreased by 26% to $139.8 million in Q3 2025, and by 21% to $446.0 million for the nine months[124] - Total revenue for Q3 2025 was $1,131.8 million, a slight decrease from $1,142.9 million in Q3 2024, while total revenue for the nine months ended September 30, 2025, was $3,270.5 million, down from $3,299.4 million in the same period of 2024[138] - The operating income for Q3 2025 was $135.3 million, compared to $182.0 million in Q3 2024, and for the nine months ended September 30, 2025, it was $431.9 million, down from $542.1 million in the same period of 2024[138] Home Deliveries and Contracts - Homes delivered in Q3 2025 reached a record of 2,296 units, a 1% increase from the previous year, while total homes delivered for the nine months was 6,620, a slight decrease[126] - New contracts decreased by 6% to 1,908 in Q3 2025, and by 8% to 6,278 for the nine months[126] - The company’s backlog remains healthy, with an average sales price 2% higher than at the end of Q3 2024[132] Margins and Costs - Gross margin percentage for homebuilding operations declined by 360 basis points to 21.5% in Q3 2025, primarily due to a decrease in average sales price and increased lot costs[125] - The effective tax rate increased to 23.8% in Q3 2025 from 22.9% in Q3 2024[124] Regional Performance - In the Northern region, homes delivered decreased by 7% from 1,015 in Q3 2024 to 942 in Q3 2025, while average sales price increased by 6% to $517,000[150] - The Southern region experienced a 1% decrease in revenue from $614.4 million in Q3 2024 to $609.2 million in Q3 2025, attributed to an 8% decrease in average sales price[154] - Operating income in the Northern region increased by $1.9 million to $77.4 million in Q3 2025, driven by a $1.6 million improvement in gross margin[150] - The Southern region's operating income decreased by $51.2 million to $62.9 million in Q3 2025, primarily due to a $45.6 million decline in gross margin[154] Financial Services - Financial services segment revenue increased by 16% to $34.6 million in Q3 2025, driven by higher margins and an increase in loan originations[124] - Revenue from mortgage and title operations increased 16% to $34.6 million in Q3 2025 from $30.0 million in Q3 2024, driven by higher margins and a 9% increase in loan originations[157] - Financial services originated 1,848 loans valued at $749.8 million in Q3 2025, an increase from 1,695 loans valued at $683.1 million in Q3 2024[145] Shareholder Equity and Investments - Shareholders' equity reached a record high of $3.1 billion, an 11% increase from the previous year, with book value per share at $120[126] - The company invested $363.1 million in land acquisitions and $421.9 million in land development during the nine months ended September 30, 2025, compared to $365.6 million and $444.7 million in the same period of 2024[134] Debt and Liquidity - The company had $734.2 million in cash and cash equivalents as of September 30, 2025, a decrease of $87.4 million from December 31, 2024, primarily due to timing of land spend and decline in home deliveries[176] - As of September 30, 2025, the company's homebuilding debt to capital ratio was 18%, down from 19% at the end of 2024, indicating improved leverage management[190] - The company had $2.47 billion available for additional senior debt under its Credit Facility as of September 30, 2025, with no borrowings outstanding[193] Market Conditions and Strategies - The company anticipates mortgage rates moving closer to 6%, which could improve affordability and stimulate buyer activity[131] - The company is taking proactive measures to manage overhead and land investments to support affordability and stimulate demand[130] - M/I Homes, Inc. plans to offer interest rate buydowns to potential homebuyers to address elevated mortgage interest rates, which currently range between 6% and 7%[220] Other Financial Metrics - Total assets as of September 30, 2025, were $4,769.5 million, an increase from $4,549.8 million at December 31, 2024[140] - The total liabilities as of September 30, 2025, were $1,338,213 thousand, compared to $1,284,004 thousand as of December 31, 2024[212] - The company maintained a Consolidated Tangible Net Worth of $3,052.9 million, significantly above the required minimum of $2,139.4 million as of September 30, 2025[198]