D.R. Horton(US:DHI)2026-01-22 20:00Financial Performance - Consolidated revenues decreased 10% to $6.9 billion compared to $7.6 billion in the prior year period [115]. - Net income attributable to D.R. Horton decreased 30% to $594.8 million compared to $844.9 million [124]. - Homebuilding revenues for the three months ended December 31, 2025, were $6.53 billion, a decrease of 8.9% compared to $7.17 billion in the prior year period [159]. - The company reported a pre-tax income of $0.2 million for the three months ended December 31, 2025, a significant decline from $11.9 million in the same period last year [182]. - The company's pre-tax income for the three months ended December 31, 2025, was $798.1 million, a decrease from $1.1 billion in the prior year period [201]. - Net income for the three months ended December 31, 2025, was $535.2 million, compared to $3,154.8 million for the year ended September 30, 2025 [251]. Home Sales and Closings - Homes closed decreased 7% to 17,818 homes, with an average closing price of $365,500, down 3% [124]. - Homes closed in Q4 2025 totaled 17,818, generating revenues of $6.51 billion, down from 19,059 homes and $7.15 billion in Q4 2024, representing a 7% decrease in closing volume and a 3% decrease in average selling price [142]. - Net sales orders increased 3% to 18,300 homes, with the value of net sales orders remaining flat at $6.7 billion [124]. - The cancellation rate for sales orders remained stable at 18% for both Q4 2025 and Q4 2024, with total cancelled sales orders valued at $1.50 billion [137]. - Homes in backlog as of December 31, 2025, totaled 11,376, with a total value of $4.31 billion, reflecting a 3% increase in backlog volume compared to 11,003 homes valued at $4.30 billion in 2024 [138]. Margins and Costs - Home sales gross margin decreased to 20.4% from 22.7% in the prior year period [124]. - The gross profit margin from home sales decreased to 20.4% in Q4 2025 from 22.7% in Q4 2024, attributed to increased average costs and decreased average selling prices [146]. - Selling, General and Administrative (SG&A) expenses decreased by 1% to $632.5 million in Q4 2025, but as a percentage of revenues, SG&A increased to 9.7% from 8.9% in the prior year [153]. Regional Performance - The South Central region saw an 8% increase in net homes sold, totaling 4,931 homes in Q4 2025, while the Northwest region experienced a 9% decrease, selling 923 homes [132]. - Homebuilding revenues in the Southwest region decreased by 22% to $894.7 million in Q4 2025, with pre-tax income dropping to $88.6 million from $168.4 million [163]. - The Southeast region saw a 17% decline in homebuilding revenues to $1.46 billion, with pre-tax income falling to $143.4 million from $222.8 million [166]. - The North region experienced a 5% increase in homebuilding revenues to $989.5 million, but pre-tax income decreased to $119.9 million from $129.8 million [168]. Inventory and Land - As of December 31, 2025, total inventory amounted to $20,239.4 million, a slight decrease from $20,316.5 million on September 30, 2025 [171]. - The company controlled 590,500 lots as of December 31, 2025, with 145,500 lots owned and 445,000 lots under purchase contracts [173]. - The total remaining purchase price of lots controlled through land and lot purchase contracts was $26.7 billion as of December 31, 2025, up from $26.0 billion on September 30, 2025 [174]. - The company acquired SK Builders for approximately $80 million in cash, adding 160 homes in inventory and 260 lots, along with a backlog of 110 homes [158]. Cash Flow and Financing - Cash provided by operating activities was $854.0 million for the three months ended December 31, 2025, compared to $646.7 million in the prior year period [237]. - Net cash used in investing activities was $116.2 million for the three months ended December 31, 2025, including $82.1 million related to a business acquisition [239]. - Net cash used in financing activities was $1.2 billion for the three months ended December 31, 2025, primarily for stock repurchases and mortgage repurchase facilities [241]. - The company expects to fund short-term financing needs with existing cash and cash generated from operations, while long-term needs may be funded through the issuance of senior unsecured debt or equity securities [240]. Debt and Equity - Homebuilding debt was $3.2 billion, unchanged from September 30, 2025 [128]. - The ratio of debt to total capital was 18.8% at December 31, 2025, down from 19.8% at September 30, 2025 [207]. - The company has a $2.305 billion senior unsecured homebuilding revolving credit facility, with an option to increase to $3.0 billion, and $2.04 billion matures on December 18, 2029 [211]. - The company repurchased 4.4 million shares at a total cost of $669.7 million during the three months ended December 31, 2025, with $2.6 billion remaining under the stock repurchase authorization [215]. Rental Operations - Rental revenues decreased to $109.5 million for the three months ended December 31, 2025, down from $217.8 million in the prior year period [182]. - The rental property inventory was valued at $2.9 billion as of December 31, 2025, compared to $2.7 billion on September 30, 2025 [183]. - The gross profit margin for rental operations was 15.2% for the three months ended December 31, 2025, down from 16.0% in the prior year [181]. - Single-family rental homes inventory included 1,330 homes as of December 31, 2025, down from 1,420 homes on September 30, 2025 [183]. Future Outlook - The company plans to manage home pricing, sales incentives, and inventory levels based on local market demand, indicating a focus on affordability amid ongoing market challenges [136]. - The company expects to maintain elevated incentive levels throughout fiscal 2026, depending on market conditions and mortgage interest rates [148]. - The company anticipates greater revenues and pre-tax income in the third and fourth quarters of its fiscal year due to seasonal patterns in homebuilding [254].