Meritage Homes(US:MTH)2026-01-28 21:30Financial Performance - Home closing revenue for Q4 2025 was $1.4 billion, a 12% decrease year-over-year, driven by a 7% decline in home closing volume to 3,755 units and a 5% drop in average sales price to $375,000[9] - The home closing gross margin for Q4 2025 was 16.5%, down 670 basis points from 23.2% in Q4 2024, primarily due to non-recurring charges and increased lot costs[9] - Net earnings for Q4 2025 were $84.0 million, or $1.20 per diluted share, reflecting a 51% decrease from $172.6 million, or $2.36 per diluted share, in Q4 2024[9] - Net earnings for the twelve months ended December 31, 2025, were $453,013, a decrease of 42% compared to $786,186 in 2024[19] - Basic earnings per share for Q4 2025 were $1.21, down 49% from $2.39 in Q4 2024, with diluted earnings per share at $1.20, also down 49% from $2.36[17] - Adjusted net earnings for the twelve months ended December 31, 2025, were $503,074,000, a decrease from $791,249,000 in 2024, with adjusted diluted earnings per share at $7.05 compared to $10.79 in the previous year[37] Sales and Orders - Total sales orders for full year 2025 were 14,650 homes, essentially flat year-over-year, with a 9% decline in average absorption pace offset by a 12% increase in average communities[9] - Homes ordered in Q4 2025 totaled 3,224 with a value of $1,206,142,000, compared to 3,304 homes valued at $1,320,440,000 in Q4 2024, showing a decrease of 2.4% in homes ordered and 9.6% in value[27] - In Q4 2025, the total homes closed were 3,755 with a total value of $1,406,449,000, compared to 4,044 homes closed valued at $1,595,920,000 in Q4 2024, representing a decrease of 7.1% in homes closed and 12.0% in total value[27] - For the twelve months ended December 31, 2025, total homes closed were 15,026 with a total value of $5,763,597,000, compared to 15,611 homes closed valued at $6,341,546,000 in 2024, indicating a decrease of 3.7% in homes closed and 9.1% in total value[28] - The order backlog at December 31, 2025, was 1,168 homes valued at $440,562,000, down from 1,544 homes valued at $629,549,000 in 2024, reflecting a decrease of 24.4% in homes and 30.0% in value[30] Investments and Assets - The company invested $416 million in land acquisition and development during Q4 2025, a decrease from $689 million in Q4 2024, reflecting a strategic response to market conditions[11] - Total assets increased to $7,622,287 as of December 31, 2025, compared to $7,162,654 in 2024, reflecting a growth of 6.4%[22] - Cash and cash equivalents at the end of Q4 2025 were $775,157, up from $651,555 at the end of Q4 2024, marking an increase of 19%[22] Margins and Costs - The company reported a total closing gross profit of $231,431 for Q4 2025, a decline of 38% from $373,144 in Q4 2024[16] - Home closing gross profit for Q4 2025 was $232,257,000, down from $369,814,000 in Q4 2024, resulting in a gross margin of 16.5%, compared to 23.2% in the prior year[36] - The cost of home closings decreased by 4% to $1,174,192 in Q4 2025 from $1,226,114 in Q4 2024[16] Shareholder Actions - The company repurchased 2,238,534 shares for $150 million during Q4 2025, with a total of 4,289,984 shares repurchased for $295 million throughout the year[14] - The weighted average shares outstanding decreased by 4% to 69,254 in Q4 2025 from 72,188 in Q4 2024[17] Market Outlook - The company anticipates full year 2026 home closing volume and revenue to be consistent with full year 2025 results, assuming no further deterioration in market conditions[12] - The effective tax rate for full year 2025 was 22.5%, compared to 21.6% in 2024, influenced by fewer homes qualifying for energy tax credits[11] Company Overview - The company has a strong presence in the U.S. housing market, operating in multiple states including Arizona, California, Colorado, and Texas, and is recognized for its energy-efficient homebuilding practices[40] - Meritage Homes has delivered over 210,000 homes in its 40-year history, emphasizing its commitment to quality construction and customer experience[41]