NVR Q3 Earnings & Homebuilding Revenues Top, New Orders Down Y/Y

Core Insights - NVR, Inc. reported third-quarter 2025 results with earnings and Homebuilding revenues exceeding the Zacks Consensus Estimate, although both metrics showed a year-over-year decline [1][4][5] Financial Performance - Earnings per share were $112.33, surpassing the consensus estimate of $107.88 by 4.1%, but down 14% from $130.50 in the prior-year quarter [4] - Homebuilding revenues reached $2.56 billion, exceeding the consensus mark of $2.41 billion by 6.3%, yet declined 4.4% year over year [5] - Consolidated revenues, combining Homebuilding and Mortgage Banking fees, totaled $2.61 billion, a slight decrease of 4.5% year over year [5] Homebuilding Segment Analysis - Homebuilding segment revenues fell 4.4% year over year to $2.56 billion, with settlements down 5% to 5,639 units [6] - The average selling price (ASP) for settlements remained stable at $454,000, slightly below the estimated $460,000 [6] - New orders decreased 16% year over year to 4,735 units, while the ASP for new orders increased by 3% to $464,800 [8] Market Conditions - The housing market continues to show softness, with affordability challenges exacerbated by macroeconomic uncertainty and inflation [2] - Backlog units decreased 19% year over year to 9,165 homes, with a dollar value of $4.39 billion [8] - The cancellation rate for new orders increased to 19%, up from 15% a year ago [8] Cost and Margin Analysis - Gross margin contracted by 240 basis points year over year to 21%, primarily due to higher lot costs and pricing pressures [7] - Contract land deposit impairments totaled approximately $18.9 million, contributing to the decline in profitability [7] Mortgage Banking Performance - Mortgage banking fees fell 11.1% year over year to $49.2 million, with closed loan production totaling $1.54 billion, down 7% [9] - The capture rate remained stable at 86%, consistent with the previous year [9] Cash Position and Share Repurchase - As of September 30, 2025, NVR had cash and cash equivalents of $1.93 billion for Homebuilding and $39.3 million for Mortgage Banking, down from $2.56 billion and $49.6 million at the end of 2024 [10] - The company repurchased 178,178 shares for $1.33 billion during the first nine months of 2025 [10]