Hovnanian Enterprises (HOV) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 revenues reached $3.005 billion, up 9% year-over-year, with adjusted EBITDA of $456 million and diluted EPS of $31.79, all exceeding or meeting guidance.

• Adjusted pre-tax income for the year was $327 million, above guidance, and full year income before income taxes rose 24% year-over-year.

• Fourth quarter contracts surged 48% year-over-year, with contracts per community among the highest in the industry.

• The company prioritized sales pace over price, using incentives and mortgage rate buy-downs to drive volume, resulting in lower gross margins but higher inventory turns and ROI.

• Land and land development spend grew 47% year-over-year, reaching the highest levels since 2010.

Financial highlights

• Q4 revenues increased 10% year-over-year to $980 million; full year revenues were $3.005 billion, up 9% from 2023.

• Adjusted EBITDA for the year was $456 million, up 7% year-over-year; adjusted pre-tax income was $327 million, up 16% year-over-year.

• Q4 net income was $94.3 million ($12.79 per diluted share); full year net income was $242 million ($31.79 per share).

• Homebuilding gross margin after interest and land charges was 18.0% in Q4 and 18.7% for the year.

• Total liquidity at year-end was $338 million, well above the targeted range.

Outlook and guidance

• Q1 2025 guidance: revenues of $650–$750 million, adjusted gross margin of 17.5–18.5%, SG&A at 13.5–14.5% of revenue, adjusted EBITDA of $55–$65 million, and adjusted pre-tax income of $25–$35 million.

• Management expects annual delivery growth in excess of 10% over the next few years, supported by increased lot and community counts.

• Guidance assumes no major adverse market changes and continued use of incentives and mortgage rate buy-downs.