KB Home (KBH) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenues declined 5% year-over-year to $1.39 billion, with 2,770 homes delivered, a 9% decrease, and net income down 21% to $109.6 million; diluted EPS was $1.49.

• Average selling price rose 4% to $500,700, but homebuilding operating income margin dropped to 9.2% from 10.8%.

• Net orders fell 17% and backlog value declined 21% to $2.2 billion, with backlog homes down 23%.

• Price reductions and incentives were used to stimulate demand amid affordability challenges and a muted spring selling season.

• Strong liquidity and book value per share growth supported long-term strategy despite market headwinds.

Financial highlights

• Q1 total revenues were $1.39 billion, with net income of $109.6 million and diluted EPS of $1.49.

• Housing gross profit margin was 20.2% (down from 21.5%); adjusted margin was 20.3%.

• SG&A expense ratio increased to 11.0% from 10.8% year-over-year.

• Total liquidity at quarter-end was $1.25 billion, including $267.8 million in cash.

• Book value per share rose 12% year-over-year to $57.05.

Outlook and guidance

• Fiscal 2025 revenue guidance lowered to $6.6–$7.0 billion, with average selling price guidance of $480,000–$495,000.

• Q2 housing revenues expected between $1.45–$1.55 billion; average selling price for Q2 projected at $488,000.

• Full-year homebuilding operating income margin forecasted at ~9.4%, with gross profit margin between 19.2–20.0%.

• Effective tax rate expected to be approximately 24% for Q2 and full year.

• Community count projected at ~250–257 by year-end.