KB Home (KBH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues rose 10–11% year-over-year to $1.75 billion, with net income up 5% to $157.3 million and diluted EPS up 13% to $2.04, driven by higher home deliveries and average selling prices.

• Deliveries increased 8% to 3,631 homes, with average selling price up 3% to $480,900; book value per share rose 13% year-over-year.

• Net orders were flat year-over-year at 3,085, but order value rose 2% and cancellation rates improved to 15% from 21%; backlog value declined 14% to $2.92 billion.

• Company repurchased $150 million in shares in Q3, totaling 1.87–1.9 million shares, and increased land investment over 50% year-over-year to nearly $850 million.

• Liquidity stood at $1.46 billion, including $374.9–$375 million in cash and $1.08 billion in available credit.

Financial highlights

• Housing gross profit margin was 20.6% (20.7% adjusted), down from 21.5% a year ago, mainly due to product/geographic mix and pricing adjustments.

• Homebuilding operating income rose 5% to $189.0 million, with an operating margin of 10.8% (10.9% adjusted).

• SG&A expense ratio improved to 9.8% from 10.2% last year.

• Financial services pretax income grew 11% to $11.0 million, driven by higher joint venture income.

• Book value per share increased 13% to $54.37.

Outlook and guidance

• Full-year 2024 housing revenues expected at $6.85–$6.95 billion, with average selling price projected at $490,000 and diluted EPS over $8.

• Q4 2024 housing revenues projected at $1.94–$2.04 billion, with gross margin expected to improve to 21–21.4%.

• Initial 2025 revenue guidance is approximately $7.5 billion, with growth expected from community count, backlog, and absorption.

• Ending community count expected in the range of 250–255.

• All lots needed for anticipated delivery targets through 2025 are owned or controlled.