Lennar (LEN) Q1 2025 earnings summary

Executive summary

• Net earnings for Q1 2025 were $519.5 million ($1.96 per diluted share), or $566.7 million ($2.14 per share) excluding technology investment losses, down from $719.3 million ($2.57 per share) in Q1 2024, mainly due to lower margins and technology investment losses.

• Achieved strong first quarter results with a 6% increase in home deliveries to 17,834 homes and a 4% rise in total revenues to $7.63 billion, despite a challenging housing market.

• Completed the Millrose Properties spin-off, transferring $5.6 billion in land assets and $1.0 billion in cash, distributing 80% of shares to shareholders and retaining 20% to be disposed of later in 2025.

• Acquired Rausch Coleman Homes, expanding into Arkansas, Oklahoma, Alabama, Kansas/Missouri, and strengthening presence in Texas and Florida.

• Maintained sales and delivery pace by adjusting incentives and pricing in real time, supporting the transition to an asset-light, land-light model.

Financial highlights

• Delivered 17,834 homes, sold 18,355 homes, and started 17,651 homes in Q1 2025; homebuilding revenues grew 5% to $7.2 billion.

• Average sales price declined 1% year-over-year to $408,000, net of incentives.

• Gross margin on home sales was 18.7% (18.8% adjusted), down from 21.8% in Q1 2024, due to higher land costs and increased incentives; SG&A at 8.5%, net margin at 10.2%.

• Ended quarter with $2.3 billion in cash and 8.9% debt to total capital ratio; net homebuilding debt to total capital at (0.3)%.

• Repurchased 5.2 million shares for $703 million and paid $132 million in dividends.

Outlook and guidance

• Q2 2025 guidance: new orders of 22,500–23,500 homes, deliveries of 19,500–20,500 homes, average sales price $390,000–$400,000, and gross margin around 18%.

• SG&A expected at 8–8.2%; EPS guidance for Q2: $1.80–$2.00 per share.

• Financial Services operating earnings expected at $135–$145 million for Q2.

• Full-year 2025 deliveries expected between 86,000 and 88,000 homes.

• Focus on cash flow and inventory management amid a soft housing market.