LGI Homes (LGIH) Q2 2025 earnings summary

Executive summary

• Delivered 1,323 homes in Q2 2025 with revenue of $483.5 million and an average sales price of $365,446, despite a 20.1% year-over-year decline in closings and a 19.8% drop in revenue due to affordability challenges and economic uncertainty.

• Net income for Q2 2025 was $31.5 million, or $1.36 per share, down 46.2% year-over-year.

• Gross margin for Q2 2025 was 22.9%, with adjusted gross margin at 25.5%, both down year-over-year but up sequentially.

• Ended Q2 with 146 active communities, a 14% increase year-over-year, and 64,756 owned and controlled lots.

• Average monthly absorption rate declined to 3.0 in Q2 2025, reflecting slower sales pace.

Financial highlights

• Q2 2025 revenue was $483.5 million, down 19.8% year-over-year, with a 20.1% decline in home closings and a 0.4% increase in average sales price.

• Adjusted gross margin was 25.5%, up 190 basis points sequentially but down from 27% year-over-year; reported gross margin was 22.9%.

• Pre-tax net income for Q2 2025 was $42.0 million, a 45.3% decrease year-over-year.

• SG&A expenses totaled $71 million, or 14.7% of revenue.

• Net orders in Q2 were 1,091, with a sequential decline reflecting muted demand.

Outlook and guidance

• Q3 2025 guidance: 1,100–1,300 home closings at ASP of $360,000–$365,000 across ~145 communities.

• Expected Q3 gross margin of 21.5%–22.5% and adjusted gross margin of 24%–25%; SG&A expense projected at 15%–16% of revenue.

• Full-year guidance withdrawn due to market uncertainty; annual guidance will be reintroduced when conditions stabilize.

• Guidance assumes stable economic and regulatory conditions similar to those experienced so far in 2025.