M/I Homes (MHO) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 decreased 7% year-over-year to $976 million, with homes delivered down 8% to 1,976 units and net income down 19% to $111 million ($3.98 per diluted share).

• New contracts declined 10% to 2,292, with the spring selling season described as "just okay" and demand remaining choppy.

• Gross margin decreased 120 basis points to 25.9%, impacted by increased incentives and interest rate buydowns.

• Shareholders' equity reached a record $3 billion, with book value per share at $112, up 14% year-over-year.

• Financial services segment achieved record quarterly revenue of $31.5 million, up 17% year-over-year.

Financial highlights

• Pre-tax income dropped 19% to $146 million; pre-tax income margin remained strong at 15%.

• Diluted EPS was $3.98, compared to $4.78 in the prior year quarter.

• Adjusted EBITDA for Q1 2025 was $154 million, down from $187 million in Q1 2024.

• Homebuilding revenue declined 7% to $944.6 million; financial services revenue rose 17% to $31.5 million.

• Cash provided by operating activities was $65 million, down from $116 million a year ago.

Outlook and guidance

• Management expects softer market conditions and choppy demand to persist through 2025, with continued focus on incentives and cost control.

• Community count projected to grow by 5% in 2025; company remains optimistic for a solid year.

• Emphasis on managing land spend, construction cycle times, and customer service amid ongoing macroeconomic uncertainty.