M/I Homes (MHO) Q2 2025 earnings summary

Executive summary

• Achieved record second quarter revenue, with figures reported at $1.2 billion and $1.16 billion, up 5% year-over-year, and record homes delivered, though profitability declined due to higher incentives and interest rate buydowns.

• Net income for Q2 2025 was $121.2 million ($4.42 per diluted share), down 17%–18% year-over-year.

• New contracts declined 8% year-over-year, and backlog units dropped 25%, reflecting softer demand and extended homebuying timelines.

• Shareholders' equity reached a record $3.1 billion, up 12% year-over-year, with book value per share at $117.

• Maintained a strong balance sheet with $800 million in cash and no borrowings under a $650 million credit facility.

Financial highlights

• Q2 2025 revenue rose 5% year-over-year to $1.2 billion; pre-tax income fell 18% to $160.1 million due to lower gross margins.

• Gross margin for Q2 2025 declined to 24.7%, down 320 basis points year-over-year.

• EBITDA for the quarter was $169 million, down from $200 million a year ago; EPS decreased 14% to $4.42.

• Homebuilding debt to capital ratio: 18% at June 30, 2025; net debt to capital: -3%.

• Return on equity stood at 17%.

Outlook and guidance

• Management expects average 2025 community count to increase by about 5% from 2024.

• Challenging market conditions, including elevated mortgage rates and affordability concerns, are expected to persist through 2025.

• Remain optimistic about business performance, supported by a strong balance sheet and land position.

• Margins expected to stabilize near current levels, with potential for improvement if interest rates decline.

• Backlog remains healthy, with average sales price 4% higher than prior year, despite lower unit count.