M/I Homes (MHO) Q3 2024 earnings summary

Executive summary

• Achieved record third quarter and year-to-date results in homes delivered, revenue, and income, with Q3 homes delivered up 8% to 2,271 and year-to-date closings at 6,653, a 9% increase.

• Net income for Q3 rose 5% to $145.4 million ($5.10 per diluted share), and pre-tax income increased 6% to $188.7 million, both third quarter records.

• Shareholders' equity reached a record $2.85 billion, with book value per share at $105, up 20% year-over-year.

• Homebuilding debt to capital ratio improved to 20%, and return on equity was 20%.

• Maintained strong buyer quality with average credit scores around 750 and average down payments above 18%.

Financial highlights

• Q3 revenue reached a record $1.14 billion, up 9% year-over-year; year-to-date revenue at $3.3 billion, up 8%.

• Gross margin for Q3 was 27.1%, up 20 basis points year-over-year; pre-tax income margin was 16.5%.

• Diluted EPS was $5.10 for Q3 and $14.99 year-to-date.

• EBITDA for Q3 was $198 million, up from $185 million a year ago.

• Financial services revenue hit a quarterly record of $30.0 million, up 27% year-over-year.

Outlook and guidance

• On track to open more new communities in Q4 and 2025, with average 2024 community count expected to be 5% higher than 2023, ending Q3 with 217 active communities.

• Anticipates continued growth in community count and business expansion in 2025 and beyond, supported by favorable demographics and limited supply.

• Expects Smart Series (entry-level) and Move-Up products to remain balanced, with no major strategic shift planned.

• Backlog average sales price is 7% higher than prior year, with a six-year lot supply under control.

• Management expects a very strong full-year 2024, citing strong balance sheet, low debt, and well-located communities.