M/I Homes (MHO) Q4 2024 earnings summary

Executive summary

• Achieved record 2024 results: homes delivered up 12% to 9,055, revenue up 12% to $4.5B, and pre-tax income up 21% to $734M.

• Fourth quarter homes delivered rose 19% year-over-year to 2,402; new contracts up 11% to 1,759.

• Navigated choppy demand and rising mortgage rates by implementing rate buy-downs, with nearly 50% of buyers utilizing them in Q4.

• Ended 2024 with 220 communities, a 7% increase in average community count, and a strong land position controlling over 52,000 lots.

• Shareholders' equity reached a record $2.9 billion, up 17% year-over-year.

Financial highlights

• Q4 revenue rose 24% year-over-year to $1.2B; full-year revenue up 12% to $4.5B.

• Q4 net income increased 27% to $133.5M ($4.71 per share); full-year net income up 21% to $564M ($19.71 per share).

• Q4 gross margin was 24.6%, down 50 bps year-over-year and 250 bps sequentially, mainly due to rate buy-downs; full-year gross margin was 26.6%, up from 25.3% in 2023.

• Q4 pre-tax income margin was 14.2%; full-year pre-tax margin was 16.3% vs. 15.1% in 2023.

• Adjusted EBITDA for the year was $767M, up from $648M in 2023.

Outlook and guidance

• Expect continued use of rate buy-downs in 2025 to address affordability and demand.

• Anticipate some gross margin compression in 2025 compared to 2024.

• Project 5% growth in average community count for 2025.

• Effective tax rate expected to be around 23% in 2025.

• Management expects continued industry strength in 2025, citing favorable demographics and housing undersupply.