Meritage Homes (MTH) Q4 2025 earnings summary

Executive summary

• Fourth quarter 2025 saw 3,755 home closings and $1.4 billion in home closing revenue, both down year-over-year due to lower volume, average sales price, affordability challenges, and increased incentives.

• Net sales orders declined 2% year-over-year in Q4 2025 amid a tougher selling environment, while community count grew 15% to 336 at year-end, offsetting slower demand.

• Full year 2025 sales volume was flat at 14,650 homes, with a 9% decline in absorption pace offset by a 12–15% increase in average communities.

• Maintained a competitive advantage with a strong supply of move-in ready homes and a 60-day closing guarantee, focusing on affordable, entry-level, and first move-up homes.

• Returned nearly $180 million to shareholders in Q4 and $416 million for the year via buybacks and dividends, representing 92% of 2025 earnings.

Financial highlights

• Q4 home closing revenue was $1.4 billion, down 12% year-over-year due to 7% lower closing volume and a 5% decrease in ASP to $375,000.

• Q4 home closing gross margin was 16.5%, down 670 bps year-over-year; adjusted margin was 19.3% (excluding $38.9 million in non-recurring charges).

• Q4 adjusted diluted EPS was $1.67, down 30% year-over-year, impacted by $42.9 million in non-recurring charges.

• Q4 net earnings were $84 million ($1.20 per diluted share), down 51% year-over-year.

• Ended 2025 with $775 million in cash and net debt to capital of 16.9%.

Outlook and guidance

• 2026 guidance projects home closing volume and revenue in line with 2025, assuming stable market conditions.

• Q1 2026 guidance: 3,000–3,300 closings, $1.13–$1.24 billion revenue, 18–19% gross margin, 24% tax rate, and $0.87–$1.13 diluted EPS.

• Expecting 5–10% community count growth in 2026 and continued focus on maximizing asset value and operating leverage.

• Committed to $400 million in share buybacks in 2026, with $100 million planned per quarter, subject to market conditions.