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Mar 31, 2025
Forestar Q2 2025 Earnings Report
Forestar reported a drop in net income despite higher revenue and increased lot deliveries in Q2 2025.
Key Takeaways
Forestar delivered higher revenues and more residential lots compared to Q2 2024, but profitability fell due to higher costs and reduced homebuyer confidence. The company issued new debt and bought back older notes to strengthen its balance sheet.
Revenue increased 5% YoY to $351 million.
Net income declined 30% YoY to $31.6 million.
Lots sold rose 4% YoY to 3,411 units.
Issued $500M in new senior unsecured notes and repurchased $329.4M of older notes.
Revenue by Segment
Forward Guidance
Forestar revised its full-year guidance downward due to a slower than expected start to the spring selling season driven by affordability constraints.
Positive Outlook
- Increased liquidity with $792M in available capital.
- Issued $500M in new 6.50% notes due 2033.
- Expanded lot deliveries to 3,411 in the quarter.
- Strong balance sheet with book value per share up 11%.
- Contracted $2.3B in future lot sales revenue.
Challenges Ahead
- Reduced FY25 delivery guidance to 15,000–15,500 lots.
- Lower FY25 revenue guidance to $1.5B–$1.55B.
- Home affordability issues impacting sales velocity.
- Consumer confidence decline affecting demand.
- Q2 net income down 30% YoY despite revenue growth.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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