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Apr 30
Hovnanian Q2 2025 Earnings Report
Hovnanian reported a drop in revenue and margins, but remained profitable in Q2 2025.
Key Takeaways
Despite a decline in revenue and gross margins, Hovnanian delivered positive net income, repurchased shares, and continued to maintain strong capital discipline while increasing their controlled lot inventory.
Total revenue fell to $686.5M from $708.4M a year ago.
Net income was $19.7M, down from $50.8M in Q2 2024.
Homebuilding gross margin declined to 13.8% from 19.5%.
The company repurchased 2.4% of its Class A common stock and redeemed all remaining 13.5% senior notes due 2026.
Hovnanian
Hovnanian
Hovnanian Revenue by Segment
Hovnanian Revenue by Geographic Location
Revenue by Segment
Home Sales Revenue
CapyFin.comLand & Other Rev Revenue
CapyFin.comFinancial Services Revenue
CapyFin.comRevenue by Geographic Location
Northeast Revenue
CapyFin.comSoutheast Revenue
CapyFin.comWest Revenue
CapyFin.com Forward Guidance
Hovnanian expects Q3 revenue between $750M and $850M, with adjusted income before taxes projected at $30M to $40M.
Positive Outlook
- Revenue expected to rise in Q3 FY25.
- Adjusted homebuilding gross margins expected between 17.0% and 18.0%.
- Adjusted EBITDA projected between $60M and $70M.
- Strong liquidity position maintained within target range.
- Continued focus on debt reduction and share repurchases.
Challenges Ahead
- Gross margins pressured by mortgage rate buydowns.
- Sales pace slower than recent years.
- Land-related due diligence led to abandonment of some positions.
- Challenging housing demand environment persists.
- Backlog value declined year-over-year due to quicker turnover on move-in ready homes.
Revenue & Expenses
Visualization of income flow from segment revenue to net income