KB HOME SEC 10-Q Report
KB HOME, a prominent homebuilding company, has released its Form 10-Q report for the second quarter of 2025. The report provides a comprehensive overview of the company's financial and operational performance amidst challenging market conditions. This summary highlights the key financial metrics and business activities that shaped the company's performance during the period.
Financial Highlights
Total Revenues: $1,529.6 million, reflecting an 11% decrease year-over-year due to softened market conditions and housing affordability concerns.
Operating Income: $131.5 million, representing a decrease from $188.2 million in the prior year, primarily due to a lower housing gross profit margin and increased selling, general and administrative expenses.
Net Income: $107.9 million, down 36% from the previous year, impacted by reduced demand and lower housing revenues.
Diluted EPS: $1.50, a 30% decrease from the prior year's $2.15, influenced by lower net income but partially offset by share repurchases.
Gross Profit Margin: 19.3%, down from 21.1% in the previous year, affected by price reductions, higher land costs, and reduced operating leverage.
Business Highlights
Revenue Segments: The homebuilding segment generated revenues of $1,524,716,000 for the three months ended May 31, 2025, and $2,911,757,000 for the six months ended May 31, 2025. The financial services segment contributed $4,869,000 and $9,605,000 for the same periods, respectively.
Geographical Performance: The West Coast region reported revenues of $660,193,000 for the three months ended May 31, 2025, and $1,261,842,000 for the six months ended May 31, 2025. The Southwest region had revenues of $314,102,000 and $626,981,000, respectively. The Central region reported $282,966,000 and $558,579,000, while the Southeast region had $267,455,000 and $464,355,000 for the same periods.
Sales Units: The company delivered 3,120 homes in the second quarter of 2025, representing an 11% decrease compared to the same period in 2024. Approximately 50% of these homes were delivered to first-time homebuyers.
Operational Strategy: The company implemented a strategy of pricing transparency and a simplified sales approach to stimulate demand, which included reducing selling prices and lowering or eliminating homebuyer concessions.
Future Outlook: Despite a 27% year-over-year decrease in ending backlog value to approximately $2.29 billion as of May 31, 2025, the company believes it is well-positioned to achieve its updated projections for the third quarter and full year of 2025.
Community Count: The average community count for the second quarter of 2025 increased by 5% year over year to 254, with an ending community count of 253, up 2% from the previous year.
Market Conditions: The second quarter of 2025 saw softened market conditions due to housing affordability concerns, elevated mortgage interest rates, and macroeconomic uncertainties, leading to a 13% year-over-year decline in net orders.
Investment Strategy: The company reduced its investments in land and land development by 23% year over year to $513.9 million in the second quarter of 2025, while increasing share repurchases, reflecting a shift in capital allocation priorities.
SEC Filing: KB HOME [ KBH ] - 10-Q - Jul. 10, 2025