D.R. Horton Reports Lower Q2 Earnings as Affordability Weighs on Demand

D.R. Horton, Inc., the largest homebuilder in the United States by volume, reported a 31% decline in net income for the fiscal second quarter ended March 31, 2025, with earnings falling to $810.4 million, or $2.58 per diluted share, from $1.2 billion, or $3.52 per share, a year earlier. Revenue for the quarter dropped 15% to $7.7 billion, reflecting a slowdown in the spring selling season and continued affordability challenges among potential homebuyers.

The company closed 19,276 homes during the quarter, down from 22,548 homes in Q2 2024. Net sales orders also declined 15% year-over-year to 22,437 homes, valued at $8.4 billion. Backlog dropped 21% to 14,164 homes worth $5.5 billion. Despite the dip, home sales gross margin remained steady at 21.8%.

D.R. Horton returned $1.4 billion to shareholders through dividends and stock repurchases in the quarter. The board approved a new $5 billion share repurchase authorization, replacing the prior $1.1 billion authorization. The company has repurchased 16.5 million shares in the first half of fiscal 2025 and declared a quarterly dividend of $0.40 per share payable on May 9.

Homebuilding pre-tax income dropped 31% to $935 million, with the margin narrowing to 13.0% from 16.0% in Q2 2024. Revenue from home sales decreased to $7.2 billion, down from $8.5 billion, and homes closed fell 15%. For the six-month period, homebuilding revenue was down 9% to $14.4 billion, with 38,335 homes closed.

Rental operations generated $22.8 million in pre-tax income on $236.6 million in revenue, reflecting a drop from $33.3 million and $371.3 million respectively in Q2 2024. The company sold fewer rental properties compared to last year, including 519 single-family homes and 300 multi-family units during the quarter.

Forestar, the company’s majority-owned residential lot development subsidiary, sold 3,411 lots in Q2 2025 for $351 million in revenue, slightly above last year. However, Forestar's pre-tax income fell 31% to $40.7 million.

Financial services revenue dipped to $212.9 million, with pre-tax income of $73.0 million, both down from Q2 2024. The company maintained a strong liquidity position with $2.5 billion in cash and $3.3 billion in credit availability.

D.R. Horton updated its fiscal 2025 guidance to project revenue between $33.3 billion and $34.8 billion and home closings between 85,000 and 87,000 units. It reaffirmed plans for over $3 billion in operating cash flow, approximately $4 billion in share repurchases, and $500 million in dividend payments for the fiscal year.

Executive Chairman David Auld emphasized the company’s financial flexibility and operational strength amid a challenging market, stating that D.R. Horton remains focused on disciplined capital allocation and enhancing long-term shareholder value.