Hovnanian Enterprises, Inc. · NYSE:HOV
Hovnanian Enterprises — Q2 2025 Earnings Presentation
53 slides from Hovnanian Enterprises's earnings presentation, May 20, 2025
Slide 1: Review of Financial Results Second Quarter Fiscal 2025
Review of Financial Results Second Quarter Fiscal 2025
Slide 2: Forward-Looking Statements
Forward-Looking Statements All statements in this presentation that are not historical facts should be considered as “Forward-Looking Statements” within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risk
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES: Consolidated earnings before interest expense and income taxes (“EBIT”) and before depreciation and amortization (“EBITDA”) and before inventory impairments and land option write-offs and loss (gain) on extinguishment of debt, net (“Adjusted EBITDA”), the ratio of Adjust
Slide 4: Recent company performance
Recent company performance
Slide 5: Second Quarter Results Compared to Guidance
Second Quarter Results Compared to Guidance ($ in millions) Guidance Actuals Q2 2025(1) Q2 2025 Total Revenues $675 - $775 $686 Adjusted Homebuilding Gross Margin(2) 17.5% - 18.5% 17.3% Total SG&A as Percentage of Total Revenues(3) 11.0% - 12.0% 11.7% Income from Unconsolidated Joint Ventures $5 - $
Slide 6: Second Quarter Results Compared to Last Year
Second Quarter Results Compared to Last Year ($ in millions) Total Revenues Adjusted Gross Margin(1) $708 $686 22.6% 17.3% Q2 2024 Q2 2025 Q2 2024 Q2 2025 Total SG&A as a Percentage of Total Revenues(2) Adjusted Income Before Income Taxes(3) 11.2% 11.7% $70 $29 Q2 2024 Q2 2025 Q2 2024 Q2 2025 (1) Ad
Slide 7: Contracts, including domestic unconsolidated joint ventures
Contracts, including domestic unconsolidated joint ventures 1,761 1,629 Q2 2024 Q2 2025 Note: Includes domestic unconsolidated joint venture contracts. 7
Slide 8: Monthly contracts
Monthly contracts 594 609 590 577 539 481 February February March March April April 2024 2025 2024 2025 2024 2025 Note: Includes domestic unconsolidated joint venture contracts. 8
Slide 9: Monthly contracts
9 539 Apr 2025 590 Apr 2024 609 Mar 2025 594 Mar 2024 481 Feb 2025 577 Feb 2024 503 Jan 2025 559 Jan 2024 430 Dec 2024 419 Dec 2023 467 Nov 2024 301 Nov 2023 Note: Includes domestic unconsolidated joint venture contracts. Monthly contracts 543 Oct 2024 299 Oct 2023 473 Sep 2024 373 Sep 2023 556 Aug
Slide 10: Quarterly Contracts Per Community
Quarterly Contracts Per Community Excluding Build for Rent Including Build for Rent 13.9 13.0 11.2 18.3 15.0 13.5 12.6 11.3 12.0 11.1 10.3 10.9 10.6 10.5 1997 - Second Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2021 Q2 2022 Q2 2023 Q2 2024 Q2 2025 2002 Quarter Second Average Quarter Since Average 2008 Note:
Slide 11: Contracts Per Community
Contracts Per Community Excluding Build for Rent Including Build for Rent 4.7 4.4 4.5 3.7 4.3 4.2 4.0 4.0 3.5 3.4 3.6 3.3 3.2 February February February March March March April April April Monthly 2024 2025 Monthly 2024 2025 Monthly 2024 2025 Average Average Average Since Since Since 2008 2008 2008
Slide 12: Contracts Per Community – Most Recent Quarter
Contracts Per Community – Most Recent Quarter For the quarter ended March 31, 2025 13.3 13.4 10.1 10.8 9.8 9.8 7.9 8.1 8.4 8.5 6.8 Communities (Mar Q1) Finders (Mar Q1) Beazer (Mar Q2) Morrison (Mar Q1) NVR (Mar Q1) Hovnanian (as if Mar. qtr. end) Meritage (Mar Q1) Pulte (Mar Q1) LGI Homes (Mar Q1)
Slide 13: Contracts Per Community – Most Recent Quarter (YoY Change)
Contracts Per Community – Most Recent Quarter Year-Over-Year Change For the quarter ended March 31, 2025, compared with the quarter ended March 31, 2024 7% -8% -6% -13% -12% -10% -14% -28% -25% -24% -36% Communities (Mar Q1) Finders (Mar Q1) Beazer (Mar Q2) Morrison (Mar Q1) NVR (Mar Q1) Hovnanian (
Slide 14: Percentage of Our Homebuyers That Used Buydowns
Percentage of Our Homebuyers That Used Buydowns 79% 74% 75% 73% 72% 71% Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Note: Represents the percentage of K. Hovnanian American Mortgage customers that used a buydown. 14
Slide 15: Quick Move In Homes Per Community
# Homes / Community Jan-18 3.9 Apr-18 4.2 Jul-18 4.5 Oct-18 4.6 Jan-19 4.4 Apr-19 4.4 Jul-19 5.3 Oct-19 5.4 Note: Excluding unconsolidated joint ventures and models. Jan-20 5.8 Apr-20 4.7 Jul-20 2.5 Oct-20 2.3 Jan-21 2.0 Apr-21 1.4 Jul-21 1.5 o 304 finished QMIs at 04/30/25 Oct-21 1.5 Jan-22 1.6 Apr
Slide 16: Raising Home Prices in Many of Our Communities
Raising Home Prices in Many of Our Communities Percentage of communities where we raised net prices 69% 71% 59% 54% 37% 40% 33% 34% 31% 30% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 16
Slide 17: Lot Vintage
Lot Vintage 35% 14,902 20% 19% 8,382 10% 7,872 8% 8% 4,364 3,293 3,627 pre 21 2021 2022 2023 2024 2025 % of Incentives - 3.4% 3.0% 7.9% 8.1% 10.1% Note: “% of incentives” is percentage of incentives to total revenue before incentives. Percentage for 2025 is for the first six months of the fiscal yea
Slide 18: Base Construction Costs Per Square Foot
Base Construction Costs Per Square Foot $96.21 $94.93 $91.83 $91.74 $91.39 $90.27 $89.78 $89.51 $89.19 $88.82 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 18
Slide 19: Community Count
Community Count Community count expected to grow further in fiscal 2025. 148 132 23 23 125 109 Q2 2024 Q2 2025 Wholly Owned Unconsolidated Joint Ventures Note: Excludes our multi-community unconsolidated joint venture in the Kingdom of Saudi Arabia. 19
Slide 20: Lots Controlled
Lots Controlled Including domestic unconsolidated joint ventures, our total lots controlled were 42,440 45,582 as of April 30, 2025. 36,841 28,657 35,990 29,584 20,402 8,255 7,257 6,450 Q2 2023 Q2 2024 Q2 2025 Owned Optioned Note: Excludes unconsolidated joint ventures. 20
Slide 21: Lots Controlled
Lots Controlled Including domestic unconsolidated joint ventures, our total lots controlled were 43,254 41,891 42,440 45,582 as of April 30, 2025. 39,516 36,841 33,576 31,726 29,123 28,657 29,487 35,259 36,510 35,990 32,336 29,584 25,867 20,789 21,598 24,389 20,402 8,334 8,255 7,889 7,337 7,709 7,25
Slide 22: Quarterly Land and Land Development Spend
Quarterly Land and Land Development Spend $318.4 $247.6 $230.5 $230.4 $229.3 $219.8 $219.6 $216.1 $205.2 $204.5 $194.8 $178.6 $177.6 $175.0 $168.8 $167.1 $162.6 $156.5 $154.8 $134.4 $117.9 $114.4 Q1 Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q2 Q2 Q2 Q2 Q3 Q3 Q3 Q3 Q3 Q4 Q4 Q4 Q4 Q4 20 21 22 23 24 25 20 21 22 23 24 25 20
Slide 23: Percentage of Optioned Lots
Percentage of Optioned Lots 85% 80% 69% 71% 60% 60% 63% 49% 51% 53% 45% Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2021 Q2 2022 Q2 2023 Q2 2024 Q2 2025 Note: Excludes unconsolidated joint ventures. 23
Slide 24: % of Lots Optioned vs Peers
LGI Homes (Mar Q1) 21% Meritage (Mar Q1) 38% KB Home (Feb Q1) 46% Note: Excludes unconsolidated joint ventures. M/I Homes (Mar Q1) 51% TRI Pointe (Mar Q1) 52% Source: Peer SEC filings and press releases as of 05/20/2025. % of Lots Optioned Note: Hovnanian 91% excludes QMIs and backlog from owned lot
Slide 25: Inventory Turns (COGS), Last Twelve Months
Inventory Turns (COGS), Last Twelve Months 2.8x 1.6x 1.6x 1.7x 1.0x 1.0x 1.0x 1.0x 1.0x 1.0x 1.1x 1.1x 0.8x 0.8x 0.5x M/I Homes (Mar Q1) LGI Homes (Mar Q1) Beazer (Mar Q2) Morrison (Mar Q1) NVR (Mar Q1) Meritage (Mar Q1) Toll (Jan Q1) KB Home (Feb Q1) Communities (Mar Q1) Hovnanian (Apr Q2) Pulte (M
Slide 26: Liquidity Position and Target
Liquidity Position and Target ($ in millions) $564 After $27M to $125 $464 $456 redeem debt early $457 and $12M of share $399 repurchases $381 $125 $366 $125 $125 $353 $357 $125 $338 $125 $306 $308 $125 $313 $311 $125 $282 $125 $271 $125 $125 $439 $125 $251 $222 $245 Target $125 $125 $125 $202 liqui
Slide 27: Debt Maturity Profile
Debt Maturity Profile April 30, 2025 ($ in millions) Total Debt Outstanding $855 $430 Annual Interest Incurred $87 11.75% In Q2 2025 redeemed $27M of 13.5% senior notes due February of 2026. $225 8.00% $175 10.00% $125 (1) $25 5.00% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2 '25 '25 '2
Slide 28: Balance Sheet Metrics
Balance Sheet Metrics ($ in millions) Equity value (book) Total debt $800 $820 $582 $1,684 $1,566 $383 $1,373 $1,291 $175 $1,143 $987 $942 $(437) $(490) FYE FYE FYE FYE FYE FYE Q2 FYE FYE FYE FYE FYE FYE Q2 2019 2020 2021 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025 Net debt to net capital
Slide 29: Third Quarter Guidance vs. Second Quarter Actuals
Third Quarter Guidance vs. Second Quarter Actuals ($ in millions) Total Revenues Adjusted Gross Margin(1) $850 18.0% $686 $750 17.3% 17.0% Q2 2025 Q3 2025 Q2 2025 Q3 2025 Guidance Guidance Total SG&A as Percentage of Total Revenues(2) Adjusted Income Before Income Taxes(3) 12.0% $40 11.7% 11.0% $29
Slide 30: Guidance for Fiscal 2025 Third Quarter
Guidance for Fiscal 2025 Third Quarter ($ in millions) Guidance Q3 2025(1) Total Revenues $750 - $850 Adjusted Homebuilding Gross Margin(2) 17.0% - 18.0% Total SG&A as Percentage of Total Revenues(3) 11.0% - 12.0% Income from Unconsolidated Joint Ventures $15 - $25 Adjusted EBITDA(4) $60 - $70 Adjus
Slide 31: ROE, Last Twelve Months
Beazer (Mar Q2) 7.9% LGI Homes (Mar Q1) 9.3% Century Communities (Mar Q1) 12.2% TRI Pointe (Mar Q1) 13.1% Lennar (Feb Q1) 14.1% Source: Peer SEC filings and press releases as of 05/20/2025. Meritage (Mar Q1) 14.5% KB Home (Feb Q1) ROE, Last Twelve Months 15.6% Midsized Peers Taylor Morrison (Mar Q1)
Slide 32: Adjusted EBIT ROI, Last Twelve Months
Adjusted EBIT ROI, Last Twelve Months 72.8% 31.3% 23.3% 26.0% 26.1% 26.5% 18.6% 20.3% 20.9% 21.5% 14.5% 17.1% 17.5% 8.2% 9.1% Toll (Jan Q1) Lennar (Feb Q1) Finders (Mar Q1) DR Horton (Mar Q2) Beazer (Mar Q2) Morrison (Mar Q1) KB Home (Feb Q1) Hovnanian (Apr Q2) Meritage (Mar Q1) Pulte (Mar Q1) Commu
Slide 33: Price to Book Value
Price to Book Value 5.45 1.59 1.70 1.71 1.29 1.37 0.87 0.95 0.96 0.97 1.00 1.01 0.56 0.67 0.67 Toll (Jan Q1) Lennar (Feb Q1) DR Horton (Mar Q2) Finders (Mar Q1) Beazer (Mar Q2) Morrison (Mar Q1) Hovnanian (Apr Q2) KB Home (Feb Q1) Meritage (Mar Q1) Pulte (Mar Q1) Communities (Mar Q1) LGI Homes (Mar
Slide 34: Price to Earnings Ratio
Price to Earnings Ratio 15.19 9.53 8.16 6.99 6.99 7.11 7.10 7.34 7.37 7.39 7.51 6.73 5.85 5.94 3.89 Toll (Jan Q1) Lennar (Feb Q1) Finders (Mar Q1) Beazer (Mar Q2) Meritage (Mar Q1) Pulte (Mar Q1) Communities (Mar Q1) LGI Homes (Mar Q1) DR Horton (Mar Q2) M/I Homes (Mar Q1) Morrison (Mar Q1) NVR (Mar
Slide 35: ROE Price to Book
ROE Price to Book 6.50 3.50 NVR 40.3%, 5.45 3.00 2.50 Price to Book Value 2.00 DR Horton Pulte Taylor Morrison 1.50 Toll Lennar Dream KB Home Finders 1.00 Hovnanian LGI Homes M/I Homes Meritage Beazer 0.50 TRI Pointe Century Communities 0.00 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
Slide 36: EBIT ROI to PE
EBIT ROI to PE 20.00 16.00 NVR 72.8%, 15.19 14.00 12.00 Price to Earnings Ratio DR Horton 10.00 Taylor Morrison LGI Homes Toll TRI Pointe 8.00 KB Home Pulte Lennar Beazer 6.00 Century Communities Dream M/I Homes Meritage Finders 4.00 Hovnanian 2.00 0.00 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
Slide 37: Appendix
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Slide 38: Second Quarter Results Compared to Guidance
Second Quarter Results Compared to Guidance ($ in millions) Actuals Guidance Actuals Q2 2025 Q2 2025(1) Q2 2025 Excluding Incremental Phantom Benefit Total Revenues $675 - $775 $686 $686 Adjusted Homebuilding Gross Margin(2) 17.5% - 18.5% 17.3% 17.3% Total SG&A as Percentage of Total 11.0% - 12.0% 1
Slide 39: Annual Contracts Per Community
Annual Contracts Per Community Excluding Build for Rent Including Build for Rent 39.5 43.5 41.9 40.7 54.2 55.2 44.0 38.9 38.9 41.2 41.0 35.1 36.0 36.9 30.0 31.4 28.4 avg. 1997- 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 TTM ended 04/30/2025 2002 Average Note: Annual Contracts per Communi
Slide 40: EBIT ROI to Price to Book Value
EBIT ROI to Price to Book Value 6.50 3.50 NVR 72.8%, 5.45 3.00 2.50 Price to Book Value 2.00 Dream DR Horton Finders Pulte Taylor 1.50 Morrison Lennar Toll KB Home 1.00 Hovnanian LGI Homes M/I Homes Meritage 0.50 TRI Pointe Beazer Century Communities 0.00 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0
Slide 41: ROE to PE
ROE to PE 16.00 20.00 NVR 40.3%, 15.19 14.00 12.00 DR Horton Price to Earnings Ratio 10.00 Lennar TRI Pointe Taylor Morrison Pulte 8.00 LGI Homes Toll Beazer Dream 6.00 Meritage Finders Century M/I Homes 4.00 Hovnanian Communities KB Home 2.00 0.00 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
Slide 42: Profitable financial services business
Profitable financial services business Financial services overview Origination portfolio for the six months ended April 30, 2025 Complements HOV’s homebuilding operations 0.9% Prime Allows ability for interest rate buy- VHA / FHA down programs for homebuilder customers Nonconforming 40.6% Prov
Slide 43: Credit Quality of Homebuyers
Credit Quality of Homebuyers Fiscal Year 2024 Second Quarter 2025 o Average LTV: 83% o Average LTV: 84% o Average CLTV: 83% o Average CLTV: 84% o ARMs: 0.0% o ARMs: 0.2% o FICO Score: 745 o FICO Score: 746 o Capture Rate: 79% o Capture Rate: 78% Note: Loans originated by our wholly-owned mortgage ba
Slide 44: Monthly Number of contracts
Monthly Number of contracts Sundays 413 May-21 5 May-21 4.3 336 May-22 5 May-22 3.3 456 May-23 4 May-23 4.3 397 May-24 4 May-24 3.5 384 Jun-21 4 Jun-21 4.0 232 Jun-22 4 Jun-22 2.1 603 Jun-23 4 Jun-23 6.0 393 Jun-24 5 Jun-24 3.4 414 Jul-21 4 Jul-21 4.0 Note: Excludes unconsolidated joint ventures. 23
Slide 45: Land Positions by Geographic Segment
Land Positions by Geographic Segment April 30, 2025 Owned Excluding Segment Mothballed Lots Optioned Lots Total Lots Mothballed Lots Northeast 2,248 6 17,313 19,567 Southeast 926 - 6,888 7,814 West 2,880 390 11,789 15,059 Consolidated Total 6,054 396 35,990 42,440 Unconsolidated Joint Ventures 2,604
Slide 46: Phantom Stock Impact
Phantom Stock Impact ($ in millions, except stock prices) Incremental Total SG&A Total SG&A Ratio Stock Price at Reported Reported Total Phantom Stock Adjusted for Adjusted for Phantom end of quarter Total SG&A SG&A Ratio Benefit (Expense) Phantom Stock Stock Q1 2021 $51.16 - - - - - Q2 2021 $132.59
Slide 47: Reconciliation of income before income taxes excluding land-related charges
Reconciliation of income before income taxes excluding land- related charges and gain on extinguishment of debt, net to income before income taxes Hovnanian Enterprises, Inc. April 30, 2025 Reconciliation of income before income taxes excluding land-related charges and gain on extinguishment of debt
Slide 48: Reconciliation of Gross Margin
Reconciliation of Gross Margin Hovnanian Enterprises, Inc. April 30, 2025 Gross margin (In thousands) Homebuilding Gross Margin Homebuilding Gross Margin Three Months Ended Six Months Ended April 30, April 30, 2025 2024 2025 2024 (Unaudited) (Unaudited) Sale of homes $ 650,314 $ 686,929 $ 1,297,228
Slide 49: Reconciliation of Adjusted EBITDA to Net Income
Reconciliation of Adjusted EBITDA to Net Income Hovnanian Enterprises, Inc. April 30, 2025 Reconciliation of adjusted EBITDA to net income (In thousands) Three Months Ended Six Months Ended April 30, April 30, 2025 2024 2025 2024 (Unaudited) (Unaudited) Net income $ 19,726 $ 50,836 $ 47,917 $ 74,740
Slide 50: Reconciliation of Inventory Turnover
Reconciliation of Inventory Turnover Hovnanian Enterprises, Inc. April 30, 2025 Calculation of Inventory Turnover(1) TTM For the quarter ended ended (Dollars in thousands) 7/31/2024 10/31/2024 1/31/2025 4/30/2025 4/30/2025 Cost of sales, excluding interest $547,332 $735,337 $533,290 $543,289 $2,359,
Slide 51: Reconciliation of Adjusted EBIT Return on Adjusted Investment
Reconciliation of Adjusted EBIT Return on Adjusted Investment Hovnanian Enterprises, Inc. April 30, 2025 Reconciliation of Adjusted EBIT Return on Adjusted Investment (in thousands) TTM For the quarter ended ended 7/31/2024 10/31/2024 1/31/2025 4/30/2025 4/30/2025 Net income $ 72,919 $ 94,349 $ 28,1
Slide 52: Key credit and balance sheet metrics reconciliations
Key credit and balance sheet metrics reconciliations October 31, LTM April 30, 2019 2020 2021 2022 2023 2024 2025 Nonrecourse mortgages secured by inventory, net of debt issuance costs $203,585 $135,122 $125,089 $144,805 $91,539 $90,675 $78,092 Senior notes and credit facilities (net of discounts, p
Slide 53: Hovnanian Enterprises, Inc.
ovnanian Enterprises; Inc.
Hovnanian Enterprises — Q2 2025 Earnings Presentation on 6ix