D R Horton — Financial Results
Revenue and Profit Declined Across the Board in Fiscal 2025
| Metric | Fiscal 2025 | Fiscal 2024 | Change |
|---|---|---|---|
| Consolidated revenues | $34.3B | $36.8B | -7% |
| Pre-tax income | $4.7B | $6.3B | -25% |
| Pre-tax margin | 13.8% | 17.1% | -330 bps |
| Diluted EPS | $11.57 | $14.34 | -19% |
D.R. Horton closed 5% fewer homes (84,863) at a 2% lower average price ($370,400), which together drove revenue lower. Pre-tax income fell much faster than revenue because margins were squeezed — a sign that the company had to work harder and spend more to move homes.
Gross Margins Fell as the Company Leaned Heavily on Incentives
Home sales gross margin (the percentage of revenue left after building costs) dropped from 23.5% to 21.5% — a 200 basis point decline. The main driver was construction costs rising while selling prices fell, with higher warranty costs and capitalized interest adding further pressure. Management was explicit: elevated incentives such as mortgage rate buydowns (where the builder temporarily subsidizes a lower interest rate for the buyer) are expected to continue into fiscal 2026 and could increase further depending on mortgage rates.
Cash Generation Actually Improved Despite Lower Profits
| Metric | Fiscal 2025 | Fiscal 2024 |
|---|---|---|
| Net cash from operations | $3.4B | $2.2B |
| Homes in inventory | 29,600 | 37,400 |
| Unsold completed homes | ~9,300 | ~10,300 |
The company generated $3.4 billion in operating cash, up from $2.2 billion, primarily because it pulled down its homes-in-inventory count by 7,800 units. Selling existing inventory rather than building new converts assets back into cash — a healthy sign of inventory discipline even in a slower market.
D.R. Horton Returned $4.8 Billion to Shareholders in One Year
The company spent $4.3 billion repurchasing 30.7 million shares and paid $494.8 million in dividends, totaling roughly $4.8 billion returned to shareholders. The board also raised the quarterly dividend from $0.40 to $0.45 per share in October 2025. With $3.3 billion still remaining on the buyback authorization, shareholder returns remain a clear capital priority.
Florida and Texas Were the Biggest Drag; the North Was a Bright Spot
The Southeast region (heavily Florida) saw homebuilding revenues fall 21%, with pre-tax income dropping from $1.4 billion to $840 million. South Central (Texas-heavy) fell 10% in revenue with pre-tax income dropping by roughly $367 million. By contrast, the North region — covering markets like Chicago, suburban Washington D.C., and New Jersey — grew revenues 15% and pre-tax income from $498 million to $584 million, and was the only region where home sales gross margins actually improved.
An Upcoming Tax Change Will Reduce a Meaningful Benefit
The One Big Beautiful Bill Act, signed July 2025, terminates the energy efficient home tax credit for homes closing after June 30, 2026. D.R. Horton received $39.5 million in tax benefits from this credit in fiscal 2025 (down from $70.4 million in fiscal 2024). This credit disappearing will modestly increase the company's effective tax rate beginning in fiscal 2026 — a headwind worth noting, though not a business-altering figure at current earnings levels.