TLDR
- Q2 EPS came in at $1.50, net income totaled $108 million
- Revenue was $1.53 billion, down from $1.71 billion a year ago
- Home deliveries fell 11%, while ASP edged up to $489,000
- Company repurchased $200 million in stock during the quarter
- FY25 guidance trimmed due to affordability and order slowdown
KB Home (NYSE: KBH) shares were trading at $53.56, up 0.45% as of 10:47 AM EDT, following the release of its Q2 2025 results on June 23. The homebuilder reported diluted EPS of $1.50 and revenue of $1.53 billion, meeting its guidance range but reflecting a year-over-year revenue decline from $1.71 billion. Net income stood at $108 million for the quarter.
KB Home (KBH)
The company’s gross margin, excluding inventory-related charges, was 19.7%, topping its guidance and signaling improved build times and reduced construction costs. Homebuilding operating income margin was 9% on an adjusted basis, down from 11.1% last year, primarily due to reduced leverage and higher SG&A expenses.
KB Home, $KBH, Q2-25. Results:
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???? Despite a decline in revenue and deliveries, KBH beat guidance and ramped up share repurchases, buying back $200M worth at below book value. pic.twitter.com/VBHyANwAP8— EarningsTime (@Earnings_Time) June 23, 2025
Orders and Deliveries Impacted by Market Headwinds
Net orders declined 13% year-over-year to 3,460, and the average absorption rate fell to 4.5 orders per community from 5.5 in Q2 2024. This slowdown was attributed to elevated mortgage rates, consumer uncertainty, and municipal delays. Homes delivered dropped to 3,120, an 11% decline, though the average selling price nudged up slightly to $488,700.
Backlog fell to 4,776 homes valued at $2.29 billion, down 27% in value. The cancellation rate rose to 16% from 13% last year, while the average community count increased 5% to 254.
Share Repurchases Signal Confidence
KB Home returned $200 million to shareholders through buybacks during Q2, acquiring 3.7 million shares at an average of $53.55 per share, below its book value of $58.64. The company plans to continue share repurchases, with $450 million still authorized. Year-to-date, KBH has repurchased 4.5 million shares for $250 million.
CEO Jeffrey Mezger highlighted the company’s balanced capital allocation strategy, noting scaled-back land acquisition and increased repurchases amid shifting conditions. Liquidity remained solid at $1.2 billion, with a 32.2% debt-to-capital ratio.
Lower Full-Year Outlook Issued
Despite strong margins and operational improvements, KB Home lowered its full-year fiscal 2025 guidance. Revenue is now expected between $6.3 billion and $6.5 billion, with gross margin forecasted between 19.0% and 19.4%, assuming no further inventory-related charges. The average selling price is projected in the range of $480,000 to $490,000.
Homebuilding operating income is estimated between 8.6% and 9.0%, and SG&A expenses are expected to remain elevated at 10.2%–10.6% of revenue. The company also maintained its tax rate forecast at around 24%.
