Beazer Homes Reports 4.4% Revenue Growth but Decline in Net Income for Q2 Fiscal 2025

Beazer Homes USA, Inc. reported its financial results for the second quarter of fiscal 2025, revealing total revenue of $565.3 million, a 4.4% increase from $541.5 million in the same quarter of the previous year. For the six months ended March 31, 2025, revenue reached $1.034 billion, up from $928.4 million in the prior year. However, net income for the quarter fell to $12.8 million, or $0.42 per diluted share, compared to $39.2 million, or $1.26 per diluted share, in the same quarter last year. The decline in profitability was attributed to increased price concessions and a higher proportion of lower-margin spec home sales.

The company experienced a notable decrease in operating income, which dropped to $13.4 million for the quarter, down from $36.0 million a year earlier. This decline was primarily driven by a decrease in gross profit, which fell to $86.0 million from $101.9 million, and a reduction in gross margin from 18.8% to 15.2%. Beazer's homebuilding gross margin, excluding impairments and interest, was reported at 18.3%, down from 21.7% in the prior year. The company also reported an increase in selling, general, and administrative expenses as a percentage of total revenue, rising to 12.0% from 11.5% in the previous year.

In terms of operational metrics, Beazer's average active community count increased by 15.9% to 163 communities, while the ending active community count was 162, up 11.7% from the previous year. However, net new orders decreased by 15.5% to 1,098, reflecting a decline in sales pace due to affordability challenges and macroeconomic uncertainties. The backlog of homes also saw a significant reduction, with units down 25.4% year-over-year, although the average selling price of homes in backlog increased by 3.7% to $544,900.

Strategically, Beazer Homes has focused on expanding its land position, controlling 28,290 lots as of March 31, 2025, a 5.2% increase from the previous year. The company has also increased its use of lot option agreements, which now account for 59.3% of its total active lots. In April 2025, Beazer's Board of Directors approved a new share repurchase program, allowing for the repurchase of up to $100 million of its common stock, replacing the previous program that had $8.3 million remaining. The company aims to balance its growth and deleveraging goals while responding to current market conditions.

Looking ahead, Beazer Homes remains cautious about the housing market, which has shown signs of slowing due to economic uncertainties. The company has adjusted its multi-year goals, aiming to reach over 200 active communities by the end of fiscal 2027 and to reduce its net debt to net capitalization ratio to the low 30% range by the same timeframe. Despite the challenges, Beazer is committed to its goal of ensuring that all new homes started by the end of 2025 will be Zero Energy Ready, with nearly 99% of new home starts in the second quarter already meeting this standard.