Forestar Group Inc. Reports Q2 Fiscal 2025 Revenue Increase to $351M, Net Income Decline

Forestar Group Inc. reported its financial results for the second quarter of fiscal 2025, revealing a revenue increase to $351.0 million, up from $333.8 million in the same period last year. However, net income decreased to $31.6 million, or $0.62 per share, compared to $45.0 million, or $0.90 per share, in the prior year. For the six months ending March 31, 2025, total revenues were $601.3 million, down from $639.7 million in the previous year, while net income for the same period fell to $48.1 million from $83.2 million.

The company experienced a notable shift in its operational metrics, with residential lot sales revenue decreasing by 6% year-over-year for the six-month period, primarily due to builders adjusting their pace of new home starts in response to current market conditions. Despite this, the three-month period ending March 31, 2025, saw a 6% increase in residential lot sales revenue compared to the same quarter last year, attributed to increased sales to customers other than D.R. Horton, which is Forestar's majority shareholder.

In terms of strategic developments, Forestar issued $500 million in senior notes due in 2033, using the proceeds to repurchase a portion of its 2026 notes. This move resulted in a $1.1 million loss on extinguishment of debt. The company also reported a significant increase in its real estate assets, which rose to $2.76 billion as of March 31, 2025, compared to $2.27 billion at the end of the previous fiscal year. The total number of lots owned and controlled increased to 105,900, up from 95,100, reflecting the company's ongoing investment in land acquisition and development.

Operationally, Forestar's employee headcount rose to 440 from 340 a year earlier, indicating an expansion in its workforce to support its growth initiatives. The company continues to focus on developing affordable housing options, with a strategic emphasis on geographic diversification across 65 markets in 24 states. Despite challenges such as elevated mortgage rates and supply chain disruptions, Forestar remains optimistic about its market position and plans to maintain disciplined investment strategies while managing lot sales and pricing effectively.

Looking ahead, Forestar anticipates that the current economic environment will continue to influence its operations, particularly in terms of demand for new homes. The company aims to leverage its strong liquidity position, with $174.3 million in cash and $617.7 million in available credit, to navigate potential market fluctuations. Forestar's management remains committed to optimizing its capital structure and pursuing growth opportunities while maintaining a focus on operational efficiency and market responsiveness.