D.R. Horton Reports 10% Revenue Decline and 30% Drop in Net Income for December 2025

D.R. Horton, Inc. reported a decline in financial performance for the three months ended December 31, 2025, with consolidated revenues decreasing by 10% to $6.89 billion compared to $7.61 billion in the same period last year. The company's net income attributable to D.R. Horton fell 30% to $594.8 million, resulting in diluted earnings per share of $2.03, down from $2.61 in the prior year. The decrease in revenue and profitability was attributed to a 7% decline in homes closed, totaling 17,818, and a 3% decrease in the average selling price of homes to $365,500.

In terms of operational metrics, the company experienced a 3% increase in net sales orders, totaling 18,300 homes, with the value of these orders remaining stable at approximately $6.7 billion. The sales order backlog also increased by 3% to 11,376 homes, valued at $4.3 billion. However, the home sales gross margin decreased to 20.4% from 22.7% in the previous year, reflecting increased sales incentives to attract buyers amid ongoing affordability challenges in the housing market.

Strategically, D.R. Horton made a significant acquisition in October 2025, purchasing the homebuilding operations of SK Builders for approximately $80 million. This acquisition included 160 homes in inventory, 260 lots, and a backlog of 110 homes, enhancing the company's operational footprint in Greenville, South Carolina. The company continues to focus on maintaining strong relationships with land developers, with 75% of its lots controlled through purchase contracts as of December 31, 2025.

The company's balance sheet showed total assets of $34.64 billion, down from $35.47 billion at the end of the previous quarter. Cash and cash equivalents decreased to $2.51 billion, while total liabilities also fell to $10.08 billion from $10.73 billion. D.R. Horton reported a debt-to-total capital ratio of 18.8%, indicating a slight increase in leverage compared to 19.8% in the prior quarter. The company remains committed to managing its inventory levels and sales incentives to adapt to market conditions, with a focus on generating strong cash flows and maintaining financial flexibility.

Looking ahead, D.R. Horton anticipates continued challenges in the housing market due to affordability constraints and cautious consumer sentiment. The company plans to maintain elevated sales incentives to support demand and may adjust its strategies based on market conditions and mortgage interest rates. The outlook remains cautious, with management emphasizing the importance of operational flexibility and strategic inventory management to navigate the evolving economic landscape.