Hovnanian Enterprises Stock Earnings Reports

Hovnanian met or exceeded its Q3 fiscal 2025 guidance: revenues of $801M, adjusted gross margin of 17.3%, SG&A at 11.3%, adjusted EBITDA of $77M and adjusted pretax income of $40M (top of the guidance range). Margins remain under pressure from elevated buyer incentives—primarily mortgage-rate buydowns, which were 11.6% of ASP this quarter and used by roughly 75% of buyers—driving lower year‑over‑year gross margin despite healthy underlying margins absent buydowns. The company is prioritizing pace over price and actively managing QMIs (8.2 QMIs per community; QMI sales were 79% of total), producing a very high backlog conversion rate (84%) but making near-term forecasting more variable. Hovnanian continues a land‑light strategy: 40,246 controlled lots (7‑year supply), 86% held via options, disciplined underwriting to 20%+ IRR, and recent lot adds that management says meet return thresholds even after buydowns. Balance sheet progress: $278M liquidity, net debt to net capital improved to 47.9% (targeting ~30%), and continued focus on lowering leverage; Q4 guidance is revenues $750–$850M, adjusted gross margin 15–16.5%, SG&A 11–12%, and adjusted pretax income $45–$55M (management expects a JV consolidation gain in Q4). Key risks remain choppy weekly demand tied to macro headlines, persistent high mortgage rates requiring buydowns that depress margins, and regional variability (better performance in Mid‑Atlantic/Northeast; softer West, Texas, Florida).