Hovnanian Enterprises Stock Earnings Reports

Hovnanian reported Q2 fiscal 2026 revenue of $668M, roughly mid‑range of guidance, with adjusted gross margin improving sequentially to 14.3% (above guidance) and adjusted EBITDA of $41M. Management says Q1 was the trough and margins began to rebound in Q2. The company continues to use targeted mortgage rate buy‑downs (incentives were 11.9% of ASP in Q2 but declined sequentially) to preserve sales pace while working through older, lower‑margin lots and a high level of quick‑move‑in (QMI) inventory. QMIs have been materially reduced (731 total QMI, a 37% decline from Jan 2025) and QMI conversion/turnover improved, driving higher same‑quarter closings and an 85% backlog conversion rate for the quarter. Hovnanian is shifting to a more land‑light model (86% of lots controlled via options), selectively acquiring newer land underwritten to today’s incentive levels to support better margins over time. Balance sheet strength is emphasized: $442M in liquidity at quarter end, unsecured debt (except revolver), net debt-to-capital down to 43.1% with a target of 30%. For Q3 FY26 management guided revenue $650–750M, adjusted gross margin 14–15%, SG&A 12.5–13.5% of revenue, and modest adjusted pretax income (breakeven to $10M), but expects sequential improvement into Q4 as newer, higher‑margin communities begin to deliver. Management notes continued macro and geopolitical uncertainty and limited visibility beyond the next quarter.