Total Revenue: $1.5 billion in the second quarter.

Diluted Earnings Per Share (EPS): $1.50 in the second quarter.

Gross Margin: 19.7%, excluding inventory-related charges.

SG&A Expenses: 10.7% of housing revenues.

Operating Income Margin: 9% of homebuilding revenues.

Net Orders: 3,460 in the second quarter.

Average Community Count: 254, a 5% increase year-over-year.

Backlog: 4,776 homes valued at $2.3 billion.

Average Selling Price: Approximately $489,000.

Net Income: $108 million in the second quarter.

Book Value Per Share: Nearly $59, a 10% year-over-year increase.

Share Repurchases: $200 million in the second quarter.

Land Investment: Over $513 million in land acquisition and development.

Total Liquidity: $1.2 billion, including $309 million of cash.

Debt to Capital Ratio: 32.2%.

Release Date: June 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

KB Home (NYSE:KBH) delivered solid financial results in the second quarter, meeting or exceeding guidance ranges across key metrics.

The company repurchased $200 million of its shares in the second quarter, demonstrating a commitment to returning cash to shareholders.

Build times improved sequentially by seven days, returning to pre-pandemic levels, which contributed to exceeding delivery expectations.

The company achieved a gross margin of 19.7%, excluding inventory-related charges, which was above the guidance range.

KB Home (NYSE:KBH) maintained a high customer satisfaction level, receiving numerous division-level honors from Avid CX.

Negative Points

Affordability challenges persist due to elevated mortgage interest rates and macroeconomic uncertainties, impacting consumer confidence and home purchase decisions.

Net orders declined in April and May, not following the typical spring trajectory, leading to a revision of fiscal 2025 guidance.

The average absorption pace per community decreased to 4.5% net orders compared to 5.5% in the previous year’s second quarter.

Municipal delays in utility signoffs and certificates of occupancy impacted the timing of community openings, affecting net orders.

The company revised its revenue expectation for fiscal 2025 to between $6.3 billion and $6.5 billion, indicating a lower top line and contributing to lower margins.

Q & A Highlights

Q: What steps is KB Home taking to manage SG&A costs amid a revenue cut? A: Jeffrey Mezger, Chairman and CEO, explained that KB Home is focused on aligning overhead with revenue and scale. They are adjusting headcount based on delivery needs and exploring various cost-saving measures. The goal is to reduce the SG&A ratio back under 10% over time.