Dream Finders Homes, Inc. (DFH) Q3 2025 Earnings Summary

Executive Summary

Q3 2025 delivered 1,915 closings (company record) and net new orders up 20% YoY, but revenues fell 3.6% YoY to $969.8M and margins compressed due to elevated incentives and mix shifts; EPS was $0.47, flat QoQ and down YoY .
EPS matched Wall Street consensus, while revenue and EBITDA missed: EPS $0.47 vs $0.47*, revenue $969.8M vs $1.15B*, EBITDA ~$62.9M vs $120.7M*; only 1 EPS estimate and 2 revenue estimates contributed to consensus, limiting breadth of street coverage .*
Full-year closings guidance cut to ~8,500 from ~9,250 given market headwinds; liquidity strengthened to $625M and $300M senior notes due 2030 priced at 6.875% to term-out revolver borrowings .
Stock reaction catalysts: revenue/EBITDA misses and guidance cut vs strong orders and backlog resilience; management highlighted easing mortgage rates and integration of Alliant Title and Green River Builders as offsets .

What Went Well and What Went Wrong

What Went Well

Record closings and orders: 1,915 closings (+1% YoY) and 2,021 net new orders (+20% YoY); cancellations improved to 12.5% (−130 bps YoY) .
Financial services expansion: pre-tax income +11% YoY to $9M, driven primarily by the Alliant Title acquisition; segment revenue up $33M YoY .
Strategic capital actions: $300M senior unsecured notes at 6.875% used to repay revolver; total liquidity $625M; share repurchases of 357,715 shares for ~$10M .
- “Our execution represents another milestone… evidence that our business model has gained further credibility in capital markets.” – Patrick Zalupski, CEO .

What Went Wrong

Top-line and margin pressure: total revenues $969.8M (−3.6% YoY) and homebuilding gross margin 17.5% (−170 bps YoY) due to ASP decreases from higher incentives, product/geographic mix, and higher land/financing costs .
SG&A intensity elevated: SG&A $110M (+8% YoY) and 11.9% of homebuilding revenue (+160 bps YoY), primarily from forward mortgage commitment programs to lock buyer rates .
Guidance cut: FY25 closings revised to ~8,500 from ~9,250 amid challenging demand and affordability, despite order momentum .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Total Revenues ($USD Millions)	$1,006.4	$1,150.5	$969.8
Homebuilding Revenues ($USD Millions)	$986.3	$1,099.6	$916.7
Financial Services Revenues ($USD Millions)	$20.2	$50.9	$53.1
Basic EPS ($USD)	$0.72	$0.57	$0.47
Diluted EPS ($USD)	$0.70	$0.56	$0.47
Homebuilding Gross Margin %	19.2%	16.5%	17.5%
Adjusted Homebuilding Gross Margin % (non-GAAP)	27.6%	25.9%	26.7%
SG&A % of Homebuilding Revenue	10.3%	12.3%	11.9%

Q3 2025 vs Estimates

Metric	Q3 2025 Consensus	Q3 2025 Actual
EPS ($USD)	$0.47*	$0.47
Revenue ($USD Millions)	$1,146.5*	$969.8
EBITDA ($USD Millions)	$120.7*	$62.9

Values with asterisk retrieved from S&P Global. EPS consensus based on 1 estimate; revenue consensus based on 2 estimates [functions.GetEstimates]. EBITDA actual approximated from operating statement context (income before taxes plus adjustments) per press release table ; consensus from S&P Global.*

Segment Closings and ASP

Segment	Units Q3 2024	ASP Q3 2024	Units Q3 2025	ASP Q3 2025
Southeast	592	$494,163	709	$448,352
Mid-Atlantic	603	$461,320	570	$419,911
Midwest	694	$589,087	636	$559,987
Total	1,889	$518,553	1,915	$476,962

Backlog by Segment

Segment	Units Q2 2025	ASP Q2 2025	Units Q3 2025	ASP Q3 2025
Southeast	998	$438,465	1,143	$415,613
Mid-Atlantic	812	$399,863	898	$377,967
Midwest	703	$623,893	578	$616,922
Total	2,513	$477,865	2,619	$447,133

Key KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Home Closings (Units)	1,889	2,232	1,915
Net New Orders (Units)	1,680	1,938	2,021
Cancellation Rate (%)	13.8%	14.0%	12.5%
Avg Sales Price Closed ($)	$518,553	$481,027	$476,962
Backlog (Units)	3,996	2,513	2,619
Backlog Value ($USD Thousands)	$2,004,091	$1,200,875	$1,171,041

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Home Closings (Units)	FY 2025	~9,250 (Q1 and Q2 reiterated)	~8,500 (Q3 revised)	Lowered

No other quantitative guidance (revenue, margins, tax rate, etc.) was provided in the Q3 release; management reiterated macro caution while pointing to easing mortgage rates and integration benefits .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Mortgage rates & affordability	“Most challenging environment in the past 3 years” (rates, confidence)	“Complex and challenging housing environment; encouraged by easing rates”	Stabilizing tone
Sales incentives & ASP	Incentives increased; ASP down QoQ (Q2: $481K vs $515K YoY)	Incentives elevated; ASP $477K (−8% YoY); mix effects noted	Continued pressure
Acquisitions & integration	Closed Alliant Title and Green River; Liberty Communities Jan’25	Integration progress; Liberty contributed 185 closings; Alliant boosted FS revenue	Execution positive
Financial services expansion	FS revenue +$47M YoY in Q2; pre-tax +$6M	FS revenue +$33M YoY; pre-tax +$1M; expansion into TN	Structural growth
Regional trends (Atlanta)	Entered/expanded Atlanta; Liberty north/south coverage	Southeast closings +117 YoY; Liberty ASP ~$329K	Scaling in SE
Leverage/liquidity	Net homebuilding debt/cap 44.7% (Q2); liquidity $433M	Net homebuilding debt/cap 47.3%; liquidity $625M; $300M notes 6.875%	Liquidity improved

Note: We were unable to locate the Q3 2025 earnings call transcript via our document tools; external schedules indicate a call occurred, but a full transcript was not available for review .

Management Commentary

“Dream Finders continued to perform admirably… While revenue was lower year over year, we were able to achieve a modest increase in home closings, along with a meaningful rise in net sales… We continue to see a complex and challenging housing environment, though we are encouraged by the recent easing of mortgage rates.” – Patrick Zalupski, Chairman & CEO .
“We completed our second bond offering for $300 million… evidence that our business model has gained further credibility in capital markets… progress made on the integration of our acquisitions last quarter, including Alliant National Title Insurance Company, Inc. and Green River Builders, Inc.” .
“Given the market challenges… impacting our initial closing goals for the year, we are revising our full-year 2025 guidance to approximately 8,500 home closings.” .

Q&A Highlights

A full transcript was not available through SEC/IR document tools; based on release disclosures, likely areas of Q&A focus included: incentives and margin trajectory, ASP trends, demand elasticity to easing mortgage rates, integration synergies from Alliant Title/Green River, and capital allocation (notes and buybacks) .
Conference call logistics show a call at 9:30AM ET on Oct 30, 2025; without transcript, no direct quotes or clarifications can be cited .

Estimates Context

EPS matched consensus: $0.47 vs $0.47*, with only 1 estimate contributing; limited breadth reduces confidence in the “beat/miss” signal .*
Revenue missed materially: $969.8M vs $1,146.5M*, reflecting ASP pressure and heavier incentives, plus mix effects (Liberty contribution at lower ASP) .*
EBITDA missed: ~$62.9M actual vs $120.7M*, consistent with lower gross margin and higher SG&A tied to rate-lock programs .*
Forward estimate implications: Street may lower FY revenue/margin assumptions and closings trajectory after the guidance cut to ~8,500; financial services growth could partially offset.

Values with asterisk retrieved from S&P Global [functions.GetEstimates].

Key Takeaways for Investors

Orders strength vs revenue/margin pressure: Net sales and cancellations improved, but ASP compression and elevated incentives weighed on revenue and margins; monitor incentive intensity into Q4 .
Guidance reset: FY25 closings lowered to ~8,500 from ~9,250, setting a more conservative base; watch for Q4 conversion from backlog (1,440 homes expected to deliver in 2025) .
Liquidity and terming-out debt: $625M liquidity and $300M 6.875% notes provide balance sheet flexibility; net homebuilding leverage ticked up but remains in the mid-40s % of capitalization, within peers’ ranges .
Regional expansion and mix: Southeast scaling (Atlanta) supports volumes but dilutes ASP; track Midwest margin resilience vs SE ASP headwinds .
Financial services tailwind: Alliant Title adds recurring, less cyclical earnings; segment growth is a structural positive for volatility dampening .
Margin trajectory: Adjusted gross margin at 26.7% improved QoQ; if mortgage rates ease and incentives moderate, gross margin could stabilize; SG&A rate-lock costs remain a drag near term .
Trading lens: Near-term risk skew from revenue/EBITDA miss and guidance cut; upside optionality if orders strength converts to Q4 closings with less incentive support and if rate decline sustains demand .