Executive Summary

Q1 2025 was mixed: consolidated revenue rose to $2.40B (+3% YoY) while diluted EPS fell to $94.83 (-19% YoY) amid margin compression and a sharply higher effective tax rate; sequentially, revenue declined from $2.85B in Q4 2024 .
Versus Wall Street consensus, revenue beat, but EPS missed: consensus revenue was $2.35B vs actual $2.40B*, while consensus EPS was $106.07 vs actual $94.83*; the EPS shortfall was driven by lower homebuilding gross margin and a step-up in effective tax rate (25.5% vs 16.2% LY) *.
Homebuilding gross margin compressed to 21.9% (from 24.5% LY) due to higher lot costs and pricing pressure tied to affordability; orders fell 12% to 5,345 units with cancellations up to 16% (13% LY) .
Capital return remained robust: NVR repurchased 77,120 shares at an aggregate cost of $583.4M in Q1, and subsequently authorized an additional $750M share repurchase on May 6, 2025 .

What Went Well and What Went Wrong

What Went Well

Revenue resilience: consolidated revenue grew +3% YoY to $2.40B despite affordability headwinds, with settlements up 1% and average settlement price up 2% .
Mortgage banking strength: closed loan production increased 4% YoY to $1.43B and income before tax rose 12% to $32.5M, reflecting execution in the captive channel .
Strategic capital return: Q1 repurchases totaled $583.4M; post-quarter, the Board authorized up to $750M additional repurchases, reinforcing shareholder return discipline .
Management commentary: “Gross profit margin was negatively impacted by higher lot costs and pricing pressure due to continued affordability challenges” — underscores proactive acknowledgment of margin drivers .

What Went Wrong

Earnings power: diluted EPS declined 19% YoY to $94.83, pressured by margin compression and a materially higher effective tax rate (25.5% vs 16.2% LY) due to reduced excess tax benefits from option exercises ($2.7M vs $43.8M LY) .
Demand softness: net new orders fell 12% YoY to 5,345 units, with cancellations rising to 16%; the average sales price of new orders slipped 1% .
Margin pressure: homebuilding gross margin fell to 21.9% from 24.5% YoY; prior quarters noted similar drivers including closing cost assistance (Q3 2024) and higher lot costs (ongoing) .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Consolidated Revenue ($USD Billions)	$2.73	$2.85	$2.40
Diluted EPS ($USD)	$130.50	$139.93	$94.83
Homebuilding Gross Profit Margin %	23.4%	23.6%	21.9%
Income Before Taxes ($USD Millions)	$538.6	$572.6	$402.0
Effective Tax Rate %	20.3%	20.1%	25.5%

Segment breakdown (selected):

Segment Metric	Q3 2024	Q4 2024	Q1 2025
Homebuilding Revenues ($USD Billions)	$2.68	$2.78	$2.35
Homebuilding Income Before Tax ($USD Millions)	$503.7	$526.7	$369.5
Mortgage Banking Fees ($USD Millions)	$55.3	$64.9	$52.6
Mortgage Banking Income Before Tax ($USD Millions)	$34.9	$45.9	$32.5

Operational KPIs:

KPI	Q3 2024	Q4 2024	Q1 2025
New Orders (Units)	5,650	4,794	5,345
New Orders ASP ($USD ‘000)	$450.7	$469.0	$448.5
Cancellation Rate %	14.5%	16.9%	16%
Settlements (Units)	5,908	6,180	5,133
Settlement ASP ($USD ‘000)	$453.2	$450.0	$457.9
Backlog (Units)	11,339	9,953	10,165
Backlog ($USD Billions)	$5.32	$4.79	$4.84
Loan Closings ($USD Millions)	$1,656.5	$1,695.8	$1,432.9
Capture Rate %	86%	86%	86%
Avg. Active Communities	422	426	401
Shares Repurchased (Units)	42,629	64,216	77,120
Aggregate Repurchase Cost ($USD Millions)	$357.5	$564.3	$583.4

Guidance Changes

NVR does not issue formal quarterly guidance in its earnings materials; no revenue, margin, expense, OI&E, tax rate, or segment-specific guidance was provided for Q1 2025 .

Metric	Period	Previous Guidance	Current Guidance	Change
N/A	N/A	N/A	N/A	Maintained (no formal guidance provided)

Earnings Call Themes & Trends

Note: A Q1 2025 earnings call transcript was not available in our document catalog; themes below are derived from company earnings releases.

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Affordability & Pricing	ASP down modestly; margin hit by closing cost assistance	ASP ~flat; margin light vs LY	Margin impacted by higher lot costs and pricing pressure due to affordability challenges	Continued pressure
Lot Costs/Land	Higher lot costs cited as margin headwind	Higher lot costs ongoing	Higher lot costs cited again; GP% down to 21.9%	Persistent headwind
Demand/Cancellations	Orders +19% YoY; cancellations 14.5%	Orders -8% YoY; cancellations 16.9%	Orders -12% YoY; cancellations 16%	Softer demand; higher cancels
Backlog Trajectory	Backlog up YoY to 11,339 units	Backlog down slightly to 9,953 units	Backlog up sequentially to 10,165 units; down YoY	Stable seq., lower YoY
Mortgage Banking	Modest decline in IBT due to lower secondary gains	IBT up 55% on higher secondary marketing gains	IBT +12% YoY; closed volume +4%	Improving vs LY
Tax Rate/Stock Options	ETR up vs LY due to lower option benefits	ETR up; excess option benefits lower	ETR jumped to 25.5%; excess option benefits $2.7M vs $43.8M LY	Headwind intensified

Management Commentary

“Gross profit margin was negatively impacted by higher lot costs and pricing pressure due to continued affordability challenges.”
“Our effective tax rate for the three months ended March 31, 2025 was 25.5% compared to 16.2% for the three months ended March 31, 2024. The increase…is primarily attributable to a lower income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $2.7 million and $43.8 million for the three months ended March 31, 2025 and March 31, 2024, respectively.”
Prior quarter color: “Gross profit margin…negatively impacted by higher lot costs and closing cost assistance.” (Q3 2024)
Prior quarter mortgage banking: “Increase [in IBT] was primarily attributable to an increase in secondary marketing gains on sales of loans.” (Q4 2024)

Q&A Highlights

An official Q1 2025 earnings call transcript was not available via our document catalog; Q&A theme and clarifications are therefore unavailable [ListDocuments: earnings-call-transcript returned none].

Estimates Context

Metric	Consensus (Q1 2025)	Actual (Q1 2025)	# of Estimates
Primary EPS ($USD)	$106.07*	$94.83	5*
Revenue ($USD)	$2,345.0M*	$2,400.0M	5*

Values retrieved from S&P Global.*

Interpretation:

Revenue beat consensus, aided by settlements and ASP uplift vs LY; EPS missed, reflecting margin compression and a higher effective tax rate .
Estimate revisions may bias lower on EPS until margin and tax rate dynamics normalize; revenue outlook likely resilient barring further affordability deterioration .

Key Takeaways for Investors

Mixed print: top-line beat vs consensus but EPS miss; margin and tax rate dynamics are the swing factors for near-term earnings power *.
Affordability and higher lot costs remain core headwinds; watch pricing discipline and incentives as levers to sustain volumes without further GP% erosion .
Demand indicators softened (orders -12% YoY; cancellations 16%), but backlog improved sequentially (+2% units vs Q4), supporting near-term deliveries .
Mortgage banking continues to contribute with stable capture and higher closed volume; a lever for consolidated profitability if secondary gains improve .
Capital return is a differentiator: $583.4M repurchased in Q1 and a fresh $750M authorization in May underpin per-share accretion and support for valuation .
Near-term trading: EPS miss and margin compression can weigh on sentiment; revenue beat and backlog sequential improvement are offsets — monitor rate/affordability headlines.
Medium-term: Execution on land discipline, community count stabilization, and maintaining capture/mortgage profitability will shape margin trajectory and EPS recovery .

Additional Relevant Press Releases (Q1 2025 context)

Share Repurchase Authorization: Board authorized up to $750M repurchases (May 6, 2025), continuing NVR’s long-standing buyback strategy; 2,924,012 shares outstanding as of May 5, 2025 .

NVR INC (NVR)·Q1 2025 Earnings Summary