Executive Summary

Q3 2025 revenue was $2.61B and diluted EPS was $112.33; revenue declined vs Q3 2024 ($2.73B) and was roughly flat sequentially vs Q2 ($2.60B), while EPS improved sequentially from $108.54 but fell year-over-year from $130.50 .
Homebuilding gross margin compressed to 21.0% from 23.4% a year ago and 21.5% in Q2, driven by higher lot costs, affordability-related pricing pressure, and ~$18.9M in contract land deposit impairments .
New orders fell 16% to 4,735 units, cancellations rose to 19.4% (from 14.5% in Q3 2024 and 16.5% in Q2), and backlog declined to 9,165 units (-19% YoY), signaling softer demand and elevated churn .
Results were above Wall Street consensus: EPS $112.33 vs $109.36*, revenue $2.61B vs $2.431B*; strength vs estimates amid margin headwinds should focus investors on order trends, cancellations, and land strategy as near-term stock catalysts .
Values marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

Sequential EPS improved to $112.33 from $108.54 despite softer demand, supported by operational discipline and lower SG&A vs Q3 2024; diluted shares also declined to 3,051 from 3,290 (share repurchase effect) .
Average sales price on new orders rose 3% YoY to $464.8K, and average settlement price held relatively flat at $454.0K, highlighting resilient pricing in a tough affordability environment .
Management emphasized drivers of margin pressure transparently: “Gross profit margin was negatively impacted by higher lot costs, pricing pressure due to continued affordability challenges, and contract land deposit impairments totaling approximately $18.9 million.” .

Orders declined 16% YoY (4,735 units), cancellations rose to 19.4% (vs 14.5% a year ago), and backlog units fell 19% to 9,165, pointing to demand softness and buyer pullbacks .
Homebuilding gross margin fell to 21.0% from 23.4% YoY (and 21.5% in Q2), with higher lot costs and pricing pressure driving compression; homebuilding pretax income dropped to $411.4M from $503.7M YoY .
Mortgage banking closed loan production decreased 7% YoY to $1.54B and pretax income slipped 6% YoY to $32.7M; higher effective tax rate (22.8% vs 20.3% in Q3 2024) also weighed on net income .

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Billions)	$2.73	$2.60	$2.61
Diluted EPS ($USD)	$130.50	$108.54	$112.33
Homebuilding Gross Margin %	23.4%	21.5%	21.0%
Income Before Taxes ($USD Millions)	$538.6	$447.1	$444.1
Effective Tax Rate %	20.3%	25.4%	22.8%
Wall St. Revenue Consensus ($USD Billions)	—	—	$2.431*
Wall St. EPS Consensus ($USD)	—	—	$109.36*

Values marked with * retrieved from S&P Global.

Segment performance and KPIs:

Segment/KPI	Q3 2024	Q2 2025	Q3 2025
Homebuilding Revenues ($USD Billions)	$2.678	$2.548	$2.560
Homebuilding Pretax Income ($USD Millions)	$503.7	$417.5	$411.4
Mortgage Banking Fees ($USD Millions)	$55.3	$50.5	$49.2
Mortgage Banking Pretax Income ($USD Millions)	$34.9	$29.6	$32.7
Mortgage Loan Closings ($USD Billions)	$1.657	$1.555	$1.540
New Orders (Units)	5,650	5,379	4,735
New Orders ASP ($USD Thousands)	$450.7	$458.1	$464.8
Cancellation Rate (%)	14.5%	16.5%	19.4%
Settlements (Units)	5,908	5,475	5,639
Settlement ASP ($USD Thousands)	$453.2	$465.4	$454.0
Backlog (Units)	11,339	10,069	9,165
Avg Active Communities (Count)	422	426	450
Lots Controlled (End of Period)	151,800	171,400	175,300
Capture Rate (%)	86%	87%	86%
Shares Repurchased (Units)	42,629	65,834	35,224
Aggregate Repurchase Cost ($USD Millions)	$357.5	$471.4	$276.4

Metric	Period	Previous Guidance	Current Guidance	Change
Guidance	FY/Q3 2025	N/A	No formal quantitative guidance provided in press release	Maintained (no guidance)

Note: No quantitative guidance ranges (revenue, margins, OpEx, tax rate, etc.) were provided in the company’s Q3 2025 press release .

Note: No Q3 2025 earnings call transcript was available in the document set; themes below reflect press releases across quarters.

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Affordability & Pricing Pressure	Q1: Margin pressure from higher lot costs and affordability; Homebuilding GM 21.9% . Q2: GM 21.5% with continued affordability pressure .	GM down to 21.0%; pricing pressure persisted .	Deteriorating
Land Deposits & Impairments	Q2: ~$13.2M contract land deposit impairments .	~$18.9M land deposit impairments .	Deteriorating
New Orders & Cancellations	Q1 orders -12% YoY; cancels 16% . Q2 orders -11% YoY; cancels 16.5% .	Orders -16% YoY; cancels 19.4% .	Deteriorating
Backlog	Q1 units 10,165 (-9% YoY) . Q2 units 10,069 (-13% YoY) .	Units 9,165 (-19% YoY) .	Deteriorating
Mortgage Banking Dynamics	Q2: Pretax down 34% YoY due to lower secondary marketing gains .	Pretax down 6% YoY; loan production -7% YoY to $1.54B .	Mixed to Slightly Negative
Community Count / Expansion	Avg active communities: Q1 401; Q2 426 .	450 (up YoY and sequentially) .	Improving
Effective Tax Rate	Q1 25.5% (vs 16.2% LY) . Q2 25.4% .	22.8% (still elevated vs LY 20.3%) .	Moderating but Elevated

“Gross profit margin was negatively impacted by higher lot costs, pricing pressure due to continued affordability challenges, and contract land deposit impairments totaling approximately $18.9 million.” (Q3 press release) .
“Mortgage closed loan production… totaled $1.54 billion… Income before tax from the mortgage banking segment totaled $32.7 million, a decrease of 6%…” (Q3 press release) .
Prior quarter context: “This decrease [mortgage banking pretax] was primarily attributable to a decrease in secondary marketing gains on sales of loans.” (Q2 press release) .

No analyst Q&A details were available in the document set; the Q3 press release did not include a call transcript or Q&A section .

EPS: Actual $112.33 vs consensus $109.36*; beat. Revenue: Actual $2.61B vs consensus $2.431B*; beat .
Values marked with * retrieved from S&P Global.
Implications: Consensus likely to recalibrate near-term revenue/EPS slightly upward given the beat, but order softness, rising cancellations, and margin compression suggest estimate revisions may remain cautious on volumes and gross margin trajectory .

Demand softness intensified: orders -16% YoY, cancellations up to 19.4%, backlog units -19% YoY—monitor traffic, incentives, and affordability signals into Q4 .
Margin headwinds continued: homebuilding GM fell to 21.0% with higher lot costs and ~$18.9M land deposit impairments—watch land discipline and pricing actions .
Sequential resilience: revenue stable ($2.61B vs $2.60B) and EPS improved ($112.33 vs $108.54), supported by cost control and repurchases (shares repurchased 35,224) .
Mortgage banking steady but subdued: production -7% YoY ($1.54B), pretax -6% YoY; capture rate held at 86%—rate volatility remains a swing factor .
Community footprint expanding: average active communities rose to 450 (from 426 in Q2 and 422 a year ago), positioning for eventual demand recovery when affordability improves .
No formal guidance provided; with an elevated tax rate (22.8%), macro sensitivity is high—focus on rates, incentives, and entry-level buyer elasticity .
Near-term trading lens: Expect the narrative to center on whether orders/cancellations stabilize and margin pressures ease; beats vs consensus provide support, but sustained demand improvement is required for multiple expansion .