Executive Summary

Q2 delivered EPS of $3.03 and total revenue of $4.40B; EPS beat S&P Global consensus by ~$0.10 while revenue was fractionally above consensus; EBITDA was modestly below consensus as incentives rose to support affordability . Consensus values marked with *; see Estimates Context (S&P Global).
Home sale gross margin landed at 27.0%, at the top of guidance, with mix benefits offsetting elevated incentives (8.7% of gross sales price); management reaffirmed back-half gross margin of 26.0%–26.5% and guided Q3 closings to 7,200–7,600, refining FY2025 closings to ~29,000 .
Demand remained choppy, but absorption (2.4/month) stayed near pre-COVID norms; Florida orders grew 2% YoY, offset by softer West and Texas and pockets like Boston; backlog ended at 10,779 units ($6.84B) .
Key forward drivers: (1) maintained best-in-class margin framework despite higher incentives, (2) lower-than-expected Q4 tariff headwind, (3) rising active-adult mix into 2026 via new Del Webb/Del Webb Explore communities, and (4) disciplined land/option strategy with 250k lots under control and 60% optioned .

What Went Well and What Went Wrong

What Went Well

Margin execution: gross margin 27.0% at the top of guide; operating margin cited at 17.9%, supported by favorable mix and disciplined pricing despite higher incentives .
Active adult strength and pipeline: strong response to newest Del Webb and Del Webb Explore communities; these are among higher-priced and highest-margin closings, supporting future mix uplift .
Strategic land posture: ~250,000 lots controlled; 60% optioned on path to 70%; $1.3B Q2 and $2.5B 1H25 land investment with FY spend plan of ~$5B; 2025 cash flow generation expected at ~$1.4B .
- Quote: “Through the first half of 2025, we realized an average of $109,000 of options and lot premiums, which is an important driver of PulteGroup's superior gross margins.” – Ryan Marshall .

What Went Wrong

Orders and volume pressure: net new orders fell 7% YoY (7,083) on lower absorption; closings declined 6% YoY (7,639), driving a 4% YoY decrease in home sale revenue to $4.27B .
Incentives elevated for affordability: incentives rose to 8.7% of GSP (vs 6.3% LY; 8.0% in Q1), reflecting persistent affordability headwinds and choppy buyer confidence .
Regional softness: more challenging demand out West and in Texas; management also cited challenges in Dallas, Boston, and Northern/Southern California, particularly among move-up buyers .

Financial Results

Quarterly fundamentals (actuals)

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($B)	$4.922	$3.893	$4.404
Diluted EPS ($)	$4.43	$2.57	$3.03
Home Sale Gross Margin %	27.5%	27.5%	27.0%
SG&A (% of home sale rev)	4.2% (incl. $255M insurance benefit)	10.5%	9.1%
Net New Orders (Units)	6,167	7,765	7,083
Backlog (Units)	10,153	11,335	10,779
Avg Community Count (Units)	960	961	994
ASP of Closings ($000)	$581	$570	$559

Q2 2025 actual vs S&P Global consensus

Metric	Actual	Consensus*	Result
Total Revenues ($B)	$4.404	$4.393	Beat*
Diluted EPS ($)	$3.03	$2.93	Beat*
EBITDA ($M)	$832.8 [GetEstimates actual]	$842.5	Miss*

Note: EBITDA actual shown as per S&P Global compilation alongside consensus for comparability; company does not report EBITDA in release. Values marked with * are from S&P Global.

Segment and regional detail (Q2 2025 vs Q2 2024)

Closings by region (units) | Region | Q2 2024 | Q2 2025 | |---|---:|---:| | Northeast | 378 | 451 | | Southeast | 1,499 | 1,402 | | Florida | 2,150 | 1,882 | | Midwest | 1,196 | 1,272 | | Texas | 1,472 | 1,218 | | West | 1,402 | 1,414 | | Total | 8,097 | 7,639 |
Net new orders by region (units) | Region | Q2 2024 | Q2 2025 | |---|---:|---:| | Northeast | 400 | 384 | | Southeast | 1,396 | 1,405 | | Florida | 1,746 | 1,773 | | Midwest | 1,265 | 1,272 | | Texas | 1,275 | 1,042 | | West | 1,567 | 1,207 | | Total | 7,649 | 7,083 |
Backlog (units, dollars) | Metric | Q2 2024 | Q2 2025 | |---|---:|---:| | Units | 12,982 | 10,779 | | Dollars ($B) | $8.109 | $6.843 |

Additional KPIs

KPI	Q1 2025	Q2 2025
Absorption pace (homes/mo)	2.7	2.4
Cancellation rate (% of starting backlog)	~11% (Q1 context)	11%
Incentives (% of gross sales price)	8.0% (sequential context)	8.7%
Starts (units)	—	7,220
Homes in production (units)	—	16,105 (47% spec; 7,606 spec)
Mortgage capture rate	86.4%	84.8%
Financial Services pre-tax ($M)	$35.9	$42.8
Debt-to-capital	11.7%	11.4%
Net debt-to-capital	2.8%	2.8%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Closings (units)	Q3 2025	—	7,200–7,600	New/Explicit
Closings (units)	FY 2025	—	~29,000	Refined
Gross margin	Q3–Q4 2025	26.0%–26.5% (prior framework)	26.0%–26.5% (affirmed)	Maintained
ASP of closings	Q3–Q4 2025 / FY 2025	—	$560k–$570k	New/Explicit
SG&A as % of home sale revenue	FY 2025	—	9.5%–9.7%	New/Explicit
Effective tax rate	FY 2025	~24.5% (ongoing)	~24.5% (affirmed)	Maintained
Average community count	Q3–Q4 2025	+3%–5% YoY (prior)	+3%–5% YoY (affirmed)	Maintained
Tariff impact per unit	Late Q4 2025	~+$5,000/unit (Q1 call indication)	Lower than prior expectation	Lowered headwind
Operating cash flow	FY 2025	—	~ $1.4B	New/Explicit
Land investment	FY 2025	—	~$5B	New/Explicit

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Demand & rates	Q4: targeted incentives amid elevated mortgage rates . Q1: buyers responded to rate declines but affordability challenged .	Choppy demand; absorption 2.4/mo; strong response when rates dipped late June .	Steady, sensitive to rate moves
Affordability & incentives	Q4: incentives targeted . Q1: margin steady despite mix and affordability issues .	Incentives 8.7% (up seq/YoY); management aims to reduce over time .	Incentives elevated near term
Regional mix	Q4: poised for spring season . Q1: diversified platform supports results .	Florida orders +2% YoY; West/Texas softer; Boston soft among move-up .	Mixed; Florida positive
Active adult (Del Webb)	Ongoing brand strength . Q1: broad mix supports margins .	New Del Webb/Explore traction; higher-margin mix into 2026 .	Positive mix tailwind
Tariffs/supply	Q4: cycle-time and procurement benefits . Q1: macro uncertainty persists .	Lower-than-expected Q4 tariff impact in 2025; 20–25% lumber from Canada; sticks/bricks ~$79/sq ft flat .	Cost stable; tariff risk reduced in 2025
Land strategy	Q4: record year, repurchases, strong cash . Q1: balance price/pace, invest and return cash .	250k lots; 60% optioned moving toward 70%; retrading where appropriate .	Higher optionality, risk mitigation
Labor & offsite	Q4: —	Labor availability stable; ICG/off-site supports cycle time and quality .	Neutral-to-positive

Management Commentary

“Buyer demand is reasonable, but we are having to compete for each home sale, and we are seeing meaningful differences in demand strengths and weaknesses from market to market.” – Ryan Marshall .
“Through the first half of 2025, we realized an average of $109,000 of options and lot premiums, which is an important driver of PulteGroup's superior gross margins.” – Ryan Marshall .
“Incentives for the second quarter were 8.7% of gross sales price, up from 6.3% last year and up from 8.0% sequentially…we are affirming our guidance…gross margins in the third and fourth quarters to be in the range of 26.0%–26.5%.” – CFO Jim Ossowski .
“We currently expect to close between 7,200 and 7,600 homes in the third quarter…refining our full year 2025 closings guide to 29,000 homes.” – CFO .
“We have increased the total number of lots under control to approximately 250,000…with option lots now comprised of 60% of our total land pipeline.” – CFO .

Q&A Highlights

Costs: Sticks & bricks at ~$79/sq ft, flat YoY and sequential; development cost relief may emerge over time but not yet flowing through quarterly results .
Tariffs: 20–25% of lumber sourced from Canada; even with potential tariff increases, impact would be manageable given sourcing mix .
Incentives elasticity: Additional incentives do not necessarily drive sufficient incremental volume; goal is to normalize incentives (3–3.5%) over time .
Mix/Margins: Active adult carries ~200 bps higher margins than move-up and ~400 bps above entry-level; new Del Webb communities should support 2026 mix and margins .
Spec and inventory: 16,105 homes in production with 47% spec; targeting 40–45% spec mix by year-end; finished inventory slightly above optimal but manageable .
Regional color: Florida move-up +18% YoY; Northeast Florida slower on entry-level affordability constraints; continued softness in West/Texas and Boston .

Estimates Context

Q2 2025 vs S&P Global consensus: EPS $3.03 vs $2.93 (beat), revenue $4.40B vs $4.39B (beat), EBITDA $832.8M vs $842.5M (miss)*. The company’s gross margin (27.0%) was at the high end of guidance, supporting the EPS beat despite higher incentives .
Recent quarters vs consensus: Q1 2025 EPS $2.57 vs $2.44 and revenue $3.89B vs $3.82B (beats); Q4 2024 EPS and revenue also exceeded consensus*; solid track record into 1H25 [GetEstimates].
Forward estimates: FY2025 EPS ~11.36*, FY2026 ~11.03*; consensus target price ~$137 across 13 estimates*; consensus implies stable earnings power with modest normalization [GetEstimates].

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

Margins holding better than feared: Q2 gross margin at 27.0% (top of guide) with back-half 26.0%–26.5% reaffirmed; mix and procurement offset elevated incentives, supporting EPS resilience .
Volume outlook pragmatic: Q3 closings 7.2–7.6k and FY closings refined to ~29k reflect current demand/absorption; backlog coverage remains solid at 10.8k units ($6.84B) .
Active adult mix is the structural lever: Del Webb/Explore pipeline points to higher-margin mix in 2026 as new communities ramp, a medium-term margin and ROIC tailwind .
Cost/tariff risk moderated near term: Lower-than-expected Q4 tariff load in 2025 and flat sticks/bricks cost help defend margins; watch Canadian tariff headlines and 2026 timing for land development cost benefits .
Capital deployment disciplined: Ongoing repurchases ($300M in Q2), robust land optionality (60% optioned), and ~$1.4B 2025 cash generation target underpin balanced returns and risk mitigation .
Trading setup: Narrative hinges on sustained margin discipline vs. affordability-driven incentives and regional softness; beats likely when rate dips stimulate sign-ups, while Texas/West softness is the key watch item for demand breadth .

Appendix: Additional Q2 items and prior-quarter context

Q2 headline metrics: EPS $3.03; total revenue $4.40B; home sale revenue $4.27B; gross margin 27.0%; SG&A 9.1% of home sale revenue; net new orders 7,083 ($3.89B); backlog 10,779 ($6.84B) .
Q1 2025: EPS $2.57; total revenue $3.89B; gross margin 27.5%; net new orders 7,765 ($4.48B); backlog 11,335 ($7.22B) .
Q4 2024: EPS $4.43; total revenue $4.92B; gross margin 27.5%; net new orders 6,167 ($3.51B); backlog 10,153 ($6.49B) .
Other Q2 press releases: Del Webb/Explore expansions into Columbus (sales Spring 2026), leadership updates; supportive to medium-term active adult growth narrative .

References:

Press release and 8-K 2.02 for Q2 2025 financials .
Q2 2025 earnings call transcript for guidance, themes, and KPIs .
Q1 2025 and Q4 2024 press releases for trend analysis .

PULTEGROUP INC/MI/ (PHM)·Q2 2025 Earnings Summary