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Tri Pointe Homes, Inc. (TPH)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered $879.8M home sales revenue and GAAP diluted EPS of $0.68; adjusted diluted EPS was $0.77, with adjusted homebuilding gross margin of 22.1% excluding an $11.0M inventory impairment .
  • Versus Wall Street consensus (S&P Global), TPH beat on normalized EPS and revenue: $0.77 vs $0.678* and $902.4M vs $806.7M*; deliveries modestly exceeded guidance while ASP came in below prior guidance due to mix (CFO) .
  • Full-year guidance was lowered on deliveries (to 4,800–5,200) and SG&A raised to 12–13%; Q3 guide calls for 1,000–1,100 deliveries, 20–21% gross margin, and 13–14% SG&A .
  • Capital allocation remains a catalyst: buyback authorization increased by $50M to $300M and $100M repurchased in Q2; revolver upsized to $850M and extended to 2030, supporting liquidity of ~$1.4B .

What Went Well and What Went Wrong

  • What Went Well

    • Delivered 1,326 homes, slightly above guidance; SG&A ratio landed at the low end of guidance (12.6%), aided by G&A savings and better revenue leverage .
    • Management executed targeted incentives (7.1% of revenue in Q2) while maintaining margin discipline; adjusted homebuilding gross margin was 22.1% (ex impairment) and 25.2% on an adjusted basis excluding interest/impairments .
    • Strong balance sheet/liquidity with $622.6M cash, $785.7M revolver capacity, net homebuilding debt-to-net capital at 8.0% .
    • Quote: “Our homebuilding gross margin of 22.1%*, adjusted to exclude the impact of an inventory-related charge, reflects continued pricing discipline, product strength, and cost control” — CEO Doug Bauer .

  • What Went Wrong

    • YoY softness: net new orders -31.5%, deliveries -22.0%, home sales revenue -22.3%; cancellation rate rose to 13% from 9% .
    • ASP delivered ($664K) below prior quarter guidance range ($680–$690K), driven by delivery mix (CFO) .
    • Margin risk remains into H2: wide range retained given limited backlog into Q4 and need to make a lot of sales; incentives likely to “trend up slightly” (CEO) .
    • $11M impairment recorded on a Bay Area project, highlighting project-level margin pressure in select markets (CFO) .

Financial Results

Quarterly trend (older → newer):

MetricQ4 2024Q1 2025Q2 2025
Home Sales Revenue ($USD Millions)$1,221.4 $720.8 $879.8
Total Revenues ($USD Millions)$1,231.5 $723.4 $884.0
Diluted EPS (GAAP)$1.37 $0.70 $0.68
Diluted EPS (Adjusted)——$0.77
Homebuilding Gross Margin % (GAAP)23.3% 23.9% 20.8%
Homebuilding GM % (Adj ex interest & impair/abandon)26.8% 27.3% 25.2%
SG&A as % of Home Sales Revenue10.3% 14.0% 12.6%
New Home Deliveries (Units)1,748 1,040 1,326

YoY comparison (Q2 2024 → Q2 2025):

MetricQ2 2024Q2 2025
Home Sales Revenue ($USD Millions)$1,133.0 $879.8
Homebuilding Gross Margin % (GAAP)23.6% 20.8%
SG&A as % of Home Sales Revenue11.0% 12.6%
Net New Home Orders (Units)1,651 1,131
Deliveries (Units)1,700 1,326
Cancellation Rate9% 13%

Actuals vs S&P Global Consensus (Q2 2025):

MetricConsensusActual
Primary EPS (Normalized)$0.678*$0.77*
Revenue ($USD)$806.7M*$902.4M*

Values retrieved from S&P Global.*

Segment breakdown (Q2 2025 deliveries and ASP):

RegionNew Homes DeliveredASP ($USD Thousands)
West Total640 $735
Central Total481 $546
East Total205 $717
Total1,326 $664

KPIs (Q2 2025):

KPIValue
Net New Orders1,131
Monthly Absorption (per avg selling community)2.5
Average Selling Communities149.8
Cancellation Rate13%
Backlog Units1,520
Backlog Dollar Value$1,179.7M
Backlog ASP$776K
Liquidity~$1.4B
Cash & Cash Equivalents$622.6M
Revolver Availability$785.7M
Homebuilding Debt-to-Capital21.7%
Net Homebuilding Debt-to-Net Capital8.0%
Share Repurchases (Q2)$100.0M; 3,187,982 shares at $31.37

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Deliveries (Homes)FY 20255,000–5,500 4,800–5,200 Lowered
ASP (Delivered)FY 2025$665K–$675K $665K–$675K Maintained
Homebuilding Gross Margin %FY 202520.5%–22.0% 20.5%–22.0% (ex Q2 $11M charge) Maintained (clarified exclusion)
SG&A % of Home Sales RevenueFY 202511.5%–12.5% 12.0%–13.0% Raised
Effective Tax RateFY 2025~27% ~27% Maintained
Deliveries (Homes)Q3 2025—1,000–1,100 New
ASP (Delivered)Q3 2025—$675K–$685K New
Homebuilding Gross Margin %Q3 2025—20%–21% New
SG&A % of Home Sales RevenueQ3 2025—13%–14% New
Effective Tax RateQ3 2025—~27% New
Stock Repurchase AuthorizationThrough 2025$250M $300M Raised (+$50M)
Revolver Capacity & MaturityOngoing$750M; prior maturity $850M; maturity extended to 2030 Raised/Extended

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Pace vs Price DisciplineFavoring price over pace; targeted incentives; absorption target 2.5–3.0 (Q1) Continue to favor price over pace; absorption 2.5; incentives ~7.1% and trend slightly up Stable discipline; slight incentive uptick
Tariffs/Macro SentimentTariffs dampening buyer confidence; limited cost impact expected (Q1) “Policy uncertainty and geopolitical tensions” affecting sentiment (CEO) Persistent headwind
Regional DemandLate-2024 softness; Q1: Raleigh/DC strong; Colorado/DFW/Charlotte softer West: IE, San Diego, Seattle stronger; Sacramento/AZ softer; Central: Austin/Dallas/Denver softer; East: DC Metro/Raleigh strong Mixed; choppy; consistent patterns
Cycle Times/OperationsQ1 focus on efficiency; starts moderated to balance specs Avg build time ~115 working days; initiatives to reduce cycle time (COO) Improvement initiatives underway
Margin Outlook/RangeGuidance implied H2 margin ~20% given incentives and mix (Q1) Wide range retained; limited backlog into Q4; midpoint targeting (CFO) Risk maintained; aiming midpoint
Capital Allocation$75M buybacks (Q1); strong liquidity $100M buybacks; authorization +$50M; revolver upsized/extended More aggressive repurchases

Management Commentary

  • “Tri Pointe Homes delivered another solid quarter, meeting our revenue and earnings guidance despite ongoing macroeconomic headwinds… Adjusted net income and diluted EPS… were $68.7 million* and $0.77*” — Doug Bauer, CEO .
  • “Our absorption pace… was 2.5… SG&A… 12.6% and at the lower end of our guidance… Net income… $69 million, or $0.70 to $0.77 per diluted share, also adjusted for the same inventory related charge” — Glenn Keeler, CFO .
  • “We remain confident… Our expansion into Utah, Florida, and the Coastal Carolinas continues to progress on schedule” — Tom Mitchell, President & COO .
  • “We ended the quarter with $1.4 billion of liquidity… and upsized our revolving credit facility… to $850 million, extended to 2030” — Management .

Q&A Highlights

  • Incentives and margin trajectory: Incentives were ~7.1% of revenue in Q2 and expected to tick up slightly; margin guidance already contemplates this (CEO) .
  • Impairment detail: $11M impairment tied to a Bay Area project; watch list methodology for sub-10% margin projects explained (CFO/COO) .
  • Margin range rationale: Wide range kept due to choppy demand, limited Q4 backlog, and significant sales yet to be made (CFO) .
  • Regional color: Inland Empire, San Diego, Seattle strong; Sacramento and AZ softer; Austin/Dallas/Denver softer; DC Metro/Raleigh strong (CFO/COO) .
  • Cycle time: ~115 working days; new templates/schedules to improve further (COO) .
  • Pace vs price floor: 2.5 monthly viewed as a floor; willingness to modestly increase incentives if pace dips below (CEO) .

Estimates Context

  • Q2 2025 beat vs consensus: EPS $0.77 vs $0.678*; revenue $902.4M vs $806.7M* (normalized EPS basis; adjusted EPS excludes impairment). Delivery beat high end of guidance, while lower ASP due to mix and SG&A at low end supported the EPS beat (CFO) .
  • Q3 2025 context: Street EPS $0.52* and revenue $782.2M*; management guides 1,000–1,100 deliveries, ASP $675–$685K, GM% 20–21%, SG&A 13–14% .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Operational execution amid a choppy demand backdrop: deliveries beat guidance; SG&A controlled; disciplined incentives maintained margin quality .
  • H2 risk skew: wide margin range retained given limited backlog into Q4 and need to sell into seasonal softness; expect incentives to drift up modestly .
  • Capital returns catalyst: $100M repurchased in Q2; authorization raised to $300M; stock trading below book (CEO remark) supports continued buybacks .
  • Liquidity and leverage strong: $1.4B liquidity, 21.7% debt-to-capital, 8.0% net homebuilding debt-to-net capital — flexibility to pursue land and expansion .
  • Geographic mix matters: West Coast selective strength (IE, San Diego, Seattle) vs Sacramento/AZ softness; Central mixed; East supported by DC Metro/Raleigh — portfolio positioning drives ASP/margin outcomes .
  • Watch project-level risk: Bay Area impairment underscores margin pressure potential in certain communities; monitoring “watch list” projects around 10% margin (CFO) .
  • Near-term trading lens: Expect focus on H2 bookings, incentive intensity, margin cadence vs midpoint, and continued buyback activity as key stock drivers .
Notes: * Values retrieved from S&P Global.