D.R. Horton’s second quarter results were well received by the market as the company exceeded Wall Street’s revenue and profit expectations despite a year-over-year decline in sales. Management attributed outperformance to disciplined incentive use, effective inventory management, and a strong operational focus at the community level. CEO Paul Romanowski noted, “Our operators at a community level managed their incentives to drive results,” helping maintain a stable closing pace in a challenging demand environment. The company also highlighted improvements in construction cycle times and a continued focus on matching product offerings to consumer affordability.
Is now the time to buy DHI? Find out in our full research report (it’s free).
D.R. Horton (DHI) Q2 CY2025 Highlights:
- Revenue: $9.23 billion vs analyst estimates of $8.79 billion (7.4% year-on-year decline, 5% beat)
- Adjusted EPS: $3.36 vs analyst estimates of $2.90 (15.8% beat)
- Adjusted EBITDA: $1.29 billion vs analyst estimates of $1.26 billion (14% margin, 2.3% beat)
- The company reconfirmed its revenue guidance for the full year of $33.95 billion at the midpoint
- Operating Margin: 13.7%, down from 17.2% in the same quarter last year
- Backlog: $5.34 billion at quarter end, down 18.6% year on year
- Market Capitalization: $43.59 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions D.R. Horton’s Q2 Earnings Call
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Alan Ratner (Zelman and Associates) asked about the drivers behind rising incentives and whether the trend is primarily competitive or a proactive effort to boost activity. CEO Paul Romanowski explained that incentives have increased to maintain sales pace and are managed dynamically at the community level.
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Stephen Kim (Evercore ISI) inquired about the outlook for selling, general, and administrative (SG&A) expenses and long-term targets. SVP Jessica Hansen said SG&A leverage will likely improve gradually, with a long-term goal in the 7-8% range of revenue.
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Matthew Bouley (Barclays) questioned expectations for community count growth in 2026 and whether the pace of new market entries would continue. Romanowski shared that community growth is expected to moderate, with expansion shifting to a more sustainable pace as new markets mature.
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Eric Bosshard (Cleveland Research) asked about trends in construction and land costs and whether further declines or stabilization are likely. Hansen and Romanowski replied that core material costs have decreased modestly, but land cost relief is not expected in the near term.
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Sam Reid (Wells Fargo) explored the composition of sales incentives, particularly the use and impact of interest rate buydowns. Romanowski confirmed that rate buydowns are a major traffic driver, especially for first-time buyers, and are tailored to local market conditions.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will closely track (1) the effectiveness of incentive strategies in sustaining sales and margin levels, (2) trends in inventory turnover and construction cycle times as indicators of operational efficiency, and (3) any moderation or reversal in land and material cost inflation. We will also monitor management’s ability to adapt its product mix in response to affordability challenges and evolving buyer preferences.
D.R. Horton currently trades at $146.10, up from $131.22 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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