Hovnanian Enterprises, Inc. has reported its fiscal 2025 third-quarter results, showing an 11% year-over-year increase in total revenues. The company has achieved or exceeded all the guidance metrics provided and has seen an 86% option rate for its total lots, the highest percentage ever. The second-highest trailing twelve-month return on equity (ROE) among midsized homebuilders was also reported.
The third-quarter total revenues increased by 10.8% to $800.6 million compared to the same period in the previous year. For the first nine months of fiscal 2025, total revenues increased by 6.7% to $2.16 billion compared with the same period in the previous fiscal year.
The homebuilding gross margin percentage, after cost of sales interest expense and land charges, was 11.7% for the third quarter of fiscal 2025, compared to 19.1% during the third quarter a year ago. The homebuilding gross margin percentage, before cost of sales interest expense and land charges, was 17.3% during the fiscal 2025 third quarter, within the guidance range provided, compared to 22.1% in last year’s third quarter.
The dollar value of consolidated contract backlog as of July 31, 2025, decreased 27.6% to $838.8 million compared with $1.16 billion as of July 31, 2024. The gross contract cancellation rate for consolidated contracts was 19% for the third quarter ended July 31, 2025, compared with 17% in the 2024 third quarter.
The company's net income was $16.6 million, or $1.99 per diluted common share, for the three months ended July 31, 2025, compared with net income of $72.9 million, or $9.75 per diluted common share, in the same period of the previous fiscal year.
For the third quarter of fiscal 2025, EBITDA was $61.0 million compared with $127.9 million for the third quarter of the prior year. Adjusted EBITDA was $77.1 million for the quarter ended July 31, 2025, which was above the guidance range provided, compared with $131.0 million in the third quarter of the prior fiscal year.
As of July 31, 2025, the company's total liquidity was $277.9 million, which was above the target liquidity range of $170 million to $245 million. During the third quarter of fiscal 2025, approximately 3,500 lots were put under option or acquired in 30 consolidated communities.
The company's total controlled consolidated lots were 40,246 as of July 31, 2025, an increase of 1.8% compared with 39,516 lots at the end of the previous fiscal year’s third quarter. 86% of the lots were optioned at the end of the third quarter of fiscal 2025, the highest percentage of option lots ever.
The company is providing guidance for total revenues, adjusted homebuilding gross margin, adjusted income before income taxes, and adjusted EBITDA for the fourth quarter of fiscal 2025.
Today the company's shares have moved -12.21% to a price of $130.76. If you want to know more, read the company's complete 8-K report here.
