Hovnanian Enterprises, Inc., a leading national homebuilder, has reported its fiscal 2026 first-quarter results. The company reported total revenues of $632.0 million for the quarter ended January 31, 2026, compared to $673.6 million in the same period of the prior year. However, the company experienced a 5% year-over-year increase in domestic consolidated communities and reported a total liquidity of $471 million.
The homebuilding gross margin percentage, after cost of sales interest expense and land charges, was 10.1% for the three months ended January 31, 2026, compared with 15.2% during the first quarter a year ago. Meanwhile, the homebuilding gross margin percentage before cost of sales interest expense and land charges was 13.4% during the fiscal 2026 first quarter, compared with 18.3% in the same period last year.
Total interest expense was $28.7 million, or 4.5% of total revenues, for the first quarter of fiscal 2026, compared with $28.9 million, or 4.3% of total revenues, for the first quarter of fiscal 2025. Income before income taxes for the first quarter of fiscal 2026 was $28.7 million compared with $39.9 million in the first quarter of the prior fiscal year.
Net income was $20.9 million, or $2.62 per diluted common share, for the three months ended January 31, 2026, compared with net income of $28.2 million, or $3.58 per diluted common share, in the same period of the previous fiscal year. EBITDA was $60.7 million for the first quarter of fiscal 2026 compared with $71.0 million for the first quarter of the prior year. Adjusted EBITDA was $63.1 million for the quarter ended January 31, 2026, compared with $72.1 million in the first quarter of the prior fiscal year.
Consolidated domestic contracts in the first quarter of fiscal 2026 increased 3.1% to 1,242 homes ($664.8 million) compared with 1,205 homes ($643.3 million) in the same quarter last year. However, the dollar value of consolidated domestic contract backlog decreased 16.0% to $782.7 million compared with $931.9 million as of January 31, 2025.
Regarding liquidity and inventory, the total liquidity as of January 31, 2026, was $471.4 million, significantly above the target liquidity range of $170 million to $245 million. In the first quarter of fiscal 2026, approximately 2,100 lots were put under option or acquired in 25 domestic consolidated communities. As of January 31, 2026, the total domestic controlled consolidated lots were 35,560 compared with 43,254 lots at the end of the previous fiscal year’s first quarter, with 86% of lots optioned.
Looking ahead, Hovnanian Enterprises anticipates improved adjusted income before income taxes in the second half of fiscal 2026, weighted towards the fourth quarter, compared to the first half of the year. The company is optimistic due to better contract activity in January and February and expects to deliver more homes from newer, higher-margin communities in the latter part of the year.
The market has reacted to these announcements by moving the company's shares -1.92% to a price of $123.06. If you want to know more, read the company's complete 8-K report here.
