D.R. Horton (DHI) Q1 FY26 earnings call

Earnings call· Dec 2025 (Q1 FY26)· Consumer Discretionary· Jan 20, 2026

Source: earnings call transcript

D.R. Horton delivered a solid start to fiscal 2026, surpassing revenue and closings guidance while navigating affordability challenges with strategic incentives. The company reaffirmed its full-year guidance for revenues, homes closed, operating cash flow, and capital returns, signaling confidence in its market position and operational flexibility. Management emphasized its disciplined approach to capital allocation and focus on affordable housing, particularly for first-time buyers, despite ongoing market volatility.

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DHI operating KPIs by quarter

DHI operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2025 Q2 FY25	Jun 2025 Q3 FY25	This call Dec 2025 Q1 FY26	Mar 2026 Q2 FY26	Jun 2026 Q3 FY26	Change vs prior quarter
Homes closed Homebuilding	19.276K Our second quarter home sales revenues were $7.2 billion on 19,276 homes closed compared to $8.5 billion on 22,548 homes closed in the prior year quarter. Source: earnings call transcript	23.16K Our tenured operators continue to respond to market conditions with discipline, balancing pace versus price to maximize returns in each of our communities, achieving 23,160 homes closed this quarter, with a home sales gross margin of 21.8%, both of which were above our guidance range. Source: earnings call transcript	17.818K Our first quarter home sales revenues were $6.5 billion on 17,818 homes closed, compared to $7.1 billion on 19,059 homes closed in the prior year quarter. Source: earnings call transcript	19.486K Home sales revenues in the second quarter totaled $7 billion on 19,486 homes closed compared to $7.2 billion on 19,276 homes closed in the prior year quarter. Source: earnings call transcript	23.983K We closed 23,983 homes during the quarter, which was at the high end of our guidance range and achieved a home sales gross margin of 20.7%. Source: earnings call transcript	+23.1%
Average closing price Homebuilding	$372.5K Our average closing price for the quarter was $372,500 down 1%, both sequentially and year-over-year. Source: earnings call transcript	$369.6K Our average closing price for the quarter was $369,600, down 1% sequentially and down 3% year-over-year. Source: earnings call transcript	$365.5K Our average closing price for the quarter was $365,500, flat sequentially and down 3% year-over-year. Source: earnings call transcript	$361.6K Our average closing price was $361,600, down 1% sequentially and down 3% year-over-year. Source: earnings call transcript	$362K Our average closing price was flat sequentially and down 2% year-over-year to $362,000. Source: earnings call transcript	+0.1%
Cancellation rate Homebuilding	16% Our cancellation rate for the quarter was 16%, down from 18% sequentially and up from 15% in the prior year quarter. Source: earnings call transcript	17% Our cancellation rate for the quarter was 17%, up from 16% sequentially and down from 18% in the prior year quarter. Source: earnings call transcript	18% Our cancellation rate for the quarter was 18%, consistent with the prior year quarter and down from 20% sequentially. Source: earnings call transcript	16% Our cancellation rate for the quarter was 16%, consistent with the prior year period and down from 18% sequentially. Source: earnings call transcript	20% Our cancellation rate for the quarter was 20%, up from 17% in the prior year period and from 16% sequentially within our normal historical range. Source: earnings call transcript	+4 pt
Markets	126 Our community count is up 10% and our market count has increased 6% to 126 markets in 36 states. Source: earnings call transcript	126 Our community count is up 12%, and our market cap has increased 4% to 126 markets in 36 states. Source: earnings call transcript	—	—	—	0%
Homes started Homebuilding	20K We started 20,000 homes in the March quarter and ended the quarter with 36,900 homes in inventory. Source: earnings call transcript	24.7K We started 24,700 homes in the June quarter, up 24% sequentially from the second quarter, and we expect our starts in the fourth quarter to be lower than the third quarter. Source: earnings call transcript	18.5K We started 18,500 homes in the December quarter, up 27% sequentially from the fourth quarter, and we expect our starts in the second quarter to be higher than the first quarter. Source: earnings call transcript	27.5K We started 27,500 homes in the second quarter and we ended the quarter with 38,200 homes in inventory, of which, 22,900 were unsold and 5,500 were completed and unsold. Source: earnings call transcript	23.9K We started 23,900 homes in the third quarter and we ended the quarter with 38,000 homes in inventory, down 1%, both sequentially and year-over-year. Source: earnings call transcript	-13.1%
Unsold homes completed greater than 6 months Homebuilding	1,200 1,200 of our unsold homes have been completed for greater than 6 months. Source: earnings call transcript	800 800 of our unsold homes have been completed for greater than 6 months. Source: earnings call transcript	900 900 of our unsold homes have been completed for greater than 6 months. Source: earnings call transcript	—	600 7,600 of our total unsold homes were completed, of which 600 have been completed for more than 6 months. Source: earnings call transcript	—
Lots controlled and owned Homebuilding	~613K Our homebuilding lot position at March 31 consisted of approximately 613,000 lots, of which 25% were owned and 75% were controlled through purchase contracts. Source: earnings call transcript	~600K Our homebuilding lot position at June 30 consisted of approximately 600,000 lots, of which 24% were owned and 76% were controlled through purchase contracts. Source: earnings call transcript	~590.5K Our homebuilding lot position at December 31 consists of approximately 590,500 lots, of which 25% were owned and 75% were controlled through purchase contracts. Source: earnings call transcript	~575K Our homebuilding lot position at March 31 consisted of approximately 575,000 lots, of which, 23% were owned and 77% were controlled through purchase contracts. Source: earnings call transcript	~570K Our homebuilding lot position at June 30 consists of approximately 570,000 lots, of which 22% were owned and 78% were controlled through purchase contracts. Source: earnings call transcript	—
Capital expenditures Finished lots	—	—	—	$1.5B During the second quarter, our homebuilding investments in lots, land and development totaled $2.1 billion, including $1.5 billion for finished lots, $500 million for land development and $120 million for land acquisition. Source: earnings call transcript	$1.5B During the third quarter, our homebuilding investments in lots, land and development totaled $2.1 billion, including $1.5 billion for finished lots and $520 million for land development and $75 million for land acquisition. Source: earnings call transcript	0%
Capital expenditures Land development	—	—	—	$500M During the second quarter, our homebuilding investments in lots, land and development totaled $2.1 billion, including $1.5 billion for finished lots, $500 million for land development and $120 million for land acquisition. Source: earnings call transcript	$520M During the third quarter, our homebuilding investments in lots, land and development totaled $2.1 billion, including $1.5 billion for finished lots and $520 million for land development and $75 million for land acquisition. Source: earnings call transcript	+4%
Capital expenditures Land acquisition	—	—	—	$120M During the second quarter, our homebuilding investments in lots, land and development totaled $2.1 billion, including $1.5 billion for finished lots, $500 million for land development and $120 million for land acquisition. Source: earnings call transcript	$75M During the third quarter, our homebuilding investments in lots, land and development totaled $2.1 billion, including $1.5 billion for finished lots and $520 million for land development and $75 million for land acquisition. Source: earnings call transcript	-37.5%
Single-family rental homes sold	519 In the second quarter, our rental operations generated $23 million of pretax income on $237 million of revenues from the sale of 519 single-family rental homes and 300 multifamily rental units. Source: earnings call transcript	1,065 In the third quarter, our rental operations generated $55 million of pretax income on $381 million of revenues from the sale of 1,065 single-family rental homes and 328 multifamily rental units. Source: earnings call transcript	397 In the first quarter, our rental operations generated $110 million of revenues from the sale of 397 single-family rental homes. Source: earnings call transcript	566 In the second quarter, our rental operations generated $12 million of pretax income on $212 million of revenues from the sale of 566 single-family rental homes and 216 multifamily rental units. Source: earnings call transcript	601 In the third quarter, our rental operations generated $31 million of pretax income on $266 million of revenues from the sale of 601 single-family rental homes and 339 multifamily rental units. Source: earnings call transcript	+6.2%
Multifamily rental units sold	300 In the second quarter, our rental operations generated $23 million of pretax income on $237 million of revenues from the sale of 519 single-family rental homes and 300 multifamily rental units. Source: earnings call transcript	328 In the third quarter, our rental operations generated $55 million of pretax income on $381 million of revenues from the sale of 1,065 single-family rental homes and 328 multifamily rental units. Source: earnings call transcript	—	216 In the second quarter, our rental operations generated $12 million of pretax income on $212 million of revenues from the sale of 566 single-family rental homes and 216 multifamily rental units. Source: earnings call transcript	339 In the third quarter, our rental operations generated $31 million of pretax income on $266 million of revenues from the sale of 601 single-family rental homes and 339 multifamily rental units. Source: earnings call transcript	+56.9%
Lots sold Forestar	3,411 Forestar, our majority-owned residential lot development company reported revenues of $351 million for the second quarter on 3,411 lots sold with pretax income of $41 million. Source: earnings call transcript	3,605 Forestar, our majority-owned residential lot development company, reported revenues for the third quarter of $391 million on 3,605 lots sold, with pretax income of $44 million. Source: earnings call transcript	1,944 Forestar, our majority-owned residential lot development company, reported revenues for the first quarter of $273 million on 1,944 lots sold with pretax income of $21 million. Source: earnings call transcript	2,938 Forestar, our majority-owned residential lot development company, reported second quarter revenues of $374 million on 2,938 lots sold, with pretax income of $44 million. Source: earnings call transcript	3,659 Forestar, our majority-owned residential lot development company reported third quarter revenues of $407 million on 3,659 lots sold with pretax income of $49 million. Source: earnings call transcript	+24.5%
Lots controlled and owned Forestar	105.9K Forestar's owned and controlled lot position at March 31 was 105,900 lots. Source: earnings call transcript	102K Forestar's owned and controlled lot position at June 30 was 102,000 lots. Source: earnings call transcript	101K Forestar's owned and controlled lot position at December 31 was 101,000 lots. Source: earnings call transcript	94K At March 31, Forestar's owned and controlled lock position totaled 94,000 lots. Source: earnings call transcript	92K At June 30, Forestar's owned and controlled lot position totaled 92,000 lots. Source: earnings call transcript	-2.1%
Finished lots purchased from Forestar	$270M $270 million of our finished lots purchased in the second quarter were from Forestar. Source: earnings call transcript	$320M $320 million of our finished lots purchased in the third quarter were from Forestar. Source: earnings call transcript	$180M $180 million of our finished lots purchased in the first quarter were from Forestar. Source: earnings call transcript	$280M During the second quarter, we purchased $280 million of finished lots from Forestar. Source: earnings call transcript	$360M During the third quarter, we purchased $360 million of finished lots from Forestar. Source: earnings call transcript	+28.6%
Homebuyers financed capture rate Financial Services	81% During the second quarter, our mortgage company handled the financing for 81% of our homebuyers. Source: earnings call transcript	81% During the third quarter, our mortgage company handled the financing for 81% of our homebuyers. Source: earnings call transcript	—	—	—	0 pt
Average FICO score Financial Services	723 Borrowers originating loans with the HI mortgage this quarter had an average FICO score of 723 and an average loan-to-value ratio of 89%. Source: earnings call transcript	720 Borrowers originating loans with DHI Mortgage this quarter had an average FICO score of 720 and an average loan-to-value ratio of 90%. Source: earnings call transcript	—	—	—	-0.4%
Average loan-to-value ratio Financial Services	89% Borrowers originating loans with the HI mortgage this quarter had an average FICO score of 723 and an average loan-to-value ratio of 89%. Source: earnings call transcript	90% Borrowers originating loans with DHI Mortgage this quarter had an average FICO score of 720 and an average loan-to-value ratio of 90%. Source: earnings call transcript	—	—	—	+1 pt
First-time homebuyers share of closings Financial Services	63% First-time homebuyers represented 63% of the closings handled by our mortgage company this quarter. Source: earnings call transcript	64% First-time homebuyers represented 64% of the closings handled by our mortgage company this quarter. Source: earnings call transcript	64% 64% of our mortgage company's closings this quarter were to first-time homebuyers. Source: earnings call transcript	65% 65% of our mortgage company's closings this quarter were to first-time homebuyers. Source: earnings call transcript	65% 65% of our mortgage company's closings this quarter were to first-time homebuyers. Source: earnings call transcript	0 pt

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