In This Article:
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Total Revenue: $2 billion for Q4, driven by a 17% increase in deliveries.
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Earnings Per Diluted Share: $2.52, a 36% increase from the previous year's Q4.
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Gross Margin: Just under 21% for Q4.
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Operating Income Margin: 11.5% for Q4.
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Net Orders: 2,688 in Q4, up 41% year over year.
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Homes Delivered: 3,978 in Q4, with a backlog conversion rate of 69%.
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Average Selling Price: Approximately $501,000 for Q4.
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Net Income: $190.6 million for Q4.
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Book Value Increase: 12% from the prior year.
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Return on Equity: Increased to 16.6% for the full year.
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Land Investment: $744 million in Q4, $2.8 billion for the full year.
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Community Count: Ended the year with 258 active communities, up 7% year over year.
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Share Repurchases: $350 million in 2024, representing 6% of shares outstanding at the start of the year.
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Debt-to-Capital Ratio: Improved to 29.4% at year-end.
Release Date: January 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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KB Home (NYSE:KBH) reported a significant increase in total revenues for the fourth quarter, reaching $2 billion, driven by a 17% increase in deliveries.
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The company achieved a 36% growth in earnings per diluted share, reaching $2.52, compared to the previous year's fourth quarter.
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Operational improvements included a 28% reduction in build times year over year, contributing to higher customer satisfaction.
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KB Home (NYSE:KBH) returned nearly $120 million of capital to shareholders during the quarter, primarily through share repurchases.
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The company expanded its land position by 37% year over year, ending 2024 with nearly 77,000 lots owned or controlled, supporting future growth.
Negative Points
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Rising mortgage rates tempered KB Home (NYSE:KBH)'s selling pace, leading to missed internal sales goals for the quarter.
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The company experienced a lower year-over-year backlog, attributed to improved build times, which could impact future revenue visibility.
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Affordability constraints due to rising mortgage rates are influencing near-term demand, causing buyer hesitancy.
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The company had to offer mortgage concessions to about 60% of net orders, indicating pressure on pricing and margins.
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KB Home (NYSE:KBH) lowered its housing revenue guidance for 2025 to $7.25 billion at the midpoint, reflecting market uncertainties.
Q & A Highlights
Q: Can you explain the factors contributing to the increase in backlog turnover ratios and how they might change in the future? A: Jeff Kaminski, Chief Financial Officer, explained that the increase in backlog turnover ratios is primarily due to improved cycle times, which have been significant. Additionally, the company has been delivering more quick move-in ready homes, contributing to higher backlog conversion rates. While they have carried more inventory, the focus remains on returning to traditional build-to-order percentages.