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NVR
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NVR, INC. ANNOUNCES FIRST QUARTER RESULTS

1. NVR's Q1 2025 net income dropped 24% compared to 2024. 2. Homebuilding revenue increased to $2.35 billion, up 3% from 2024. 3. New orders decreased by 12% and cancellation rates rose to 16%. 4. Mortgage banking segment saw 4% growth in loan production. 5. Effective tax rate increased significantly from 16.2% to 25.5%.

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$7071.4604/23 03:41 PM EDTLatest Updated
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FAQ

Why Bearish?

NVR's significant decline in net income and increased cancellation rates may dampen investor confidence, resembling patterns seen during past housing market downturns.

How important is it?

The combination of declining net income, increasing costs, and rising cancellation rates indicate potential underlying issues, which are likely to concern investors.

Why Short Term?

The immediate financial results and market conditions may impact NVR quickly, similar to previous quarterly reports influencing stock performance.

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LENPHMDHIKBHTOL
, /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its first quarter ended March 31, 2025 of $299.6 million, or $94.83 per diluted share. Net income and diluted earnings per share for the first quarter ended March 31, 2025 decreased 24% and 19%, respectively, when compared to 2024 first quarter net income of $394.3 million, or $116.41 per diluted share. Consolidated revenues for the first quarter of 2025 totaled $2.40 billion, which increased 3% from $2.33 billion in the first quarter of 2024.  Homebuilding New orders in the first quarter of 2025 decreased by 12% to 5,345 units, when compared to 6,049 units in the first quarter of 2024. The average sales price of new orders in the first quarter of 2025 was $448,500, a decrease of 1% when compared with the first quarter of 2024. The cancellation rate in the first quarter of 2025 was 16% compared to 13% in the first quarter of 2024. Settlements in the first quarter of 2025 increased by 1% to 5,133 units, compared to 5,089 units in the first quarter of 2024. The average settlement price in the first quarter of 2025 was $457,900, an increase of 2% from the first quarter of 2024. Our backlog of homes sold but not settled as of March 31, 2025 decreased on a unit basis by 9% to 10,165 units and decreased on a dollar basis by 7% to $4.84 billion when compared to the respective backlog unit and dollar balances as of March 31, 2024. Homebuilding revenues of $2.35 billion in the first quarter of 2025 increased by 3% compared to homebuilding revenues of $2.29 billion in the first quarter of 2024. Gross profit margin in the first quarter of 2025 decreased to 21.9%, compared to 24.5% in the first quarter of 2024. Gross profit margin was negatively impacted by higher lot costs and pricing pressure due to continued affordability challenges. Income before tax from the homebuilding segment totaled $369.5 million in the first quarter of 2025, a decrease of 16% when compared to the first quarter of 2024. Mortgage Banking Mortgage closed loan production in the first quarter of 2025 totaled $1.43 billion, an increase of 4% when compared to the first quarter of 2024. Income before tax from the mortgage banking segment totaled $32.5 million in the first quarter of 2025, an increase of 12% when compared to $29.0 million in the first quarter of 2024.  Effective Tax Rate Our effective tax rate for the three months ended March 31, 2025 was 25.5% compared to 16.2% for the three months ended March 31, 2024. The increase in the effective tax rate in the first quarter of 2025 is primarily attributable to a lower income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $2.7 million and $43.8 million for the three months ended March 31, 2025 and March 31, 2024, respectively. About NVR NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding segment sells and builds homes under the Ryan Homes, NVHomes and Heartland Homes trade names, and operates in thirty-six metropolitan areas in sixteen states and Washington, D.C. For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com and www.heartlandluxuryhomes.com. Some of the statements in this release made by the Company constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "believes," "expects," "may," "will," "should" or "anticipates" or the negative thereof or other comparable terminology. All statements other than of historical facts are forward-looking statements. Forward-looking statements contained in this document may include those regarding market trends, NVR's financial position and financial results, business strategy, the outcome of pending litigation, investigations or similar contingencies, projected plans and objectives of management for future operations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of NVR to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to the following: general economic and business conditions (on both a national and regional level); interest rate changes; access to suitable financing by NVR and NVR's customers; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; competition; the availability and cost of land and other raw materials used by NVR in its homebuilding operations; shortages of labor; the economic impact of a major epidemic or pandemic; weather related slow-downs; building moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which NVR has little or no control. NVR undertakes no obligation to update such forward-looking statements except as required by law. NVR, Inc. Consolidated Statements of Income (in thousands, except per share data) (unaudited) Three Months Ended March 31, 2025 2024 Homebuilding: Revenues $          2,350,445 $          2,286,177 Other income 26,712 40,866 Cost of sales (1,835,375) (1,726,213) Selling, general and administrative (165,117) (152,503) Operating income 376,665 448,327 Interest expense (7,181) (6,649) Homebuilding income 369,484 441,678 Mortgage Banking: Mortgage banking fees 52,587 47,286 Interest income 3,806 4,092 Other income 1,093 1,171 General and administrative (24,693) (23,358) Interest expense (273) (177) Mortgage banking income 32,520 29,014 Income before taxes 402,004 470,692 Income tax expense (102,428) (76,423) Net income $              299,576 $              394,269 Basic earnings per share $                100.41 $                123.76 Diluted earnings per share $                  94.83 $                116.41 Basic weighted average shares outstanding 2,984 3,186 Diluted weighted average shares outstanding 3,159 3,387 NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) (unaudited) March 31, 2025 December 31, 2024 ASSETS Homebuilding: Cash and cash equivalents $              2,176,902 $              2,561,339 Restricted cash 64,264 42,172 Receivables 36,543 32,622 Inventory: Lots and housing units, covered under sales agreements with customers 1,774,287 1,727,243 Unsold lots and housing units 242,217 237,177 Land under development 70,050 65,394 Building materials and other 23,818 28,893 2,110,372 2,058,707 Contract land deposits, net 757,197 726,675 Property, plant and equipment, net 98,038 95,619 Operating lease right-of-use assets 84,791 78,340 Reorganization value in excess of amounts allocable to identifiable assets, net 41,580 41,580 Other assets 264,138 251,178 5,633,825 5,888,232 Mortgage Banking: Cash and cash equivalents 34,204 49,636 Restricted cash 12,540 11,520 Mortgage loans held for sale, net 391,914 355,209 Property and equipment, net 7,286 7,373 Operating lease right-of-use assets 22,686 23,482 Reorganization value in excess of amounts allocable to identifiable assets, net 7,347 7,347 Other assets 85,731 38,189 561,708 492,756 Total assets $              6,195,533 $              6,380,988 NVR, Inc. Consolidated Balance Sheets (Continued) (in thousands, except share and per share data) (unaudited) March 31, 2025 December 31, 2024 LIABILITIES AND SHAREHOLDERS' EQUITY Homebuilding: Accounts payable $                  364,929 $                  332,772 Accrued expenses and other liabilities 455,369 441,300 Customer deposits 315,746 322,926 Operating lease liabilities 90,489 83,939 Senior notes 910,633 911,118 2,137,166 2,092,055 Mortgage Banking: Accounts payable and other liabilities 79,009 53,433 Operating lease liabilities 24,694 25,428 103,703 78,861 Total liabilities 2,240,869 2,170,916 Commitments and contingencies Shareholders' equity: Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 sharesissued as of both March 31, 2025 and December 31, 2024 206 206 Additional paid-in capital 3,057,037 3,031,637 Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as ofboth March 31, 2025 and December 31, 2024 (16,710) (16,710) Deferred compensation liability 16,710 16,710 Retained earnings 15,346,529 15,046,953 Less treasury stock at cost – 17,610,715 and 17,543,686 shares as of March 31,2025 and December 31, 2024, respectively (14,449,108) (13,868,724) Total shareholders' equity 3,954,664 4,210,072 Total liabilities and shareholders' equity $              6,195,533 $              6,380,988 NVR, Inc. Operating Activity (dollars in thousands) (unaudited) Three Months Ended March 31, 2025 2024 Units AveragePrice Units AveragePrice New orders, net of cancellations: Mid Atlantic (1) 1,866 $         514.5 2,282 $         515.4 North East (2) 377 $         695.0 527 $         612.6 Mid East (3) 1,098 $         419.9 1,263 $         409.9 South East (4) 2,004 $         356.3 1,977 $         369.9 Total 5,345 $         448.5 6,049 $         454.3 Three Months Ended March 31, 2025 2024 Units AveragePrice Units AveragePrice Settlements: Mid Atlantic (1) 2,050 $         527.9 1,966 $         517.5 North East (2) 471 $         613.2 463 $         552.2 Mid East (3) 1,013 $         407.1 1,049 $         397.5 South East (4) 1,599 $         354.6 1,611 $         370.0 Total 5,133 $         457.9 5,089 $         449.2 As of March 31, 2025 2024 Units AveragePrice Units AveragePrice Backlog: Mid Atlantic (1) 3,884 $         535.7 4,410 $         521.0 North East (2) 961 $         694.4 1,092 $         628.2 Mid East (3) 2,130 $         422.6 2,190 $         417.7 South East (4) 3,190 $         372.9 3,497 $         377.5 Total 10,165 $         475.9 11,189 $         466.4 NVR, Inc. Operating Activity (Continued) (dollars in thousands) (unaudited) Three Months Ended March 31, 2025 2024 Average active communities: Mid Atlantic (1) 120 157 North East (2) 24 34 Mid East (3) 93 100 South East (4) 164 136 Total 401 427 Three Months Ended March 31, 2025 2024 Homebuilding data: New order cancellation rate 16 % 13 % Lots controlled at end of period 167,600 143,200 Mortgage banking data: Loan closings $         1,432,922 $         1,378,009 Capture rate 86 % 86 % Common stock information: Shares outstanding at end of period 2,944,615 3,167,625 Number of shares repurchased 77,120 66,858 Aggregate cost of shares repurchased $            583,394 $            496,936 (1) Maryland, Virginia, West Virginia, Delaware and Washington, D.C. (2) New Jersey and Eastern Pennsylvania (3) New York, Ohio, Western Pennsylvania, Indiana and Illinois (4) North Carolina, South Carolina, Tennessee, Florida, Georgia and Kentucky SOURCE NVR, INC. 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