- Revenue increased 3% to $2.40 billion, but net income fell 24% to $299.6 million for NVR, Inc. (NVR, Financial) in Q1 2025.
- The homebuilding segment experienced a 12% decline in new orders and a cancellation rate increase to 16%.
- Mortgage banking showed resilience with a 4% increase in loan production to $1.43 billion and a 12% rise in income before tax.
NVR, Inc. (NVR), one of the leading homebuilding and mortgage banking companies in the United States, reported mixed financial results for its first quarter ending March 31, 2025. The company achieved a 3% increase in consolidated revenues, reaching $2.40 billion compared to the same period last year.
Despite the revenue growth, NVR's net income saw a significant decline of 24%, totaling $299.6 million. The diluted earnings per share (EPS) also fell by 19% to $94.83. This downturn is primarily attributed to a contraction in the gross profit margin, which decreased to 21.9% from 24.5% a year ago, largely due to higher lot costs and pricing pressures.
In the homebuilding segment, new orders decreased by 12% to 5,345 units, accompanied by an increased cancellation rate of 16% versus 13% in Q1 2024. The average sales price of new orders also saw a slight decrease of 1%, setting at $448,500. Consequently, the backlog of homes sold but not settled decreased by 9% in units and 7% in dollar value, amounting to $4.84 billion.
Conversely, the mortgage banking segment of NVR displayed more positive results. Closed loan production rose by 4% to $1.43 billion, and the segment's income before tax increased by 12%, reaching $32.5 million.
Another factor impacting the bottom line was a rise in the effective tax rate, which jumped to 25.5% from 16.2% in the previous year. The increase is primarily due to a reduced tax benefit from stock option exercises.
Despite these challenges, NVR continued its strategy of returning capital to shareholders, repurchasing 77,120 shares worth $583.4 million during the quarter, exceeding the previous year's repurchase total of $496.9 million.
