- Meritage Homes (MTH, Financial) reported a decline in key financial metrics for Q1 2025, with a revenue drop to $1.3 billion.
- Net earnings fell by 34% year-over-year to $123 million, affecting its diluted EPS, which decreased to $1.69.
- The company reiterated its full-year 2025 guidance, expecting home closing revenue between $6.6 and $6.9 billion.
Meritage Homes Corporation (MTH) released its first-quarter 2025 financial results, highlighting mixed performance amidst a challenging housing market. The company reported that home closing revenue decreased by 8% year-over-year to $1.3 billion. This decline was accompanied by a 3% reduction in the number of home closings, which totaled 3,416 units for the quarter.
Net earnings for Q1 2025 saw a significant drop, falling 34% to $123 million compared to the same period in the previous year. This translated into a diluted earnings per share (EPS) of $1.69, representing a 33% decrease from $2.53 in Q1 2024. The gross margin for home closings also contracted, falling to 22.0% from 25.8%, primarily due to increased financing incentives and higher lot costs.
Despite these declines, Meritage Homes maintained a strong liquidity position with $1 billion in cash and a net debt-to-capital ratio of 13.7%. During the first quarter, the company issued $500 million in senior notes and invested $465 million in land acquisition. Additionally, $31 million was paid in dividends, and $45 million was spent on share repurchases.
The company reiterated its full-year 2025 guidance, anticipating 16,250 to 16,750 home closings and revenue between $6.6 and $6.9 billion. Meritage Homes also noted a 7% increase in its community count, bringing the total to 290 communities, while exercising control over approximately 84,200 lots.
While the company's balance sheet remains robust, the sharp reduction in backlog units and the increased reliance on financing incentives suggest challenges ahead as it aims to meet its full-year projections.
