PulteGroup (PHM 0.42%), one of the largest U.S. homebuilders, reported its second quarter 2025 results on July 22, 2025. The company posted GAAP earnings per share (EPS) of $3.03, surpassing the consensus GAAP estimate of $2.95, but GAAP revenue of $4.27 billion lagged the anticipated $4.38 billion and marked a decline from the previous year. The quarter was shaped by disciplined margin management but softer sales.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $3.03 | $2.95 | $3.83 | (20.9%) |
| Revenue | $4.40 billion | $4.38 billion | $4.60 billion | (4.3%) |
| Home Sale Gross Margin | 27.0 % | 29.9% | (2.9 pp) | |
| Net New Orders (units) | 7,083 | 7,649 | (7.4%) | |
| Backlog | $6.8 billion | $8.1 billion | (16%) |
Source: PulteGroup. Note: Analyst estimates for the quarter provided by FactSet.
About PulteGroup and Its Business Model
PulteGroup builds homes and communities across the United States, with a focus on serving first-time, move-up, and active adult buyers. Its brands, like Centex and Del Webb, address varying lifestyle and budget needs. Homebuilding is at its core, but integrated services—such as mortgage financing and title—also play important roles.
The company's recent strategy emphasizes disciplined land acquisition, balancing price and volume, and thoughtful marketing to multiple buyer segments. PulteGroup keeps a pipeline of controlled land through ownership and option agreements, aiming to minimize risk and enable steady growth. Margin management, cost controls, and capital efficiency are also central to its approach.
Quarter Highlights: Revenue, Margins, and Demand Trends
GAAP EPS came in above analyst targets at $3.03, a result supported by a home sale gross margin of 27.0%. Despite the beat on GAAP earnings, revenue slipped compared to both expectations and the prior year. The result was shaped by a 6% drop in home closings—down to 7,639 units from 8,097 in Q2 2024—with the average selling price rose to $559,000. This represented a 2% increase from Q2 2024. Management identified a softer selling environment, referencing affordability concerns, cost inflation, and competitive pressures as critical trends in the period.
Home sale gross margin, a key measure reflecting how much profit is made after home construction costs, remained high relative to peers but declined to 27.0%, down 2.9 percentage points from a year earlier. PulteGroup reported that higher use of sales incentives—at 8% of average selling price in Q1 2025—continued to squeeze margins. The operating margin stood at 17.9%.
Net new orders, a leading indicator of future business, fell 7% to 7,083 homes, with the dollar value of net new orders was $3.9 billion, an 11% decrease from $4.4 billion in the prior year quarter. The sales pace per community was down 10% in Q1 2025, and April was described as a particularly volatile month for demand and predictability. PulteGroup's community count grew 6% year-over-year to 994, supporting its longer-term growth plans despite present demand challenges.
Backlog, the value of homes sold but not yet closed, shrank 16% from $8.1 billion in Q2 2024 to $6.8 billion. The number of homes in backlog dropped 17% from 12,982 in Q2 2024 to 10,779 units.
This region benefited from PulteGroup’s focus on move-up and active adult buyers. The Del Webb brand, which focuses on active adult communities, continued to show resilience but remained vulnerable to macro and market volatility.
The company expects newly imposed tariffs to increase construction costs by about 1% of average selling price—roughly $5,000 per home—beginning in Q4 2025. Financial services operations, primarily mortgage origination, remained integrated with homebuilding, but Pre-tax income in this segment decreased to $43 million from $63 million due to lower closing volumes. Mortgage capture rates remained high at 85%.
Management reduced its full-year land spend guidance from $5.5 billion to $5.0 billion, citing the desire to keep future capital flexible, rather than any large-scale cancellation of investments. PulteGroup's share repurchases continued, with $300 million spent to buy back 3.0 million shares, and The quarterly dividend was $0.22 per share, up 10% from $0.20 in Q2 2024.
Financial Outlook and Key Watch Areas
Guidance now calls for 29,000 to 30,000 home deliveries, down from a previous target of 31,000. Gross margin guidance for the second half is now set at 26.0% to 26.5%, reflecting continued elevated incentive use and expected cost impacts from tariffs, especially in the fourth quarter.
PulteGroup expects operating cash flow for the full year to reach approximately $1.4 billion. The company ended the period with $1.3 billion in cash and a debt-to-capital ratio of 11.4%. Factors to monitor in upcoming quarters include the trajectory of new orders, conversion of backlog, margin trends, and any supply chain disruptions tied to tariffs.
Note: Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
