Beazer Homes Usa (BZH 7.12%), a national homebuilder known for energy-efficient housing, reported results for its fiscal third quarter ended June 30, 2025, on July 31, 2025. The biggest news was a swing to a net loss, with diluted earnings per share at $(0.01) (GAAP), missing the GAAP analyst EPS estimate of $0.42 and down from $0.88 per diluted share (GAAP) in the fiscal third quarter of 2024. Homebuilding revenue was $535.4 million, falling short of the GAAP consensus of $559.0 million and representing a 9.2% decline compared to the same period last year. Lower home sales, weaker orders—especially in the Texas market—and ongoing affordability challenges drove profit margin down and led the company to record $10.3 million in inventory impairment charges. Overall, the quarter showed clear signs of weakening demand, rising competitive pressure, and risks to near-term profit levels.
| Metric | Fiscal Q3 2025 (ended June 30, 2025) | Fiscal Q3 2025 Estimate | Fiscal Q3 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS – Diluted (GAAP) | $(0.01) | $0.42 | $0.88 | (101.1%) |
| Revenue (GAAP) | $545.4 million | $559.1 million | $595.7 million | (8.4%) |
| Homebuilding Gross Margin | 13.5 % | 17.3 % | (380) bps | |
| Adjusted EBITDA (Non-GAAP) | $32.1 million | $53.5 million | (40.0%) | |
| Net New Orders | 861 | 1,070 | (19.5%) |
Source: Analyst estimates for the quarter provided by FactSet.
Business overview and focus areas
Beazer Homes Usa operates as a homebuilder with a broad footprint in the United States, building single-family homes for a diverse range of customers. It emphasizes energy efficiency, branding itself as “America’s #1 Energy-Efficient Homebuilder,” and focuses on building homes to Zero Energy Ready standards, certified by the U.S. Department of Energy. This approach appeals to buyers who value lower utility costs and sustainable features, and positions the company in a distinct market segment.
Recently, Beazer Homes has focused on expanding its community count—essentially, the number of new neighborhoods under development—while maintaining strict standards for energy efficiency. Alongside this, it aims to improve its financial strength by lowering its net debt to net capitalization ratio (the proportion of company capital financed by debt), keeping it flexible in shifting market conditions. Success also depends on timely land purchasing, geographic diversity, efficient construction, and customer-oriented programs like Mortgage Choice and customizable floor plans. Regulatory compliance—including strict environmental and lending standards—is another bedrock of its business model.
Third-quarter highlights: Results and drivers
This quarter, several major metrics showed meaningful declines. The company’s revenue dropped 9.2% compared to the prior year’s fiscal third quarter, missing GAAP analyst revenue expectations by $23.6 million. Diluted earnings per share (GAAP) swung from a profit of $0.88 in the fiscal third quarter of 2024 to a loss of $0.01, impacted by a $10.3 million inventory impairment charge. Adjusted EBITDA—a measure of profit that removes certain charges—fell 40.0% year over year. These numbers reflect broad demand softness and more generous buyer incentives, including price concessions and closing cost subsidies.
Gross margin compressed to 13.5% from 17.3% in the fiscal third quarter of 2024. One key cause was a higher reliance on “spec” homes, which are houses built before they are sold and often command weaker margins. Around 70% of sales in the fiscal second quarter were spec homes, reflecting buyers’ preference for quicker move-ins but pressuring profits. The company noted that higher incentives and a shift in the product mix added to the squeeze on gross profit.
Order trends also worsened. Net new home orders fell 19.5% to 861 units, and orders per community per month slid by 30.0%. The company’s cancellation rate rose to 19.8%. Backlog—the number of sold-but-not-yet-closed homes—declined 30.6% by unit. While the company did increase its active community count 14.4% to 167 by quarter-end, the weaker sales pace per community more than offset this growth.
On the cost side, selling, general, and administrative expenses made up a bigger slice of revenue, rising 130 basis points to 13.2%. This increase reflected the challenge of covering fixed overhead costs against shrinking revenue, with management noting that earlier investments for future growth have lifted the current expense base. The company also reported higher than usual inventory charges of $10.3 million, indicating some land and housing investments are turning unprofitable. Closings and orders fell in the West region, while closings declined in the Southeast region.
Despite these pressures, Beazer Homes continued its commitment to energy efficiency. Nearly 99% of new home starts in the fiscal second quarter were built to Zero Energy Ready standards, with an average Home Energy Rating System (HERS) score—a measure of energy consumption—improving to 42 for fiscal 2024, an industry-leading figure. Management reported that these high-efficiency homes continued to deliver margin benefits, though premium pricing for these features remains a work in progress. The company also boosted its share of option-controlled land, rising to 60.1% from 55.5% in the prior year.
Looking forward: Guidance and investor focus
Looking ahead, management had previously forecasted a rise in home closings and profit measures, but the actual GAAP results missed earlier guidance. Earlier targets for fiscal 2025 pointed to community count growth of up to 15% and adjusted gross margins around 18.5%. Revenue and SG&A targets were also set, but year-to-date trends now challenge these ambitions. While community growth remains on track, land spending guidance was cut to a range of $750 million to $800 million, reflecting a more cautious approach to future development.
Management reaffirmed its longer-term goal of expanding active communities to above 200 by the end of fiscal 2027, lowering leverage to the low 30% range, and growing book value per share at a double-digit compound annual rate from the end of last fiscal year through fiscal 2027. As a signal of confidence, the company authorized a new $100 million share repurchase program in addition to the $12.5 million of shares bought back. However, the ongoing softness in orders and elevated cancelations are likely to impact near-term results. Investors should keep an eye on sales pace per community, margin recovery, and any signs of a rebound in backlog or orders as future quarters unfold.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
