Here's our initial take on Dream Finders Homes (DFH -1.79%) financial report.
Key Metrics
| Metric | Q2 2024 | Q2 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue | $1.06 billion | $1.15 billion | 9% | Beat |
| Earnings per share | $0.81 | $0.56 | (31%) | Missed |
| Home closings | 2,031 | 2,232 | 10% | n/a |
| Net new orders | 1,712 | 1,938 | 13% | n/a |
Dream Finders Remains On Course Despite Difficult Market
Dream Finders grew revenue by 9% and home closings by 10% in what is a difficult housing environment, but higher homebuilding cost of sales and financial services expense ate into profitability. Homebuilding gross margin fell 250 basis points to 16.5%.
Elevated interest rates, an uncertain economy, and pressures from soaring costs on home building supplies and labor have created what CEO Patrick Zalupski called "perhaps the most challenging environment in the past three years."
Dream Finders continues to execute on its plan despite the downturn. In the quarter, the company closed deals for Alliant National Title Insurance Co. and Green River Builders, bringing its total to 10 acquisitions in the past six years. Alliant opens up new revenue sources, while Green River expands Dream Finders' presence in the fast-growing Atlanta area.
The company also repurchased more than 700,000 shares for $16 million during the period.
Immediate Market Reaction
Investors knew going in that this was a tough housing market, and the results had little impact on sentiment. Dream Finders stock is down about 1% in early Thursday trading.
What to Watch
The big question facing homebuilders is when the housing market will turn. On Wednesday, the Federal Reserve held rates steady, and the odds of a September rate cut fell slightly, opening up the possibility of higher for longer on interest rates.
Dream Finders ended the quarter with a backlog of 2,513 homes valued at $1.2 billion and reiterated its guidance for about 9,250 home closings in 2025. If the market remains weak, expect the company to continue to hunt for acquisition candidates in its core Sun Belt markets in anticipation of an eventual turnaround.
The company cannot control the macro environment, and it is unlikely to see oversized growth until buyers return. But Dream Finders appears to be holding serve in a difficult climate, which is about the best investors can hope for for now.
