PulteGroup, Inc. Q3 FY2025 earnings call

• Strong Q3 financial results: Closed over 7,500 homes, home sale revenues $4.2 billion, operating margins 16.8%, earnings per share $2.96, and return on equity 21% for trailing 12 months. • Diversified operating model: Spans 47 major markets, serves first-time, move-up, and active adult buyer groups. • Del Webb brand: Recognized leader in active adult segment, with new Del Webb Explore communities for GenX buyers. • Production alignment: Started 6,557 homes in Q3, matching sales pace; average build cycle down to 106 days. • Land spend: Moderated land spend for 2025, on track to invest ~$5 billion, down 5% from 2024, with healthy land pipeline. • SG&A control: SG&A expense $401 million in Q3, 9.4% of home sale revenue, maintaining full-year guidance of 9.5%-9.7% of home sale revenues.

PulteGroup's homebuilding operations closed over 7,500 homes in Q3. Home sale revenues were $4.2 billion, operating margins 16.8%, and earnings per share $2.96. The financial services segment had pretax income of $44 million in Q3 2025, down from $55 million in Q3 2024. By buyer group, net new orders for first-time buyers were down 14% year-over-year, move-up down 3%, and active adult up 7%. Active adult sales represented 24% of Q3 net new orders. Home sale revenues were down 2% year-over-year due to a 5% decrease in closing volumes, partially offset by a 3% increase in average sales price to $564,000.

• Expected Q4 closings: 7,200-7,600 homes; full-year closings likely 29,000-29,400 homes. • Average sales price: Range of $560,000-$570,000 for Q4 and full-year 2025. • Fourth quarter gross margin: 25.5%-26.0%. • Full-year 2025 SG&A: Guidance of 9.5%-9.7% of home sale revenues remains unchanged.

• Weaker consumer confidence and stretched affordability limiting opportunities, especially for first-time buyers. • Economic weakness and job stability concerns impacting consumer willingness to make major home purchases. • Tariffs could increase build costs by ~$1,500 per home starting in 2026. • Local market competitive dynamics affecting sales and margins.

Q: Matthew Bouley from Barclays asked about dialogue with FHFA and administration on housing and actionable solutions.

A: Ryan Marshall said communication with administration is ongoing, housing issue is complex, requiring coordinated effort from federal, state, and local leaders.

Q: John Lovallo from UBS asked about Florida and Southeast market stabilization.

A: Ryan Marshall said Florida and Southeast markets are stable with desirable locations, pro-growth policies, and buyer demand.

Q: Michael Rehaut from JPMorgan asked about mix and volume growth for 2026.

A: Ryan Marshall said mix is aligned with ideal, and they have a strong land pipeline, but full 2026 guidance will be provided at end of next quarter.

Q: Alan Ratner from Zelman asked about consumer confidence and government housing bills.

A: Ryan Marshall said consumer confidence is key, and political focus on housing as essential for economy is positive.

Q: Stephen Kim from Evercore asked about incentives classification.

A: James Ossowski said financial incentives are about 1/3, with majority being non-financial like design center discounts.

Q: Anthony Pettinari from Citigroup asked about 4Q gross margin guide.

A: James Ossowski said guide reflects factors like spec inventory and market competitiveness.

Q: Rafe Jadrosich from Bank of America asked about finished specs per community and starts.

A: Ryan Marshall said finished specs are ~2 per community, ideally 1.2, and starts are aligned with sales rate.

Q: Susan Maklari from Goldman Sachs asked about regional variations.

A: Ryan Marshall said Texas and West markets have inventory and price appreciation issues, while Northeast and East Coast are more stable.

Q: Kenneth Zener from Seaport Research asked about incentives distribution and Texas job growth.

A: Ryan Marshall said incentives are distributed by market sellability, and Texas markets have growing population and jobs.