KB Home is one of the largest and most recognized homebuilders in the United States, operating across 49 markets and having built nearly 700,000 homes in over 65 years. The company reported its first-quarter results for fiscal 2025, showing signs of decline as it adjusts to changing market conditions.

In the first quarter of 2025, KB Home generated revenues of $1.39 billion, a 5% decrease compared to $1.46 billion in the same period last year. Home deliveries fell by 9% to 2,770 homes. Despite this decline, the company’s average selling price increased by 4% to $500,700, reflecting an emphasis on maintaining higher prices in a challenging environment.

Net income for the quarter was $109.6 million, down 21% from $138.7 million a year earlier, while diluted earnings per share fell to $1.49, compared to $1.76 in the prior year. The housing gross profit margin decreased to 20.2% from 21.5%, primarily due to higher land costs and increased homebuyer concessions. Selling, general, and administrative expenses as a percentage of housing revenues were reported at 11%, slightly up from 10.8% year-over-year.

KB Home reported a total of 2,772 net orders in the first quarter, which represented a 17% decrease in year-over-year orders, contributing to a backlog reduction to 4,436 homes valued at $2.20 billion—a 21% year-over-year decline. The company’s absorption pace per community was also lower, with 3.6 homes sold monthly compared to 4.6 in the first quarter of 2024.

The company invested $920 million in land acquisition and development during the quarter, a substantial 57% increase from the prior year. Cash and cash equivalents decreased to $267.8 million, with total liquidity reported at $1.25 billion. KB Home’s debt-to-capital ratio rose to 30.5%, compared to 29.4% at the end of the previous quarter.

Looking forward, KB Home lowered its revenue guidance for fiscal 2025 to between $6.6 billion and $7 billion, reflecting the slower pace of orders. Additionally, the anticipated average selling price for the full year was revised down to a range of $480,000 to $495,000 from a previous estimate of $488,000 to $498,000. Homebuilding operating income margin for the full year is now projected at around 9.4%, down from previous guidance of approximately 10.7%.

The company remains dedicated to tightly managing its operations in response to evolving market conditions and intends to maintain a balanced approach in capital allocation while supporting its growth strategy.