Hovnanian Enterprises Reports Fourth Quarter and Fiscal Year 2025 Results

Met or Exceeded All Guidance Metrics Provided
8% Year-Over-Year Increase in Consolidated Communities
Successfully Completed $900 Million Unsecured Debt Refinancing Extending Maturities Until 2031 and 2033
Operating Performance Reflects a $34 Million Expense from Refinancing and $19 Million in Land Charges

MATAWAN, N.J., Dec. 04, 2025 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, reported results for its fiscal fourth quarter and year ended October 31, 2025.

RESULTS FOR THE THREE-MONTHS AND FULL YEAR ENDED OCTOBER 31, 2025:

• Total revenues were $817.9 million in the fourth quarter of fiscal 2025, which was within the guidance range we provided, compared with $979.6 million in the same quarter of the prior year. For the year ended October 31, 2025, total revenues were $2.98 billion compared with $3.00 billion in fiscal 2024.
  
  
• Domestic unconsolidated joint ventures⁽¹⁾ sale of homes revenues for the fourth quarter of fiscal 2025 increased 27.3% to $180.4 million (285 homes) compared with $141.7 million (235 homes) for the three months ended October 31, 2024. For fiscal 2025, domestic unconsolidated joint ventures sale of homes revenues increased 17.6% to $621.6 million (934 homes) compared with $528.6 million (803 homes) in the fiscal year ended October 31, 2024.
  
  
• Homebuilding gross margin percentage, after cost of sales interest expense and land charges, was 10.7% (with 2.5% attributable to land charges) for the three months ended October 31, 2025, compared with 18.0% during the fourth quarter a year ago (with only 0.9% attributable to land charges). In fiscal 2025, homebuilding gross margin percentage, after cost of sales interest expense and land charges, was 12.7% compared with 18.7% in the prior fiscal year.
  
  
• Homebuilding gross margin percentage, before cost of sales interest expense and land charges, was 16.3% during the fiscal 2025 fourth quarter, which was within the guidance range we provided, compared with 21.7% in last year’s fourth quarter. For the year ended October 31, 2025, homebuilding gross margin percentage, before cost of sales interest expense and land charges, was 17.2% compared with 22.0% in the previous fiscal year.
  
  
• Total SG&A was $91.5 million, or 11.2% of total revenues, in the fourth quarter of fiscal 2025 compared with $87.7 million, or 9.0% of total revenues, in the fourth quarter of fiscal 2024. Total SG&A was $349.8 million, or 11.7% of total revenues, in fiscal 2025 compared with $342.2 million, or 11.4% of total revenues, in the previous fiscal year.
  
  
• Total interest expense as a percentage of total revenues increased to 4.2% for the fourth quarter of fiscal 2025, compared with 3.2% for the fourth quarter of fiscal 2024. The year-over-year increase in interest expense is primarily related to a few large communities in planning. For the year ended October 31, 2025, total interest expense as a percentage of total revenues was 4.2% compared with 4.0% in the previous fiscal year.
  
  
• The company incurred losses related to the early extinguishment of debt and land charges of $52.9 million, contributing to a loss before income taxes for the fourth quarter of fiscal 2025 of $4.1 million compared with income before income taxes of $117.9 million in the fourth quarter of the prior fiscal year. For fiscal 2025, income before income taxes was $86.1 million compared with $317.1 million during the prior fiscal year.
  
  
• Income before income taxes, excluding $19.4 million in land-related charges and a $33.5 million loss on extinguishment of debt related to our September 2025 debt refinancing, was $48.8 million in the fourth quarter of fiscal 2025, which was within the guidance range we provided, compared with income before these items of $125.8 million in the fourth quarter of fiscal 2024. For the year ended October 31, 2025, income before income taxes excluding land-related charges and loss (gain) on extinguishment of debt, net was $158.8 million compared with income before these items of $327.3 million in fiscal 2024.
  
  
• Net loss was $0.7 million, or $0.51 per diluted common share, for the three months ended October 31, 2025, compared with net income of $94.3 million, or $12.79 per diluted common share, in the same period of the previous fiscal year. For fiscal 2025, net income was $63.9 million, or $7.43 per diluted common share, compared with net income of $242.0 million, or $31.79 per diluted common share, during fiscal 2024.
  
  
• EBITDA was $35.7 million for the fourth quarter of fiscal 2025 compared with $151.0 million for the fourth quarter of the prior year. For fiscal 2025, EBITDA was $226.4 million compared with $445.4 million in the prior year. Reported EBITDA is inclusive of the loss on extinguishment of debt and land related charges of $52.9 million discussed above.
  
  
• Adjusted EBITDA was $88.6 million for the quarter ended October 31, 2025, which was above the high end of the guidance range we provided, compared with $159.0 million in the fourth quarter of the prior fiscal year. For the year ended October 31, 2025, adjusted EBITDA was $299.1 million compared with $455.6 million in the previous fiscal year.
  
  
• Consolidated contracts in the fourth quarter of fiscal 2025 decreased 10.8% to 1,209 homes ($629.2 million) compared with 1,355 homes ($705.6 million) in the same quarter last year. Contracts, including domestic unconsolidated joint ventures, for the three months ended October 31, 2025, decreased 7.7% to 1,450 homes ($787.1 million) compared with 1,571 homes ($845.7 million) in the fourth quarter of fiscal 2024. Last year's results were reflective of an exceptionally strong market, with contracts that included domestic unconsolidated joint ventures rising by 81.6% in October 2024.
  
  
• As of October 31, 2025, the number of consolidated communities increased by 7.7% to 140, compared with 130 communities as of October 31, 2024. Including domestic unconsolidated joint ventures, community count grew by 6.1% to 156 as of October 31, 2025, up from 147 as of October 31, 2024.
  
  
• Consolidated contracts per community declined by 17.3% year-over-year to 8.6 in the fourth quarter of fiscal 2025, compared to 10.4 in the same quarter of fiscal 2024. When including domestic unconsolidated joint ventures, contracts per community decreased by 13.1% to 9.3 for the three months ended October 31, 2025, compared with 10.7 in the prior year period. As discussed above, we had an exceptionally strong fourth quarter of fiscal 2024, which included a 56.5% year-over-year increase in consolidated contracts per community in October of 2024.
  
  
• The dollar value of consolidated contract backlog, as of October 31, 2025, decreased 22.4% to $726.5 million compared with $936.8 million as of October 31, 2024. The dollar value of contract backlog, including domestic unconsolidated joint ventures, as of October 31, 2025, decreased 25.2% to $923.2 million compared with $1.23 billion as of October 31, 2024. The year-over-year decrease in backlog dollars is partly due to increased sales of quick move in homes (QMIs), which are typically in backlog for a very short period of time.
  
  
• The gross contract cancellation rate for the fourth quarter ended October 31, 2025, was 17% for both consolidated contracts and domestic unconsolidated joint venture contracts, compared with 18% for both items in the fourth quarter of the prior year.
  
  
• For the trailing twelve-month period our net income return on inventory was 3.8% and our adjusted earnings before interest and income taxes return on investment (Adjusted EBIT ROI) was 17.7%. For the most recently reported trailing twelve-month periods, we believe we had the second highest Adjusted EBIT ROI compared to nine of our publicly traded midsized homebuilder peers.
  

⁽¹⁾When we refer to “Domestic Unconsolidated Joint Ventures”, we are excluding results from our multi-community unconsolidated joint venture in the Kingdom of Saudi Arabia (KSA).

LIQUIDITY AND INVENTORY AS OF OCTOBER 31, 2025:

• During the fourth quarter of fiscal 2025, land and land development spending was $199.4 million compared with $318.4 million in the same quarter one year ago. For fiscal 2025, land and land development spending was $859.4 million compared with $995.4 million in the prior year.
  
  
• Total liquidity as of October 31, 2025, was $404.1 million, which was significantly above our target liquidity range of $170 million to $245 million.
  
  
• In the fourth quarter of fiscal 2025, approximately 3,100 lots were put under option or acquired in 32 consolidated communities.
  
  
• As of October 31, 2025, our total controlled consolidated lots were 35,883 compared with 41,891 lots at the end of the previous fiscal year’s fourth quarter. Continuing our land-light strategic focus, 85% of our lots were optioned at the end of the fourth quarter of fiscal 2025. Based on trailing twelve-month deliveries, the current position equaled 6.5 years’ supply.
  
  
• Total QMIs as of October 31, 2025, were 907, a decline of 10.7% compared with 1,016 as of July 31, 2025, illustrating our efforts to match our starts with our sales pace. This equates to 6.5 QMIs per community as of October 31 2025.
  
  

DEBT REFINANCING:

• The Company issued $450.0 million aggregate principal amount of 8.0% Senior Notes due 2031 and $450.0 million aggregate principal amount of 8.375% Senior Notes due 2033.
  
  
• The Company used the net proceeds from the new issuances to redeem all of its outstanding secured notes consisting of 8.0% Senior Secured 1.125 Lien Notes due 2028 and 11.75% Senior Secured 1.25 Lien Notes due 2029, as well as to repay in full all loans outstanding under its Senior Secured 1.75 Lien Term Loan Facility due 2028.
  
  
• The Company entered into a Fourth Amendment to the Credit Agreement governing its $125 million secured revolving credit facility which, among other things, extended the final scheduled maturity thereof by two years to June 30, 2028.
  
  
• Key benefits of the refinancing:
  • Simplified capital structure: Replaced multiple tiers of secured debt with unsecured notes.
  • Extended maturity runway: The transaction refinanced all of the Company’s secured debt maturing in fiscal 2028 and 2029 and proactively extended these maturities to fiscal 2031 and fiscal 2033 with unsecured notes.
  • Decreased interest incurred: Despite the nominal increase in debt outstanding, we are pleased that the transaction resulted in $12 million decrease in annual interest incurred.
  • Extended the revolver maturity: The transaction extended the maturity of the revolver, which was the nearest term maturity, from the third quarter of fiscal 2026 until the third quarter of fiscal 2028.

FINANCIAL GUIDANCE⁽²⁾:

The Company is providing guidance for total revenues, adjusted homebuilding gross margin, adjusted income before income taxes and adjusted EBITDA for the first quarter of fiscal 2026. Financial guidance below assumes no adverse changes in current market conditions, including deterioration in our supply chain or material increases in mortgage rates, inflation or cancellation rates, and excludes further impact to SG&A expenses from phantom stock expense related solely to stock price movements from the closing price of $120.23 on October 31, 2025.

For the first quarter of fiscal 2026, total revenues are expected to be between $550 million and $650 million, adjusted homebuilding gross margin is expected to be between 13.0% and 14.0%, adjusted income before income taxes is expected to be between $10 million and $20 million and adjusted EBITDA is expected to be between $35 million and $45 million.

⁽²⁾The Company cannot provide a reconciliation between its non-GAAP projections and the most directly comparable GAAP measures without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items required for the reconciliation. These items include, but are not limited to, land-related charges, inventory impairments and land option write-offs and loss (gain) on extinguishment of debt, net. These items are uncertain, depend on various factors and could have a material impact on GAAP reported results.

COMMENTS FROM MANAGEMENT:

“Despite a tough housing market, our team performed very well, meeting or beating all of our guidance for the quarter,” said Ara K. Hovnanian, Chairman of the Board and Chief Executive Officer. “To maintain sales pace, we continued to rely on incentives, which lowered our gross profit margins but allowed us to sell older, less profitable land. In the fourth quarter, we averaged 8.6 contracts per community. Given our recent land acquisitions, we expect our gross margin percentage to be lowest in the first quarter of fiscal 2026 and to gradually increase in the following quarters. This gives us a strong base for long-term value creation for our shareholders.”

“This quarter marked a significant milestone in strengthening our capital structure with the successful refinancing of our secured debt with unsecured bonds—a culmination of years of disciplined liability management and strategic capital market activity. By improving our financial flexibility and reducing risk, we’ve positioned ourselves to invest strategically in growth, while navigating market cycles with confidence. Our focus remains unwavering: delivering industry-leading returns to our shareholders over the long term through prudent financial stewardship and operational excellence,” concluded Mr. Hovnanian.

WEBCAST INFORMATION:

Hovnanian Enterprises will webcast its fiscal 2025 fourth quarter and full year financial results conference call at 11:00 a.m. E.T. on Thursday, December 4, 2025. The webcast can be accessed live through the “Investor Relations” section of Hovnanian Enterprises’ website at http://www.khov.com. For those who are not available to listen to the live webcast, an archive of the broadcast will be available under the “Past Events” section of the Investor Relations page on the Hovnanian website at http://www.khov.com. The archive will be available for 12 months.

ABOUT HOVNANIAN ENTERPRISES, INC.:

Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, is headquartered in Matawan, New Jersey and, through its subsidiaries, is one of the nation’s largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company’s homes are marketed and sold under the trade name K. Hovnanian^ Homes. Additionally, the Company’s subsidiaries, as developers of K. Hovnanian’s^ Four Seasons communities, make the Company one of the nation’s largest builders of active lifestyle communities.

Additional information on Hovnanian Enterprises, Inc. can be accessed through the “Investor Relations” section of the Hovnanian Enterprises’ website at http://www.khov.com. To be added to Hovnanian's investor e-mail list, please send an e-mail to [email protected] or sign up at http://www.khov.com.

NON-GAAP FINANCIAL MEASURES:

Consolidated earnings before interest expense and income taxes (“EBIT”) and before depreciation and amortization (“EBITDA”) and before inventory impairments and land option write-offs and loss (gain) on extinguishment of debt, net (“Adjusted EBITDA”), the ratio of Adjusted EBITDA to interest incurred and EBIT before inventory impairments and land option write-offs and loss (gain) on extinguishment of debt, net (“Adjusted EBIT”) are not U.S. generally accepted accounting principles (“GAAP”) financial measures. The most directly comparable GAAP financial measure is net (loss) income. The reconciliation for historical periods of EBIT, EBITDA, Adjusted EBIT and Adjusted EBITDA to net (loss) income are presented in tables attached to this earnings release.

Homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, are non-GAAP financial measures. The most directly comparable GAAP financial measures are homebuilding gross margin and homebuilding gross margin percentage, respectively. The reconciliation for historical periods of homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, to homebuilding gross margin and homebuilding gross margin percentage, respectively, is presented in a table attached to this earnings release.

Adjusted income before income taxes, which is defined as (loss) income before income taxes excluding land-related charges and loss (gain) on extinguishment of debt, net is a non-GAAP financial measure. The most directly comparable GAAP financial measure is (loss) income before income taxes. The reconciliation for historical periods of adjusted income before income taxes to (loss) income before income taxes is presented in a table attached to this earnings release.

Adjusted investment, which is defined as total inventories excluding liabilities from inventory not owned, net of debt issuance costs and interest capitalized and including investments in and advances to unconsolidated joint ventures (“Adjusted Investment”), is a non-GAAP financial measure. The most directly comparable GAAP financial measure is total inventories. The reconciliation for historical periods of Adjusted Investment to total inventories is presented in a table attached to this earnings release.

The ratio of Adjusted EBIT return on adjusted investment (“Adjusted EBIT ROI”), which is the ratio of Adjusted EBIT for the trailing twelve-months, to the average Adjusted Investment for the prior five fiscal quarters, is a non-GAAP financial measure. The most directly comparable GAAP financial measure is the ratio of net income return to total inventories. The presentation of the ratios of Adjusted EBIT ROI and net income return on inventory are presented in a table attached to this earnings release.

Total liquidity is comprised of $272.8 million of cash and cash equivalents, $6.3 million of restricted cash required to collateralize letters of credit and $125.0 million available under a senior secured revolving credit facility as of October 31, 2025.

FORWARD-LOOKING STATEMENTS

All statements in this press release that are not historical facts should be considered as “Forward-Looking Statements” within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such forward-looking statements include but are not limited to statements related to the Company’s goals and expectations with respect to its financial results for future financial periods and statements regarding demand for homes, mortgage rates, inflation, supply chain issues, customer incentives and underlying factors. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are not guarantees of future performance or results and (iii) are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements as a result of a variety of factors. Such risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic, industry and business conditions and impacts of a significant homebuilding downturn; (2) shortages in, and price fluctuations of, raw materials and labor, including due to geopolitical events, changes in trade policies, including the imposition of tariffs and duties on homebuilding materials and products and related trade disputes with and retaliatory measures taken by other countries and changes in immigration laws or the enforcement thereof and trends in labor migration; (3) fluctuations in interest rates and the availability of mortgage financing, including as a result of instability in the banking sector; (4) increases in inflation; (5) adverse weather and other environmental conditions and natural or man-made disasters; (6) the seasonality of the Company’s business; (7) the availability and cost of suitable land and improved lots and sufficient liquidity to invest in such land and lots; (8) reliance on, and the performance of, subcontractors; (9) regional and local economic factors, including dependency on certain sectors of the economy, and employment levels affecting home prices and sales activity in the markets where the Company builds homes; (10) increases in cancellations of agreements of sale; (11) changes in tax laws affecting the after-tax costs of owning a home; (12) legal claims brought against us and not resolved in our favor, such as product liability litigation, warranty claims and claims made by mortgage investors; (13) levels of competition; (14) utility shortages and outages or rate fluctuations; (15) information technology failures and data security breaches; (16) negative publicity; (17) global economic and political instability (18) high leverage and restrictions on the Company’s operations and activities imposed by the agreements governing the Company’s outstanding indebtedness; (19) availability and terms of financing to the Company; (20) the Company’s sources of liquidity; (21) changes in credit ratings; (22) government regulation, including regulations concerning the development of land, the home building, sales and customer financing processes, tax laws and environmental, health and safety matters; (23) potential liability as a result of the past or present use of hazardous materials; (24) operations through unconsolidated joint ventures with third parties; (25) significant influence of the Company’s controlling stockholders; (26) availability of net operating loss carryforwards; (27) loss of key management personnel or failure to attract qualified personnel; and (28) certain risks, uncertainties and other factors described in detail in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2024 and the Company’s Quarterly Reports on Form 10-Q for the quarterly periods during fiscal 2025 and subsequent filings with the Securities and Exchange Commission. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

(1) Includes gain on consolidation of a joint venture of $18.9 million and $45.7 million for the years ended October 31, 2025 and 2024, respectively.