D.R. Horton, Inc. (NYSE:DHI) reported mixed fiscal 2026 first-quarter results on Tuesday, posting lower year-over-year earnings and revenue while exceeding Wall Street expectations on both measures. The homebuilder generated solid cash flow and returned significant capital to shareholders while navigating affordability pressures and cautious consumer sentiment.
Net income attributable to D.R. Horton totaled $594.8 million, or $2.03 per diluted share, for the three months ended Dec. 31, 2025, compared with $844.9 million, or $2.61 per diluted share, in the prior-year quarter. Earnings per share exceeded the $1.95 analyst estimate.
D.R. Horton is an American home construction company based in Arlington, Texas. Since 2002, the company has been the largest homebuilder by volume in the United States.
Revenue was $6.887 billion, down from $7.613 billion a year earlier. Sales also exceeded expectations, surpassing the $6.603 billion consensus estimate.
Consolidated pre-tax income was $798.1 million, producing a pre-tax profit margin of 11.6%. First-quarter consolidated pre-tax profit margin and home sales gross margin each included a 40-basis-point benefit from the recovery of prior period warranty costs.
Homebuilding Performance Weighs on Results
Homebuilding revenue declined 9% to $6.5 billion, with homes closed falling 7% to 17,818. Homebuilding pre-tax income decreased 30% to $708.1 million, and the pre-tax profit margin was 10.8%.
Net sales orders increased 3% to 18,300 homes with an order value of $6.7 billion. The cancellation rate was 18%, consistent with the prior-year quarter. The sales order backlog at quarter-end totaled 11,376 homes, valued at $4.3135 billion.
Rental, Lot Development, and Financial Services Contributions
Rental operations generated $109.5 million of revenue from the sale of 397 single-family rental homes and produced a 0.2% pre-tax profit margin. Forestar generated $273.0 million of revenue from the sale of 1,944 lots, with a pre-tax profit margin of 7.6%.
Financial services revenue was $184.6 million, with pre-tax income of $58.0 million and a pre-tax profit margin of 31.4%.
Cash provided by operations totaled $854.0 million. Total liquidity at quarter-end was $6.6 billion, including $2.51 billion in cash and cash equivalents.
At quarter’s end, the company had 30,400 homes in inventory, of which 20,000 were unsold. Of the unsold homes, 7,300 were completed, including 900 that had been completed for more than six months.
Management Commentary
David Auld, Executive Chairman, said, “We expect our sales incentives to remain elevated in fiscal 2026, the extent to which will depend on the strength of demand during the spring, changes in mortgage interest rates and market conditions throughout the year.”
He also said, “Our strong liquidity, low leverage, experienced operators and national scale provide us with significant financial and operational flexibility. We are well-positioned with our affordable product offerings and flexible lot supply to continue delivering value to our homebuyers and meet market demand. We are maintaining our disciplined approach to capital allocation to enhance the long-term value of D.R. Horton, including consistently returning capital to our shareholders.”
Outlook
D.R. Horton reiterated fiscal 2026 guidance for consolidated revenues of $33.5 billion to $35.0 billion and homebuilding closings of 86,000 to 88,000 homes. The company expects operating cash flow of at least $3.0 billion, share repurchases of approximately $2.5 billion, and dividend payments of approximately $500 million.
DHI Price Action: D.R. Horton shares were up 2.06% at $159.16 during premarket trading on Tuesday, according to Benzinga Pro data.
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