Beazer Homes USA, Inc., a leading national homebuilder, has released its financial results for the third quarter and nine-month period ending June 30, 2025. While the company faced headwinds in certain markets, particularly in Texas, Beazer demonstrated operational resilience and continued to make meaningful progress toward its long-term strategic goals.
CEO Commentary: Staying Focused on the Long Game
“During the third quarter, we continued to take actions aligned with achieving our Multi-Year Goals as we navigated a challenging sales environment,” said Allan P. Merrill, Chairman and Chief Executive Officer of Beazer Homes. “Although we faced a weaker-than-expected sales pace—especially in some of our Texas markets—double-digit growth in our active community count and resilient gross margins helped offset some of the pressure.”
Merrill also highlighted a notable increase in the company’s book value per share, which surpassed $41, driven in part by strategic share repurchases. These actions reinforce Beazer’s commitment to creating long-term shareholder value, despite near-term volatility.
Long-Term Objectives Remain Within Reach
Beazer’s long-term outlook remains intact. “With 167 communities and nearly 28,000 controlled lots, we are well positioned to reach our goal of 200 active communities by the end of fiscal 2027,” Merrill added. “As such, we now expect to direct more of our discretionary capital toward achieving our two other fiscal 2027 objectives: lowering our net debt to net capitalization ratio to the low-30% range and generating double-digit annual growth in book value per share—both of which we remain confident we will accomplish.”
The CEO also emphasized Beazer’s differentiation in the market, especially in energy efficiency. “We remain highly confident in our market position,” he said. “As America’s #1 Energy-Efficient Homebuilder, we believe our commitment to comfort, cost savings, and healthy indoor air quality through superior construction continues to resonate with today’s buyers.”
Fiscal Q3 2025 Highlights and Year-Over-Year Comparison
Beazer’s performance during the fiscal third quarter reflects the broader market challenges and internal adjustments made to strengthen its business fundamentals. Key metrics compared to the same quarter in fiscal 2024 are outlined below:
- Net Loss from Continuing Operations: $0.3 million, or $0.01 per diluted share, compared to net income of $27.2 million, or $0.88 per share in Q3 FY24. This quarter’s result included $10.3 million in inventory impairment and abandonment charges, equivalent to $0.27 per share.
- Adjusted EBITDA: $32.1 million, a decline of 40.0% year-over-year.
- Homebuilding Revenue: $535.4 million, down 9.2% from Q3 FY24, primarily due to an 11.3% drop in home closings, partially offset by a 2.4% increase in average selling price (ASP).
- Gross Margin: Homebuilding gross margin declined to 13.5%, a 380-basis point decrease. Excluding one-time charges and amortized interest, gross margin was 18.4%, down 190 basis points from the previous year.
- Selling, General & Administrative (SG&A) Expenses: Increased to 13.2% of revenue, up 130 basis points year-over-year, due to lower revenue leverage.
- Net New Orders: 861 homes, down 19.5%, attributed to a 30.0% drop in orders per community per month. This was partially offset by a 14.9% increase in average active community count to 167.
- Backlog: $742.5 million (1,352 homes), down 29.0% from $1.05 billion (1,949 homes) a year ago. However, ASP for backlog increased 2.3% to $549.2 thousand.
Key Business Segments and Operational Performance
Orders and Sales Pace
The drop in net new orders—down 19.5% to 861—was primarily driven by a 30% decline in sales velocity, with orders per community per month falling to 1.7 from 2.4 a year ago. The cancellation rate also ticked up modestly to 19.8%, from 18.6% in Q3 FY24, reflecting heightened buyer hesitation in an uncertain economic environment.
Despite slower sales, Beazer continued to expand its community footprint, with a 14.9% rise in average active community count—a strategic move designed to drive long-term volume growth.
Homebuilding Revenue and Closings
Total homebuilding revenue came in at $535.4 million, down 9.2% from the year-ago quarter. This decline was largely the result of lower home closings, which dropped 11.3% to 1,035 units. The shortfall was mitigated in part by a 2.4% rise in average selling price to $517.3 thousand. ASP increases were attributed to favorable product and geographic mix.
According to the company, the reduction in closings stemmed from a lower beginning backlog, but was partially offset by a higher volume of spec homes sold and shorter construction cycle times.
Margins and Incentives
Excluding one-time items, homebuilding gross margins narrowed to 18.4%, from 20.3% in Q3 FY24. The decline reflects a higher proportion of spec home closings, which typically carry lower margins, and an uptick in price concessions and closing cost incentives in select markets.
These trends, combined with elevated input costs and shifts in product mix, underscore the challenges of maintaining profitability in a tightening market.
Land Position and Capital Allocation
Beazer spent $153.8 million on land acquisition and development in the third quarter, a 23.5% decrease from $201.1 million in the prior year period. Total controlled lots declined slightly by 2.0% to 27,794. Excluding land held for future development or sale, active lots controlled fell 3.2% year-over-year.
Notably, the company has increased its use of land option agreements, which now represent 60.1% of its active lot portfolio—up from 55.5% last year. This reflects a strategic shift toward capital-efficient land control.
Balance Sheet, Liquidity, and Capital Returns
Beazer ended the quarter with a solid liquidity position of $292.3 million, including $82.9 million in unrestricted cash and $209.4 million of undrawn capacity under its revolving credit facility. While total liquidity was slightly lower than the $328.2 million reported a year ago, the company’s financial position remains strong.
- Total Debt to Capitalization: 48.4%, up slightly from 47.6% a year ago.
- Net Debt to Net Capitalization: 46.6%, up modestly from 45.8%.
As part of its ongoing capital return strategy, the company launched a new share repurchase program in April 2025, authorizing up to $100 million in buybacks. Under this new plan, Beazer repurchased $12.5 million of its common stock during the third quarter at an average price of $21.38 per share.
Positioned for Sustainable Growth
Despite short-term challenges, Beazer remains committed to executing its long-term growth plan. The company’s focus on expanding its community count, maintaining capital discipline, and delivering value through energy-efficient homes forms the foundation of its strategy to outperform through economic cycles.
“Looking forward, we are optimistic about the opportunities ahead,” Merrill concluded. “Our superior construction quality, combined with our focus on energy efficiency, will continue to differentiate Beazer in a competitive housing market.”
With a clear path toward its fiscal 2027 targets and a disciplined approach to capital allocation, Beazer Homes is positioning itself to weather short-term volatility while laying the groundwork for sustained, long-term shareholder value creation.
