$KBH KB Home Earnings Call Key Highlights:

🎯 Strong Financial Performance

Fourth-quarter total revenue reached $2 billion, a year-over-year increase driven by a 17% rise in home deliveries and shorter build times.
Earnings per diluted share increased 36% to $2.52. Gross margins were robust at nearly 21%, and operating income margins grew to 11.5%.
For the full fiscal year 2024, revenues totaled $7 billion, with diluted earnings per share of $8.45, reflecting a 20% improvement.
🏡 Operational Efficiency

Average build times were reduced by 28% year-over-year, aligning with the company's goal of 4-month completion cycles.
60% of fourth-quarter home deliveries originated from build-to-order sales, demonstrating the model’s efficiency in backlog conversion.
📈 Market Demand and Demographics

The housing market benefited from strong employment and wage increases, with millennials and Gen Z driving demand.
Net orders for Q4 increased 41% year-over-year, with stable cancellation rates and improved community absorption rates.
📉 Challenges from Mortgage Rate Volatility

Rising mortgage rates tempered selling pace, leading to missed internal sales targets despite strong underlying demand.
60% of net orders included mortgage concessions, demonstrating efforts to address buyer affordability concerns.
🌱 Land Investments and Expansion

$744 million was invested in land acquisition in Q4, a 54% increase year-over-year, culminating in $2.8 billion for 2024.
Total lot positions grew 37% to 77,000, supporting plans for significant community growth in 2025 and beyond.
🌍 Geographic Highlights

Active expansion in newer markets like Atlanta, with plans to grow in established regions.
Active community count ended at 258, a 7% year-over-year increase, with expectations for further growth in early 2026.
🔧 Cost Management

Direct costs, including lumber and concrete, showed favorable trends, aiding margins despite increased land costs and mortgage concessions.
Focus on operational efficiencies and reducing build times remains a strategic priority.
💡 Customer Insights and Satisfaction

The company maintained a 16% average cash down payment, with buyers showing high creditworthiness (average FICO score of 742).
KBHS Home Loans captured 88% of financed buyers, enhancing customer satisfaction and closing visibility.
📊 Capital Returns and Liquidity

$350 million in share repurchases during 2024, reducing share count by 26% since 2021.
Strong liquidity of $1.68 billion, with a debt-to-capital ratio improved to 29.4%.
🌟 Outlook for Fiscal 2025

Forecasted revenues of $7.0-$7.5 billion, with gross margins of 20.0%-21.0%.
Plans for continued investment in land development and a balanced approach to share repurchases.