KB HOME
For the period ended Nov 30, 2025. Filed Jan 23, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Jan 23, 2026
KBH$50.70-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-11-30; filed 2025-01-24.
0000795266-25-000014
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-11-30; filed 2026-01-23.
0000795266-26-000017
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 1026 previous paragraphs and 1043 current paragraphs.
608 unchanged; 234 reworded; 184 added; 166 removed; 18 previous and 17 current paragraphs rearranged.
Tables are not compared: 26 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (184)
Current report
Housing market conditions in 2025 were challenging despite solid underlying drivers, mainly favorable demographic
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trends in population growth and household formation, along with relatively steady employment levels and an ongoing structural
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undersupply of new homes. Compared to 2024, demand was softer as tepid consumer confidence, macroeconomic and
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geopolitical uncertainties, affordability challenges and persistently elevated mortgage loan interest rates over the course of the
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year limited the pool of actionable buyers and caused many of those buyers to hesitate on making purchase decisions. At the
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same time, during 2025, we believe we executed well operationally, maintaining high customer satisfaction levels, further
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improving build times, lowering construction costs and balancing pace and price to optimize each asset. Additionally, to help
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navigate the current environment, we implemented a simplified sales strategy focused on providing a straightforward,
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transparent base price, with limited, if any, concessions or incentives, that is intended to offer to our customers a compelling
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value competitive with area resale home prices. With this strategy, which we began instituting on a community-by-community
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basis in mid-February 2025 to stimulate demand, we both reduced selling prices relative to applicable market conditions and
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lowered or eliminated other homebuyer concessions.
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orders per community was 3.7 compared to 4.4 in 2024. Reflecting the price reductions we put in place per our sales strategy,
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and expanded on in certain underperforming communities to align with local demand, the value of our net orders for 2025 was
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orders to$463,200.
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cancellation rate as a percentage of gross orders for the 2025 fourth quarter was 18%, compared to 17% for the 2024 fourth
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housing revenues of$6.21 billion declined 10% from the previous year due to a 9% decrease in the number of homes delivered
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selling, general and administrative expenses as a percentage of housing revenues. Our housing gross profit margin for 2025
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was 18.6%, compared to 21.0% for 2024, due to price reductions, higher relative land costs, geographic mix, and an increase in
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inventory-related charges, partly offset by lower construction costs. Our selling, general and administrative expenses as a
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percentage of housing revenues of 10.4% for 2025 increased 40 basis points year over year, primarily reflecting higher
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marketing expenses associated with our expanded community count, higher relative general and administrative expenses, and
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decreased operating leverage from lower housing revenues. General and administrative expenses for 2025 included
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$16.0 million of stock-based compensation expense recognized on an accelerated basis for certain equity awards granted in
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October 2025 that included new provisions for accelerated vesting of restricted stock and continued vesting of PSUs for long-
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tenured employees upon retirement. Total pretax income for 2025 decreased to$554.2 million from$850.9 million for 2024,
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and$8.45, respectively for 2024. Our diluted earnings per share for 2025 reflected lower net income, partly offset by the
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favorable impact of our common stock repurchases over the past several quarters.
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navigating the evolving market conditions throughout the year. We continue to take a disciplined and balanced approach in
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growth and returning capital to our stockholders. Given the prevailing environment and our land pipeline, we began
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moderating our investments in land and land development in the 2025 second quarter while increasing our share repurchases.
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Even with this shift, we maintained our land investments at a level that we believe will support our current growth projections.
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For 2025, our investments in land and land development totaled$2.61 billion, an 8% decrease year over year. During this same
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On November 12, 2025, we obtained an upsized$1.20 billion five-year Credit Facility, refinancing and replacing our prior
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$1.09 billion unsecured revolving credit facility, which we voluntarily terminated on the same date. We also extended the
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maturity of our$360.0 million Term Loan to 2029. Our next senior note maturity is on June 15, 2027. We ended 2025 with
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an 18% improvement in our 2025 average build time. At the same time, with our planned new community openings in 2026,
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we believe we are well-positioned to achieve our projections for the 2026 first quarter and full year, as described below under
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2025, homebuilding revenues totaled$6.21 billion, representing a 10% decrease from the prior year mostly due to lower
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housing revenues.
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In 2024, our operational execution contributed to year-over-year increases in total revenues, net income and diluted
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earnings per share. Our performance for the year reflected, among other things, key longer-term housing market drivers
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remaining largely positive, including favorable demographic trends, rising household formations, solid employment, wage
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growth and the ongoing undersupply of new and resale homes. At the same time, affordability constraints stemming largely
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from rising mortgage interest rates tempered buyer demand in 2024.
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4.4 from 3.8 in 2023, despite uneven market conditions during the current year that were driven primarily by buyer discomfort
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with volatile mortgage interest rates, persistent inflationary pressures and general economic concerns. To navigate this business
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environment, we focused on balancing pace, price and construction starts at each community to optimize our return on each
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inventory asset within its market context. With this approach, we implemented price increases in most of our communities in
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the 2024 first half, selectively adjusted prices at certain communities in the third quarter to help stimulate demand, and, given
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our backlog entering the period, held prices relatively stable in the seasonally slower fourth quarter. Additionally, we continued
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to employ targeted sales strategies throughout the year, as we have to varying degrees since the 2022 second half, including
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homebuyer concessions (particularly, mortgage-related concessions such as interest rate buydowns), to help drive order activity
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and minimize cancellations, especially during periods of rising mortgage interest rates. Reflecting these actions, and relatively
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year, with all of our homebuilding reporting segments generating increases. Our cancellation rate as a percentage of gross
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orders for the 2024 fourth quarter improved to 17%, from 28% for the 2023 fourth quarter and, together with our improved
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of$6.90 billion grew 8% from the previous year, due to a 7% increase in the number of homes delivered to 14,169 and a slight
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general and administrative expenses as a percentage of housing revenues were nearly even with the prior year at 10.0%. Net
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diluted earnings per share for 2024 was driven by higher net income and the favorable impact of our common stock repurchases
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over the past several quarters.
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Our return on equity (“ROE”) for 2024 was 16.6%, compared to 15.7% for 2023. ROE is calculated as net income for the
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year divided by average stockholders’ equity, where average stockholders’ equity is based on the ending stockholders’ equity
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balances of the trailing five quarters.
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support future growth and returning capital to our stockholders. In 2024, we continued to take a balanced approach in
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allocating our capital aligned with these priorities. Our investments in land and land development for 2024 increased 58% year
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$350.0 million, which represented about 6% of our shares that were outstanding at the start of the year, and in the 2024 second
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quarter, our board of directors increased the quarterly cash dividend on our common stock by 25% to$.25 per share, from$.20
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per share. We paid a cash dividend at this higher rate in the 2024 second, third and fourth quarters. We ended 2024 with total
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4,434, mainly reflecting a 28% improvement in our 2024 average build time, we believe we are well-positioned for 2025, as
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described below under “Outlook.”
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Revenues. Homebuilding revenues of$6.90 billion for 2024 grew 8% from the prior year due to an increase in housing
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revenues, partly offset by a decrease in land sale revenues.
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In 2024, housing revenues grew 8% from the previous year, reflecting a 7% increase in the number of homes delivered and
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increases of 28%,9% and 7% in our West Coast, Southeast and Southwest homebuilding reporting segments, respectively,
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partially offset by a 10% decrease in our Central segment. The slightly higher average selling price primarily resulted from the
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priced West Coast homebuilding reporting segment, and a decrease in homebuyer concessions.
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product and geographic mix shifts of homes delivered and higher relative construction and land costs, largely offset by
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decreases in both inventory-related charges and homebuyer concessions. As a percentage of housing revenues, the
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amortization of previously capitalized interest associated with housing operations was 1.7% for 2024 and 1.9% for
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Excluding the inventory-related charges associated with housing operations described above, our adjusted
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Our discussion and analysis below is focused on our 2024 and 2023 financial results, including comparisons of our year-
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Our discussion and analysis below is primarily focused on our 2025 and 2024 financial results, including comparisons of
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over-year performance between these years. Discussion and analysis of our 2022 fiscal year specifically, as well as the year-
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our year-over-year performance between these years. Discussion and analysis of our 2023 fiscal year specifically, as well as the
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over-year comparison of our 2023 financial performance to 2022, are located under Part II, Item 7 – Management’s Discussion
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year-over-year comparison of our 2024 financial performance to 2023, are located under Part II, Item 7 – Management’s
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and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended
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Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal
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November 30, 2023, filed with the SEC on January 19, 2024, which is available on our investor relations website at
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year ended November 30, 2024, filed with the SEC on January 24, 2025, which is available on our investor relations website at
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Our net orders in 2024 increased 18% year over year to 13,093, and the pace of monthly net orders per community rose to
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With these market dynamics, our net orders in 2025 decreased 11% year over year to 11,596, and the pace of monthly net
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The value of our 2024 net orders rose 21% year over year as a result of the net order growth and a 3% increase in the overall
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down 17% year over year as a result of the decline in net orders and a 6% decrease in the overall average selling price of net
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soft net order levels in the year-earlier quarter, our 2024 fourth quarter net orders and net order value each grew 41% year over
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In the 2025 fourth quarter, our net orders and net order value decreased 10% and 17%, respectively, year over year. Our
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build times compared to a year ago, our homes delivered as a percentage of backlog at the beginning of the quarter increased to
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quarter and, together with our improved build times compared to a year ago, our homes delivered as a percentage of backlog at
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69% for the 2024 fourth quarter from 49% for the year-earlier quarter.
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the beginning of the quarter increased to 84% for the 2025 fourth quarter from 69% for the year-earlier quarter.
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increase in the overall average selling price of those homes to$486,900. Approximately 50% of our homes delivered in 2024
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to 12,902 and a slight decrease in the overall average selling price of those homes to$481,400. Approximately 50% of our
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were to first-time homebuyers. Homebuilding operating income for 2024 increased 6% to$763.9 million, compared to$718.7
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homes delivered in 2025 were to first-time homebuyers. Homebuilding operating income for 2025 was$507.1 million,
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million for 2023 and, as a percentage of homebuilding revenues was 11.1%, compared to 11.3%. Our homebuilding operating
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compared to$763.9 million for 2024 and, as a percentage of homebuilding revenues was 8.2%, compared to 11.1%. Our
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income margin for 2024 primarily reflected a 20 basis point decrease in our housing gross profit margin to 21.0%, as selling,
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homebuilding operating income margin for 2025 primarily reflected a lower housing gross profit margin and an increase in
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million gain associated with the sale of a privately held technology company in which we held an ownership interest. Further
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which included a$12.5 million gain associated with the sale of our ownership interest in a privately held technology company.
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income and diluted earnings per share for 2024 grew 11% and 20%, respectively, each as compared to 2023. The increase in
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Net income and diluted earnings per share for 2025 were$428.8 million and$6.15, respectively, compared to$655.0 million
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We believe our strong balance sheet and liquidity position helped provide us with the flexibility to operate effectively
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We believe our strong balance sheet and liquidity position helped provide us with flexibility to operate effectively while
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through the evolving market conditions during the year and pursue our priorities of investing in land and land development to
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allocating capital, guided by market conditions and our priorities of investing in land and land development to support future
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over year to$2.84 billion. In addition, we repurchased approximately 4.7 million shares of our common stock at a total cost of
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period, we repurchased approximately 9.4 million shares of our common stock at a total cost of$538.5 million, compared to 4.7
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liquidity of$1.68 billion, comprised of$598.0 million of cash and cash equivalents and$1.08 billion of available capacity
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total liquidity of$1.43 billion, comprised of$228.6 million of cash and cash equivalents and nearly$1.20 billion of available
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under our Credit Facility. We had no cash borrowings outstanding under the Credit Facility at November 30, 2024.
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capacity under our Credit Facility. We had no cash borrowings outstanding under the Credit Facility at November 30, 2025.
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Reflecting our increased investments in land and land development, we ended 2024 with 258 active communities, up 7%
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Reflecting our investments in land and land development, we ended 2025 with 271 active communities, up 5% year over
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year over year. Although the number of homes in our ending backlog at November 30, 2024 was down 20% year over year to
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year. The number of homes in our ending backlog at November 30, 2025 was down 29% year over year to 3,128, partly due to
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Homebuilding revenues for 2024 and 2023 were comprised of housing revenues and land sale revenues. Housing revenues
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Revenues. Homebuilding revenues for 2025 and 2024 were comprised of housing revenues and land sale revenues. In
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a slight increase in their overall average selling price. The year-over-year growth in the number of homes delivered reflected
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delivered and a slight decrease in their overall average selling price. Our 2025 housing revenues were down year over year in
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and geographic mix shifts of homes delivered.
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slightly lower average selling price primarily reflected a combination of product and geographic mix factors, as well as the
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We generated$3.6 million of land sale revenues in 2024, compared to$10.7 million of such revenues in 2023. Generally,
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We generated$1.3 million of land sale revenues in 2025, compared to$3.6 million of such revenues in 2024. Generally,
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Operating Income. Our homebuilding operating income increased 6% in 2024, as compared to the previous year, primarily
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Operating Income. Our homebuilding operating income decreased 34% in 2025, as compared to the previous year,
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reflecting higher housing gross profits, partly offset by higher selling, general and administrative expenses. In 2024 and 2023,
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primarily reflecting lower housing gross profits, partly offset by lower selling, general and administrative expenses. In 2025
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homebuilding operating income included total inventory-related charges of$4.6 million and$11.4 million, respectively, as
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and 2024, homebuilding operating income included total inventory-related charges of$32.1 million and$4.6 million,
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discussed in Note 7 –Inventory Impairments and Land Option Contract Abandonments in the Notes to Consolidated Financial
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respectively, as discussed in Note 7 –Inventory Impairments and Land Option Contract Abandonments in the Notes to
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Statements in this report. As a percentage of homebuilding revenues, our homebuilding operating income for 2024 decreased
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Consolidated Financial Statements in this report. As a percentage of homebuilding revenues, our homebuilding operating
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20 basis points year over year to 11.1%, mainly due to a lower housing gross profit margin. Excluding inventory-related
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income for 2025 decreased 290 basis points year over year to 8.2%, mainly due to a lower housing gross profit margin and
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charges for both periods, our homebuilding operating income margin declined 30 basis points to 11.1% in 2024 from 11.4% in
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for both periods, our homebuilding operating income margin declined 240 basis points to 8.7% in 2025 from 11.1% in 2024.
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•Housing Gross Profits – In 2024, housing gross profits of$1.45 billion grew 7% from the previous year, reflecting an
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•Housing Gross Profits – In 2025, housing gross profits of$1.15 billion were down 20% from the previous year,
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increase in housing revenues, partly offset by a decrease in our housing gross profit margin. Housing gross profits for
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reflecting both lower housing revenues and a decrease in our housing gross profit margin. Housing gross profits for
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2024 and 2023 included inventory-related charges associated with housing operations of$4.6 million and$11.4
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2025 and 2024 included inventory-related charges associated with housing operations of$32.1 million and$4.6
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Our housing gross profit margin for 2024 was 21.0%, down 20 basis points from the previous year, primarily due to
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Our housing gross profit margin for 2025 was 18.6%, down 240 basis points from the previous year due to price
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housing gross profit margin decreased 30 basis points year over year to 21.1% in 2024. The calculation of adjusted
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housing gross profit margin decreased 200 basis points year over year to 19.1% in 2025. The calculation of adjusted
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•Land Sale Profits – Land sale profits totaled$1.5 million for 2024, compared to$1.2 million for 2023.
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•Land Sale Profits – Land sales generated break-even results in 2025. Land sale profits for 2024 totaled$1.5 million.
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Homebuilding revenues for 2025 and 2024 were comprised of housing revenues and nominal land sale revenues. Our 2025
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million shares at a total cost of$350.0 million in 2024.
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interest income and other was comprised of interest income and a$12.5 million gain associated with the sale of our ownership
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gross profit margin to 16.6% and a 40 basis-point increase in selling, general and administrative expenses as a percentage of
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housing revenues was primarily due to reduced operating leverage from lower housing revenues.
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to Consolidated Financial Statements in this report.
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Payable in the Notes to Consolidated Financial Statements in this report.
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in the Notes to Consolidated Financial Statements in this report.
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similar contracts as a percentage of total lots was 43% at November 30, 2025, compared to 49% at November 30, 2024.
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including obtaining additional bank commitments. The amount of the Credit Facility available for cash borrowings and the
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Notes Payable in the Notes to Consolidated Financial Statements in this report.
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further described in Note 15 –Notes Payable in the Notes to Consolidated Financial Statements in this report.
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purchases of property and equipment and$14.5 million for contributions to unconsolidated joint ventures. These uses of cash
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used for stock repurchases totaling$353.7 million, dividend payments on our common stock of$71.6 million, tax payments
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associated with stock-based compensation awards of$25.0 million, and payments on mortgages and land contracts due to land
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sellers and other loans of$.9 million. The cash used was partially offset by$10.4 million of issuances of common stock under
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transparent pricing initiatives, particularly from first-time homebuyers and higher-income consumers;
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report. In 2023, interest income and other was comprised solely of interest income. Interest income, which is generated from
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geographic mix shifts of homes delivered.
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Ventures in the Notes to Consolidated Financial Statements in this report.
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the Notes to Consolidated Financial Statements in this report.
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made in our West Coast homebuilding reporting segment.
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conditions and available opportunities that meet our investment return standards.
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available opportunities and our investment return standards.
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Credit Facility. As of November 30, 2024, we hadno cash borrowings and$8.3 million of letters of credit outstanding under
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contributions to unconsolidated joint ventures. These uses of cash were partly offset by a$5.1 million return of investments in
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payments on our common stock of$56.8 million, tax payments associated with stock-based compensation awards of$14.2
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million, and payments on mortgages and land contracts due to land sellers and other loans of$3.8 million. The cash used was
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partially offset by$8.9 million of issuances of common stock under employee stock plans.
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of common stock. Our board of directors approved a$.05 per share increase in the quarterly cash dividend on our common
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stock to$.20 per share in the 2023 third quarter, and declared quarterly dividends at the new higher rate for the 2023 third and
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authorization, which had $113.6 million of remaining availability. In the 2024 second, third and fourth quarters, we
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Actual results could differ from those estimates and assumptions. See Note 1 –Summary of Significant Accounting Policies in
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Consolidated Financial Statements in this report.
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moderate inflation, as it did in 2022 and 2023, and those available in the capital markets or from financial institutions