D.R. Horton, Inc. (NYSE: DHI), the largest U.S. homebuilder by volume since 2002, released its fiscal 2026 first-quarter financial results on Tuesday. The company reported mixed outcomes, with year-over-year decreases in both net income and revenues, yet both figures surpassed Wall Street's expectations for the period ended December 31, 2025.
During the quarter, D.R. Horton posted net income attributable to common shareholders of $594.8 million, equivalent to $2.03 per diluted share. This compares to net income of $844.9 million, or $2.61 per diluted share, recorded in the first quarter of the previous fiscal year. Despite the decline, the earnings per share outcome beat analysts’ consensus estimate, which stood at $1.95.
The company’s total revenue for the quarter was $6.887 billion, down from $7.613 billion in the prior-year period. However, this figure also exceeded the analyst revenue consensus forecast of $6.603 billion. D.R. Horton generated consolidated pre-tax income of $798.1 million during the quarter, which translated to an 11.6% pre-tax profit margin. This margin benefited from a 40 basis point gain due to a recovery of prior period warranty costs.
When isolating the homebuilding division, revenue fell approximately 9% year over year to $6.5 billion. The number of homes closed decreased by 7% to 17,818 units compared to the prior year’s quarter. Correspondingly, pre-tax income for homebuilding dropped 30% to $708.1 million. The division’s pre-tax profit margin came in at 10.8%, also including the 40 basis point warranty cost recovery benefit.
Despite these declines, new home sales orders improved by 3% to 18,300 homes, amounting to an order value of $6.7 billion. The cancellation rate held steady at 18%, consistent with the same quarter a year earlier. At the end of the quarter, the sales order backlog stood at 11,376 homes, representing $4.3135 billion in revenue.
Additional operational segments included rental, lot development, and financial services. Rental operations contributed $109.5 million in revenue from 397 single-family rental home sales, producing a slim pre-tax profit margin of 0.2%. Lot sales via Forestar generated $273.0 million in revenue, with 1,944 lots sold and a 7.6% pre-tax profit margin. Financial services reported revenue of $184.6 million, achieving a robust pre-tax income of $58.0 million and a 31.4% pre-tax margin.
Throughout the quarter, D.R. Horton realized strong cash flow from operations, totaling $854.0 million. The company ended the quarter with total liquidity of $6.6 billion, including $2.51 billion held in cash and cash equivalents.
Inventory levels remained substantial, with 30,400 homes available at quarter-end. Of these, 20,000 remained unsold, including 7,300 completed homes—900 of which had been completed for over six months.
Commenting on the results, Executive Chairman David Auld highlighted ongoing market challenges, saying, "We expect our sales incentives to remain elevated during fiscal 2026, with the magnitude contingent on spring demand strength, mortgage interest rate fluctuations, and broader market conditions throughout the year." He emphasized the company's strong liquidity position, low leverage, experienced operational team, and national reach as key factors in maintaining financial and operational flexibility.
Auld stated, "Our affordable product lineup and flexible lot supply position us well to continue meeting homebuyer needs and market demand. We remain disciplined in capital allocation to enhance long-term shareholder value, including consistently returning capital to shareholders."
Looking ahead, D.R. Horton reaffirmed its fiscal 2026 guidance of consolidated revenues between $33.5 billion and $35.0 billion and homebuilding closings ranging from 86,000 to 88,000 homes. The company also anticipates at least $3.0 billion in operating cash flow, approximately $2.5 billion in share repurchases, and around $500 million in dividends.
Following the earnings announcement, D.R. Horton’s stock rose by 2.06%, trading at $159.16 in premarket on Tuesday, reflecting investor confidence despite the mixed financial results.