PulteGroup, Inc. (NYSE:PHM) announced its financial outcomes for the fourth quarter, delivering results that exceeded analyst forecasts for both adjusted earnings and revenue. The homebuilding firm reported a net income of $502 million, equating to $2.56 per share. Adjusted earnings per share stood at $2.88, surpassing the consensus estimate of $2.81. Total revenue reached $4.611 billion, outperforming the projected $4.322 billion; however, this figure represents a slight decline from the $4.922 billion recorded in the same period last year.
Examining business segments, homebuilding revenue totaled $4.517 billion, down from $4.807 billion a year earlier. Specifically, revenues from home sales amounted to $4.478 billion compared to $4.708 billion in the prior year, while income from land sales and other services decreased considerably to $39.419 million from $99.108 million. Additionally, the quarter saw a 3% reduction in home closings, tallying 7,821 units, along with a marginal 1% decline in the average selling price to $573,000.
The reported gross margin on home sales was 24.7%, including a $35 million, or 80 basis points, charge associated with land impairments. This represents a contraction from 27.5% gross margin achieved in the previous year’s fourth quarter. Selling, general and administrative (SG&A) expenses related to homebuilding were $389 million, equivalent to 8.7% of home sale revenues. This figure takes into account an insurance benefit of $34 million recognized during the quarter, contrasting with SG&A expenses of $196 million, or 4.2% of home sale revenues, in the same period last year, which included a higher insurance benefit of $255 million.
In terms of orders, the company recorded a 4% increase in new home orders, totaling 6,428 units with an aggregate value of $3.5 billion, approximately matching the previous year’s comparable period. The average number of active communities grew 6%, reaching 1,014. Backlog stood at 8,495 homes, valued at $5.3 billion at quarter-end.
Financial services operations experienced a downturn, with revenue decreasing to $93.426 million from $115.146 million in the prior-year quarter. Pre-tax income from this segment declined accordingly to $35 million, down from $51 million. The mortgage capture rate fell slightly to 84% from 86%, while mortgage originations dropped to 4,940 loans from 5,328, coupled with a reduction in origination principal from $2.342 billion to $2.144 billion.
Regarding capital management, PulteGroup repurchased 2.4 million shares for $300 million in the quarter, contributing to a full-year total buyback of 10.6 million shares—approximately 5.2% of outstanding shares—costing $1.2 billion at an average price of $112.76 per share. Land acquisition and development investments amounted to $1.4 billion within the same timeframe.
The quarter closed with cash and equivalents of $1.981 billion, in addition to $27.907 million in restricted cash. Notes payable carried a balance of $1.631 billion, while financial services debt totaled $532.338 million. The company reported a debt-to-capital ratio of 11.2%, and a net debt-to-capital level of negative 3.0%.
On a full-year basis ending December 31, 2025, PulteGroup's net income was $2.219 billion, or $11.12 per diluted share—a decrease from $3.083 billion, or $14.69 per diluted share, recorded in 2024. Annual revenues similarly dipped to $17.312 billion from $17.947 billion. Operating cash flows improved year-over-year, generating $1.871 billion compared to $1.681 billion previously.
Despite the macro improvements in affordability stemming from lowered interest rates and favorable pricing conditions, PulteGroup's CEO Ryan Marshall noted that consumer confidence remained subdued, continuing to restrain homebuyer demand. He emphasized the company's strategy focused on efficient asset turnover, strong cash flow generation, and ongoing development of a land pipeline aimed at supporting a steady annual growth in community counts of between 3% and 5%.
Following the earnings release, PulteGroup's shares advanced nearly 4%, trading at $123.27 according to Benzinga Pro data at the time of publication. This market reaction underscored investor recognition of the company's ability to exceed earnings expectations amid a cautious demand environment.