Core Insights - PulteGroup reported a decline in third-quarter profit due to ongoing affordability concerns that are deterring home buyers [1] Company Summary - PulteGroup's third-quarter profit decreased as affordability issues continue to impact the housing market [1]

Q3 2025 Operating & Financial Results October 21, 2025 Forward-looking statements This presentation includes "forward-looking statements." These statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these statements. You can identify these statements by the fact that they do not relate to ...

[Third Quarter 2025 Financial Results Overview](index=1&type=section&id=1.%20Third%20Quarter%202025%20Financial%20Results%20Overview) [Key Financial Highlights](index=1&type=section&id=1.1.%20Key%20Financial%20Highlights) PulteGroup's Q3 2025 net income decreased to $586 million, with home sale revenues down 2% to $4.2 billion Third Quarter 2025 Key Financial Highlights | Metric | Q3 2025 | Q3 2024 | | :------------------------- | :---------- | :---------- | | Net Income | $586 million | $698 million | | Diluted EPS | $2.96 | $3.35 | | Home Sale Revenues | $4.2 billion | $4.3 billion | | Home Sale Gross Margin | 26.2% | 28.8% | | SG&A Expense (% of revenue) | 9.4% | 9.4% | | Closings | 7,529 homes | (5% decrease) | | Average Sales Price | $564,000 | (3% increase) | | Net New Orders | 6,638 homes | (6% decrease) | | Value of Net New Orders | $3.6 billion | $3.9 billion | | Unit Backlog | 9,888 homes | | | Value of Backlog | $6.2 billion | | | Common Shares Repurchased | $300 million | | [CEO Commentary](index=1&type=section&id=1.2.%20CEO%20Commentary) CEO Ryan Marshall emphasized disciplined capital allocation and strong cash flow, positioning for future growth - PulteGroup remains disciplined in its long-term operating and financial strategies, managing production volumes and capital allocation to drive **high returns** over the housing cycle[3](index=3&type=chunk) - The company generated **strong cash flow from operations** and returned **$344 million** to shareholders through dividends and share repurchases in Q3[3](index=3&type=chunk) - PulteGroup's diversified business platform is enabling **strong financial results** and positioning the business for growth when buyer demand improves, despite impacts from weaker consumer confidence and affordability challenges[4](index=4&type=chunk) [Operational Performance](index=1&type=section&id=1.3.%20Operational%20Performance) Q3 2025 home closings decreased 5%, net new orders declined 6%, with financial services income also falling Q3 2025 Operational Performance | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :-------------------------- | :---------- | :---------- | :----------- | | Closings (units) | 7,529 | 7,924 | -5% | | Average Sales Price | $564,000 | $548,000 | +3% | | Net New Orders (units) | 6,638 | 7,031 | -6% | | Value of Net New Orders | $3.6 billion | $3.9 billion | -7.7% | | Average Community Count | 1,002 | 954 | +5% | | Backlog (units) | 9,888 | 12,089 | -18.2% | | Value of Backlog | $6.2 billion | $7.69 billion | -19.4% | | Financial Services Pre-tax Income | $44 million | $55 million | -20% | | Mortgage Capture Rate | 84% | 87% | -3 percentage points | - The higher average sales price in Q3 2025 was driven by a shift in the **geographic mix** of homes closed compared to the prior year[4](index=4&type=chunk) - PulteGroup repurchased **2.4 million common shares** for **$300 million** in Q3 2025, and **8.2 million shares** for **$900 million** through the first nine months of 2025[9](index=9&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=2.%20Consolidated%20Financial%20Statements) [Consolidated Statements of Operations](index=4&type=section&id=2.1.%20Consolidated%20Statements%20of%20Operations) PulteGroup's consolidated statements of operations show a decrease in total revenues and net income for both the three and nine months ended September 30, 2025, compared to the prior year Consolidated Statements of Operations (Q3 2025 vs Q3 2024) | Metric | Q3 2025 ($000s) | Q3 2024 ($000s) | Change (YoY) | | :--------------------------------- | :-------------- | :-------------- | :----------- | | Home sale revenues | $4,248,375 | $4,343,227 | -2.2% | | Land sale and other revenues | $53,169 | $19,284 | +175.7% | | Financial Services revenues | $103,255 | $113,831 | -9.3% | | Total revenues | $4,404,799 | $4,476,342 | -1.6% | | Home sale cost of revenues | $(3,133,548) | $(3,091,267) | +1.4% | | SG&A expenses | $(400,681) | $(406,897) | -1.5% | | Income before income taxes | $767,788 | $906,196 | -15.2% | | Net income | $585,834 | $697,914 | -16.1% | | Diluted earnings per share | $2.96 | $3.35 | -11.6% | | Cash dividends declared per share | $0.22 | $0.20 | +10.0% | Consolidated Statements of Operations (9 Months Ended Sep 30, 2025 vs 2024) | Metric | 9M 2025 ($000s) | 9M 2024 ($000s) | Change (YoY) | | :--------------------------------- | :-------------- | :-------------- | :----------- | | Home sale revenues | $12,265,619 | $12,610,981 | -2.7% | | Land sale and other revenues | $140,345 | $96,327 | +45.7% | | Financial Services revenues | $295,241 | $317,848 | -7.1% | | Total revenues | $12,701,205 | $13,025,156 | -2.5% | | Home sale cost of revenues | $(8,968,112) | $(8,897,835) | +0.8% | | SG&A expenses | $(1,184,472) | $(1,125,637) | +5.2% | | Income before income taxes | $2,256,082 | $2,823,151 | -20.1% | | Net income | $1,717,115 | $2,170,023 | -20.9% | | Diluted earnings per share | $8.55 | $10.28 | -16.8% | | Cash dividends declared per share | $0.66 | $0.60 | +10.0% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=2.2.%20Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2025, PulteGroup's total assets increased slightly to $17.85 billion from $17.36 billion at year-end 2024 Condensed Consolidated Balance Sheets (as of Sep 30, 2025 vs Dec 31, 2024) | Asset/Liability/Equity | Sep 30, 2025 ($000s) | Dec 31, 2024 ($000s) | Change | | :---------------------------------- | :------------------- | :------------------- | :----- | | Cash and equivalents | $1,451,532 | $1,613,327 | -10.0% | | Total cash, cash equivalents, and restricted cash | $1,479,557 | $1,653,680 | -10.5% | | House and land inventory | $13,351,977 | $12,692,820 | +5.2% | | Total Assets | $17,850,979 | $17,363,763 | +2.8% | | Accounts payable | $731,104 | $727,995 | +0.4% | | Customer deposits | $470,745 | $512,580 | -8.2% | | Financial Services debt | $404,223 | $526,906 | -23.3% | | Notes payable | $1,623,338 | $1,618,586 | +0.3% | | Total Liabilities | $5,024,942 | $5,241,799 | -4.2% | | Shareholders' equity | $12,826,037 | $12,121,964 | +5.8% | [Consolidated Statements of Cash Flows](index=6&type=section&id=2.3.%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2025, net cash provided by operating activities remained strong at $1.1 billion, slightly down from the prior year Consolidated Statements of Cash Flows (9 Months Ended Sep 30, 2025 vs 2024) | Cash Flow Activity | 9M 2025 ($000s) | 9M 2024 ($000s) | Change | | :---------------------------------- | :-------------- | :-------------- | :----- | | Net income | $1,717,115 | $2,170,023 | -20.9% | | Net cash provided by operating activities | $1,100,122 | $1,113,184 | -1.2% | | Net cash used in investing activities | $(64,104) | $(108,350) | -40.9% | | Net cash used in financing activities | $(1,210,141) | $(1,398,875) | -13.5% | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $(174,123) | $(394,041) | -55.8% | | Share repurchases | $(900,000) | $(879,999) | +2.3% | | Dividends paid | $(133,658) | $(126,560) | +5.6% | [Segment Performance Data](index=7&type=section&id=3.%20Segment%20Performance%20Data) [Homebuilding Segment](index=7&type=section&id=3.1.%20Homebuilding%20Segment) The Homebuilding segment experienced a decrease in home sale revenues and income before income taxes for both the three and nine months ended September 30, 2025 [Home Sale Revenues and Closings](index=7&type=section&id=3.1.1.%20Home%20Sale%20Revenues%20and%20Closings) Home sale revenues for the Homebuilding segment decreased by 2.2% in Q3 2025 and 2.7% for the nine months ended September 30, 2025 Homebuilding Revenues and Closings (Q3 2025 vs Q3 2024) | Metric | Q3 2025 ($000s/units) | Q3 2024 ($000s/units) | Change (YoY) | | :-------------------------- | :-------------------- | :-------------------- | :----------- | | Home sale revenues | $4,248,375 | $4,343,227 | -2.2% | | Total Homebuilding revenues | $4,301,544 | $4,362,511 | -1.4% | | Income before income taxes | $723,430 | $851,270 | -15.0% | | Closings - units (Total) | 7,529 | 7,924 | -5.0% | | Closings - units (Northeast) | 408 | 391 | +4.3% | | Closings - units (Southeast) | 1,444 | 1,340 | +7.8% | | Closings - units (Florida) | 1,932 | 1,984 | -2.6% | | Closings - units (Midwest) | 1,313 | 1,194 | +10.0% | | Closings - units (Texas) | 1,073 | 1,485 | -27.7% | | Closings - units (West) | 1,359 | 1,530 | -11.2% | | Average selling price | $564 | $548 | +2.9% | [Net New Orders and Backlog](index=8&type=section&id=3.1.2.%20Net%20New%20Orders%20and%20Backlog) Net new orders for the Homebuilding segment decreased by 6% in units and 7.7% in dollar value in Q3 2025 Homebuilding Net New Orders and Backlog (Q3 2025 vs Q3 2024) | Metric | Q3 2025 (units/$000s) | Q3 2024 (units/$000s) | Change (YoY) | | :-------------------------- | :-------------------- | :-------------------- | :----------- | | Net new orders - units (Total) | 6,638 | 7,031 | -5.6% | | Net new orders - units (Northeast) | 371 | 385 | -3.6% | | Net new orders - units (Southeast) | 1,354 | 1,340 | +1.0% | | Net new orders - units (Florida) | 1,721 | 1,681 | +2.4% | | Net new orders - units (Midwest) | 1,144 | 1,233 | -7.2% | | Net new orders - units (Texas) | 938 | 1,134 | -17.3% | | Net new orders - units (West) | 1,110 | 1,258 | -11.8% | | Net new orders - dollars | $3,639,690 | $3,928,860 | -7.4% | | Unit backlog (Total) | 9,888 | 12,089 | -18.2% | | Dollars in backlog | $6,234,554 | $7,694,761 | -19.0% | [Financial Services Segment](index=7&type=section&id=3.2.%20Financial%20Services%20Segment) The Financial Services segment reported a decrease in income before income taxes for both the three and nine months ended September 30, 2025 Financial Services Income Before Income Taxes | Period | 2025 ($000s) | 2024 ($000s) | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Three Months Ended Sep 30 | $44,358 | $54,926 | -19.3% | | Nine Months Ended Sep 30 | $123,013 | $159,283 | -22.7% | - Lower pre-tax income in Financial Services was primarily driven by **lower closing volumes** in homebuilding operations and a decrease in mortgage capture rate to **84%** from **87%** in the prior year[8](index=8&type=chunk) [Supplemental Financial Information](index=9&type=section&id=4.%20Supplemental%20Financial%20Information) [Mortgage Originations](index=9&type=section&id=4.1.%20Mortgage%20Originations) Mortgage origination volume and principal decreased in Q3 2025 compared to the prior year, reflecting the broader slowdown in homebuilding closings Mortgage Originations (Q3 2025 vs Q3 2024) | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :------------------ | :------ | :------ | :----------- | | Origination volume | 4,782 | 5,005 | -4.4% | | Origination principal | $2,054,441 | $2,103,197 | -2.3% | | Capture rate | 84.4% | 86.7% | -2.3 percentage points | Mortgage Originations (9 Months Ended Sep 30, 2025 vs 2024) | Metric | 9M 2025 | 9M 2024 | Change (YoY) | | :------------------ | :------ | :------ | :----------- | | Origination volume | 14,037 | 14,442 | -2.7% | | Origination principal | $6,085,214 | $5,998,347 | +1.4% | | Capture rate | 85.1% | 85.9% | -0.8 percentage points | [Interest in Inventory](index=9&type=section&id=4.2.%20Interest%20in%20Inventory) The interest capitalized into inventory decreased for both the three and nine months ended September 30, 2025, while interest expensed increased Interest in Inventory (Q3 2025 vs Q3 2024) | Metric | Q3 2025 ($000s) | Q3 2024 ($000s) | Change (YoY) | | :-------------------------- | :-------------- | :-------------- | :----------- | | Interest capitalized | $26,139 | $26,443 | -1.1% | | Interest expensed | $(31,199) | $(29,708) | +5.0% | | Interest in inventory, end of period | $131,564 | $146,097 | -9.9% | Interest in Inventory (9 Months Ended Sep 30, 2025 vs 2024) | Metric | 9M 2025 ($000s) | 9M 2024 ($000s) | Change (YoY) | | :-------------------------- | :-------------- | :-------------- | :----------- | | Interest capitalized | $78,360 | $86,346 | -9.2% | | Interest expensed | $(86,756) | $(79,327) | +9.4% | | Interest in inventory, end of period | $131,564 | $146,097 | -9.9% | [Reconciliation of Non-GAAP Financial Measures](index=10&type=section&id=4.3.%20Reconciliation%20of%20Non-GAAP%20Financial%20Measures) PulteGroup provides debt-to-capital and net debt-to-capital ratios as non-GAAP financial measures to indicate overall leverage - PulteGroup calculates total net debt by subtracting total cash, cash equivalents, and restricted cash from notes payable[33](index=33&type=chunk) - These non-GAAP measures are used as indicators of **overall leverage** and are considered useful for evaluating comparability and profitability within the homebuilding industry[33](index=33&type=chunk) Debt-to-Capital Ratios | Metric | Sep 30, 2025 ($000s) | Dec 31, 2024 ($000s) | Change | | :-------------------------- | :------------------- | :------------------- | :----- | | Notes payable | $1,623,338 | $1,618,586 | +0.3% | | Shareholders' equity | $12,826,037 | $12,121,964 | +5.8% | | Total capital | $14,449,375 | $13,740,550 | +5.2% | | Debt-to-capital ratio | 11.2% | 11.8% | -0.6 percentage points | | Total net debt | $143,781 | $(35,094) | N/A | | Total net capital | $12,969,818 | $12,086,870 | +7.3% | | Net debt-to-capital ratio | 1.1% | (0.3)% | +1.4 percentage points | [Corporate Information](index=2&type=section&id=5.%20Corporate%20Information) [Conference Call Details](index=2&type=section&id=5.1.%20Conference%20Call%20Details) PulteGroup scheduled a conference call to discuss its third quarter 2025 results for Tuesday, October 21, 2025, at 8:30 a.m. Eastern Time, accessible via its corporate website - A conference call discussing Q3 2025 results was scheduled for **Tuesday, October 21, 2025, at 8:30 a.m. Eastern Time**[10](index=10&type=chunk) - Interested investors can access the live webcast via PulteGroup's corporate website at **www.pultegroupinc.com**[10](index=10&type=chunk) [Forward-Looking Statements](index=2&type=section&id=5.2.%20Forward-Looking%20Statements) The release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially - The release includes forward-looking statements identifiable by terms like 'believe,' 'expect,' 'intend,' 'estimate,' and 'anticipate,' which discuss future events or expectations[11](index=11&type=chunk) - These statements are subject to risks and uncertainties, including **interest rate changes**, **availability of mortgage financing**, **economic conditions** (inflation, consumer confidence), **supply shortages**, **cost of labor and materials**, **land availability and cost**, and **governmental regulation**[12](index=12&type=chunk) - Other risks include **declines in inventory value**, **competition**, **technological developments** (e.g., AI in homebuilding), **insurance costs**, **adverse capital market conditions**, and **cybersecurity incidents**[12](index=12&type=chunk)[13](index=13&type=chunk) [About PulteGroup](index=3&type=section&id=5.3.%20About%20PulteGroup) PulteGroup, Inc. is one of America's largest homebuilding companies, operating in over 45 markets - PulteGroup, Inc. (NYSE: PHM) is one of America's **largest homebuilding companies**, based in Atlanta, Georgia, with operations in **over 45 markets**[14](index=14&type=chunk) - The company's brand portfolio includes **Centex, Pulte Homes, Del Webb, DiVosta Homes, American West, and John Wieland Homes and Neighborhoods**, allowing it to serve diverse buyer groups[14](index=14&type=chunk) - PulteGroup's stated purpose is "**building incredible places where people can live their dreams**"[14](index=14&type=chunk)

Core Insights - PulteGroup, Inc. reported a net income of $586 million for Q3 2025, translating to $2.96 per share, a decrease from the previous year's net income of $698 million or $3.35 per share [1] Financial Performance - The company experienced a decline in net income year-over-year, with a reduction of $112 million [1] - The earnings per share also decreased by $0.39 compared to the same quarter in the prior year [1] Business Strategy - PulteGroup emphasized its commitment to maintaining discipline in business operations, aligning with long-term operating and financial strategies [1] - The company is focused on managing production volumes and capital allocation effectively [1]

Core Insights - Investors are advised to focus on PulteGroup's new orders and home sale gross margin as key indicators of the company's performance [1] Group 1 - The upcoming earnings report from PulteGroup is highly anticipated by investors [1] - New orders are a critical metric for assessing the company's future revenue potential [1] - Home sale gross margin will provide insights into the company's profitability and operational efficiency [1]

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Key Takeaways PHM's Q3 EPS is expected to be $2.86, down 14.6% year over year, with revenues projected to fall 4%.High mortgage rates and affordability issues likely drove lower closings and pressured revenue growth.PHM anticipates gross margin of 26-26.5%, down from 28.8% last year due to higher incentive costs.PulteGroup Inc. (PHM) is scheduled to report its third-quarter 2025 results on Oct. 21, before the opening bell.In the last reported quarter, the company’s earnings per share (EPS) and revenues beat ...

Core Viewpoint - Recent downgrades by Wall Street analysts on homebuilding stocks raise concerns about the real estate sector's outlook, prompting a need for deeper analysis of the fundamentals and key performance indicators driving these businesses [1][2]. Homebuilding Stocks Performance - Companies like Lennar Corp. and PulteGroup Inc. have seen their stock prices fall to an average of 74% of their 52-week highs, officially entering bear market territory [2]. - The downgrades reflect not just market reactions but also the underlying performance reported by these companies [2]. Macroeconomic Context - Building permits in the U.S. have fallen below long-term averages, contributing to a near-depressive state in the homebuilding industry [3]. - Despite the current risks, real estate investment trusts (REITs) are trading at discounts, presenting potential hedging opportunities for investors [3]. Home Prices and Demand - Average home prices have risen to $512,000, aimed at stimulating homebuyer demand, yet building permits have consistently declined, leading to reduced demand for new homes and negatively impacting homebuilders' margins [4]. Earnings and Financial Performance - Lennar reported a 48.5% decline in homebuilding earnings, attributed to slowdowns in activity and rising construction costs [7]. - Lennar's earnings per share (EPS) for the quarter was $2.29, a 46% decline from last year's $4.26, despite exceeding market expectations [8]. - PulteGroup experienced a 36% decline in operating cash flows, from $657.2 million to $421.7 million, reflecting similar industry headwinds [11]. Backlogs and Future Orders - Lennar has a backlog of 16,953 homes and 23,004 new orders, which could provide some optimism, although these projects are subject to cancellation if the macroeconomic environment worsens [9]. - PulteGroup's backlog stands at 10,779 homes, but like Lennar, these projects are also vulnerable to cancellation [11]. Analyst Ratings and Market Sentiment - Analysts from Zacks Research have rated both Lennar and PulteGroup as Strong Sell, indicating a bearish sentiment in the market [10][12]. - PulteGroup's short interest rose by 7.1% over the past month, reflecting growing bearish conviction in the housing and construction market [13]. Investment Opportunities - Some investors may view the current dips in homebuilder stocks as buying opportunities, betting on the realization of backlogs to support future EPS [14]. - REITs are highlighted as a potential diversification strategy, as they are less affected by building permits and construction activity, focusing instead on the income generated from properties [15][16].

Core Insights - The article highlights significant construction defects affecting homeowners, particularly in Florida and Nevada, with PulteGroup being a central figure in these issues [1][6][5]. Group 1: Construction Defects - Florida has been dealing with a "billion-dollar stucco problem," where poorly applied stucco has led to extensive damage in homes, prompting investigations by the state attorney general [1][6]. - In Lake Las Vegas, homeowners are facing severe structural issues due to improper soil compaction, with repair costs estimated between $300,000 and $500,000 per property [2][3]. - Many homes in the affected areas exhibit visible damage, such as wide cracks in walls and detached patios, exacerbated by the use of stucco [4][5]. Group 2: Legal and Financial Implications - PulteGroup has previously faced legal consequences in Florida, including a $78.7 million judgment related to stucco defects and a settlement requiring restitution and repairs for affected homeowners [6]. - Nevada law mandates builders respond to construction defect notices within 90 days, but many homeowners report no action taken within this timeframe [2]. - The article discusses broader implications for homeowners, emphasizing that purchasing a new home does not guarantee quality or safety, leading to potential repair bills in the hundreds of thousands [7]. Group 3: Regional Challenges - Texas faces its own challenges with clay soils that expand and contract, causing structural issues in homes, particularly exacerbated by climate extremes [6]. - California has strong consumer protections, such as the "Right to Repair Act," but disputes over construction defects can still lead to prolonged legal battles [6].

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