HORTON D R INC /DE/

D.R. Horton, Inc. operates as the largest homebuilding company in the United States as measured by number of homes closed, constructing and selling homes through 126 markets across 36 states. The company's common stock is included in the S&P 500 Index and listed on the New York Stock Exchange and NYSE Texas under the ticker symbol DHI. The homebuilding industry is highly competitive, with the company competing not only for homebuyers and renters but also for desirable properties, raw materials, skilled labor and financing, and it competes with local, regional and national homebuilding and rental companies as well as existing home sales and rental properties.

D.R. Horton has been the largest volume homebuilder in the United States every year since 2002, having closed more than 1.2 million homes during its 47-year history. The company believes its national, regional and local scale provides benefits including greater access to and lower cost of capital due to balance sheet strength and lending and capital markets relationships, volume discounts and rebates from suppliers and lower labor rates from certain subcontractors, and enhanced leverage of general and administrative activities. The company's homebuilding operations are decentralized across 92 separate operating divisions at September 30, 2025, with centralized controls at regional and corporate offices for key risk elements such as cash management, financing, allocation of capital, and approval of land and lot acquisitions.

Homebuilding is D.R. Horton's core business, generating 92% of consolidated revenues of $34.3 billion ¹ and $36.8 billion ² in fiscal 2025 and 2024, respectively, and 90% of consolidated revenues of $35.5 billion ³ in fiscal 2023. Most homebuilding revenue is generated from the sale of completed homes and to a lesser extent from the sale of land and lots. Approximately 84% of home sales revenue in fiscal 2025 was generated from the sale of single-family detached homes, with the remainder from attached homes such as townhomes and duplexes. Product offerings include a broad range of homes for entry-level, move-up, active adult and luxury buyers, generally ranging in size from 1,000 to 4,000 square feet and in price from $250,000 to more than $1,000,000. The company primarily uses the D.R. Horton brand name and markets homes through commissioned sales employees, with the majority of home closings also involving an independent real estate broker.

For the year ended September 30, 2025, homebuilding operations closed 84,863 homes ⁴ with an average closing price of $370,400 ⁵. The rental segment consists of single-family and multi-family rental operations, closing 3,460 single-family rental homes ⁶ and 2,947 multi-family rental units ⁷ in fiscal 2025. Forestar Group Inc., of which D.R. Horton owned 62% ⁸ of outstanding shares at September 30, 2025, is a publicly traded residential lot development company operating in 64 markets across 23 states. For the year ended September 30, 2025, Forestar sold 14,240 lots ⁹, of which 83% ¹⁰ were sold to D.R. Horton. Financial services operations provide mortgage financing and title agency services, with DHI Mortgage originating or brokering 68,982 mortgage loans ¹¹ in fiscal 2025 and providing mortgage financing services for 81% ¹² of the homes closed by homebuilding operations.

At September 30, 2025, the value of backlog of sales orders was $4.1 billion ¹³ (10,785 homes ¹⁴), a decrease of 14% ¹⁵ from $4.8 billion ¹⁶ (12,180 homes ¹⁷) at September 30, 2024. The average sales price of homes in backlog was $382,000 ¹⁸ at September 30, 2025, down from $391,700 ¹⁹ at September 30, 2024. Cancellations of sales contracts as a percentage of gross sales orders were 18% ²⁰ in both fiscal 2025 and 2024. The length of time between signing a sales contract and closing is generally from one to three months, so substantially all homes in backlog at September 30, 2025 are scheduled to close in fiscal 2026.

As of September 30, 2025, D.R. Horton employed 14,341 people ²¹, of whom 9,972 work in homebuilding operations, 2,967 in financial services, 586 at the corporate office, 330 in rental operations, 433 at Forestar and 53 in other businesses. The company's homebuilding revolving credit facility is $2.305 billion ²² with an uncommitted accordion feature that could increase to $3.0 billion ²³, including bank commitments of $2.04 billion ²⁴ maturing December 18, 2029 and $265 million ²⁵ maturing October 28, 2027. Forestar had a $640 million ²⁶ senior unsecured revolving credit facility with an accordion feature to increase to $1.0 billion ²⁷, and in October 2025 Forestar increased its facility to $665 million ²⁸ through an additional commitment. The rental subsidiary DRH Rental has a $1.05 billion ²⁹ senior unsecured revolving credit facility with an accordion feature to increase to $2.0 billion ³⁰, maturing October 10, 2027. DHI Mortgage utilizes a $1.4 billion ³¹ committed mortgage repurchase facility maturing May 6, 2026 and an uncommitted mortgage repurchase facility with capacity of $500 million ³² at September 30, 2025. D.R. Horton, Inc. has a $5.0 billion ³³ stock repurchase authorization.

Consolidated revenues were $34.3 billion ³⁴ in fiscal 2025 compared to $36.8 billion ³⁵ in fiscal 2024 and $35.5 billion ³⁶ in fiscal 2023. Homebuilding operations closed 84,863 homes ³⁷ in fiscal 2025 with an average closing price of $370,400 ³⁸, compared to 87,939 homes ³⁹ with an average closing price of $385,500 ⁴⁰ in fiscal 2024. The rental segment closed 3,460 single-family rental homes ⁴¹ and 2,947 multi-family rental units ⁴² in fiscal 2025, compared to 3,970 single-family rental homes ⁴³ and 2,202 multi-family rental units ⁴⁴ in fiscal 2024. Forestar sold 14,240 lots ⁴⁵ in fiscal 2025, with 83% ⁴⁶ sold to D.R. Horton. DHI Mortgage originated or brokered 68,982 mortgage loans ⁴⁷ in fiscal 2025, providing financing for 81% ⁴⁸ of homebuilding closings.

The company's primary growth vector is increasing investments in land, lot and home inventories in existing homebuilding markets, as well as expanding through investments in new product offerings, new geographic markets and the growth of rental property operations. Forestar is a key part of the strategy to maintain relationships with land developers and control a large portion of the land and lot position through land purchase contracts, and it continues to invest in land acquisition and development to expand its residential lot development business across a geographically diversified national platform and consolidate market share in the fragmented U.S. lot development industry. The company also routinely evaluates opportunities to expand operations, including potential acquisitions of other homebuilding or related businesses, which usually provide immediate land and home inventories and control of additional land and lot positions through purchase contracts.

The company's financial services operations provide mortgage financing and title agency services to homebuyers in many homebuilding markets, with DHI Mortgage originating loan products that can be sold to third-party purchasers, the majority of which are eligible for sale to Fannie Mae, Freddie Mac or Ginnie Mae. DHI Mortgage sells substantially all of the loans and the related servicing rights to third-party purchasers after origination, and during fiscal 2025 approximately 71% ⁴⁹ of mortgage loans were sold directly to Fannie Mae, Freddie Mac or into securities backed by Ginnie Mae, and 27% ⁵⁰ were sold to one other major financial entity. The company seeks to establish loan purchase arrangements with additional financial entities on an ongoing basis.

The filing does not contain specific margin or cost outlook targets, but notes that inflation can adversely affect the company by increasing costs of land, materials, labor and cost of capital, and that the increase in mortgage interest rates has required the use of pricing adjustments and incentives resulting in lower gross margins. The company controls construction costs by designing homes efficiently, utilizing common house plans as consistently as possible, obtaining competitive bids for construction materials and labor, and negotiating pricing from subcontractors and suppliers based on volume of services and products purchased on a local, regional and national basis. Overhead costs are controlled by centralizing certain accounting and administrative functions, monitoring staffing and compensation levels, and applying technology to business processes to improve productivity.

The company's homebuilding revolving credit facility of $2.305 billion ⁵¹ with an uncommitted accordion feature to $3.0 billion ⁵² provides liquidity, with bank commitments of $2.04 billion ⁵³ maturing December 18, 2029 and $265 million ⁵⁴ maturing October 28, 2027. Forestar's revolving credit facility was $640 million ⁵⁵ with an accordion to $1.0 billion ⁵⁶, increased to $665 million ⁵⁷ in October 2025. The rental subsidiary has a $1.05 billion ⁵⁸ revolving credit facility with an accordion to $2.0 billion ⁵⁹ maturing October 10, 2027. DHI Mortgage has a $1.4 billion ⁶⁰ committed mortgage repurchase facility maturing May 6, 2026 and an uncommitted facility with capacity of $500 million ⁶¹. D.R. Horton, Inc. has a $5.0 billion ⁶² stock repurchase authorization and an automatically effective universal shelf registration statement filed in July 2024 registering debt and equity securities. Forestar has an effective shelf registration statement filed in September 2024 registering $750 million ⁶³ of equity securities, of which $300 million ⁶⁴ is reserved for sales under its at-the-market equity offering program entered into in November 2024.

The filing does not contain specific R&D spending levels or capital expenditure plans.

The company faces structural headwinds from elevated mortgage interest rates, which have reduced the affordability of homes and required pricing adjustments and incentives that result in lower gross margins. Prolonged periods of elevated mortgage interest rates or further increases could have an adverse impact on business and financial results. Inflationary pressures have increased costs of land, materials, labor and cost of capital, and newly imposed or increased tariffs, duties and/or trade restrictions on imported materials such as steel, aluminum and lumber may raise costs for these items or products made with them. The company also faces risks from supply shortages of building materials and tightness in the labor market, which could lengthen construction cycles and increase costs.

The company's homebuilding, rental and land development operations are cyclical and significantly affected by changes in general and local economic and real estate conditions such as employment levels, consumer confidence, housing demand, availability of financing for homebuyers, interest rates, inflation, and demographic trends. Adverse changes in these conditions may negatively impact business and financial results and increase the risk for asset impairments and write-offs. The federal government's fiscal policies and the Federal Reserve's monetary policies may negatively impact financial markets and consumer confidence, and deployments of U.S. military personnel, terrorist attacks, other acts of violence or threats to national security may cause an economic slowdown in the markets where the company operates.

The homebuilding, rental and land development operations are cyclical and significantly affected by changes in economic conditions such as employment levels, consumer confidence, housing demand, availability of financing for homebuyers, interest rates, and inflation, and adverse changes could increase the risk for asset impairments and write-offs. The Federal Reserve's interest rate increases have resulted in higher mortgage interest rates, reducing affordability and requiring pricing adjustments and incentives that result in lower gross margins. Approximately 71% ⁶⁵ of mortgage loans were sold directly to Fannie Mae, Freddie Mac or into securities backed by Ginnie Mae, and any significant change regarding the long-term structure and viability of these agencies could adversely affect interest rates, mortgage availability and sales. The company faces inventory risks from controlling, owning and developing land, and a significant deterioration in economic or homebuilding industry conditions may result in substantial inventory impairment charges. Supply shortages of building materials, tightness in the labor market, and newly imposed or increased tariffs on imported materials such as steel, aluminum and lumber may raise costs and cause construction delays.

Management's message emphasizes that D.R. Horton is the largest homebuilding company in the United States as measured by number of homes closed, having been the largest volume homebuilder every year since 2002 and having closed more than 1.2 million homes during its 47-year history. The company's strategic priorities include maintaining geographic diversification across 126 markets in 36 states to lower operational risks and enhance earnings potential, utilizing Forestar as a key part of the strategy to control a large portion of land and lot positions through land purchase contracts, and focusing on the first-time and first-time move-up homebuyer which account for the majority of home closings. Management also emphasizes the decentralized operating structure with 92 separate homebuilding operating divisions at September 30, 2025, allowing local managers flexibility in operational decisions, while centralizing key risk elements such as cash management, financing, allocation of capital, and approval of land and lot acquisitions at regional and corporate offices.