D.R. Horton — Fiscal 2026 Earnings Summary

Financial Performance:

• Consolidated revenues were $33.0 billion for fiscal 2026, down from $34.3 billion in the prior year; fourth quarter revenues were $9.4 billion.
• Net income attributable to D.R. Horton was $2.9 billion for fiscal 2026 (down 19% year-over-year) and $741.8 million for the fourth quarter (down 18% year-over-year).
• Earnings per diluted share were $10.11 for fiscal 2026 (down 13%) and $2.67 for the fourth quarter (down 12%).
• Consolidated pre-tax income was $3.9 billion for fiscal 2026 with an 11.8% pre-tax profit margin; fourth quarter pre-tax income was $1.0 billion with a 10.8% margin.
• Cash provided by operations totaled $3.5 billion for fiscal 2026.
• Debt to total capital ratio was 20.8% at September 30, 2026.
• Book value per share increased 4% to $85.14.
• Return on equity was 12.2% and return on assets was 8.2% for fiscal 2026.
• The company repurchased 24.0 million shares for $3.6 billion during fiscal 2026, reducing the outstanding share count by 8%.
• Cash dividends paid totaled $513.3 million during fiscal 2026.
• Total liquidity at year-end was $7.2 billion.

Guidance and Future Outlook:

• Fiscal 2027 consolidated revenue guidance is $30.0 billion to $32.0 billion.
• Fiscal 2027 homes closed guidance is 79,000 to 84,000 homes.
• Expected income tax rate for fiscal 2027 is approximately 25.5%.
• Fiscal 2027 consolidated cash flow from operations is projected at approximately $3.5 billion.
• Fiscal 2027 share repurchases are expected to be approximately $3.0 billion.
• Fiscal 2027 dividend payments are expected to be approximately $500 million.
• Management expects incentives to remain elevated in fiscal 2027, dependent on market conditions.
• The company plans to provide first-quarter fiscal 2027 guidance on its conference call.

Business Segments and Product Lines:

• Homebuilding: Revenue decreased 3% to $30.7 billion for fiscal 2026 and 2% to $8.4 billion for the fourth quarter. Homes closed decreased 1% to 84,202 for the year and 2% to 22,915 for the quarter. Pre-tax income decreased 17% to $3.4 billion for the year and 11% to $891.0 million for the quarter. Net sales orders increased 2% to 84,995 homes for the year but decreased 7% to 18,619 homes for the quarter. The cancellation rate was 19% for the year and 23% for the fourth quarter.
• Rental: Revenue was $1.2 billion for fiscal 2026 and $647.1 million for the fourth quarter. The segment reported pre-tax income of $18.2 million for the year and a pre-tax loss of $25.3 million for the quarter, which included $91.4 million in inventory impairment charges.
• Forestar: Generated $1.6 billion in revenue and $192.1 million in pre-tax income for fiscal 2026 (11.7% margin). Fourth quarter revenue was $580.8 million with $78.6 million in pre-tax income (13.5% margin).
• Financial Services: Revenue was $817.3 million for fiscal 2026 and $219.2 million for the fourth quarter. Pre-tax income was $258.1 million for the year (31.6% margin) and $78.2 million for the quarter (35.7% margin).
• At fiscal year-end, the company had 28,200 homes in inventory, including 17,700 unsold homes.
• 68% of homes closed during fiscal 2026 were on lots developed by Forestar or third parties.

Market and Competitive Landscape:

• D.R. Horton completed its 25th consecutive year as America's largest builder by volume.
• The company entered 30 new markets and 7 new states over the past five years, increasing its community count by 65%.
• Housing market conditions became more challenging in the fourth quarter due to rising mortgage rates, affordability constraints, and cautious consumer sentiment.
• The company provided homeownership to more than 84,000 individuals and families during fiscal 2026, including approximately 43,500 first-time homebuyers.

Risks and Challenges:

• Market conditions including rising mortgage rates and affordability constraints continue to pressure new home demand.
• The company faces risks related to the cyclical nature of homebuilding, land development, and rental operations.
• Potential risks include adverse capital market developments, changes in government financing programs, and increases in mortgage interest rates.
• Risks associated with land, lot, and rental inventory, as well as inflationary environments and higher interest rates, are noted.
• Challenges include acquiring land, building materials, and skilled labor, as well as obtaining regulatory approvals.

Management Commentary and Tone:

• Executive Chairman David Auld stated the team responded with discipline by adjusting incentives, pricing, and starts to align inventory with demand.
• Management highlighted strong liquidity, low leverage, local market expertise, and national scale as providing significant financial and operational flexibility.
• The Board increased the quarterly cash dividend by 11% to $0.50 per share, marking the thirteenth consecutive year of dividend growth.
• Management expressed confidence in delivering value to homebuyers, gaining market share, and generating compelling shareholder returns over the long term.

Other Key Points:

• The company repaid $600 million in principal amount of its 1.3% homebuilding senior notes at maturity in October 2026 and has no other senior note maturities in fiscal 2027.
• The remaining stock repurchase authorization was $4.7 billion as of September 30, 2026.
• The company declared a new quarterly cash dividend of $0.50 per share payable on November 19, 2026, to stockholders of record on November 12, 2026.
• The homebuilding return on inventory (ROI) for fiscal 2026 was 16.6%.
• The company operates in 128 markets across 38 states.
• The company is the majority-owner of Forestar Group Inc., a publicly traded national residential lot development company.