D.R. Horton delivered a solid Q2 FY2026 with pre-tax margin above guidance, net sales orders up 11% YoY, and completed unsold homes down 35%. Management guided Q3 revenue of $8.8-9.3B and gross margin of 19.7-20.2%, while lowering full-year closings and revenue slightly due to a lower average sales price. The tone was cautiously disciplined, highlighting cost savings from reduced cycle times and stable demand in most markets. Q2 FY2026 consolidated revenue $7.6B, home sales gross margin 19.7% normalized, pre-tax margin 11.5% above guidance.
D.R. Horton delivered a solid Q2 FY2026 with pre-tax margin above guidance, net sales orders up 11% YoY, and completed unsold homes down 35%. Management guided Q3 revenue of $8.8-9.3B and gross margin of 19.7-20.2%, while lowering full-year closings and revenue slightly due to a lower average sales price. The tone was cautiously disciplined, highlighting cost savings from reduced cycle times and stable demand in most markets. Q2 FY2026 consolidated revenue $7.6B, home sales gross margin 19.7% normalized, pre-tax margin 11.5% above guidance.
Management acknowledged affordability constraints and economic uncertainty but expressed confidence in their ability to adjust, citing solid order growth, stable demand, and disciplined inventory management.
Q2 FY2026 consolidated revenue $7.6B, home sales gross margin 19.7% normalized, pre-tax margin 11.5% above guidance.
Net sales orders +11% YoY; cancellation rate stable at 16%.
Reported gross margin was 22.54%, reinforcing the quarter's better-than-guided profitability.
Net sales orders up 11% despite affordability headwinds. Management acknowledged affordability constraints and economic uncertainty but expressed confidence in their ability to adjust, citing solid order growth, stable demand, and disciplined inventory management.
Management is actively managing investments in lots, land, and development based on market conditions, with second quarter home building investments totaling $2.1 billion. They are emphasizing capital efficiency through increased use of third-party developers and maintaining rental inventory around $3 billion. The tone is disciplined and flexible, adjusting capital allocation to current conditions
Management acknowledged affordability constraints and economic uncertainty but expressed confidence in their ability to adjust, citing solid order growth, stable demand, and disciplined inventory management.
“Our completed unsold homes are down 25% from December and 35% from a year ago, with both unsold homes as a percentage of total inventory and completed unsold inventory at their lowest levels since fiscal 2023.”
“our median cycle time from home start to home close improved by almost a month year over year. Our improved cycle times enable us to hold less inventory and turn homes more efficiently.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Free cash flow | FY2026 | $3B | $3B | GUIDED |
| Gross marginHOME_SALES | FY2026 Q3 | 19.7%–20.2% | 19.95% | GUIDED |
| Op margin | FY2026 Q3 | 12.2%–12.7% | 12.45% | GUIDED |
| Revenue | FY2026 | $33.5B–$34.5B | $34B | LOWERED |
| Revenue | FY2026 Q3 | $8.8B–$9.3B | $9.05B | GUIDED |
| UnitsHOME_BUILDING | FY2026 | $86K–$87.5K | $86.75K | LOWERED |
| UnitsHOME_BUILDING | FY2026 Q3 | $23.5K–$24K | $23.75K | GUIDED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q1 | Op margin | FY2026 Q2 | 10.6%–11.1% | 10.58% | Met / beat |
| FY2026 Q1 | Revenue | FY2026 Q2 | $7.3B–$7.8B | $7.5581B | Met / beat |
| FY2026 Q1 | Units | FY2026 Q2 | $19.7K–$20.2K | $19.486K | Missed |
| FY2025 Q4 | Op margin | FY2026 Q1 | 11.3%–11.8% | 10.59% | Missed |
| FY2025 Q4 | Revenue | FY2026 Q1 | $6.3B–$6.8B | $6.8869B | Met / beat |