Meritage Homes Corporation reported first quarter 2025 diluted EPS of $1.69, a 33% decrease year-over-year from $2.53, and missing analysts' estimates. Home closing revenue for the quarter was $1.342 billion, an 8% decrease from $1.466 billion in the prior year.
The company's home closing gross margin declined by 380 basis points to 22.0% in Q1 2025, down from 25.8% in Q1 2024. Orders decreased by 3% year-over-year to 3,876 homes, with the average absorption pace falling 10% to 4.4 net sales per month.
Despite the declines, Meritage achieved a record backlog conversion rate of 221%, reflecting the benefit of its strategic pivot to move-in ready homes. The company ended the quarter with $1 billion in cash and a net debt-to-capital ratio of 13.7%, and reaffirmed its full-year 2025 guidance for home closing volume and revenue.
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