M/I Homes Sets Records in Key Metrics Despite Income Pressures—Backlog Shrinks but Equity Surges
Third Quarter Delivers a New High for Home Closings Amidst a Revenue Dip
M/I Homes (NYSE: MHO) posted its Q3 2025 results, highlighting the company’s ability to set a new third quarter record for home deliveries even as overall revenue slipped 1% year over year. A total of 2,296 homes were delivered—an uptick of 1% from the prior-year period, standing as a bright spot in otherwise cautious numbers. Revenue came in at $1.10 billion, just off last year’s pace, while pre-tax income took a noticeable dip of 26% to $140 million. Net income followed, landing at $106.5 million ($3.92 per diluted share) compared to $145.4 million ($5.10 per diluted share) in Q3 2024.
Shareholder Equity at Record Highs Even as Backlog Contracts
Despite near-term profitability headwinds, the company’s financial backbone strengthened further. Shareholders' equity rose to a record $3.15 billion, an 11% gain from the year-ago quarter, with book value per share reaching an all-time high of $120.44. The balance sheet was further supported by a credit upgrade to Ba1 from Moody’s, zero borrowings on the credit facility, and a lean homebuilding debt-to-capital ratio of just 18%—all of which help fortify M/I Homes as it faces ongoing market uncertainty.
| Key Metrics | Q3 2025 | Q3 2024 | Y/Y Change |
|---|---|---|---|
| Homes Delivered | 2,296 | 2,271 | +1% |
| Revenue (millions) | $1,132 | $1,143 | -1% |
| Pre-tax Income (millions) | $140 | $189 | -26% |
| Net Income (millions) | $106.5 | $145.4 | -27% |
| Book Value/Share | $120.44 | $104.59 | +15% |
| Shareholder Equity (billions) | $3.15 | $2.85 | +11% |
Backlog and New Contracts Slide—Southern Segment Offsets Some Weakness
New contracts fell 6% from the previous year, with 1,908 signed in Q3 2025. Notably, the northern region saw a 17% drop, while the southern region eked out a 3% gain—offering a silver lining as the company’s expansion in that area continues. Backlog units contracted by 31%, and total backlog value slipped 30% to $1.21 billion. The average sales price for homes in backlog, however, hit a record $553,000, highlighting price resiliency even as overall volumes contracted.
| Region | Q3 2025 Contracts | Q3 2024 Contracts | % Change | Q3 2025 Backlog | Q3 2024 Backlog | Avg Backlog Price (Q3 2025) |
|---|---|---|---|---|---|---|
| Northern | 742 | 890 | -17% | 1,081 | 1,493 | $563,000 |
| Southern | 1,166 | 1,133 | +3% | 1,108 | 1,681 | $544,000 |
Operating Metrics Show Resilience and Conservative Leverage
The company closed out the quarter with $734 million in cash and zero outstanding borrowings on its recently extended $900 million bank credit facility. A repurchase of $50 million in common stock signals management’s confidence in valuation. Debt remains well-controlled with a homebuilding debt-to-capital ratio of 18%—improved from 20% the prior year. Furthermore, M/I Homes’ net debt-to-capital ratio is now negative, underscoring the company’s strong liquidity position as it invests for future growth.
Key Takeaway: Balance Sheet Strength and Southern Markets Stand Out as Offsetting Forces
While M/I Homes faced declining pre-tax income and a significant backlog contraction, its all-time high equity and prudent capital structure may provide confidence as market volatility continues. The company’s strategic push in the southern region, improving credit metrics, and disciplined balance sheet could be reasons for investors to keep MHO on their radar heading into Q4 and beyond.
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