“Q2 was another strong quarter for Meritage. Our backlog conversion of 136% generated 4,118 home deliveries and home closing revenue of $1.7 billion. Home closing gross margin for the quarter was 25.9%, which combined with SG&A leverage of 9.3% resulting in diluted EPS of $6.31.”
— Steve Hilton
03Detailed Report
MTH
Company MTH
Period
Q2 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 21, 2026
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Executive Summary
Meritage Homes delivered a solid QQ2 2024 performance, underpinned by the company’s strategic pivot toward move-in ready, quickly closable homes. The quarter showcased strong demand fundamentals across regions, a robust backlog conversion and an above-peer gross margin, supported by SG&A leverage and continued cost discipline. Management reaffirmed and incrementally raised full-year guidance, signaling confidence in the plan to scale to 20,000 units while maintaining a strong balance sheet and ample liquidity. The combination of a strengthened balance sheet (IG upgrade, convertible debt issuance, larger cash cushion) and a high-quality backlog and lot position provides the company with durable flexibility to fund land investments and growth, though near-term profitability is sensitive to rate volatility and the pace of move-in readiness deployment. The management cadence around 60-day move-in inventory, realtor relationships, and selective incentives remains central to the outlook and risk framework.
Key Performance Indicators
Revenue
Increasing
1.70B
QoQ: 15.41% | YoY: 8.56%
Gross Profit
Increasing
449.70M
26.42% margin
QoQ: 16.46% | YoY: 20.05%
Operating Income
Decreasing
286.04M
QoQ: 24.89% | YoY: -11.94%
Net Income
Increasing
231.56M
QoQ: 24.48% | YoY: 23.93%
EPS
Increasing
6.38
QoQ: 24.61% | YoY: 25.59%
Revenue Trend
Margin Analysis
Financial Highlights
- Revenue: $1.702B in QQ2 2024, up 8.6% YoY and 15.4% QoQ.
- Gross profit: $449.7M, gross margin 26.42% (vs 24.4% prior year), up 200+ bps YoY; operating margin 16.81%; net margin 13.60%.
- Net income: $231.6M; diluted EPS $6.31; YoY EPS +25.6%, QoQ +24.6%.
- Absorption pace: 4.5 net sales per month in Q2 2024 (vs target 4.0); orders were 3,799, up 14% YoY; backlog conversion 136% generating 4,118 home deliveries.
- Backlog and inventory: ending backlog ~2,700 homes ( down from ~3,800 a year ago); 71k lots under control (4.7-year supply); 26% of total specs completed as move-in ready; 96% of closings sourced from previously started inventory.
- Balance sheet and liquidity: cash of $993M; net debt to capital 6.2%; revolving credit facility refinanced to $910M; Moody’s upgraded to investment grade.
- Capital allocation: land spend $631M in Q2; YTD land spend ~$1.1B; 2024-2025 land spend guidance $2.0–$2.5B; quarterly dividend increased to $0.75/share; share repurchases resumed post-convert lockup.
- Guidance: Full-year 2024 closings 14,750–15,500; home closing revenue $6.1–$6.3B; gross margin ~24.5–25%; effective tax rate ~22.5%; diluted EPS $19.80–$21.00; Q3 2024 guidance: 3,650–3,850 closings; revenue $1.5–$1.6B; gross margin 23.5–24%; EPS $4.60–$5.05.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.70B
8.56%
15.41%
Gross Profit
449.70M
20.05%
16.46%
Operating Income
286.04M
-11.94%
24.89%
Net Income
231.56M
23.93%
24.48%
EPS
6.38
25.59%
24.61%
Key Financial Ratios
Gross Profit Margin
Fair
26.40%
Gross profit margin is moderate, room for improvement in cost management
Operating Profit Margin
Good
16.80%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Good
13.60%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Fair
3.34%
Return on assets is acceptable but below top-tier companies
Return on Equity
Weak
4.74%
Return on equity suggests inefficient capital allocation
Current Ratio
Strong
9.04
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Conservative
0.28
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Value
3.06x
P/E ratio suggests potential undervaluation or stable earnings
Price to Book
Undervalued
0.58x
Trading below book value, potential value opportunity or distressed
Management Insights Available for Members
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