Executive Summary
Lennar reported QQ2 2025 revenue of $8.378 billion, a 4.4% year-over-year decline but a 9.8% quarter-over-quarter increase. Gross profit was $804.4 million for a gross margin of 9.60%, with operating income of $648.6 million and net income of $477.4 million, translating to an EPS of $1.81. Despite solid profitability on an absolute basis, year-over-year earnings deteriorated markedly (net income and EPS down about 50% versus the prior-year period) as input costs and operating expenses remained elevated and the company faced a sharp swing in working capital dynamics. Free cash flow was negative at roughly $(1.11) billion, driven by a large working capital outflow (change in working capital of about $(2.09) billion) despite a modest capital expenditure load of $15.2 million. The balance sheet shows a substantial asset base ($34.37 billion) and a strong equity cushion ($22.58 billion) with net debt of approximately $(2.80) billion, suggesting ample balance sheet firepower but ongoing cash-generation challenges from operating activities. Management commentary on the call was not included in the supplied data; as a result, accompanying qualitative insights are limited to reported numbers and typical homebuilding cycle drivers. Investors should monitor housing demand signals, mortgage rate trajectories, and the company’s ability to translate earnings into positive operating cash flow in the second half of 2025.
Key Performance Indicators
QoQ: -6.58% | YoY:-42.35%
QoQ: -9.12% | YoY:-47.63%
QoQ: -8.10% | YoY:-49.97%
QoQ: -8.59% | YoY:-47.54%
Key Insights
Revenue: $8.378B (YoY -4.43%; QoQ +9.77%)
Gross Profit: $804.43M; Gross Margin: 9.60%
EBITDA: $682.40M; EBITDA Margin: 8.15%
Operating Income: $648.58M; Operating Margin: 7.74%
Net Income: $477.45M; Net Margin: 5.70%
EPS (GAAP): $1.81; Diluted EPS: $1.81; Weighted Avg Shares: 261.51M
Cash Flow: Operating cash flow $(1.10)B; Free cash flow $(1.11)B
Capex: $15.22M; Acquisitions/Investing: $(161.39)M net; Financing: Net cash used by financing activities $(175.37)M
Balance Sheet (select):
Cash &am...
Financial Highlights
Revenue: $8.378B (YoY -4.43%; QoQ +9.77%)
Gross Profit: $804.43M; Gross Margin: 9.60%
EBITDA: $682.40M; EBITDA Margin: 8.15%
Operating Income: $648.58M; Operating Margin: 7.74%
Net Income: $477.45M; Net Margin: 5.70%
EPS (GAAP): $1.81; Diluted EPS: $1.81; Weighted Avg Shares: 261.51M
Cash Flow: Operating cash flow $(1.10)B; Free cash flow $(1.11)B
Capex: $15.22M; Acquisitions/Investing: $(161.39)M net; Financing: Net cash used by financing activities $(175.37)M
Balance Sheet (select):
Cash & Equivalents: $1.408B; Short-term investments: $39.1M; Cash & ST investments: $1.447B
Net Receivables: $3.410B; Inventory: $14.5168B; PP&E Net: $5.2796B; Goodwill: $3.6321B
Total Assets: $34.3745B; Total Liabilities: $11.6427B; Total Equity: $22.5791B
Long-term Debt: $4.4258B; Total Debt: $4.2081B; Net Debt: $2.8004B
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
8.38B |
-4.43% |
9.77% |
| Gross Profit |
804.43M |
-42.35% |
-6.58% |
| Operating Income |
648.58M |
-47.63% |
-9.12% |
| Net Income |
477.45M |
-49.97% |
-8.10% |
| EPS |
1.81 |
-47.54% |
-8.59% |
Management Commentary
Transcript not provided in the prompt. As a result, thematic management quotes and narrative guidance from the QQ2 2025 earnings call could not be extracted. Anticipated themes in a typical Lennar call would include: (1) demand drivers in key US housing markets, (2) backlogs, pricing discipline, and leverage of land bank/land development, (3) cost control initiatives and pass-through of input cost volatility, (4) capital allocation strategy including debt management and capital returns. Readers should supplement this section with the actual call transcript for precise quotes and themes.
Transcript not provided
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Transcript not provided
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Forward Guidance
No formal forward-guidance figures were included in the supplied data. Given the current revenue trajectory, margin profile, and significant working capital outflow, the plausibility of near-term cash-flow improvement will hinge on a rebound in housing demand, stabilization or reduction in input costs, and improved working capital efficiency. In scenarios where mortgage rates stabilize or decline modestly and demand recovers, Lennar could begin to convert earnings into positive operating cash flow in 2H 2025. Key factors investors should monitor: trajectory of US housing demand and backlogs, land-development timing, input cost inflation, supply-chain dynamics, and the company’s timing and scale of capital returns versus debt reduction.