KB Home Q3 Financial Services Revenue Dips Slightly

TL;DR

KB Home's Q3 financial services revenue slightly down YoY, total revenue also down YTD. Watch margins.

AI Summary

KB Home reported its third-quarter results for the period ending August 31, 2024. The company's financial services segment generated $103.5 million in revenue during the quarter, a slight decrease from $104.1 million in the same period last year. For the first nine months of fiscal year 2024, total revenues were $3.47 billion, down from $3.76 billion in the prior year.

Why It Matters

This filing provides insight into KB Home's financial performance, particularly the contribution of its financial services segment, which can impact overall profitability and investor sentiment.

Risk Assessment

Risk Level: medium — The housing market is subject to economic fluctuations, interest rate changes, and consumer demand, which can significantly impact homebuilders like KB Home.

Key Numbers

• $103.5M — Q3 Financial Services Revenue (Slight decrease from $104.1M in Q3 2023.)
• $3.47B — Year-to-Date Total Revenue (Down from $3.76B in the same period last year.)

Key Players & Entities

• KB Home (company) — Filer of the 10-Q report
• August 31, 2024 (date) — End of the reporting period
• $103.5 million (dollar_amount) — Revenue for the financial services segment in Q3 2024
• $104.1 million (dollar_amount) — Revenue for the financial services segment in Q3 2023
• $3.47 billion (dollar_amount) — Total revenues for the first nine months of fiscal year 2024
• $3.76 billion (dollar_amount) — Total revenues for the first nine months of fiscal year 2023

FAQ

Key Financial Figures

• $1.00 — ich registered Common Stock (par value $1.00 per share) KBH New York Stock Exchange

Filing Documents

• kbh-20240831.htm (10-Q) — 1680KB
• kbh-08312024xexhibitx311.htm (EX-31.1) — 12KB
• kbh-08312024xexhibitx312.htm (EX-31.2) — 12KB
• kbh-08312024xexhibitx321.htm (EX-32.1) — 6KB
• kbh-08312024xexhibitx322.htm (EX-32.2) — 6KB
• 0000795266-24-000119.txt ( ) — 8056KB
• kbh-20240831.xsd (EX-101.SCH) — 52KB
• kbh-20240831_cal.xml (EX-101.CAL) — 66KB
• kbh-20240831_def.xml (EX-101.DEF) — 289KB
• kbh-20240831_lab.xml (EX-101.LAB) — 636KB
• kbh-20240831_pre.xml (EX-101.PRE) — 469KB
• kbh-20240831_htm.xml (XML) — 1124KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Statements of Operations - Three Months and Nine Months Ended August 31, 2024 and 2023 3 Consolidated Balance Sheets - August 31, 2024 and November 30, 2023 4 Consolidated Statements of Stockholders ' Equity - Three Months and Nine Months Ended August 31, 2024 and 2023 5 Consolidated Statements of Cash Flows - Nine Months Ended August 31, 2024 and 2023 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 25

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 46

Controls and Procedures

Item 4. Controls and Procedures 47

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 47

Risk Factors

Item 1A. Risk Factors 47

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 47

Other Information

Item 5. Other Information 47

Exhibits

Item 6. Exhibits 48

SIGNATURES

SIGNATURES 49 2

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements KB HOME CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Amounts – Unaudited) Three Months Ended August 31, Nine Months Ended August 31, 2024 2023 2024 2023 Total revenues $ 1,752,608 $ 1,587,011 $ 4,930,187 $ 4,736,641 Homebuilding: Revenues $ 1,745,979 $ 1,579,719 $ 4,909,189 $ 4,716,102 Construction and land costs ( 1,385,563 ) ( 1,240,380 ) ( 3,874,193 ) ( 3,709,759 ) Selling, general and administrative expenses ( 171,466 ) ( 160,097 ) ( 500,187 ) ( 468,510 ) Operating income 188,950 179,242 534,809 537,833 Interest income and other 4,073 5,492 29,379 7,688 Equity in income (loss) of unconsolidated joint ventures 3,453 ( 112 ) 3,232 ( 1,182 ) Homebuilding pretax income 196,476 184,622 567,420 544,339 Financial services: Revenues 6,629 7,292 20,998 20,539 Expenses ( 1,608 ) ( 1,530 ) ( 4,627 ) ( 4,360 ) Equity in income of unconsolidated joint venture 5,932 4,149 19,422 11,157 Financial services pretax income 10,953 9,911 35,793 27,336 Total pretax income 207,429 194,533 603,213 571,675 Income tax expense ( 50,100 ) ( 44,600 ) ( 138,800 ) ( 131,800 ) Net income $ 157,329 $ 149,933 $ 464,413 $ 439,875 Earnings per share: Basic $ 2.10 $ 1.86 $ 6.12 $ 5.34 Diluted $ 2.04 $ 1.80 $ 5.94 $ 5.18 Weighted average shares outstanding: Basic 74,476 80,175 75,339 81,790 Diluted 76,630 82,732 77,565 84,332 See accompanying notes. 3 KB HOME CONSOLIDATED BALANCE SHEETS (In Thousands, Except Shares – Unaudited) August 31, 2024 November 30, 2023 Assets Homebuilding: Cash and cash equivalents $ 374,911 $ 727,076 Receivables 373,536 366,862 Inventories 5,648,930 5,133,646 Investments in unconsolidated joint ventures 62,984 59,128 Property and equipment, net 89,290 88,309 Deferred tax assets, net 113,775 119,475 Other assets 113,675 96,987 6,777,101 6,591,483 Financial services 62,779 56,879 Total assets $ 6,839,880 $ 6,648,362 Liabilities and stockholders' equity Hom

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation and Significant Accounting Policies Basis of Presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended November 30, 2023, which are contained in our Annual Report on Form 10-K for that period. The consolidated balance sheet at November 30, 2023 has been taken from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for the fair presentation of our results for the interim periods presented. The results of our consolidated operations for the three months and nine months ended August 31, 2024 are not necessarily indicative of the results to be expected for the full year due to seasonal variations in operating results and other factors. Unless the context indicates otherwise, the terms "we," "our," and "us" used in this report refer to KB Home, a Delaware corporation, and its subsidiaries. Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents. We consider all highly liquid short-term investments purchased with an original maturity of three months or less to be ca