NVR · Q3 2025 Earnings

Bearish

NVR, Inc.

Reported October 22, 2025

30-second summary

Homebuilding revenue fell 4% YoY to $2.56B and gross margin compressed to 21.0% from 23.4% a year ago — but the more telling number is new orders down 16% YoY to 4,735 units, with backlog now -19% YoY on units (9,165) and -17% YoY on dollars ($4.39B). Cancellations stepped to 19.4% from 14.5% a year ago (+490bps YoY), and contract land deposit impairments of $18.9M flowed through cost of sales. The H1 demand slowdown flagged last quarter has worsened, not stabilized.

Headline numbers

EPS

Q3 FY2025

$112.33

Revenue

Q3 FY2025

$2.61B

-4.4% YoY

Gross margin

Q3 FY2025

21.0%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$2.61B	-4.4%	$2.60B	+0.4%
EPS	$112.33	—	$108.54	+3.5%
Gross margin	21.0%	—	21.5%	-50bps

Guidance

No quantitative guidance provided in either prior or current quarter; unable to perform guidance comparison.

Segment performance

Q3 FY2025

Segment	Q3 FY2025	YoY
Homebuilding	$2.56B	-4.4%
Mortgage Banking	$0.055B	-6.0%

Platform metrics

Q3 FY2025

Segment	Q3 FY2025
New Orders (units)	4,735
New Order Cancellation Rate	19.4%
Average Sales Price (new orders)	$464,800
Settlements (units)	5,639
Average Settlement Price	$454,000
Backlog Units	9,165
Backlog Value	$4.39 billion
Mortgage Loan Closings	$1.54 billion

Management tone

No earnings call is held and no transcript exists; NVR's disclosure is the numerical release only. Tone analysis is not possible. What the print communicates without commentary: incentive intensity is rising (margin down 240bps YoY with $18.9M of land deposit impairments), buyer conversion is weakening (cancellations +490bps YoY), and the backlog cushion is shrinking (-19% units YoY).

Answers to last quarter's watch list

Whether new orders return to YoY growth in any region. No. All four regions are down double-digits or near it YoY: Mid Atlantic -22.3%, North East -19.2%, Mid East -15.7%, South East -8.1%.

Resolved negatively

Homebuilding gross margin trajectory. 21.0% vs. 23.4% a year ago, with management explicitly citing pricing pressure from affordability and land deposit impairments.

Resolved negatively

Backlog dollars vs. units. Both compressed sharply YoY: units -19%, dollars -17%.

Resolved negatively

Cancellation rate trend. Moved adversely toward the 20% threshold. 19.4% in Q3 vs. 14.5% a year ago — a 490bps YoY step.

Resolved negatively

Mortgage Banking fee recovery. Deteriorated, not recovered. Fees of $49.2M, down 11% YoY; segment pre-tax income of $32.7M, down 6% YoY.

Resolved negatively

What to watch into next quarter

Whether cancellation rate breaches 20%. Running at 19.4% (+490bps YoY); a print at or above 20% in Q4 would confirm the buyer-stress signal has fully materialized.

Homebuilding gross margin floor. 21.0% is 240bps below year-ago; watch whether Q4 holds 21% or breaks lower, which would re-rate steady-state earnings power. Further land deposit impairments would be a clear tell.

Backlog refill rate. With orders (4,735) running ~900 units below settlements (5,639), if Q4 orders don't recover the backlog will fall further and force a steeper revenue decline into 1H-2026.

Settlement ASP vs. new order ASP gap. New order ASP is +3% YoY while settlement ASP is flat; if settlement ASP turns negative in Q4 it would confirm NVR is using price, not just incentives, to clear inventory.

Whether any region returns to flat or positive orders. The South East is the best candidate at -8.1% YoY; if it can't stabilize by year-end, the structural-demand-reset thesis hardens.

Sources

NVR, Inc. Q3 2025 Earnings Release — https://www.sec.gov/Archives/edgar/data/906163/000090616325000115/q32025ex991_earningsrelease.htm
NVR, Inc. Q2 2025 Earnings Release (prior-quarter comparison) — https://www.sec.gov/Archives/edgar/data/906163/000090616325000080/q22025ex991_earningsrelease.htm

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