Meritage Homes reports first quarter 2024 results

Record-high quarterly sales orders, home closing gross margin of 25.8% and a 43% increase in diluted EPS

SCOTTSDALE, Ariz., April 24, 2024 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH), the fifth-largest U.S. homebuilder, reported first quarter results for the period ended March 31, 2024.

Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
 Three Months Ended March 31,
 2024 2023 % Chg
Homes closed (units) 3,507  2,897 21%
Home closing revenue$1,466,096 $1,261,923 16%
Average sales price — closings$418 $436 (4)%
Home orders (units) 3,991  3,487 14%
Home order value$1,631,195 $1,506,893 8%
Average sales price — orders$409 $432 (5)%
Ending backlog (units) 3,033  3,922 (23)%
Ending backlog value$1,244,257 $1,763,832 (29)%
Average sales price — backlog$410 $450 (9)%
Earnings before income taxes$234,015 $165,303 42%
Net earnings$186,016 $131,301 42%
Diluted EPS$5.06 $3.54 43%


“Meritage has had a remarkable start to the year, generating an average absorption pace of 4.9 per month in the first quarter of 2024, which resulted in our highest quarterly sales orders,” said Steven J. Hilton, executive chairman of Meritage Homes. “We entered the spring selling season with a healthy supply of available inventory and were able to capitalize on strong current market conditions stemming from the increasing need for housing from Millennials, Gen Z and the move-down Baby Boomers, all finding limited existing housing supply.”

“Executing on our spec building and streamlined strategy, we delivered 3,507 homes in the first quarter of 2024—of which nearly 50% came from intra-quarter sales orders—and yet another record backlog conversion rate of 138%,” added Phillippe Lord, chief executive officer of Meritage Homes. "Home closing revenue of $1.5 billion in the first quarter of 2024 combined with home closing gross margin of 25.8% and SG&A leverage of 10.4% generated $5.06 in diluted EPS. We increased our book value per share 17% year-over-year to $129.98 and generated a return on equity of 18.0% as of March 31, 2024."*

“In the first quarter of 2024, we carried out our commitment to growth by putting nearly 6,300 net new lots under control, representing an estimated 43 future communities. We strategically deployed our capital by spending $430 million on land acquisition and development and returning $83 million back to shareholders in the form of share repurchases and dividends. We achieved this balanced long-term value creation, while maintaining cash of over $905 million and a net debt-to-capital ratio of 2.0% at March 31, 2024.”


  • Orders of 3,991 homes for the first quarter of 2024 increased 14% year-over-year, due primarily to a 17% increase in the average absorption pace to 4.9 per month from 4.2 per month in the first quarter of 2023, which was partially offset by a 1% decrease in average active communities. Strong demand coupled with the right amount of available inventory during the first quarter of 2024 led to our highest quarterly sales order volume, which benefited from an 8% cancellation rate that was well below the Company's historical average. Entry-level represented 91% of first quarter 2024 sales orders, compared to 87% in the same quarter of 2023. Average sales price ("ASP") on orders in the first quarter of 2024 of $409,000 was down 5% from the first quarter of 2023 due to both geographic and product mix shift.
  • The 16% year-over-year increase in home closing revenue to $1.5 billion was due to 21% higher home closing volume that was partially offset by a 4% decrease in ASP on closings resulting from product mix shift. First quarter 2024 ASP on closings increased sequentially from the fourth quarter of 2023 due to reduced utilization of rate lock financing incentives and price increases.
  • Home closing gross margin improved 340 bps to 25.8% in the first quarter of 2024 from 22.4% in the prior year due to reduced utilization of rate lock financing incentives, lower direct costs, and greater leverage of fixed costs, which were partially offset by higher lot costs.
  • The financial services loss of $0.7 million included $5.8 million in write-offs related to rate lock unwind costs in the first quarter of 2024. This compared to financial services profit of $2.9 million in the first quarter of 2023 that had $1.9 million in similar write-offs.
  • Selling, general and administrative expenses ("SG&A") as a percentage of first quarter 2024 home closing revenue were 10.4%, which was relatively in line with 10.3% in the prior year, primarily as a result of higher commissions offsetting the leverage achieved on higher home closing revenue.
  • The first quarter effective income tax rate was 20.5% in 2024, in line with 20.6% in 2023. The Company's tax rates benefited from earned eligible energy tax credits on qualifying homes under the Inflation Reduction Act.
  • Net earnings were $186.0 million ($5.06 per diluted share) for the first quarter of 2024, a 42% increase from $131.3 million ($3.54 per diluted share) for the first quarter of 2023 due to higher home closing revenue and gross profit with flat SG&A as a percentage of home closing revenue and tax rates achieved in the first quarter of 2024.


  • Cash and cash equivalents at March 31, 2024 totaled $905.3 million, compared to $921.2 million at December 31, 2023.
  • Land acquisition and development spend totaled $430.4 million for the first quarter of 2024, compared to $310.1 million for the first quarter of 2023.
  • Approximately 66,400 lots were owned or controlled as of March 31, 2024, compared to approximately 60,900 total lots at March 31, 2023. Nearly 6,300 net new lots were added in the first quarter of 2024, representing an estimated 43 future communities.
  • First quarter 2024 ending community count of 275 was up 2% sequentially compared to the fourth quarter of 2023, and down 1% compared to prior year.
  • Debt-to-capital and net debt-to-capital ratios were 17.5% and 2.0%, respectively, at March 31, 2024, which compared to 17.9% and 1.9%, respectively, at December 31, 2023.
  • The Company increased the quarterly cash dividend to $0.75 per share in the first quarter of 2024, from $0.27 per share in the first quarter of 2023, and paid dividends totaling $27.2 million in the first quarter of 2024.
  • In the first quarter of 2024, the Company repurchased 362,419 shares of stock, or approximately 1.0% of the outstanding shares at the beginning of the quarter, for $55.9 million, well exceeding the announced systematic buyback commitment of $15.0 million per quarter. As of March 31, 2024, $129.1 million remained available to repurchase under the authorized share repurchase program.

The Company is providing the following updated guidance for full year 2024, based on first quarter 2024 results and current market conditions:

 Full Year 2024
Home closing volume14,500-15,000 units
Home closing revenue$6.0-6.2 billion
Home closing gross margin24.5-25.0%
Effective tax rateApproximately 22.5%
Diluted EPS$19.20-20.70

Management will host a conference call to discuss its first quarter 2024 results at 8:30 a.m. Pacific Time (11:30 a.m. Eastern Time) on Thursday, April 25, 2024. To listen, please go to Meritage's Investor Relations page for the live webcast or dial in to 1-877-407-6951 US toll free or 1-412-902-0046. A replay will be available on the Investor Relations page.

* The Company's return on equity is calculated as net income for the trailing twelve months divided by average total stockholders' equity for the trailing five quarters. The Company's book value per share is calculated as total stockholders' equity for the period divided by the shares outstanding as of the last day of the period.

Meritage Homes Corporation and Subsidiaries
Consolidated Income Statements
(In thousands, except per share data)
  Three Months Ended March 31,
   2024   2023  Change $ Change %
 Home closing revenue$1,466,096  $1,261,923  $204,173  16%
 Land closing revenue 2,305   17,385   (15,080) (87)%
 Total closing revenue 1,468,401   1,279,308   189,093  15%
 Cost of home closings (1,088,138)  (979,462)  108,676  11%
 Cost of land closings (2,298)  (15,945)  (13,647) (86)%
 Total cost of closings (1,090,436)  (995,407)  95,029  10%
 Home closing gross profit 377,958   282,461   95,497  34%
 Land closing gross profit 7   1,440   (1,433) (100)%
 Total closing gross profit 377,965   283,901   94,064  33%
Financial Services:        
 Revenue 6,353   5,731   622  11%
 Expense (3,003)  (3,067)  (64) (2)%
 (Loss)/earnings from financial services unconsolidated entities and other, net (4,040)  259   (4,299) N/M 
 Financial services (loss)/profit (690)  2,923   (3,613) (124)%
Commissions and other sales costs (101,550)  (82,846)  18,704  23%
General and administrative expenses (50,732)  (47,519)  3,213  7%
Interest expense         %
Other income, net 9,022   8,844   178  2%
Earnings before income taxes 234,015   165,303   68,712  42%
Provision for income taxes (47,999)  (34,002)  13,997  41%
Net earnings$186,016  $131,301  $54,715  42%
Earnings per common share:        
 Basic    Change $ or shares Change %
 Earnings per common share$5.12  $3.58  $1.54  43%
 Weighted average shares outstanding 36,311   36,664   (353) (1)%
 Earnings per common share$5.06  $3.54  $1.52  43%
 Weighted average shares outstanding 36,779   37,121   (342) (1)%

Meritage Homes Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands)
 March 31, 2024 December 31, 2023
Cash and cash equivalents$905,298 $921,227
Other receivables 243,322  266,972
Real estate (1) 4,914,512  4,721,291
Deposits on real estate under option or contract 122,813  111,364
Investments in unconsolidated entities 18,743  17,170
Property and equipment, net 47,868  48,953
Deferred tax asset, net 47,000  47,573
Prepaids, other assets and goodwill 189,749  218,584
Total assets$6,489,305 $6,353,134
Accounts payable$306,150 $271,650
Accrued liabilities 418,216  424,764
Home sale deposits 42,796  36,605
Loans payable and other borrowings 6,604  13,526
Senior notes, net 994,966  994,689
Total liabilities 1,768,732  1,741,234
Stockholders' Equity:   
Preferred stock   
Common stock 363  364
Additional paid-in capital 240,852  290,955
Retained earnings 4,479,358  4,320,581
Total stockholders’ equity 4,720,573  4,611,900
Total liabilities and stockholders’ equity$6,489,305 $6,353,134

(1) Real estate – Allocated costs:
Homes under contract under construction$858,943 $704,206
Unsold homes, completed and under construction 1,304,633  1,260,855
Model homes 118,958  118,252
Finished home sites and home sites under development 2,631,978  2,637,978
Total real estate$4,914,512 $4,721,291

Meritage Homes Corporation and Subsidiaries
Consolidated Statements of Cash Flows 
(In thousands)
 Three Months Ended March 31,
  2024   2023 
Cash flows from operating activities:   
Net earnings$186,016  $131,301 
Adjustments to reconcile net earnings to net cash provided by operating activities:   
Depreciation and amortization 6,038   5,208 
Stock-based compensation 6,114   6,225 
Equity in earnings from unconsolidated entities (972)  (1,346)
Distribution of earnings from unconsolidated entities 985   1,776 
Other 1,001   928 
Changes in assets and liabilities:   
(Increase)/decrease in real estate (193,431)  2,999 
(Increase)/decrease in deposits on real estate under option or contract (11,449)  10,886 
Decrease/(increase) in other receivables, prepaids and other assets 53,769   (11,749)
Increase/(decrease) in accounts payable and accrued liabilities 27,668   (31,687)
Increase in home sale deposits 6,191   9,931 
Net cash provided by operating activities 81,930   124,472 
Cash flows from investing activities:   
Investments in unconsolidated entities (1,586)   
Distributions of capital from unconsolidated entities    43 
Purchases of property and equipment (6,258)  (8,899)
Proceeds from sales of property and equipment 79   128 
Net cash used in investing activities (7,765)  (8,728)
Cash flows from financing activities:   
Repayment of loans payable and other borrowings (6,922)  (168)
Dividends paid (27,239)  (9,927)
Repurchase of shares (55,933)  (10,000)
Net cash used in financing activities (90,094)  (20,095)
Net (decrease)/increase in cash and cash equivalents (15,929)  95,649 
Beginning cash and cash equivalents 921,227   861,561 
Ending cash and cash equivalents $905,298  $957,210 

Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)

We aggregate our homebuilding operating segments into reporting segments based on similar long-term economic characteristics and geographical proximity. Our three reportable homebuilding segments are as follows:

  • West: Arizona, California, Colorado, and Utah
  • Central: Texas
  • East: Florida, Georgia, North Carolina, South Carolina, and Tennessee

 Three Months Ended March 31,
 2024 2023
 Homes Value Homes Value
Homes Closed:       
West Region1,014  515,632 785  417,322
Central Region1,167  427,565 1,048  424,880
East Region1,326  522,899 1,064  419,721
Total3,507 $1,466,096 2,897 $1,261,923
Homes Ordered:       
West Region1,170  580,805 1,286  635,936
Central Region1,310  482,183 1,073  420,521
East Region1,511  568,207 1,128  450,436
Total3,991 $1,631,195 3,487 $1,506,893
Order Backlog:       
West Region902  439,957 1,373  676,135
Central Region911  341,691 988  419,822
East Region1,220  462,609 1,561  667,875
Total3,033 $1,244,257 3,922 $1,763,832

 Three Months Ended March 31,
 2024 2023
 Ending Average Ending Average
Active Communities:       
West Region83 80.5 96 95.0
Central Region80 84.0 82 81.5
East Region112 108.0 100 98.0
Total275 272.5 278 274.5

Meritage Homes Corporation and Subsidiaries
Supplemental and Non-GAAP information

Supplemental Information (Dollars in thousands):
 Three Months Ended March 31,
  2024   2023 
Depreciation and amortization$6,038  $5,208 
Summary of Capitalized Interest:   
Capitalized interest, beginning of period$54,516  $60,169 
Interest incurred 12,925   15,030 
Interest expensed     
Interest amortized to cost of home and land closings (13,214)  (12,747)
Capitalized interest, end of period$54,227  $62,452 

Reconciliation of Non-GAAP Information (Dollars in thousands):
Debt-to-Capital Ratios
 March 31, 2024 December 31, 2023
Senior notes, net, loans payable and other borrowings 1,001,570   1,008,215 
Stockholders' equity 4,720,573   4,611,900 
Total capital$5,722,143  $5,620,115 
Debt-to-capital 17.5%  17.9%
Senior notes, net, loans payable and other borrowings$1,001,570  $1,008,215 
Less: cash and cash equivalents (905,298)  (921,227)
Net debt$96,272  $86,988 
Stockholders’ equity 4,720,573   4,611,900 
Total net capital$4,816,845  $4,698,888 
Net debt-to-capital (1) 2.0%  1.9%

(1) Net debt-to-capital reflects certain adjustments to the debt-to-capital ratio and is defined as net debt (debt less cash and cash equivalents) divided by total capital (net debt plus stockholders' equity). Net debt-to-capital is considered a non-GAAP financial measure and should be considered in addition to, rather than as a substitute for, the comparable GAAP financial measures. We believe this non-GAAP financial measure is relevant and useful to investors in understanding our operating results and may be helpful in comparing the Company with other companies in the homebuilding industry to the extent they provide similar information. We encourage investors to understand the methods used by other companies in the homebuilding industry to calculate non-GAAP financial measures and any adjustments thereto before comparing to our non-GAAP financial measures.

About Meritage Homes Corporation
Meritage Homes is the fifth-largest public homebuilder in the United States, based on homes closed in 2023. The Company offers energy-efficient and affordable entry-level and first move-up homes. Operations span across Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina and Tennessee.

Meritage Homes has delivered over 180,000 homes in its 38-year history, and has a reputation for its distinctive style, quality construction, and award-winning customer experience. The Company is an industry leader in energy-efficient homebuilding, an eleven-time recipient of the U.S. Environmental Protection Agency’s ("EPA") ENERGY STAR® Partner of the Year for Sustained Excellence Award, a ten-time recipient of the EPA's ENERGY STAR® Residential New Construction Market Leader Award, and a three-time recipient of the EPA's Indoor airPLUS Leader Award.

For more information, visit

The information included in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include expectations about the housing market in general and our future results including our full year 2024 projected home closing volume, home closing revenue, home closing margin, effective tax rate and diluted earnings per share.

Such statements are based on the current beliefs and expectations of Company management and current market conditions, which are subject to significant uncertainties and fluctuations. Actual results may differ from those set forth in the forward-looking statements. The Company makes no commitment, and disclaims any duty, except as required by law, to update or revise any forward-looking statements to reflect future events or changes in these expectations. Meritage's business is subject to a number of risks and uncertainties. As a result of those risks and uncertainties, the Company's stock and note prices may fluctuate dramatically. These risks and uncertainties include, but are not limited to, the following: increases in interest rates or decreases in mortgage availability, and the cost and use of rate locks and buy-downs; inflation in the cost of materials used to develop communities and construct homes; cancellation rates; supply chain and labor constraints; the ability of our potential buyers to sell their existing homes; our ability to acquire and develop lots may be negatively impacted if we are unable to obtain performance and surety bonds; the adverse effect of slow absorption rates; legislation related to tariffs; impairments of our real estate inventory; competition; home warranty and construction defect claims; failures in health and safety performance; fluctuations in quarterly operating results; our level of indebtedness; our ability to obtain financing if our credit ratings are downgraded; our exposure to and impacts from natural disasters or severe weather conditions; the availability and cost of finished lots and undeveloped land; the success of our strategy to offer and market entry-level and first move-up homes; a change to the feasibility of projects under option or contract that could result in the write-down or write-off of earnest money or option deposits; our limited geographic diversification; shortages in the availability and cost of subcontract labor; the replication of our energy-efficient technologies by our competitors; our exposure to information technology failures and security breaches and the impact thereof; the loss of key personnel; changes in tax laws that adversely impact us or our homebuyers; our inability to prevail on contested tax positions; failure of our employees and representatives to comply with laws and regulations; our compliance with government regulations; liabilities or restrictions resulting from regulations applicable to our financial services operations; negative publicity that affects our reputation; potential disruptions to our business by an epidemic or pandemic, and measures that federal, state and local governments and/or health authorities implement to address it; and other factors identified in documents filed by the Company with the Securities and Exchange Commission, including those set forth in our Form 10-K for the year ended December 31, 2023 under the caption "Risk Factors," which can be found on our website at

Contacts:Emily Tadano, VP Investor Relations and ESG
 (480) 515-8979 (office)