Earnings Preview: KB Home (KBH) anticipated to see a drop in revenue and earnings for Q4 2025

Shares of KB Home (NYSE: KBH) rose over 1% on Wednesday. The stock has dropped 4% over the past three months. The homebuilder is scheduled to report its earnings results for the fourth quarter of 2025 on Thursday, December 18, after the market closes. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $1.66 billion for KB Home for the fourth quarter of 2025, which indicates a decline of over 16% from the same period a year ago. In the third quarter of 2025, revenues decreased 7% year-over-year to $1.62 billion.

Earnings

The consensus estimate for earnings per share in Q4 2025 is $1.79, which points to a decrease of over 28% from the prior-year quarter. In Q3 2025, EPS fell 21% YoY to $1.61.

Points to note

Like its peers, KB Home has been operating in a challenging housing market where inflation and interest rates have stood as barriers to affordability. However a downtick in interest rates has allowed affordability to pick up and this may have aided its performance in the fourth quarter. The company has remained optimistic on the long-term outlook for the housing market.

KB Home has forecasted housing revenues for the fourth quarter of 2025 to range between $1.6-1.7 billion. Average selling price is estimated to be $465,000-475,000 and housing gross margin is expected to be 18.0-18.4% for the quarter.

In Q3, KBH’s net orders declined 4% while homes delivered were down 7%. Average selling price of $475,700 was down slightly YoY. Adjusted housing gross margin dropped to 18.9% from 20.7% last year, reflecting price reductions, higher relative land costs, and geographic mix, partly offset by lower construction costs.

KB Home’s built-to-order model, that offers homebuyers customized homes to suit their price range, provides the company with an advantage. The homebuilder also prefers to offer customers a transparent price rather than incentives to drive sales.

On its Q3 earnings call, KBH mentioned that it plans to emphasize built-to-order homes in its sales approach in Q4 and that its goal is to return to a range of 70% built-to-order homes. An increase in the built-to-order mix is expected to boost gross margin expansion as these homes generate substantially higher margins than inventory homes.