Hovnanian Enterprises, Inc. Q2 2026 Earnings Recap

Hovnanian’s shares rose 7.4% as the company surpassed expectations on adjusted gross margin and adjusted EBITDA, signaling cautious investor approval of its margin recovery and execution despite a challenging housing market.

Key Takeaways

• Total revenues were $668 million, near the midpoint of guidance, with a 3% year-over-year decline driven by 12% fewer home deliveries amid softer demand.
• Adjusted gross margin came in at 14.3%, exceeding guidance and improving sequentially from 13.4% in Q1, marking a rebound after the trough earlier this year.
• Adjusted EBITDA of $41 million beat projections, landing above the forecasted range. Adjusted pretax income was $9 million at the top end of guidance.
• Incentives, primarily mortgage rate buy downs, declined 70 basis points sequentially to 11.9% of average sales price—the first decline in nearly two years—supporting margin improvement.
• Construction costs decreased 2% year-over-year, and single-family home cycle times improved by 6 days, partially offsetting margin pressures from the competitive selling environment.