Hovnanian Posts Sequential Margin Recovery as Unsold Spec Inventory Falls

Overview

• Hovnanian reported results Thursday, May 21, 2026, with Q2 revenue of $668 million and an adjusted gross margin of 14.3%, a sequential improvement from the prior quarter.
• Adjusted EBITDA came in at $41 million, above the company’s projected range, and adjusted pre‑tax income reached the top of guidance at $9 million.
• Incentives fell for the first time sequentially in nearly two years to 11.9% of average sales price, a decline the company links to fewer finished spec homes and more sales of to‑be‑built product.
• The company ended the quarter with $442 million in liquidity, has cut finished unsold quick move‑in homes materially (finished QMIs near 1 per community and total QMIs down to about 5.8 per community), and lowered net debt to capital to 43.1%.
• Management gave Q3 revenue guidance of $650 million to $750 million and 14%–15% adjusted gross margin, reiterated expectations for sequential improvement into Q4 fiscal 2026 and said community count should grow late 2026 into early 2027 while noting some community openings remain delayed.