Hovnanian reports narrow Q2 loss as rising home contracts outpace margin pressures

Hovnanian Enterprises (NYSE:HOV) reported a small net loss for its second fiscal quarter that nevertheless came in ahead of internal operating guidance, as resilient homebuyer traffic helped the national homebuilder mitigate ongoing margin compression and affordability hurdles.

The Matawan, New Jersey-based homebuilder announced Thursday that total revenue for the three months ended April 30, 2026, dipped slightly to $667.6 million, down from the $686.5 million recorded during the comparative prior-year period.

The firm logged a minor net loss of $0.6 million, or $0.46 per diluted common share, compared to a net income of $15.5 million, or $2.43 per diluted share, in the second quarter of fiscal 2025.

For the first six months of fiscal 2026, cumulative net income totaled $20.3 million, or $2.20 per diluted share, down from the $47.9 million reported in the first half of the prior fiscal year.

Despite the bottom-line softness, several operational metrics exceeded executive targets.

Hovnanian’s homebuilding gross margin before interest and land charges came in at 14.3% for the quarter.

While this represents a decrease from the prior year's levels due to elevated mortgage rate buy-downs and localized buyer incentives, it marked a sequential expansion over the first quarter's margins and sat comfortably above management's targeted expectations.

Total adjusted EBITDA finished at $41.1 million, outpacing the high end of internal guidance which mapped a $30 million to $40 million range.

Sales activity gained momentum during the spring selling season.

Total domestic contracts, including unconsolidated joint ventures, rose 2.3% year-over-year to 1,667 homes, up from 1,630 homes in last year's second quarter.

The rise in volume was supported by a growing community footprint, which expanded to 151 wholly owned developments.

However, long-term order books showed moderate pullbacks as the total dollar value of the company's backlog contracted by roughly 5% compared to the same period in fiscal 2025.