See which workplaces made this year's list.

2026_GPTW_best-places-by-industry-Construction-PulteGroup,_Inc.

Employees say:"We have an amazing culture. Management inspires, leads by example, and leads with humility. Teams support one another, hold each other accountable, and have each other's backs. Individuals are committed to working hard, growing, and doing the right thing. We are recognized for our contributions and successes. My job is absolutely one of the best parts of my life."

Best Large Workplaces in Construction

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100 Best Places to Work 2026_PulteGroup, Inc.

Fortune 100 Best Companies to Work For

The companies on this annual list make a conscious effort to be supportive, inclusive workplaces.

2025 Best Large Workplaces for Women_PulteGroup, Inc._US1__68a71dfc383bc91cadd06a7f_3

Employees say:"Management consistently demonstrates adaptability to departmental needs and communicates company metrics and initiatives with clarity and transparency. Emotional wellbeing is a core part of our culture, and we're provided with ample opportunities to maintain a healthy work-life balance. Our team is incredibly supportive, always striving to do the right thing and ensuring our division's clients are satisfied. The collective effort and dedication truly make this a great place to work."

100 Best Large Workplaces for Women

2025_GPTW_Construction_Large_PulteGroup, Inc._US1__685d50c0023fa8a026342320_1

Employees say:"I believe Pulte has established a culture that recognizes people as its most valuable asset. The company provides excellent wellness coverage and programs, competitive pay, paid holidays, company-wide celebratory events, and various other initiatives that prioritize its employees."

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The top companies on our list have one thing in common: Staff largely trust leadership to see them as well-rounded people and reward them for a job well done.

GPTW_100BestCompaniesToWorkFor_2025-PulteGroup, Inc._US1__20241210214006_4

Employees say: "This company provides opportunities for employees to grow and develop to be the best employee that they can be. PulteGroup has built a great work culture and team that empowers its employees. Some examples are teambuilding events, great communication, and holiday events."

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

GPTW_Women_Large_2024-PulteGroup, Inc._US1__20240830224000_3

Employees say:"The work like balance is unlike anything I have experienced before. You have enough PTO to not worry about using it all quickly. You do not feel like you have to miss moments in your kids/family life due to work."

GPTW-Construction-Large-2024-PulteGroup

Employees say:"I have worked in the new home sales business for 17 years and with 4 other home builders. Pulte has been beyond the best company to work for. Management truly wants you to succeed and is supportive. Everyone is welcoming and I feel as though I am really part of a team. They offer a leadership development program that I was invited to participate in. Upper management and the division president are approachable and easy to talk to, they ask for feedback and value my opinions. I genuinely ENJOY spending my free time with my co-workers and have cultivated many friendships."

Fortune partners with global people analytics firm Great Place to Work to analyze survey feedback representing employees from companies across the U.S.

GPTW Millennials 2024-Large-PulteGroup, Inc.

Employees say:"The people at Pulte are genuinely nice and compassionate. I've never felt so supported in my career as much as I do here. I feel at ease because I am not worried how I will be treated. I don't take for granted the excellence in behavior here."

100 Best Large Workplaces for Millennials

Industries included in the sector are construction and engineering services and homebuilders.

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100 Best Companies 2024-PulteGroup, Inc.

After weathering a difficult year in a nearly frozen housing market, PulteGroup fell seven places from its 2023 ranking. Yet it remains the third largest homebuilder in the U.S., with operations in more than 45 U.S. markets. PulteGroup aims to create affordable housing opportunities; provides mortgage-free homes to wounded veterans through its Built to Honor program; organizes food drives with local pantries; and launches fundraising initiatives for organizations employees care about.&nbsp; &nbsp;The PulteGroup Foundation launched Dollars for Doers in 2022: For every hour an employee volunteers, the foundation contributes the equivalent of up to $25 per hour, for up to 40 hours annually per employee.&nbsp; &nbsp;To bolster the success of its homebuilding operations team, which constitutes 75% of its workforce, PulteGroup offers mentorship and formal training programs, such as its Certified Field Trainer initiative to support trainees for up to six months.

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Building a culture of trust and transparency is essential to help everyone thrive, especially in rocky economic times.

100 BEST COMPANIES 2023-PulteGroup

One of the largest homebuilders in the U.S. aims to continually improve the employee experience. As a result, nine out of 10 employees want to work at PulteGroup for “a long time.” 
<ul> 
 	<li>The diversity board’s outreach committee has enhanced PulteGroup’s recruitment, hiring, and onboarding efforts with a focus on identifying a large pool of diverse job candidates and building recruitment relationships with HBCUs.</li> 
 	<li>New hires are assigned an onboarding experience partner, responsible for ensuring new team members feel connected to the company.</li> 
 	<li>PulteGroup’s affordable housing committee is piloting a new program, Hope to Home, that will subsidize a percentage of the homes the company builds, offering them to first-time buyers in underserved groups.</li> 
 	<li>The company has a one-stop learning management system that provides employees with training, workshops, and developmental tools.</li> 
 	<li>PulteGroup’s new health and wellness program goes beyond physical and emotional health coverage to include financial and social wellness.</li> 
</ul>

GPTW Women 2023-PulteGroup, Inc.

Employees say: 
 
"Everyone on the team cares about doing a great job, taking care of each other, and doing what is right for our customers. There’s a high level of work ethic and pride from everyone."

Fortune partnered with Great Place to Work to analyze survey feedback representing nearly half a million U.S. employees.

GPTW Millennial Large 2023-PulteGroup

Employees say: 
 
"Every single employee seems genuinely happy to work at PulteGroup, Inc. I think I can speak for most, if not all, of us when I say we feel like this company and our superiors care about our happiness. I feel seen as something more than just an employee. My managers are happy in their roles and are great leaders. The opportunity to volunteer and have a day off to do so is so special. This company cares for our community, and I feel a massive sense of pride over it."

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

When it comes to supporting employees, flexibility, diversity, and a few extra paid days off go a long way.

100 Best 2022 PulteGroup,-Inc._1274415-5

America’s third-largest homebuilder has a laser focus on diversity, equity, and inclusion. PulteGroup created internal committees to work on recruiting and training a diverse talent pool of employees and to sponsor cultural awareness programming with live, interactive webinars that spotlight the achievements of a diverse range of individuals. Externally, in keeping with the company’s values, PulteGroup is working to create homeowning opportunities for lower-income families and minorities through affordable housing and down payment assistance initiatives. Part of the company’s emphasis on inclusion includes a flexible workweek. Once fully implemented, employees will work in the office two days per week and remotely for the other three.

Great Places to Work in Construction Large-2022-PulteGroup, Inc._1274415-5

Employees say: 
 
“This team is like a big family, and it is a lot of fun to be able to work with all of them. We have a strong bond and its great to feel like my work makes a difference. This is the only place I have worked that truly shows how much they appreciate our hard work and what we do.”

GPTW Women 2022-PulteGroup, Inc

Employees say: 
 
“Pulte offers a lot of development and growth opportunities that help you grow and advance in your career. There is a large focus on recognition and connection, even in a hybrid environment. I have been impressed with our increased efforts on diversity and inclusion the past couple of years and the launch of our BRGs and women in leadership series.”

To determine millennials' workplace preferences, Fortune's research partner Great Place to Work analyzed feedback representing more than 6.1 million U.S. employees.

GPTW 2022 Millennials List Large-Pulte Group

Employees say: 
 
“I have said this before and I’ll say it again, I feel blessed to be with a company who is not always thinking of the bottom line. Keeping people safe when weather is bad, during a pandemic making sure we had the essentials, and listening to its employees when they chime in with ideas. I have several close friends working for other builders and they cannot say the same. I’m a proud Pulte employee!”

This year’s Fortune 500 marks the 68th running of the list.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Our 2021 list of the 100 best companies to work for, as ranked by their employees. See which companies made the list.

100 Best Companies 2021-76-PulteGroup,-Inc.

The homebuilder was hit hard by the pandemic, which forced it to make painful staff reductions in the form of furloughs and layoffs. In response, PulteGroup CEO Ryan Marshall, his direct reports, and the entire board of directors took pay cuts, raising $400,000 for a relief fund aiding those who lost their jobs. In the end, the company was able to bring back 100% of furloughed employees within 60 days, and actively set about rehiring those who were laid off. Marshall has also made a commitment to improving PulteGroup’s diversity practices, forming an internal diversity and inclusion board meant to hold the organization accountable to its goals.

The companies on this year's list make a conscious effort to be supportive, inclusive workplaces.

Best-Workplaces-Women-2021-Large-PulteGroup,-Inc

Employees say: 
 
“The company is always making an effort to recognize its employees and show their appreciation. The CEO knows front-line employees by name and makes an effort to build relationships with employees at all levels of the organization.”

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-284-PulteGroup

Started by 18-year-old homebuilder Bill Pulte in 1950, PulteGroup is now the third-largest home construction company in the U.S. based on number of homes closed. Its brands include Del Webb and Centex.

We surveyed tens of thousands of employees to create this list of millennials’ favorite workplaces.

Best Large Workplaces Millennials 2021-PulteGroup,-Inc

Employees say: 
 
“My managers trust me to get the job done well, and as result, I have incredible opportunity and flexibility. I trust my team, and they too enjoy complete flexibility and opportunity. Together - we always WIN! This is truly a Great Place to Work!”

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

Best Workplaces Women 2020-PulteGroup

Employees say: 
 
“People are genuinely interested in my career advancement. I've been mentored and challenged, which directly resulted in several promotions. This is truly a team where people care for each other and look for ways to build them up to promote.”

This year's Fortune 500 marks the 66th running of the list.

F500-2020_309_PulteGroup

The Atlanta-based homebuilder, whose brands include Del Webb and Centex, is considered the third-largest home construction company in the U.S. based on the number of homes closed. It operates in more than 40 markets.

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This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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PulteGroup is one of the largest homebuilders in the U.S., having constructed over 800,000 homes since 1950. The company operates in more than 45 markets across 24 states through its portfolio of brands, including Centex, Pulte Homes, Del Webb, DiVosta Homes, American West, and John Wieland Homes and Neighborhoods.

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PulteGroup (PHM): Company Profile, Stock Price, News, Rankings

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PulteGroup

pultegroup

Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to the PulteGroup Fourth Quarter twenty twenty four Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Thank you. I would now like to turn the call over to Bob O'Shaughnessy. My apologies. Please go ahead.

Good morning, everyone, and welcome to today's call. We look forward to discussing our and full year financial results. With me today are Ryan Marshall, our President and CEO and Jim Osowski, our incoming Executive Vice President and CFO. As always, a copy of our earnings release and this morning's presentation slides have been posted to our corporate website at pultegroup.com. We will also post an audio replay of this call later today.

I would highlight that today's presentation includes forward looking statements about the company's expected future performance. Actual results could differ materially from those suggested by our comments today. Most significant risk factors that could affect future results are summarized as part of today's earnings release and within the accompanying presentation slides. These risk factors and other key information are detailed in our SEC filings, including our annual and quarterly reports. With that said, let me turn the call over to Ryan.

Thanks, Bob, and good morning. We are pleased to speak with you today about how we are running the business and our outstanding and full year financial results. Before Bob gives you the detailed data relating to the I thought it would be appropriate to summarize some of the company's many achievements in 2024. Delivered 31219 homes in 2024, which represents an increase of 9% over last year. We generated record home sale revenues of $1,730,000,000,0.0 We once again reported industry leading full year gross margins of 28.9%.

And we were able to do this in the face of increasing affordability challenges through the careful management of product offerings, pricing, incentives and absorption paces as we sought to maintain high profitability, while ensuring we continue to turn our assets. We continue to manage our overheads efficiently as our reported SG and A amounted to 7.6% of our home sale revenues, including the insurance benefits we recorded in 2024. And we reported strong operating results from our financial services operations, which generated $2.10,000,000 dollars of pre tax income compared to $133,000,000 last year. As a result, our reported net operating margin was 21.3% for the year. No matter how you look at it, our performance this year was outstanding as we have continued to navigate the turbulence in the markets over the last few years.

Our performance is a product of the disciplined and consistent manner in which we are running the business, which has allowed us to quickly adjust key business practices to position PulteGroup for ongoing success. Our strong operating performance also allowed us to continue to manage our capital in a manner which leaves us with considerable financial strength. In the year, we generated $170,000,000,0.0 of cash flow from operations after investing $530,000,000,0.0 in new land. We continue to efficiently increase our land pipeline, putting approximately 43000 new lots under control. Inclusive of these lots, we now control 235000 lots of which 56% are under option.

In addition, we returned $170,000,000,0.0 to investors, including $120,000,000,0.0 through share repurchases, the payment of $168,000,000 in dividends and $3.10,000,000 dollars through the early retirement of senior notes. After all of that, we ended the year with $170,000,000,0.0 of cash and our gross debt to capital ratio was 11.8%. We are also very proud of the numerous awards recognizing our company's culture, including being named to Fortune's Top 100 Best Companies to Work For in 2024 for the fourth consecutive year. Looking to the future, it remains our view that the long term outlook for new home construction is positive. The U.

S. Economy has navigated recessionary concerns well, employment remains strong and the interest in new homes remains at high levels. In addition, the structural shortage of housing due to under building, ever increasing land entitlement challenges and ongoing labor availability challenges together with our expectation for continuing lower resale transactions due to a higher for longer rate environment leads us to believe that new home supply will continue to be absorbed without a significant increase in standing inventory. Given our constructive views on the outlook for long term housing demand, we are planning to continue to invest in our operations to support growing our business over time. Within our operating model, we set our start to pace to align with the sales environment rather than being based on a predetermined annual production volume.

As a result, home buying demand will impact our closing volumes and resulting growth from year to year. While there can be resulting peaks and valleys in our deliveries, our focus remains on investing in our business to grow volume while maintaining high returns. As we've demonstrated for much of the past decade, we expect to continue to generate strong cash flows that will allow us to fund our business investment, pay our dividend and return excess capital to investors, all while maintaining our balance sheet strength and flexibility. Our expectation of continued financial success is reflected in this morning's announcement that our Board approved a $150,000,000,0.0 increase to our share repurchase authorization. With many forecasting interest rates to fall, the economy to stay relatively healthy and conditions in the job market to remain favorable, there are certainly reasons to be optimistic about housing demand in the coming years.

Having said that, affordability challenges and the generally high cost of living are certainly impacting the American consumer. Specific to homebuyers, we believe the recent volatility in mortgage rates, including the current increase back above 7% has contributed to the recent lower activity levels. Against this backdrop, we continue to carefully monitor our investment in production levels with a view towards generating high returns in our business. Consistent with how we have been managing our business in recent years, we are managing our starts activity with a view towards driving our spec inventory to be more in line with our desired levels, including targeting our total spec inventory to be between 4045% of our total units under production. Let me now turn the call over to Bob for a review of our results.

Bob? Thanks, Ryan. Starting with our income statement, wholesale revenues in the were $470,000,000,0.0 compared with $420,000,000,0.0 in the prior year. The increase in wholesale revenues for the period reflects 6% increase in closings to 8103 homes along with a 6% increase in our average sales price to $581,000 Our mix of closings in the quarter were comprised of forty percent first time, 40% move up and 20% active adult. Consistent with our commentary over the last two quarters, the slight decline in the percentage of closings from active adult buyers reflects the timing of recent active adult community closeouts and we continue to expect a normalization of contribution from these consumers when replacement active adult communities begin opening for sales in the In the closings were forty percent first time, 36% move up and 24% active adult.

I would note that the increase in our average selling price in the quarter relative to our guide is due primarily to the increase in the relative portion of our closings from move up customers. Our average community count for the was nine sixty, which represents a 4% increase over last year's average of nine nineteen communities and was in line with our prior guidance. Looking at order activity in the quarter, our net new orders decreased 1% to 6167 homes. This decrease was primarily attributable to a 5% decrease in sales per store and a slight increase in our cancellation rate as a percentage of beginning backlog, partially offset by the 4% increase in our community count. Looking at demand conditions in the quarter, as we noted during our call, the market in Oct.

0 demonstrated a more typical seasonal demand pattern coming out of the This continued through the quarter as consumers faced economic uncertainty related to potential economic changes being considered by the incoming administration and the recent increase in mortgage rates. We also noted then given the macro issues consumers faced that the spring selling season would offer the best assessment of fundamental housing demand. Fast forward to today and we continue to believe that market fundamentals while still presenting affordability challenges to consumers are supportive of housing and the spring selling season will be the best barometer for how the consumer will behave in today's economic environment. Looking at our quarter activity by buyer group, fourth quarter net new orders decreased 14% for first time buyers, increased 15% for move up buyers and decreased 1% for active adult buyers. We believe these activity levels reflect the continued interest of consumers for new homes, but also show the impact of the affordability challenges consumers face, particularly for first time buyers.

As a result of our sales and closings activity, our quarter end backlog was 10153 homes, which is down 16% from last year. On a dollar basis, our backlog of $650,000,000,0.0 is down 11%. Inclusive of the 7502 homes we started in the we ended the year with 16439 homes in production. 53% of our production is spec, including eighteen sixty two finished specs, which when combined with cycle times that are now largely in line with our historical norm puts us in position to meet buyer demand through the year. With that said, in the event that the spring selling season trends towards lower absorption rates, we will reduce our pace of spec starts in communities with higher spec inventory levels so as to better match local selling conditions and help reduce standing inventory.

As Ryan noted, our goal is to reduce our spec inventory back down to 40% to 45% of our total production by the end of the year. Based on our current production pipeline, we expect to deliver 31000 closings in 2025, including between 412800 closings in the Looking at pricing, we currently expect the average sales price of closings to be in the range of $560,000 to $570,000 in each of the of the year. Our gross margin was 27.5%, which is down 130 basis points sequentially, but within the guide we gave at the end of the Consistent with recent quarters, our margins reflect higher incentives, which increased 20 basis points sequentially from the to 7.2%. Based on our backlog and current sales conditions, we anticipate that gross margins in the will be approximately 27%. For the balance of the year, we currently expect gross margins to be in the range of 26.5 to 27% in each of the These estimates assume that incentives throughout 2025 will remain consistent with the incentives we recognized in the I would also point out that our margins beyond the will ultimately be influenced by the demand conditions during the year as we have a significant number of homes to sell and close over the balance of the year.

Moving on to expenses, our reported SG and A expense was $196,000,000 or 4.2 percent of wholesale revenues, which compares with prior year reported SG and A expense of $3.00 $8,000,000 or 7.4% of wholesale revenues. It should be noted that our reported results for the and 2023 included two fifty five million dollars and $65,000,000 respectively of pre tax insurance benefits. Based on anticipated closing volumes, we currently expect SG and A expense in 2025 to be approximately 9.5% of wholesale revenues, including SG and A expense of approximately 10.5 of wholesale revenues in the In the our financial services operations reported pretax income of $51,000,000 which is up from $44,000,000 last year. The improvement in pretax income reflects the increase in our homebuilding closing as well as the continuation of favorable market conditions across our financial services platform. Our reported pretax income for the was $120,000,000,0.0 compared with prior year pretax income of $9.47,000,000 dollars In the period, we recorded tax expense of $2.69,000,000 dollars for an effective tax rate of 22.8%.

Our effective tax rate includes benefits related to energy efficiency credits and our purchase of renewable energy tax credits. Projecting ahead, we expect our tax rate in 2025 to be approximately 24.5, excluding the impact of any discrete tax events, including energy efficiency credits or the purchase of incremental renewable energy tax credits. Looking at the bottom line, our reported results showed net income of $9.13,000,000 dollars or $4,.43 per share. In the comparable prior year period, we reported net income of $7.11,000,000 dollars or $3,.28 per share. Reflective of our strong operating results, we generated cash flows from operations of $170,000,000,0.0 in 2024.

Given our current expectations for operating and financial results in 2025, we expect to generate cash flows from operations of approximately $140,000,000,0.0 Turning to our investment in capital allocation activities. We invested $150,000,000,0.0 in land acquisition and development in the of which 53% was for development of our existing land assets. For the year, our land investment totaled $530,000,000,0.0 of which 57% was for development. Given our constructive views on near and longer term housing dynamics, we currently plan to continue investing in land at a rate designed to allow us to grow over time. As a result, we expect to invest approximately $550,000,000,0.0 in 2025.

I would expect that approximately 55% of that spend will be for development. With my comments about our willingness to slow starts, we would also evaluate our spend on new land assets if absorption is slow as we seek to maintain a high level of return. Inclusive of our investments, we ended the year with 235000 lots under control, which is an increase of 5% over the prior year. I would highlight that on a year over year basis, we lowered our owned lot count by 2000 lots, while increasing our lots under option by 14000 lots. As a result, our percentage of lots under option increased to 56%, up from 53% last year.

I'm pleased to note that 69% of our new land approvals in the were under some form of option as we work towards a 70% option mix in our portfolio. Based on the investments we have made and our anticipated community openings and closings in 2025, we expect our average community count in 2025 to be up 3% to 5% in each quarter as compared to the comparable prior year period. Looking at our capital allocation priorities, we continued returning capital to investors in the which included the repurchase of 250,000,0.0 common shares at a cost of $3.20,000,000 dollars or $12,9.9 per share. As Ryan noted, our total return to investors in 2024 amounted to 1700000000.0 including the $120,000,000,0.0 of share repurchases, $168,000,000 of dividends and $3.10,000,000 dollars through the early retirement of senior notes. Based on the actions taken, our debt to capital ratio at the end of the year was 11.8%, down four ten basis points from last year.

Adjusting for the $170,000,000,0.0 of cash on our balance sheet, our net debt to capital ratio is now below 0. I'd like to take a moment to provide an update on our expectations for leverage in the future. As you know, we historically expressed that our target leverage level has been between 2030% of capital on a gross basis. Due to the strength of our operations and the resulting utilization of our cash flows over the last decade or so, we are well below that target range on a gross basis. And as I noted, we are actually now net debt free.

Looking forward, we expect to continue to generate sufficient cash flows for our capital needs. As a result, we are no longer targeting a specific leverage level. Instead, we will allocate our capital in line with our historical practice, continue to prioritize investment in the business and the payment of our dividend with excess capital being used to repurchase our stock and or retire our debt. Our resulting leverage position will therefore be an outcome that is dependent on the decision we make rather than targeted to a predetermined level. With that said, we would expect to see our leverage remain flat or decline in the future unless there's a transaction where leverage augments our opportunity.

Specific to 2025, I would also highlight that our board recently approved 10% increase in our dividend per share starting in the And as Ryan noted, we also announced a $150,000,000,0.0 increase to our share repurchase authorization this morning. Now let me turn the call back to Ryan for some final comments.

Thanks, Bob. At the end of last year, I spoke about our successful navigation of the many challenges we faced in recent years. 2024 was no different as we have dealt with continuing interest rate variability and affordability challenges, significant weather events and ongoing geopolitical issues. I remain extremely proud of how our entire team has responded to these events and the exceptional operating and financial results PulteGroup has delivered over time. I believe that our strategy to focus on disciplined land investment while maintaining operational and organizational expertise has proven out as we have capitalized on market conditions and have grown earnings per share at a compound annual growth rate of 30% while delivering an average annual return on equity of 27.8% over the last five years.

Of course, those achievements reflect what we have done as opposed to what we will do and our future share price performance will depend on what we are able to achieve in the future. To that end, I think it's important to share that we will continue to operate the business in a fashion that seeks to realize strong returns through cycle. For the long term, we've invested in high quality land positions that we believe will allow the company to grow over time. Importantly, the optionality we have achieved in our controlled lot position gives us the flexibility to pivot if the market faces unexpected headwinds. Similarly, in the near term, we have positioned our inventory production to be sufficient to meet projected demand.

It is important to remember that we are seeking to keep all of our communities productive and have made sure that we have the inventory and planned start activity in place to meet that end. However, as discussed earlier, we have higher spec inventory than we've traditionally carried. We've often said, we will not be margin proud and we'll find pricing to make sure our standing inventory moves. We will continue to do that and as noted earlier, we will work to adjust our pricing and inventory positioning with a view towards driving our spec inventory levels back in line with recent norms. I know stocks reflect performance, so we are seeking to grow our business and deliver ROE that remains among the industry leaders while generating positive cash flow and maintaining a low risk profile which we believe will drive the best returns for our shareholders.

With all of that said, I'd like to take a moment to acknowledge the change that we announced back in July 0. As you know, Bob notified us of his retirement as our CFO, which will be effective after we file our 10 ks next week. As part of our succession plan, Bob will transition to a new role for the balance of the year in part to ensure a smooth transition of the CFO role, but during which time he will also oversee our growth and strategic partnerships platform, including our land banking efforts, our asset management committee and our financial services operations. I'd like to thank Bob for his fourteen years of service and look forward to working with him over the coming year. I would also like to more formally introduce Jim Osowski who will be taking over as our CFO.

Jim is a twenty two year veteran of Pulte having come to us after working for a national accounting firm at the start of his career. Jim has served in many capacities for us, including a number of field and corporate leadership positions. In fact, in his current role, he has been involved in all of our significant strategy and operating initiatives over the last thirteen years. Throughout his career, he has demonstrated a strong understanding of the homebuilding business and has developed deep relationships with our board, our senior leadership team and our field operating teams. He has also exhibited a great ability to work with our service providers.

Based on the depth and breadth of his experiences and relationships, I am eminently confident in Jim's ability to seamlessly step into the CFO role. And finally, before I close, I would like to take a moment to express my continuing gratitude and thanks to each of our employees for their tireless efforts in supporting the delivering of superior homes and experiences to our homebuyers, while providing outstanding financial returns to our investors. We're now prepared to open the call for questions in order that we can get to as many questions as possible during the remaining time of this call, we would ask that you limit yourself to 1 question and 1 follow-up. Thank you. And I now ask the operator to again explain the process and to open the call for questions.

The first question comes from the line of John Lovallo of UBS. Please go ahead.

Good morning, guys. Thanks for taking my questions and Bob, best of luck to you. The first question is, maybe just help us with the sequential walk from the into the and then through the remainder of the year for gross margin. I think you're talking about 27% in the and then 26.5% to 27% in to I mean, how would you sort of bucket the headwinds in terms of maybe working down some of that spec inventory, higher incentives, product mix and stick and bricks and land cost inflation?

Yes, John, good morning. Thanks for the question. The we feel really good about what our order results were in the despite it being a more difficult selling environment. The walk from Oct. 0 through Dec.

0 matched what we would consider to be a more seasonal pattern as you progress through the Oct. 0 being the best, Nov. 0 a little less and Dec. 0 the lowest total month. As we turn the corner into 2025, we saw the continuation of what we would expect to to be a normal seasonal selling pattern, including as we move toward the really important spring selling season.

We're starting to see some green shoots. There's been some positive order activity. We know that it's still early, in that kind of spring selling season and we typically look to February, timing to be the official start, but we're encouraged and optimistic by what we're seeing. In terms of the margin guide, we think we've done a really nice job in a tough environment balancing the pace price mix and continuing deliver what our industry leading gross margins. We noted that 27% will be our margin guide with the range of 26.5% to 27% for the balance of the year.

We believe based on what we know now today, we've factored in not only what's in our backlog, but also what we would expect to sell the standing inventory for inclusive of anticipated discounts, which the big assumption that we've made John is that those incentives are going to remain consistent with what we've experienced in the If things turn out differently than that, then we'd certainly have to have a different conversation. But we feel pretty confident about where we sit now that we position ourselves well to continue to have success in and beyond.

Okay. That's helpful. And then you're talking about If I

could sorry, if I could just add 1 thing. Sure. Sure. In terms of the structural kind of 26.5% to 27%, it does include a flat incentive from the exit from Just for your perspective, it's assuming relatively flat pricing. You can hear that in the guide we gave on ASPs.

But I would note that land costs are up about 10% year over year. So that's the primary driver of our cost increases.

Understood. That's helpful. Thank you. And then you guys mentioned sort of normal seasonality and then you talked about some green shoots. When we think about the absorption, I think historically it's been like 40% positive sequentially into the I mean is that a reasonable guide as we look into the spring selling season here?

Yes, John, we haven't given a guide. So I think we'll leave the comments kind of as we've made them to this point, but we're encouraged by what we're seeing.

PulteGroup (PHM) Q4 2024 Earnings Call Transcript

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