Meritage Homes reported a strong QQ1 2024 with revenue of $1.475 billion and net income of $186.0 million, translating to diluted EPS of $5.06. A standout feature of the quarter was an exceptional backlog conversion of 138%, underpinned by a move‑in ready strategy that helped deliver 3,991 orders and 3,507 deliveries, driving a robust gross margin of 25.8% and a solid operating leverage profile. Management reinforced that intra-quarter closings were a deliberate capability, with nearly half of quarterly deliveries sold and closed within the period, reflecting a real-time pricing and inventory strategy aligned with market demand dynamics.
Strategically, Meritage advanced its land position and inventory framework, ending QQ1 with approximately 56,400 lots under control (about 4.6 years of supply) and a backlog of roughly 3,000 homes. The company emphasized move-in readiness as a core operational discipline, enabling faster closings, improved ROE (18%), and stronger cash generation (operating cash flow of $82 million in the quarter; cash balance of $905 million; net debt to cap at 2%). The board and management also accelerated capital returns, with a programmatic share repurchase (>$56 million in QQ1) and a dividend increase to $0.75 per share per quarter, signaling confidence in the cash flow generation and a more balanced capital allocation framework.
Guidance was modestly revised higher for full-year 2024 to 14,500–15,000 closings, $6.0–$6.2 billion in home closing revenue, gross margins of ~24.5%–25%, an effective tax rate of ~22.5%, and diluted EPS in the range of $19.20–$20.70. Q2 guidance implied 3,600–3,800 closings and $1.5–$1.6 billion in revenue, maintaining a consistent margin framework. Looking ahead, management signaled ongoing emphasis on land acquisition, faster cycle times, and disciplined cost management, with a view toward mid‑single to high‑single-digit revenue growth in 2024 and meaningful upside into 2025 as the land and move-in ready inventory engine remains intact. Risks include macro rate volatility, potential shifts in demand, and continued elevated land costs.