KB Home today opened its Equinox townhome community in the Compass Pointe master plan in Ontario, California. The development features two‑story homes with three bedrooms and two‑and‑a‑half baths, and base prices range from $514,990 to $566,990. Amenities include a pool, children’s playground, picnic areas, and parks, and the site is within walking distance of top‑rated schools and the planned Ontario Grand Park.
The opening is part of KB Home’s broader push toward a higher‑margin built‑to‑order (BTO) mix. The company’s Design Studio allows each home to be customized, a strategy that has helped it shift the BTO mix from 57% in Q4 2025 to a target of 70% or higher. This shift is intended to counter the margin compression that has weighed on the builder’s profitability in 2025, when the housing gross profit margin fell to 17.0% (adjusted 17.8%) from 20.9% the year before.
KB Home’s Q4 2025 results provide context for the community launch. The company reported revenue of $1.69 billion, up 15.3% year‑over‑year, and adjusted earnings per share of $1.92, beating analyst expectations of $1.79 by $0.13. The earnings beat was driven by disciplined cost control and a favorable mix of BTO homes, which helped offset a 7% decline in average selling price to $465,600 and a 9% drop in homes delivered to 3,619 units. The company’s backlog fell 37% year‑over‑year to $1.40 billion, reflecting the broader market headwinds of affordability concerns and elevated mortgage rates.
Looking ahead, KB Home guided for Q1 2026 revenue of $1.05 billion to $1.15 billion, 2,300 to 2,500 deliveries, and a housing gross profit margin of 15.4% to 16%. For the full year, the company expects revenue of $5.1 billion to $6.1 billion on 11,000 to 12,500 deliveries, with margin improvement tied to the increasing BTO mix. Management highlighted that the new Equinox community is one of 35 to 40 new communities planned for Q1 2026, underscoring its commitment to expanding in Southern California while pursuing higher profitability.
KB Home maintains strong liquidity, with $1.43 billion in cash and a debt‑to‑capital ratio of 30.3% as of Q4 2025. The builder has also continued its long‑standing dividend program, marking 40 consecutive years of payments. The Equinox launch, therefore, represents both a tangible expansion of the company’s portfolio and a strategic step toward a more profitable, BTO‑focused business model.
KB Home is the #1 customer‑ranked national homebuilder in the Inland Empire, and the Equinox community’s proximity to schools and planned parkland positions it to attract families seeking modern, energy‑efficient homes in a growing market. The community’s opening aligns with the company’s broader strategy to leverage its BTO model to improve margins amid a challenging housing environment.
The market’s reaction to KB Home’s Q4 2025 earnings was tempered by concerns over margin compression and a declining backlog, even as the company beat earnings and revenue estimates. Investors noted that the company’s guidance for 2026 signals confidence in its BTO strategy, but also highlighted the ongoing affordability and mortgage‑rate headwinds that could impact demand.
KB Home’s focus on BTO homes, combined with its strong liquidity and dividend track record, positions it to navigate the current market headwinds while pursuing margin improvement. The Equinox community launch is a concrete manifestation of this strategy, offering a new product line that aligns with consumer demand for customizable, energy‑efficient homes in Southern California.
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