What changed in this filing

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Item 1. Financial Statements

2025-07-24 compared with 2025-04-24 · 180 added, 106 removed, 413 unchanged (41% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

As of March 31, 2025 and December 31, 2024

As of June 30, 2025 and December 31, 2024

(in thousands, except share and per share amounts)

15 unchanged sentences

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized, none outstanding

Common stock, $ 0.01 par value, 100,000,000 shares authorized, 30,546,570 and 30,961,227 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Common stock, $ 0.01 par value, 100,000,000 shares authorized, 29,679,571 and 30,961,227 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

5 unchanged sentences

Unaudited Condensed Consolidated Statements of Operations

For the Three Months Ended March 31, 2025 and 2024

For the Three and Six Months Ended June 30, 2025 and 2024

(in thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Homebuilding revenues

6 unchanged sentences

Cost of home sales revenues

( 1,504,666 )

( 1,513,127 )

Cost of land sales and other revenues

Total homebuilding cost of revenues

( 1,505,563 )

( 1,513,164 )

Financial services costs

1 unchanged sentence

Inventory impairment

Other expense

Other (expense) income, net

Income before income tax expense

5 unchanged sentences

Unaudited Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2025 and 2024

For the Six Months Ended June 30, 2025 and 2024

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

5 unchanged sentences

Deferred income taxes

Loss on disposition of assets

(Gain) loss on disposition of assets and other

Changes in assets and liabilities:

5 unchanged sentences

Accrued expenses and other liabilities

Net cash (used in) provided by operating activities

Net cash used in operating activities

Investing activities

Purchases of property and equipment

Proceeds from sale of property and equipment

Proceeds from sale of mortgage servicing rights

Expenditures related to development of rental properties

1 unchanged sentence

Other investing activities

Net cash used in investing activities

Net cash provided by (used in) investing activities

Financing activities

1 unchanged sentence

Payments on revolving credit facilities

( 1,260,500 )

Borrowing under construction loan agreements

2 unchanged sentences

Debt issuance costs

Net payments for mortgage repurchase facilities

Net (payments) proceeds for mortgage repurchase facilities

Withholding of common stock upon vesting of stock-based compensation awards

1 unchanged sentence

Dividend payments

Net cash used in financing activities

Other financing activities

Net cash (used in) provided by financing activities

Cash and cash equivalents and Restricted cash

10 unchanged sentences

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

For the Three Months Ended March 31, 2025 and 2024

(in thousands)

For the Three Months Ended June 30, 2025 and 2024

Additional Paid-In Capital

1 unchanged sentence

Total Stockholders' Equity

Balance at December 31, 2024

Balance at March 31, 2025

Vesting of stock-based compensation awards

3 unchanged sentences

Cash dividends declared and dividend equivalents

Balance at June 30, 2025

Balance at March 31, 2024

Vesting of stock-based compensation awards

Withholding of common stock upon vesting of stock-based compensation awards

Repurchases of common stock

Stock-based compensation expense

Cash dividends declared and dividend equivalents

Balance at June 30, 2024

For the Six Months Ended June 30, 2025 and 2024

Additional Paid-In Capital

Retained Earnings

Total Stockholders' Equity

Balance at December 31, 2024

4 unchanged sentences

Cash dividends declared and dividend equivalents

Balance at March 31, 2024

Balance at June 30, 2025

Balance at December 31, 2023

Vesting of stock-based compensation awards

Withholding of common stock upon vesting of stock-based compensation awards

Repurchases of common stock

Stock-based compensation expense

Cash dividends declared and dividend equivalents

Balance at June 30, 2024

See Notes to Unaudited Condensed Consolidated Financial Statements

1 unchanged sentence

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2025

June 30, 2025

Basis of Presentation

22 unchanged sentences

Accordingly, actual results could differ from those estimates.

Reclassification

Certain prior period amounts have been reclassified to conform to current period presentation.

These reclassifications have not changed the results of operations of prior periods.

Recently Issued Accounting Standards

8 unchanged sentences

Improvements to Income Tax Disclosures” (“ASU 2023-09”).

ASU 2023-09 requires more disaggregated income tax disclosures, including additional information in the rate reconciliation and additional disclosures about income taxes paid.

ASU 2023-09 requires more disaggregated income tax disclosures, including additional information in the rate reconciliation

and additional disclosures about income taxes paid.

ASU 2023-09 will become effective for our fiscal year ending December 31, 2025.

We are currently evaluating the impact of the adoption of ASU 2023-09 on our consolidated financial statements and related annual disclosures.

We are currently evaluating the impact of the adoption of ASU 2023-09 on our consolidated financial statements and related annual disclosures, but we do not expect the impact to be significant.

Reporting Segments

5 unchanged sentences

Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios and the internet, and generally provides no option or upgrade selections.

Our Century Complete brand has operations in 10 states and is managed separately from our four geographic regions, and it is considered a separate operating segment.

We have presented our homebuilding operations as the following reportable segments as of March 31, 2025:

Our Century Complete brand has operations in nine states and is managed separately from our four geographic regions, and it is considered a separate operating segment.

We have presented our homebuilding operations as the following reportable segments as of June 30, 2025:

 West (California and Washington)

1 unchanged sentence

 Southeast (Florida, Georgia, North Carolina, South Carolina, and Tennessee)

 Century Complete (Alabama, Arizona, Florida, Georgia, Indiana, Kentucky, Louisiana, Michigan, North Carolina, South Carolina)

 Century Complete (Alabama, Arizona, Florida, Georgia, Indiana, Kentucky, Michigan, North Carolina, and South Carolina)

We have identified our Financial Services operations, which provide mortgage, title, insurance brokerage and escrow services to our homebuyers, and Century Living, which is engaged in the development, construction, management, and disposition of multi-family rental properties currently all located in Colorado, as reportable segments.

8 unchanged sentences

Beginning in the first quarter of 2025, we have separately reported our Century Living segment as a reportable segment, which was previously included in our Corporate segment, in order to reflect the distinct nature of our multi-family rental operations.

Accordingly, we have recast the corresponding segment information for the three months ended March 31, 2024.

Accordingly, we have recast the corresponding segment information for the three and six months ended June 30, 2024.

During the first quarter of 2025, our strategy evolved for our Century Living multi-family rental properties to be predominantly focused on the disposition of the assets.

1 unchanged sentence

We record multi-family rental property inventory within prepaid and other assets on the condensed consolidated balance sheet , and cash flows from development activities and the disposition of properties are recorded as operating activities on the condensed consolidated statement of cash flows.

The following table summarizes total revenue, significant expenses, and income (loss) before income tax expense by segment (in thousands ):

Three months ended March 31, 2025

The following tables summarize total revenue, significant expenses, and income (loss) before income tax expense by segment (in thousands ):

Three months ended June 30, 2025

Century Complete

6 unchanged sentences

Other segment items (1)

Income before tax expense

Three months ended March 31, 2024

Income (loss) before tax expense

Three months ended June 30, 2024

Century Complete

6 unchanged sentences

Other segment items (1)

Income before tax expense

Income (loss) before tax expense

Six months ended June 30, 2025

Century Complete

Financial Services

Century Living

Cost of home sales

( 1,504,666 )

Inventory impairment

Selling, general and administrative

Financial services costs

Other segment items (1)

Income (loss) before tax expense

Six months ended June 30, 2024

Century Complete

Financial Services

Century Living

Cost of home sales

( 1,513,127 )

Inventory impairment

Selling, general and administrative

Financial services costs

Other segment items (1)

Income (loss) before tax expense

(1) Includes cost of land sales and other revenues, and other income (expense).

8 unchanged sentences

(“Landmark”), a homebuilder with operations, including six active communities, in Nashville, Tennessee, for approximately $ 33.4 million in cash, inclusive of customary holdbacks.

We concluded that the acquisition represented a business

During the three months ended March 31, 2024, we incurred $ 0.1 million in acquisition costs, which are reflected in other expense in our condensed consolidated statements of operations

We concluded that the acquisition represented a business combination.

During the six months ended June 30, 2024, we incurred $ 0.1 million in acquisition costs, which are reflected in other expense in our condensed consolidated statements of operations

On July 31, 2024, we closed the acquisition of substantially all the assets and operations and assumed certain liabilities of Anglia Homes LP (“Anglia”), a homebuilder with operations, including 26 active communities, in the greater Houston, Texas area, for approximately $ 127.0 million in cash, inclusive of customary holdbacks.

13 unchanged sentences

Management believes carrying mortgage loans held for sale at fair value improves financial reporting by mitigating volatility in reported earnings caused by measuring the fair value of the loans and the derivative instruments used to economically hedge them.

As of March 31, 2025 and December 31, 2024, Inspire had mortgage loans held for sale with an aggregate fair value of $ 207.4 million and $ 236.9 million, respectively, and an aggregate outstanding principal balance of $ 208.9 million and $ 241.6 million, respectively.

The gain from the change in fair value for mortgage loans held for sale was $ 3.2 million for the three months ended March 31, 2025, and the loss from the change in fair value for mortgage loans held for sale was $ 5.0 million for the three months ended March 31, 2024.

The total unpaid principal balance of mortgage loans serviced at March 31, 2025 and December 31, 2024 was $ 3.1 billion and $ 2.9 billion, respectively.

As of June 30, 2025 and December 31, 2024, Inspire had mortgage loans held for sale with an aggregate fair value of $ 184.4 million and $ 236.9 million, respectively, and an aggregate outstanding principal balance of $ 187.1 million and $ 241.6 million, respectively.

The loss from the change in fair value for mortgage loans held for sale was $ 1.2 million for the three months ended June 30, 2025 and the gain from the change in fair value for mortgage loans held for sale was $ 2.0 million for the six months ended June 30, 2025.

The gain from the change in fair value for mortgage loans held for sale was $ 0.9 million for the three months ended June 30, 2024, and the loss from the change in fair value for mortgage loans held for sale was $ 4.2 million for the six months ended June 30, 2024.

During the three months ended June 30, 2025, we sold mortgage servicing rights with an unpaid principal balance of approximately $ 3.0 billion.

Refer to Note 13 – Fair Value Disclosures for further information regarding our mortgage servicing rights.

The total unpaid principal balance of mortgage loans serviced at June 30, 2025 and December 31, 2024 was $ 100.1 million and $ 2.9 billion, respectively .

Net gains and losses from the sale of mortgage loans held for sale are included in financial services revenue on the consolidated statements of operations, and include (1) net gains on sale of loans, which are recognized based upon the difference between the sales proceeds and carrying value of the related loans upon sale, with sale proceeds reflecting the cash received from investors through the sale of the mortgage loan and servicing release premium;

4 unchanged sentences

and (6) fees earned from originating mortgage loans.

Fees earned from originating mortgage loans, which are recognized at the time the mortgage loans are funded, include origination fees, credits, and discount points provided directly to our customers to reduce interest rates .

Net gains on the sale of mortgage loans were $ 12.8 million and $ 17.9 million for the three months ended March 31, 202 5 and 2024, respectively.

Mortgage loans in process for which interest rates were locked by borrowers, or interest rate lock commitments, had an aggregate principal balance of $ 131.1 million and $ 76.3 million as of March 31, 2025 and December 31, 2024, respectively, and carried a weighted average interest rate of approximately 5.4 % and 5.5 %, respectively .

Fees earned from originating mortgage loans, which are recognized at the time the mortgage loans are funded, include origination fees, credits, commitment fees, and discount points provided directly to our customers to reduce interest rates .

Net gains on the sale of mortgage loans were $ 15.3 million and $ 28.1 million for the three and six months ended June 30, 202 5, respectively, and were $ 14.0 million and $ 31.8 million for the three and six months ended June 30, 2024, respectively.

Mortgage loans in process for which interest rates were locked by borrowers, or interest rate lock commitments, had an aggregate principal balance of $ 111.1 million and $ 76.3 million as of June 30, 2025 and December 31, 2024, respectively, and carried a weighted average interest rate of approximately 5.2 % and 5.5 %, respectively .

Interest rate risks related to these obligations are typically mitigated through our interest rate hedging program or by the preselling of loans to investors.

17 unchanged sentences

(1) Restricted cash consists of restricted cash related to land development, earnest money deposits for home sale contracts held by third parties as required by various jurisdictions, and certain compensating balances associated with our mortgage repurchase facilities and other financing obligations.

(2) During the three months ended March 31, 2025, our strategy evolved for our Century Living multi-family rental properties to be predominantly focused on the disposition of the assets and we determined that these operations have become part of our ordinary activities.

Accordingly, we reclassified $ 119.4 million associated with multi-family properties under construction within prepaid and other assets and $ 90.5 million associated with completed multi-family rental property assets within property and equipment, net to multi-family rental properties inventory within prepaid and other assets on the condensed consolidated balance sheet as of March 31, 2025.

(2) During the first quarter of 2025, our strategy evolved for our Century Living multi-family rental properties to be predominantly focused on the disposition of the assets and we determined that these operations have become part of our ordinary activities.

Multi-family rental properties inventory includes multi-family rental properties that are under construction and properties that are in lease-up.

13 unchanged sentences

We subsequently assess the adequacy of our warranty accrual on a quarterly basis through a model that incorporates historical payment trends and adjust the amounts recorded, if necessary.

Based on warranty payment trends relative to our estimates at the time of home closing, we reduced our warranty reserve by $ 1.9 million and $ 1.3 million during the three months ended March 31, 2025 and 2024, respectively, which is included as a reduction to cost of home sales revenues on our condensed consolidated statements of operations.

Changes in our warranty accrual for the three months ended March 31, 2025 and 2024 are detailed in the table below (in thousands) :

Three Months Ended March 31,

Based on warranty payment trends relative to our estimates at the time of home closing, we increased our warranty reserve by $ 0.6 million during the three months ended June 30, 2025, and we reduced our warranty reserve by $ 0.2 million during the three months ended June 30, 2024.

We reduced our warranty reserve by $ 1.4 million and $ 1.5 million during the six months ended June 30, 2025 and 2024, respectively, which is included as a reduction to cost of home sales revenues on our condensed consolidated statements of operations.

Changes in our warranty accrual for the three and six months ended June 30, 2025 and 2024 are detailed in the table below (in thousands) :

Three Months Ended June 30,

Six Months Ended June 30,

Beginning balance

10 unchanged sentences

Our self-insurance liability is presented on a gross basis without consideration of insurance recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any.

Estimates of insurance recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any, are recorded as receivables when such recoveries are considered probable.

During the three months ended March 31, 2025 and 2024, we recorded no change to our self-insurance reserve.

Estimates of insurance recoveries and amounts we have paid on behalf

of and expect to recover from other parties, if any, are recorded as receivables when such recoveries are considered probable.

During the six months ended June 30, 2025 and 2024, we recorded no adjustment to our self-insurance reserve.

Any adjustments to our self-insurance reserve would be included in cost of home sales revenues on our condensed consolidated statements of operations .

Changes in our self-insurance reserve for incurred but not reported construction defect claims for the three months ended March 31, 2025 and 2024 are detailed in the table below (in thousands) :

Three Months Ended March 31,

Changes in our self-insurance reserve for incurred but not reported construction defect claims for the three and six months ended June 30, 2025 and 2024 are detailed in the table below (in thousands) :

Three Months Ended June 30,

Six Months Ended June 30,

Beginning balance

2 unchanged sentences

Ending balance

Our outstanding debt obligations included the following as of March 31, 2025 and December 31, 2024 (in thousands):

Our outstanding debt obligations included the following as of June 30, 2025 and December 31, 2024 (in thousands):

6.750 % senior notes, due June 2027 (1)

5 unchanged sentences

(1) The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest expense over the respective terms of the senior notes.

(2) As of March 31, 2025, other financing obligations included $ 3.2 million related to insurance premium notes as well as $ 118.1 million outstanding under construction loan agreements related to Century Living.

(2) As of June 30, 2025, other financing obligations included $ 12.3 million related to certain secured borrowings as well as $ 127.7 million outstanding under construction loan agreements related to Century Living.

As of December 31, 2024, other financing obligations included $ 11.0 million related to insurance premium notes and certain secured borrowings , as well as $ 102.4 million outstanding under construction loan agreements.

6.750% Senior Notes Due 2027

As of March 31, 2025, we had outstanding $ 500.0 million in aggregate principal amount of our 6.750 % Senior Notes due 2027, which principal balance is due in June 2027.

As of June 30, 2025, we had outstanding $ 500.0 million in aggregate principal amount of our 6.750 % Senior Notes due 2027, which principal balance is due in June 2027.

Prior to that date, interest only payments are due semi-annually in June and December of each year.

These notes were issued under an indenture which contains certain restrictive covenants on issuing future secured debt and other transactions.

As of March 31, 2025, the aggregate obligation of these notes, inclusive of unamortized financing costs on these notes was $ 498.2 million as reported on our condensed consolidated financial statements.

As of June 30, 2025, the aggregate obligation of these notes, inclusive of unamortized financing costs on these notes was $ 498.4 million as reported on our condensed consolidated financial statements.

3.875% Senior Notes Due 2029

As of March 31, 2025, we had outstanding $ 500.0 million in aggregate principal amount of our 3.875 % Senior Notes due 2029, which principal balance is due in August 2029.

As of June 30, 2025, we had outstanding $ 500.0 million in aggregate principal amount of our 3.875 % Senior Notes due 2029, which principal balance is due in August 2029.

Prior to that date, interest only payments are due semi-annually in February and August of each year.

These notes were issued under an indenture which contains certain restrictive covenants on issuing future secured debt and other transactions.

As of March 31, 2025, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $ 496.6 million, as reported on our condensed consolidated financial statements.

As of June 30, 2025, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $ 496.8 million, as reported on our condensed consolidated financial statements.

Construction Loan Agreements

3 unchanged sentences

Borrowings under the construction loan agreements bear interest at various rates, including a fixed rate and floating interest rates per annum equal to the Secured Overnight Financing Rate (which we refer to as “SOFR”) plus an applicable margin.

The outstanding principal balances and all accrued and unpaid interest is due on varying maturity dates from March 17, 2026 through February 28, 2029 , with certain of the construction loan agreements allowing for the option to extend the maturity dates for a period of 12 months if certain conditions are satisfied.

outstanding principal balances and all accrued and unpaid interest is due on varying maturity dates from March 17, 2026 through February 28, 2029 , with certain of the construction loan agreements allowing for the option to extend the maturity dates for a period of 12 months if certain conditions are satisfied.

The construction loan agreements contain customary affirmative and negative covenants (including covenants related to construction completion, and limitations on the use of loan proceeds, transfers of land, equipment, and improvements), as well as customary events of default.

Interest on our construction loan agreements is capitalized to the multi-family properties assets included in prepaid expenses and other assets on the condensed consolidated balance sheets while the related multi-family rental properties are being actively developed .

As of March 31, 2025 and December 31, 2024, $ 118.1 million and $ 102.4 million was outstanding under the construction loan agreements respectively, with borrowings that bore a weighted average interest rate of 6.6 % and 6.5 % as of March 31, 2025 and December 31, 2024, respectively, and we were in compliance with all covenants thereunder.

As of June 30, 2025 and December 31, 2024, $ 127.7 million and $ 102.4 million was outstanding under the construction loan agreements respectively, with borrowings that bore a weighted average interest rate of 6.6 % and 6.5 % as of June 30, 2025 and December 31, 2024, respectively, and we were in compliance with all covenants thereunder.

Revolving Line of Credit

On November 1, 2024, we entered into a credit agreement (the “Credit Agreement”) with U.S.

Bank National Association, as Administrative Agent, and the lenders party thereto.

The Credit Agreement, which replaced our prior Second Amended and Restated Credit Agreement, provides us with a senior unsecured revolving credit facility (which we refer to as the “revolving line of credit”) of

up to $ 900.0 million.

We are party to a credit agreement (the “Credit Agreement”) with U.S.

Bank National Association, as Administrative Agent, and the lenders party thereto, which provides us with a senior unsecured revolving credit facility (which we refer to as the “revolving line of credit”) of up to $ 1.0 billion.

The revolving line of credit includes a $ 250.0 million sublimit for letters of credit.

Subject to the terms and conditions of the Credit Agreement, we are entitled to request an increase in the size of the revolving line of credit by an amount not exceeding $ 400.0 million;

and pursuant to those terms, on April 22, 2025, we increased our revolving line of credit from $ 900.0 million to $ 1.0 billion, resulting in $ 300.0 million remaining for possible future increases.

The obligations under the Credit Agreement are guaranteed by certain of our subsidiaries.

6 unchanged sentences

The Credit Agreement also provides for customary fees including commitment fees payable to each lender ranging from 0.20 % to 0.35 % per annum based on our leverage ratio of the unused portion of the revolving line of credit and other customary fees.

As of March 31, 2025 and December 31, 2024, $ 237.0 million and $ 135.5 million, respectively, was outstanding under the revolving line of credit, with borrowings that bore an interest rate of 5.9 % and 5.9 %, respectively, and we were in compliance with all covenants under the Credit Agreement.

On April 22, 2025, in accordance with the terms of the Credit Agreement, we increased our revolving line of credit to $ 1.0 billion.

As of June 30, 2025 and December 31, 2024, $ 270.0 million and $ 135.5 million, respectively, was outstanding under the revolving line of credit, with borrowings that bore an interest rate of 5.8 % and 5.9 %, respectively, and we were in compliance with all covenants under the Credit Agreement.

Mortgage Repurchase Facilities – Financial Services

1 unchanged sentence

Morgan Chase Bank, N.A., U.S.

Bank National Association and Truist Bank, which provide Inspire with uncommitted repurchase facilities of up to an aggregate of $ 375.0 million as of March 31, 2025, secured by the mortgage loans financed thereunder.

The repurchase facilities have varying short term maturity dates through November 14, 2025 .

Borrowings under the mortgage repurchase facilities bear interest at variable interest rates per annum equal to SOFR plus an applicable margin, and bore a weighted average interest rate of 6.0 % as of March 31, 2025.

Bank National Association and Truist Bank, which provide Inspire with uncommitted repurchase facilities of up to an aggregate of $ 375.0 million as of June 30, 2025, secured by the mortgage loans financed thereunder.

The repurchase facilities have varying short term maturity dates through June 1, 2026 .

Amounts outstanding under the repurchase facilities are not guaranteed by us or any of our subsidiaries, and the agreements contain various affirmative and negative covenants applicable to Inspire that are customary for arrangements of this type.

As of March 31, 2025 and December 31, 2024, we had $ 204.3 million and $ 232.8 million outstanding under the repurchase facilities, respectively, and were in compliance with all covenants thereunder.

As of June 30, 2025 and December 31, 2024, we had $ 181.4 million and $ 232.8 million outstanding under the repurchase facilities, respectively, and were in compliance with all covenants thereunder.

Interest on Senior Notes and Revolving Line of Credit

Interest on our senior notes and revolving line of credit, if applicable, is capitalized to inventories while the related communities are being actively developed and until homes are completed.

As our qualifying assets exceeded our outstanding debt during the three months ended March 31, 2025 and 2024, we capitalized all interest costs incurred on these facilities during these periods.

Interest on our senior notes and revolving line of credit, if applicable, is capitalized to homebuilding inventories while the related communities are being actively developed and until homes are completed.

As our qualifying assets exceeded our outstanding debt during the three and six months ended June 30, 2025 and 2024, we capitalized all interest costs incurred on these facilities during these periods.

Our interest costs were as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Interest capitalized beginning of period

4 unchanged sentences

Our 2025 estimated annual effective tax rate, before discrete items, of 25.6 %, is driven by our blended federal and state statutory rate of 24.9 %, and certain permanent differences between GAAP and tax, including disallowed deductions for executive compensation, and partially offset by estimated federal energy home credits for current year home deliveries.

For the three months ended March 31, 2025, our estimated annual rate of 25.3 % was benefitted by discrete items which had a net impact of decreasing our rate by 0.3 %, including the impact of excess tax benefits for vested stock-based compensation.

For the three months ended March 31, 2025 and 2024, we recorded income tax expense of $ 13.1 million and $ 20.0 million, respectively .

For the six months ended June 30, 2025, our estimated annual rate of 25.6 % was benefitted by discrete items which had a net impact of decreasing our rate by 0.1 %, including the impact of excess tax benefits for vested stock-based compensation.

On July 4, 2025, H.R.1, the One Big Beautiful Bill Act , was signed into law, which disallows Section 45L tax credits for new energy-efficient homes delivered after June 30, 2026.

As a result, our income tax expense and effective tax rate would not reflect a benefit from such tax credits as to homes delivered after that date.

For the three months ended June 30, 2025 and 2024, we recorded income tax expense of $ 12.2 million and $ 26.9 million, respectively .

For the six months ended June 30, 2025 and 2024, we recorded income tax expense of $ 25.4 million and $ 46.9 million, respectively.

Fair Value Disclosures

14 unchanged sentences

 Mortgage loans held for investment at fair value – A portion of our mortgage loans held for investment included in prepaid expenses and other assets , which were those determined to be unsaleable and transferred from mortgage loans held for sale, are recorded at fair value and are calculated based on Level 3 analysis which incorporates information including the value of underlying collateral, from markets where there is little observable trading activity.

The following outlines the Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2025 and December 31, 2024, respectively (in thousands):

The following outlines the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024, respectively (in thousands):

Balance Sheet Classification

11 unchanged sentences

The unobservable inputs used in the valuation of the mortgage loans held for investment at fair value include, among other items, the value of underlying collateral, from markets where there is little observable trading activity.

(2) The unobservable inputs used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and cost to service, which were a weighted average of 8.2 %, 10.6 %, and $ 75 per year per loan, respectively, as of March 31, 2025, and 8.5 %, 10.6 %, and $ 74 per year per loan, respectively, as of December 31, 2024.

(2) The unobservable inputs used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and cost to service, which were a weighted average of 7.3 %, 10.4 %, and $ 75 per year per loan, respectively, as of June 30, 2025 , and 8.5 %, 10.6 %, and $ 74 per year per loan, respectively, as of December 31, 2024.

The high and low end of the range of unobservable inputs used in the valuation did not result in a significant change to the fair value measurement.

The following table represents the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements, with gains and losses from the changes in fair value reflected in financial services revenue on our condensed consolidated statements of operations (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Mortgage servicing rights

2 unchanged sentences

End of period

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Mortgage loans held-for-investment at fair value

4 unchanged sentences

End of period

For the financial assets and liabilities that the Company does not reflect at fair value, the following present both their respective carrying value and fair value at March 31, 2025 and December 31, 2024, respectively (in thousands).

March 31, 2025

During the three months ended June 30, 2025, we sold mortgage servicing rights with an unpaid principal balance of approximately $ 3.0 billion for approximately $ 47.3 million, including customary holdbacks.

For the financial assets and liabilities that the Company does not reflect at fair value, the following present both their respective carrying value and fair value at June 30, 2025 and December 31, 2024, respectively (in thousands).

June 30, 2025

December 31, 2024

7 unchanged sentences

(2) Carrying amounts include any associated unamortized deferred financing costs, premiums and discounts.

As of March 31, 2025, these amounts totaled $ 1.8 million and $ 3.4 million for the 6.750 % senior notes and 3.875 % senior notes, respectively.

As of June 30, 2025, these amounts totaled $ 1.6 million and $ 3.2 million for the 6.750 % senior notes and 3.875 % senior notes, respectively.

As of December 31, 2024, these amounts totaled $ 2.0 million and $ 3.6 million for the 6.750 % senior notes and 3.875 % senior notes, respectively.

(3) Carrying amount approximates fair value due to short-term nature and/or interest rate terms.

(4) As of March 31, 2025, other financing obligations included $ 3.2 million related to insurance premium notes that bore a weighted average interest rate of 7.8 %, and $ 118.1 million related to outstanding borrowings on the construction loan agreements related to Century Living that bore a weighted average interest rate of 6.6 %.

(4) As of June 30, 2025, other financing obligations included $ 12.3 million related to certain secured borrowings that bore a weighted average interest rate of 5.0 %, and $ 127.7 million related to outstanding borrowings on the construction loan agreements related to Century Living that bore a weighted average interest rate of 6.6 %.

As of December 31, 2024, other financing obligations included $ 11.0 million related to insurance premium notes and certain secured borrowings that bore a weighted average interest rate of 6.7 %, and $ 102.4 million related to outstanding borrowings on the construction loan agreements that bore a weighted average interest rate of 6.5 %.

Non-financial assets and liabilities include items such as inventory and property and equipment that are measured at fair value when acquired and as a result of impairments, if deemed necessary.

D uring the three months ended March 31, 2025, we determined that inventory with a carrying value before impairment of $ 2.0 million for one community in our Century Complete segment was not recoverable.

Accordingly, during the three months ended March 31, 2025, we recognized impairment charges of an aggregate $ 0.4 million in order to record the community at fair value.

No impairment charges were recorded in the three months ended March 31, 2024.

The estimated fair value of the community was determined through a discounted cash flow approach utilizing Level 3 inputs.

When estimating future discounted cash flows, we utilized a weighted-average discount rate of approximately 10 % in our valuation during the three months ended March 31, 2025.

Changes in our cash flow projections in future periods related to this community may change our conclusions on the recoverability of inventory in the future.

D uring the three months ended June 30, 2025, we determined that inventory with a carrying value before impairment of $ 31.6 million for five communities in our Century Complete and Southeast segments was not recoverable.

D uring the six months ended June 30, 2025, we determined that inventory with a carrying value before impairment of $ 33.7 million for six communities in our Century Complete and Southeast segments was not recoverable.

Accordingly, during the three and six months ended June 30, 2025, we recognized impairment charges of an aggregate $ 7.4 million and $ 7.8 million, respectively, in order to record the communities at fair value .

During the three and six months ended June 30, 2024, w e recognized impairment charges of $ 0.6 million related to two communities with a carrying value before impairment of $ 4.5 million.

The estimated fair values of the communities were determined through a discounted cash flow approach utilizing Level 3 inputs.

When estimating future discounted cash flows, we utilized a weighted-average discount rate of approximately 12 % in each of our valuations during the three months and six months ended June 30, 2025 and 2024, respectively.

Changes in our cash flow projections in future periods related to our communities may change our conclusions on the recoverability of inventory in the future.

Stock-Based Compensation

During the three months ended March 31, 2025 and 2024, we granted restricted stock units (which we refer to as “RSUs”) covering 0.2 million and 0.2 million shares of common stock, respectively, with a grant date fair value of $ 76.38 and $ 85.84 per share, respectively, that vest over a three year period.

During the three months ended March 31, 2025, we granted performance share units (which we refer to as “PSUs”) covering up to 0.5 million shares of common stock assuming maximum level of performance with a weighted-average grant date fair value of $ 67.01 per share that are subject to service, performance, and market vesting conditions.

During the six months ended June 30, 2025 and 2024, we granted restricted stock units (which we refer to as “RSUs”) covering 0.2 million and 0.2 million shares of common stock, respectively, with a grant date fair value of $ 76.38 and $ 85.84 per share, respectively, that vest over a three year period.

During the six months ended June 30, 2025 and 2024, we granted 16.0 thousand and 11.0 thousand shares of common stock, respectively, on an unrestricted basis (which we refer to as “stock awards”) with a grant date fair value of $ 53.26 and $ 82.84 per share, respectively, to our non-employee directors.

During the six months ended June 30, 2025, we granted performance share units (which we refer to as “PSUs”) covering up to 0.5 million shares of common stock assuming maximum level of performance with a weighted-average grant date fair value of $ 67.01 per share that are subject to service, performance, and market vesting conditions.

The quantity of shares that will vest and be issued upon settlement of the PSUs ranges from 0 % to up to 250 % of a targeted number of shares depending upon the participant and will be determined based on achievement of three-year cumulative revenue and three-year cumulative adjusted pre-tax income performance goals.

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W e u tilize the Monte Carlo simulation model to determine the fair value of PSUs that contain market conditions , and stock-based compensation expense is recognized ratably for awards subject to market conditions regardless of whether the market condition is satisfied, provided that the requisite service has been met.

During the three months ended March 31, 2024, we granted PSUs covering up to 0.3 million shares of common stock assuming maximum level of performance with a grant date fair value of $ 82.23 per share that are subject to both service and performance vesting conditions.

During the six months ended June 30, 2024, we granted PSUs covering up to 0.3 million shares of common stock assuming maximum level of performance with a grant date fair value of $ 82.23 per share that are subject to both service and performance vesting conditions.

The quantity of shares that will ultimately vest and be issued upon settlement of the PSUs ranges from 0 % to 250 % of a targeted number of shares and will be determined based on achievement of a three-year cumulative adjusted pre-tax income performance goal.

During the three months ended March 31, 2025 and 2024, we issued 0.4 million and 0.2 million shares of common stock, respectively, upon the vesting and settlement of PSUs that were granted in previous periods.

During the six months ended June 30, 2025 and 2024, we issued 0.4 million and 0.2 million shares of common stock, respectively, upon the vesting

and settlement of PSUs that were granted in previous periods.

Approximately 1.1 million shares will vest from 2026 to 2028 if the defined maximum performance targets are met and, for applicable awards, if the defined maximum TSR conditions are met, and no shares will vest if the defined minimum performance targets are not met.

A summary of our outstanding RSUs and PSUs, assuming the current estimated level of performance achievement , are as follows (in thousands, except years):

March 31, 2025

June 30, 2025

Unvested units

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Weighted-average years to recognize compensation cost

During the three months ended March 31, 2025 and 2024, we recognized stock-based compensation expense of $ 0.3 million and $ 2.8 million, respectively.

During the three months ended June 30, 2025 and 2024, we recognized stock-based compensation expense of $ 7.9 million and $ 7.9 million, respectively.

During the six months ended June 30, 2025 and 2024, we recognized stock-based compensation expense of $ 8.2 million and $ 10.7 million, respectively.

Stock-based compensation expense is included in selling, general, and administrative expense on our condensed consolidated statements of operations.

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Accordingly, future compensation cost associated with outstanding PSUs may increase or decrease based on the probability and extent of achievement with respect to the applicable performance measures.

During the three months ended March 31, 2025, in accordance with ASC 718, Compensation—Stock Compensation, we updated our recognition of stock-based compensation expense associated with previously granted PSU awards to reflect probable financial results as they relate to the performance goals of the awards.

Accordingly, our estimate of the number of shares which will ultimately vest and be issued upon settlement of our PSU awards decreased by a total of 0.1 million shares during the three months ended March 31, 2025.

We recorded a cumulative adjustment to reduce stock-based compensation expense of $ 5.8 million ($ 4.3 million net of tax), or $ 0.14 per share (basic and diluted), during the three months ended March 31, 2025.

During the three and six months ended June 30, 2025, in accordance with ASC 718, Compensation—Stock Compensation, we updated our recognition of stock-based compensation expense associated with previously granted PSU awards to reflect probable financial results as they relate to the performance goals of the awards.

Accordingly, our estimate of the number of shares which will ultimately vest and be issued upon settlement of certain PSU awards increased by a total of 0.2 million shares during the three months ended June 30, 2025, and increased by approximately 40 thousand shares during the six months ended June 30, 2025.

During the three months ended June 30, 2025, we recorded a cumulative adjustment to increase stock-based compensation expense of $ 1.0 million ($ 0.8 million net of tax), or $ 0.03 per basic share and $ 0.02 per diluted share.

During the six months ended June 30, 2025, we recorded a cumulative adjustment to reduce stock-based compensation expense of $ 4.7 million ($ 3.5 million net of tax), or $ 0.12 per basic share and $ 0.11 per diluted share.

Stockholders’ Equity

The Company’s authorized capital stock consists of 100.0 million shares of common stock, par value $ 0.01 per share, and 50.0 million shares of preferred stock, par value $ 0.01 per share.

As of March 31, 2025 and December 31, 2024, there were 30.5 million and 31.0 million shares of common stock issued and outstanding, respectively, and no shares of preferred stock outstanding.

As of June 30, 2025 and December 31, 2024, there were 29.7 million and 31.0 million shares of common stock issued and outstanding, respectively, and no shares of preferred stock outstanding.

On May 4, 2022, the stockholders approved the adoption of the Century Communities, Inc.

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Under the 2022 Incentive Plan, 3.1 million shares of common stock are available for issuance to eligible participants, plus 51.2 thousand shares of our common stock that remained available for issuance under the 2017 Incentive Plan and any shares subject to awards outstanding under the 2017 Incentive Plan that are subsequently forfeited, cancelled, expire or otherwise terminate without the issuance of such shares.

During the three months ended March 31, 2025 and 2024, we issued 0.6 million and 0.3 million shares of common stock, respectively, related to the vesting and settlement of RSUs and PSUs.

As of March 31, 2025, approximately 1.5 million shares of common stock remained available for issuance under the 2022 Incentive Plan .

The following table sets forth cash dividends declared by our Board of Directors to holders of record of our common stock during the three months ended March 31, 2025 and 2024, respectively (dollars in thousands, except per share information):

Three months ended March 31, 2025

During the six months ended June 30, 2025 and 2024, we issued 0.6 million and 0.3 million shares of common stock, respectively, related to the vesting and settlement of RSUs and PSUs.

As of June 30, 2025, approximately 1.5 million shares of common stock remained available for issuance under the 2022 Incentive Plan .

The following table sets forth cash dividends declared by our Board of Directors to holders of record of our common stock during the three and six months ended June 30, 2025 and 2024, respectively (dollars in thousands, except per share information):

Six months ended June 30, 2025

Cash Dividends Declared and Paid

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March 12, 2025

Three months ended March 31, 2024

June 11, 2025

Six months ended June 30, 2024

Cash Dividends Declared and Paid

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March 13, 2024

June 12, 2024

Under the 2022 Incentive Plan and the previous 2017 Incentive Plan, at the discretion of the Compensation Committee of the Board of Directors, RSUs and PSUs granted under the plan have the right to earn dividend equivalents, which entitles the holders of such RSUs and PSUs to additional RSUs and PSUs equal to the same dividend value per share as holders of common stock.

Dividend equivalents are subject to the same vesting and other terms and conditions as the underlying RSUs and PSUs.

Our current stock repurchase program, authorized by our Board of Directors, authorizes us to repurchase up to 4.5 million shares of our outstanding common stock, of which 3.9 million shares remained available to be repurchased as of March 31, 2025.

During the three months ended March 31, 2025 and 2024, an aggregate of 753.3 thousand and 186.9 thousand shares, respectively, were repurchased under this and our previous stock repurchase program for a total purchase price of approximately $ 55.6 million and $ 16.1 million, respectively, and a weighted average price of $ 73.76 and $ 86.16 per share, respectively, excluding the excise tax accrued on our net share repurchases as a result of the Inflation Reduction Act of 2022.

During the three months ended March 31, 2025 and 2024, shares of common stock at a total cost of $ 17.2 million and $ 10.4 million, respectively, were netted and surrendered as payment for minimum statutory withholding obligations in connection with the vesting of outstanding stock-based compensation awards.

Shares surrendered by the participants in accordance with the applicable award agreements and plan are deemed repurchased and retired by us but are not part of our publicly announced share repurchase programs.

Our stock repurchase program authorizes us to repurchase up to 4.5 million shares of our outstanding common stock, of which 3.1 million shares remained available to be repurchased as of June 30, 2025.

During the three and six months ended June 30, 2025, an aggregate of 883.6 thousand shares and 1.6 million shares, respectively, were repurchased under our stock repurchase program for a total purchase price of approximately $ 48.0 million and $ 103.6 million, respectively, and a weighted average price of $ 54.35 and $ 63.28 per share, respectively , excluding the excise tax accrued on our net share repurchases as a result of the Inflation Reduction Act of 2022.

During the three and six months ended June 30, 2024, an aggregate of 465.0 thousand and 651.9 thousand shares, respectively, were repurchased for a total purchase price of approximately $ 37.0 million and $ 53.1 million, respectively, and a weighted average price of $ 79.61 and $ 81.49 per share, respectively.

During the six months ended June 30, 2025 and 2024, shares of common stock at a total cost of $ 17.2 million and $ 10.4 million, respectively , were netted and surrendered as payment for minimum statutory withholding obligations in connection with the vesting of outstanding stock-based compensation awards.

Earnings Per Share

We use the treasury stock method to calculate earnings per share as our currently issued non-vested RSUs and PSUs do not have participating rights.

The following table sets forth the computation of basic and diluted earnings per share (which we refer to as “EPS”) for the three months ended March 31, 2025 and 2024 (in thousands, except share and per share information):

Three Months Ended March 31,

The following table sets forth the computation of basic and diluted earnings per share (which we refer to as “EPS”) for the three and six months ended June 30, 2025 and 2024 (in thousands, except share and per share information):

Three Months Ended June 30,

Six Months Ended June 30,

Weighted average common shares outstanding - basic

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Stock-based awards are excluded from the calculation of diluted EPS in the event they are subject to unsatisfied performance conditions or are antidilutive.

During the three months ended March 31, 2025 and 2024, we excluded 0.7 million and 0.5 million, respectively, of common stock unit equivalents from diluted earnings per share related to the PSUs for which performance conditions remained unsatisfied.

During the three months ended March 31, 2025 and 2024, we excluded 0.2 million and no amounts, respectively, of common stock unit equivalents from diluted earnings per share that were antidilutive.

We excluded 0.7 million and 0.7 million common stock unit equivalents from diluted earnings per share during the three and six months ended June 30, 2025, respectively, and we excluded 0.4 million and 0.4 million common stock unit equivalents from diluted earnings per share during the three and six months ended June 30, 2024 , respectively, related to the PSUs for which performance conditions remained unsatisfied.

We excluded 0.3 million and 0.3 million common stock unit equivalents from diluted earnings per share during the three and six months ended June 30, 2025, respectively, that were antidilutive.

No amounts were antidilutive during the three and six months ended June 30, 2024.

Commitments and Contingencies

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In the normal course of business, we post letters of credit and performance and other bonds primarily related to our land development performance obligations with local municipalities.

As of March 31, 2025 and December 31, 2024, we had $ 570.9 million and $ 563.5 million, respectively, in letters of credit and performance and other bonds issued and outstanding.

As of June 30, 2025 and December 31, 2024, we had issued and outstanding letters of credit of $ 90.8 million and $ 97.5 million, respectively, and we had issued and outstanding performance and other bonds of $ 454.0 million and $ 466.0 million, respectively.

Legal Proceedings

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements