What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-07-24 compared with 2025-04-24 · 225 added, 142 removed, 462 unchanged (44% of the section changed)

65 unchanged sentences

Additionally, we prefer building move-in-ready homes over built-to-order homes, which we believe allows for a faster construction process, advantageous pricing with subcontractors, and shortened time period from home sale to home delivery, thus allowing our customers greater certainty on their financing and allowing us to more appropriately price the homes and deploy our capital.

Of the 2,284 homes delivered during the first three months of 2025, approximately 94% of homes delivered had purchase prices below the Federal Housing Administration-insured mortgage limits and approximately 99% of homes delivered were built as move-in ready homes.

Of the 4,871 homes delivered during the first six months of 2025, approximately 94% of homes delivered had purchase prices below the Federal Housing Administration-insured mortgage limits and approximately 99% of homes delivered were built as move-in ready homes.

Market conditions in the homebuilding industry have continued to be impacted by elevated mortgage rates, macro-economic and geopolitical uncertainty, and broader concerns about affordability by homebuyers.

Amidst these market conditions, we experienced a slowing in demand during the first quarter of 2025, as net new home contracts (new home contracts net of cancellations) for the three months ended March 31, 2025 decreased 6.1% compared to the prior year period.

Still, there remains an underlying need for affordable new homes, supported by solid demographic trends, and w e have continued to provide, when necessary, incentive offerings across our communities, including discounts on base home prices, lot premiums, options and upgrades, and financing incentives, including interest rate buydowns.

During the three months ended March 31, 2025, cycle times remained approximately in the four-month timeframe.

Amidst these market conditions, we experienced a slowing in demand during the first six months of 2025, as net new home contracts (new home contracts net of cancellations) for the three and six months ended June 30, 2025 decreased 8.4% and 7.2%, respectively, as compared to the respective prior year periods.

During the six months ended June 30, 2025, cycle times remained approximately in the four-month timeframe.

We anticipate the homebuilding markets in each of our operating segments will continue to be tied to both the macro-economic environment and the local economy, and we expect our operating strategy will continue to adapt to market changes, though we cannot provide any assurance that our strategies will remain consistent or continue to be successful.

We believe future demand for our homes remains uncertain as future economic, market and geopolitical conditions remain uncertain, in particular with respect to inflation;

impact of potential future increases or decreases to the federal funds interest rate by the Federal Reserve;

We believe future demand for our homes

remains uncertain as future economic, market and geopolitical conditions remain uncertain, in particular with respect to inflation;

the impact of potential future increases or decreases to the U.S.

Federal funds interest rate by the U.S.

Federal Reserve;

interest rates;

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the extent to which and how long government monetary directives and actions will impact the U.S.

the effect of recent tariffs;

the effect of significant new tariffs and/or duties;

consumer confidence;

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As a result, our past performance may not be indicative of our future results.

We believe we are well-positioned to benefit from the ongoing shortage of both new and resale homes available for purchase in our key markets and the favorable demographics that support the need for new affordable housing.

We believe we are well-positioned to benefit from the favorable demographics that support the need for new affordable housing.

We believe our operations are prepared to withstand volatility in future market conditions as a result of our product offerings which both span the home buying segment and focus on affordable price points, and our current and future inventories of attractive land positions.

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Results of Operations

During the three months ended March 31, 2025, we generated $52.5 million in income before income tax expense, as compared to $84.3 million in the prior year period, and we generated net income of $39.4 million, or $1.26 per diluted share, as compared to $64.3 million, or $2.00 per diluted share in the prior year period.

‎During the three months ended March 31, 2025, we generated total revenues of $903.2 million, as compared to $948.5 million in the prior year period, as we delivered 2,284 homes with an average sales price of $386.9 thousand, as compared to 2,358 homes with an average sales price of $391.2 thousand in the prior year period.

The number of homes delivered decreased by 3.1% as compared to the prior year period primarily due to slower absorption rates, and average sales price decreased 1.1% as compared to the prior year, primarily due to higher incentives in the current year period.

During the three months ended March 31, 2025, net new contracts decreased 6.1% to 2,692 as compared to the prior year period.

We ended the first quarter of 2025 with $100.3 million of cash and cash equivalents and $24.2 million of cash held in escrow.

During the three and six months ended June 30, 2025, we generated $47.1 million and $99.6 million, respectively, in income before income tax expense, as compared to $110.6 million and $195.0 million, respectively, in the respective prior year periods.

During the three and six months ended June 30, 2025, we generated net income of $34.9 million, or $1.14 per diluted share, and $74.2 million, or $2.40 per diluted share, respectively, as compared to $83.7 million, or $2.61 per diluted share, and $148.1 million, or $4.60 per diluted share, respectively, in the respective prior year periods.

‎During the three and six months ended June 30, 2025, we generated total revenues of $1.0 billion and $1.9 billion, respectively, as compared to $1.0 billion and $2.0 billion, respectively, in the respective prior year periods.

During the three and six months ended June 30, 2025, we delivered 2,587 and 4,871 homes, respectively, with an average sales price of $377.5 thousand and $381.9 thousand, respectively.

The number of homes delivered decreased by 1.1% and 2.1%, respectively, as compared to the respective prior year periods, primarily due to slower absorption rates, and average sales price decreased 2.9% and 2.1%, respectively, as compared to the respective prior year periods, primarily due to higher incentives in the current year periods.

During the three and six months ended June 30, 2025, net new contracts decreased 8.4% and 7.2%, respectively, to 2,546 and 5,238, respectively, as compared to the respective prior year periods.

We ended the second quarter of 2025 with $93.2 million of cash and cash equivalents and $34.3 million of cash held in escrow.

We had $270.0 million outstanding under our revolving line of credit, with a homebuilding debt to capital ratio of 33.3% and a net homebuilding debt to net capital ratio of 31.0%.

During the three months ended March 31, 2025, we paid quarterly cash dividends to our stockholders of $0.29 per share, a 12% increase from the $0.26 per share quarterly dividend paid during the three months ended March 31, 2024.

We have continued to strategically manage our lot pipeline, resulting in 79,014 lots owned and controlled at March 31, 2025.

Our Financial Services segment generated income before income tax expense of $2.4 million for the three months ended March 31, 2025, a 76.5% decrease from the prior year period.

During the three months ended March 31, 2025, the number of mortgages originated decreased 2.6% and the number of loans sold to third parties decreased 2.8%, in each case as compared to the prior year period.

The decrease in income before income tax expense of our Financial Services segment was primarily driven by lower margins on mortgages originated due to a more competitive market, as well as a decrease in fair value of our mortgage servicing portfolio.

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024:

During the three and six months ended June 30, 2025, we paid quarterly cash dividends to our stockholders of $0.29 per share, a 12% increase from the $0.26 per share quarterly dividend paid during the three and six months ended June 30, 2024.

We have continued to strategically manage our lot pipeline, while selectively reducing our land acquisition and development activities by terminating certain contracts in our markets that no longer met our investment criteria, in light of market conditions, resulting in 68,701 lots owned and controlled at June 30, 2025.

For the three and six months ended June 30, 2025, our Financial Services segment generated income before income tax expense of $6.2 million and $8.6 million, respectively, representing an increase of 9.9% and a decrease of 45.4% from the respective prior year periods.

During the three and six months ended June 30, 2025, the number of mortgages originated decreased 1.6% and 2.1%, respectively, and the number of loans sold to third parties increased 9.5% and 3.4%, respectively, as compared to the respective prior year periods.

The increase in income before income tax expense of our Financial Services segment for the three-month comparison was primarily driven by the benefit of the sale of our mortgage servicing rights portfolio during the period, which was partially offset by fair value adjustments related to our mortgage loans held for investment.

The decrease in income before income tax expense for the six-month comparison was primarily driven by lower margins on mortgages originated due to a more competitive market.

The following table summarizes our results of operations for the three and six months ended June 30, 2025 and 2024:

(in thousands, except per share amounts)

Three Months Ended March 31,

Increase (Decrease)

Three Months Ended June 30,

Six Months Ended June 30,

Consolidated Statements of Operations:

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Inventory impairment

Other (expense) income, net

Income before income tax expense

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(2) Homebuilding gross margin percentage is inclusive of impairment charges, if applicable.

We recorded impairment charges of $0.4 million during the three months ended March 31, 2025.

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

We recorded impairment charges of $7.4 million and $7.8 million, respectively, during the three and six months ended June 30, 2025, and w e recorded impairment charges of $0.6 million during the three and six months ended June 30, 2024.

NM – Not meaningful

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Commencing in the first quarter of 202 5 , we have separately reported our Century Living segment, previously included in our Corporate segment, in order to reflect the distinct nature of our multi-family rental operations.

Accordingly, we have re cast the corresponding segment information for the three months ended Ma r ch 31, 202 4 .

Three months ended March 31, 2025

Accordingly, we have re cast the corresponding segment information for the three and six months ended June 30, 202 4 .

Three months ended June 30, 2025

Century Complete

9 unchanged sentences

Income (loss) before tax expense

Three months ended March 31, 2024

Three months ended June 30, 2024

Century Complete

9 unchanged sentences

Income (loss) before tax expense

Six months ended June 30, 2025

Century Complete

Financial Services

Century Living

New homes delivered

Average sales price of new homes delivered

Cost of home sales

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

New homes delivered

Average sales price of new homes delivered

Cost of home sales

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).

During the three months ended March 31, 2025, our West segment generated income before income tax expense of $21.4 million, a 19.9% decrease from the prior year period, which was primarily driven by a decrease in homebuilding gross margin.

Revenue increased $9.1 million during the three months ended March 31, 2025 as compared to the prior year period, primarily driven by a 6.7% increase in the number of homes delivered, and was partially offset by a 1.2% decrease in the average sales price per home.

The increase in the number of homes delivered was primarily driven by an increase in open communities, and the average sales price decrease was driven by the mix of deliveries within individual communities.

Homebuilding gross margin was 22.1% for the three months ended March 31, 2025, which decreased 230 basis points from 24.4% in the prior year period, primarily driven by higher incentives in the current year period.

During the three months ended March 31, 2025, our Mountain segment generated income before income tax expense of $23.4 million, a 15.7% decrease from the prior year period, which was primarily driven by a decrease in revenue and a decrease in homebuilding gross

Revenue decreased $29.2 million during the three months ended March 31, 2025 as compared to the prior year period, primarily driven by a 13.3% decrease in the number of homes delivered, and was partially offset by a 2.1% increase in the average sales price per home.

The decrease in the number of homes delivered was primarily driven by slower absorption rates, and the average sales price increase was driven by the mix of deliveries within individual communities.

Homebuilding gross margin was 19.6% for the three months ended March 31, 2025, which decreased 70 basis points from 20.3% in the prior year period, primarily driven by higher incentives in the current year period.

During the three months ended March 31, 2025, our Texas segment generated income before income tax expense of $10.4 million, a 25.4% decrease from the prior year period, which was primarily driven by a decrease in homebuilding gross margin.

Revenue increased $5.4 million during the three months ended March 31, 2025 as compared to the prior year period, primarily driven by a 7.8% increase in the number of homes delivered, and was partially offset by a 3.4% decrease in the average sales price per home.

The increase in the number of homes delivered was primarily driven by an increase in open communities and partially offset by slower absorption rates, and the average sales price decrease was driven by the mix of deliveries within individual communities .

Homebuilding gross margin was 20.0% for the three months ended March 31, 2025, which decreased 170 basis points from 21.7% in the prior year period, primarily driven by higher incentives in the current year period.

During the three months ended March 31, 2025, our Southeast segment generated income before income tax expense of $14.2 million, a 31.8% decrease from the prior year, which was primarily driven by a decrease in revenue and a decrease in homebuilding gross margin.

Revenue decreased $27.2 million during the three months ended March 31, 2025 as compared to the prior year period, primarily driven by a 20.1% decrease in the number of homes delivered, and was partially offset by a 4.1% increase in the average sales price per home.

The decrease in the number of homes delivered was primarily driven by slower absorption rates, and the average sales price increase was driven by the mix of deliveries within individual communities.

Homebuilding gross margin was 21.8% for the three months ended March 31, 2025, which decreased 90 basis points from 22.7% in the prior year period, primarily driven by higher incentives in the current year period.

During the three and six months ended June 30, 2025, our West segment generated income before income tax expense of $25.0 million and $ 46 .4 million, respectively, representing decreases of 22.3% and 21.2% from the respective prior year periods, which were primarily driven by decreases in homebuilding gross margin.

For the three-month comparison, revenue decreased $1.8 million as compared to the prior year period, primarily driven by a 3.9% decrease in the average sales price per home, and partially offset by a 3.1% increase in the number of homes delivered.

For the six-month comparison, revenue increased $7.3 million as compared to the prior year period, primarily driven by a 4.8% increase in the number of homes delivered, and partially offset by a 2.6% decrease in the average sales price per home.

The average sales price per home decreases were driven by higher incentives, and the increases in the number of homes delivered were primarily driven by increases in open communities, partially offset by slower absorption rates.

Homebuilding gross margin decreased from the respective prior year periods, primarily driven by higher incentives in the respective current year periods.

During the three and six months ended June 30, 2025, our Mountain segment generated income before income tax expense of $15.1 million and $38.6 million, respectively, representing decreases of 56.0% and 38.0% from the respective prior year periods, which were primarily driven by decreases in revenue and decreases in homebuilding gross margin.

During the three and six months ended June 30, 2025, revenue decreased $52.5 million and $81.8 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 18.5% and 15.9%, respectively, in the number of homes delivered, and decreases of 2.2% and 0.1%, respectively, in the average sales price per home.

The decreases in the number of homes delivered were primarily driven by slower absorption rates, and

the decreases in average sales price per home were driven by higher incentives.

Homebuilding gross margin decreased from the respective prior year periods, primarily driven by higher incentives in the respective current year periods.

During the three and six months ended June 30, 2025, our Texas segment generated income before income tax expense of $8.1 million and $18.5 million, respectively, representing decreases of 54.4% and 41.7% from the respective prior year periods, which were primarily driven by decreases in homebuilding gross margin.

During the three and six months ended June 30, 2025, revenue increased $1.4 million and $6.8 million, respectively, compared to the respective prior year periods, primarily driven by increases of 3.3% and 5.4%, respectively, in the number of homes delivered, and were partially offset by decreases of 2.3% and 2.8%, respectively, in the average sales price per home.

The increases in the number of homes delivered were primarily driven by increases in open communities mainly due to our acquisition of Anglia Homes during the third quarter of 2024, and partially offset by slower absorption rates;

and the decreases in average sales price per home were driven by higher incentives.

Homebuilding gross margin decreased from the respective prior year periods, primarily driven by higher incentives in the respective current year periods.

During the three and six months ended June 30, 2025, our Southeast segment generated income before income tax expense of $11.2 million and $25.4 million, respectively, representing decreases of 56.7% and 45.6% from the respective prior year periods, which were primarily driven by decreases in homebuilding gross margin.

For the three-month comparison, revenue increased $18.3 million as compared to the respective prior year period, primarily driven by a 14.9% increase in the number of homes delivered, and partially offset by a 2.6% decrease in the average sales price per home.

The increase in the number of homes delivered was primarily driven by an increase in open communities, partially offset by slower absorption rates;

and the decrease in average sales price per home was driven by higher incentives.

For the six-month comparison, revenue decreased $8.9 million as compared to the prior year period, primarily driven by a 3.3% decrease in the number of homes delivered, primarily due to slower absorption rates.

Homebuilding gross margin decreased from the respective prior year periods, primarily driven by impairment charges of $3.8 million during the three months ended June 30, 2025, as well as higher incentives in the respective current year periods.

Century Complete

During the three months ended March 31, 2025, our Century Complete segment generated income before income tax expense of $13.8 million, a 34.5% decrease from the prior year period, which was primarily driven by a decrease in homebuilding gross margin.

Revenue increased $3.1 million during the three months ended March 31, 2025 as compared to the prior year period, primarily driven by a 2.1% increase in the number of homes delivered, and was partially offset by a 0.6% decrease in the average sales price per home.

Homebuilding gross margin was 18.0% for the three months ended March 31, 2025, which decreased 210 basis points from 20.1% in the prior year period, primarily driven by higher incentives in the current year period.

During the three and six months ended June 30, 2025, our Century Complete segment generated income before income tax expense of $15.0 million and $28.8 million, respectively, representing decreases of 48.4% and 42.5% from the respective prior year periods, which were primarily driven by decreases in revenue and homebuilding gross margin.

During the three and six months ended June 30, 2025, revenue decreased $6.3 million and $3.2 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 1.9% and 0.1%, respectively, in the number of homes delivered, and decreases of 0.6% and 0.6%, respectively, in the average sales price per home.

The decreases in the number of homes delivered were primarily driven by slower absorption rates, and the decreases in average sales price per home were driven by higher incentives.

Homebuilding gross margin decreased from the respective prior year periods, primarily driven by impairment charges during the three and six months ended June 30, 2025 of $3.6 million and $4.0 million, respectively, as well as higher incentives in the respective current year periods.

Financial Services

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Fluctuations in financial services income before income tax may occur because some components of revenue fluctuate differently than loan volumes, and some expenses are not directly related to mortgage loan volume or to changes in the amount of revenue earned.

Our Financial Services segment generated income before income tax expense of $2.4 million for the three months ended March 31, 2025, a 76.5% decrease from the prior year period.

The decrease in income before income tax expense for the six-month comparison was primarily driven by lower margins on mortgages originated due to a more competitive market.

The following table presents selected operational data for our Financial Services segment in relation to our loan origination activities (dollars in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Total originations:

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Century Living

Our Century Living operations are engaged in the development, construction, management, and disposition of multi-family rental properties.

As of March 31, 2025, the Company had three multi-family rental properties under active construction in Colorado, two of which were available for leasing.

These three projects represent over 1,000 total multi-family units, including 471 under active construction and 581 completed units, of which 336 units were leased as of March 31, 2025.

During the three months ended March 31, 2025, our Corporate segment generated a loss of $31.6 million, as compared to a loss of $35.3 million during the same respective period in 2024.

The decrease in loss was primarily due to $7.7 million in impairment charges related to other investments during the three months ended March 31, 2024, as well as a reduction in interest income as compared to the prior year period.

Our Century Living operations are engaged in the development, construction, management, and disposition of multi-family rental properties, currently all located in Colorado.

During the six months ended June 30, 2025, the Company had three multi-family rental properties;

one of which was completed and two of which were under active construction.

Two of the properties were currently available for leasing.

These three projects represent over 1,000 total multi-family units, including 471 under active construction and 581 completed units, of which 526 units were leased as of June 30, 2025 .

During the three and six months ended June 30, 2025, our Corporate segment generated losses of $35.0 million and $66.6 million, respectively, as compared to losses of $33.6 million and $68.9 million, respectively, during the same respective periods in 2024.

The increase in loss for the three-month comparison was primarily due to increased compensation costs as compared to the prior year period.

The decrease in loss for the six-month comparison was primarily due to $7.7 million in prior year impairment charges related to other investments during the six months ended June 30, 2024, and was partially offset by increased compensation costs during the current year period as compared to the prior year period.

Homebuilding Gross Margin

Homebuilding gross margin represents home sales revenues less cost of home sales revenues and inventory impairment, if applicable.

Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, decreased to 19.9% for the three months ended March 31, 2025 as compared to 21.3% in the prior year period.

The decrease was primarily driven by higher incentives in the current year period.

Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, decreased for the three and six months ended June 30, 2025 to 17.6% and 18.7%, respectively, as compared to 22.5% and 22.0% for the same respective periods in 2024.

The decreases were primarily driven by reductions in average sales price per home due to higher incentives in the current year periods.

In the following table, we calculate our homebuilding gross margin and our adjusted homebuilding gross margin, as adjusted to exclude inventory impairment, if applicable, and interest in cost of home sales revenues, and further adjusted to exclude the effect of purchase price accounting for acquired work in process inventory, if applicable.

Three Months Ended March 31,

Three Months Ended June 30,

Home sales revenues

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Inventory impairment

Adjusted homebuilding gross margin excluding inventory impairment

Interest in cost of home sales revenues

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Adjusted homebuilding gross margin excluding interest, inventory impairment and purchase price accounting for acquired work in process inventory (1)

Six Months Ended June 30,

Home sales revenues

Cost of home sales revenues

Inventory impairment

Homebuilding gross margin

Inventory impairment

Adjusted homebuilding gross margin excluding inventory impairment

Interest in cost of home sales revenues

Purchase price accounting for acquired work in process inventory

Adjusted homebuilding gross margin excluding interest, inventory impairment and purchase price accounting for acquired work in process inventory (1)

(1) This non-GAAP financial measure should not be used as a substitute for our operating results in accordance with GAAP.

See the reconciliations to the most comparable GAAP measure and other information under “ — Non-GAAP Financial Measures.” An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

For the three months ended March 31, 2025, our adjusted homebuilding gross margin percentage excluding inventory impairment, interest in cost of home sales revenues, and purchase price accounting for acquired work in process inventory was 21.6% as compared to 22.8% for the prior year period.

See the reconciliations to the most comparable GAAP measure and other information above.

An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

For the three and six months ended June 30, 2025, our adjusted homebuilding gross margin percentage excluding inventory impairment, interest in cost of home sales revenues, and purchase price accounting for acquired work in process inventory was 20.0% and 20.8%, respectively, as compared to 24.0% and 23.4% for the same respective periods in 2024.

We believe the above information is meaningful as it isolates the impact that inventory impairment, indebtedness, and acquisitions (in each case as applicable) during any period, have on our homebuilding gross margin and allows for comparability of our homebuilding gross margins to prior periods and to homebuilding gross margins of our competitors.

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(dollars in thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Selling, general and administrative

As a percentage of home sales revenue

As a percentage of home sales revenue, our selling, general and administrative expense increased 130 basis points during the three months ended March 31, 2025, driven primarily by decreased revenue on a partially fixed cost base.

Our selling, general and administrative expense increased $6.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

This increase was primarily attributable to increased compensation and other costs due to higher active community count and $1.5 million in restructuring costs, and partially offset by decreased stock compensation expense.

Six Months Ended June 30,

Selling, general and administrative

As a percentage of home sales revenue

Our selling, general and administrative expense increased $2.9 million and $9.5 million for the three and six months ended June 30, 2025 as compared to the same respective periods in 2024.

These increases were primarily attributable to advertising costs and other costs due to higher active community count.

During the three and six months ended June 30, 2025, our selling, general and administrative expense as a percentage of home sales revenue increased 80 basis points and 100 basis points, respectively, driven primarily by decreased revenue on a partially fixed cost base.

Income Tax Expense

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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 .

Segment Assets

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Century Living

Total assets increased to $4.6 billion as of March 31, 2025 as compared to $4.5 billion as of December 31, 202 4, primarily as a result of changes in our inventory balances within our homebuilding segments related to the timing of home and land development construction activities.

Total assets increased to $4.6 billion as of June 30, 2025 as compared to $4.5 billion as of December 31, 202 4, primarily due to changes in our inventory balances within our homebuilding segments related to the timing of home and land development construction activities.

This increase was partially offset by a decrease in our Financial Services assets, including a decrease in mortgage loans held for sale, and a decrease in our mortgage servicing rights due to the sale of the portfolio during the three months ended June 30, 2025.

Homebuilding lots owned and controlled

March 31, 2025

June 30, 2025

December 31, 2024

Century Complete

During the three months ended March 31, 2025, we continued to strategically manage our lot pipeline, resulting in 79,014 lots owned and controlled at March 31, 2025, compared to 80,632 at December 31, 2024.

Of our total lots owned and controlled as of March 31, 2025, 45.4% were owned and 54.6% were controlled, as compared to 44.3% owned and 55.7% controlled as of December 31, 2024.

During the three and six months ended June 30, 2025, we continued to strategically manage our lot pipeline, resulting in 68,701 lots owned and controlled at June 30, 2025, compared to 80,632 at December 31, 2024.

Of our total lots owned and controlled as of June 30, 2025, 54.5% were owned and 45.5% were controlled, as compared to 44.3% owned and 55.7% controlled as of December 31, 2024.

The decrease in the number of controlled lots was driven by the termination of certain contracts in our markets that no longer met our investment criteria, in light of market conditions.

Other Homebuilding Operating Data

1 unchanged sentence

Three Months Ended

Six Months Ended

Increase (Decrease)

Century Complete

Net new home contracts (new home contracts net of cancellations) for the three months ended March 31, 2025 decreased by 174 homes, or 6.1%, to 2,692 as compared to 2,866 for the same period in 2024.

Net new home contracts (new home contracts net of cancellations) for the three months ended June 30, 2025 decreased by 234 homes, or 8.4%, to 2,546 as compared to 2,780 for the same period in 2024.

Net new home contracts for the six months ended June 30, 2025 decreased by 408 homes, or 7.2%, to 5,238 as compared to 5,646 for the same period in 2024.

Average monthly absorption rate

Our overall average monthly “absorption rate” (calculated as monthly net new home contracts divided by average selling communities) for the three months ended March 31, 2025 and 2024 by segment is included in the table below:

Three Months Ended March 31,

Our overall average monthly “absorption rate” (calculated as monthly net new home contracts divided by average selling communities) for the three and six months ended June 30, 2025 and 2024 by segment is included in the table below:

Three Months Ended June 30,

Increase (Decrease)

Century Complete

During the three months ended March 31, 2025, our absorption rate decreased by 24.3% to 2.8 per month as compared to the same period in 2024, driven by slowing demand during the first quarter of 2025 amidst homebuilding market conditions impacted by elevated mortgage rates, macro-economic and geopolitical uncertainty, and broader concerns about affordability by homebuyers.

Six Months Ended June 30,

Increase (Decrease)

Century Complete

During the three and six months ended June 30, 2025, our absorption rates decreased by 22.9% and 22.2%, respectively, to 2.7 per month and 2.8 per month, respectively, as compared to the same respective periods in 2024, primarily driven by slowing demand during the first six months of 2025 amidst homebuilding market conditions impacted by elevated mortgage rates, macro-economic and geopolitical uncertainty, and broader concerns about affordability by homebuyers.

Selling communities

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Average Selling Communities

As of March 31,

For the three months ended March 31,

Average Selling Communities

As of June 30,

Three Months Ended June 30,

Six Months Ended June 30,

Century Complete

Our selling communities increased by 65 communities to 318 communities at March 31, 2025 as compared to 253 at March 31, 2024.

This 25.7% increase was a result of an increased land pipeline that resulted in new community openings in excess of community closeouts, as well as the acquisition of Anglia completed during the third quarter of 2024.

Our selling communities increased by 61 communities to 327 communities at June 30, 2025 as compared to 266 at June 30, 2024.

This 22 .9% increase was a result of an increased land pipeline that resulted in new community openings in excess of community closeouts, as well as the acquisition of Anglia Homes completed during the third quarter of 2024.

(dollars in thousands)

As of March 31,

As of June 30,

Average Sales Price

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Backlog reflects the number of homes, net of cancellations, for which we have entered into a sales contract with a customer but for which we have not yet delivered the home.

As of March 31, 2025, we had 1,258 homes in backlog, which decreased as compared to 1,590 homes in backlog at March 31, 2024, with a total value of $521.1 million, as compared to $667.2 million at March 31, 2024.

Backlog dollar value decreased due to the decrease in the number of backlog units, and a 1.3% decrease in the average sales price of backlog units, largely due to mix.

As of June 30, 2025, we had 1,217 homes in backlog, which decreased as compared to 1,753 homes in backlog at June 30, 2024, with a total value of $466.0 million, as compared to $754.6 million at June 30, 2024.

Backlog dollar value decreased due to the decrease in the number of backlog units, and a 11.1% decrease in the average sales price of backlog units, generally due to higher incentives.

Supplemental Guarantor Information

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The guarantees are effectively subordinated to any secured debt of the Guarantors.

As of March 31, 2025, Century Communities, Inc.

As of June 30, 2025, Century Communities, Inc.

had outstanding $1.0 billion in total principal amount of Senior Notes.

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(1) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the equity interests of such Guarantor after which the applicable Guarantor is no longer a “Restricted Subsidiary” (as defined in the respective indentures), which sale, transfer, exchange or other disposition does not constitute an “Asset Sale” (as defined in the respective indentures) or is made in compliance with applicable provisions of the applicable indenture;

(2) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the assets of such Guarantor, which sale, transfer, exchange or other

disposition does not constitute an Asset Sale or is made in compliance with applicable provisions of the applicable indenture;

(2) upon any sale, transfer, exchange or

other disposition (by merger, consolidation or otherwise) of all of the assets of such Guarantor, which sale, transfer, exchange or other disposition does not constitute an Asset Sale or is made in compliance with applicable provisions of the applicable indenture;

provided, that after such sale, transfer, exchange or other disposition, such Guarantor is an “Immaterial Subsidiary” (as defined in the respective indentures);

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Summarized Balance Sheet Data (in thousands)

March 31, 2025

June 30, 2025

December 31, 2024

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Summarized Statements of Operations Data (in thousands)

March 31, 2025

Six Months Ended

June 30, 2025

December 31, 2024

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Liquidity and Capital Resources

Our liquidity, consisting of our cash and cash equivalents and cash held in escrow and revolving line of credit availability, was $787.5 million as of March 31, 2025 and $918.0 million as of December 31, 2024.

Our principal uses of capital for the three months ended March 31, 2025 were our land purchases, land development, home construction, construction of multi-family rental properties, share repurchases, dividends, and the payment of routine liabilities.

Our liquidity, consisting of our cash and cash equivalents and cash held in escrow and current capacity on our revolving line of credit, was $857.6 million as of June 30, 2025 and $918.0 million as of December 31, 2024 .

Our principal uses of capital for the three and six months ended June 30, 2025 were our land purchases, land development, home construction, construction of multi-family rental properties, share repurchases, dividends, and the payment of routine liabilities.

Cash flows for each of our communities depend on the stage in the development cycle and can differ substantially from reported earnings.

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From a liquidity standpoint, we continue to acquire and develop lots in our markets when they meet our current investment criteria.

During the six months ended June 30, 2025, we reduced our land acquisition and development activities by terminating certain contracts in our markets that no longer met our investment criteria, in light of current market conditions.

Short-term Liquidity and Capital Resources

We use funds generated by operations, available borrowings under our revolving line of credit, and proceeds from issuances of debt or equity to fund our short-term working capital obligations and our purchases of land, as well as land development, home construction activities, and other cash needs.

We had $237.0 million outstanding under our revolving line of credit as of March 31, 2025, as compared to $135.5 million outstanding as of December 31, 2024.

We had $270.0 million outstanding under our revolving line of credit as of June 30, 2025, as compared to $135.5 million outstanding as of December 31, 2024.

Our Financial Services operations use funds generated from operations, and availability under our mortgage repurchase facilities to finance its operations, including originations of mortgage loans to our homebuyers.

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In a higher interest rate environment, we may incur additional interest expense on borrowings that bear floating interest rates, such as under our revolving line of credit, repurchase facilities, and construction loan agreements.

To the extent these sources of capital are insufficient to meet our needs, we may also conduct additional public or private offerings of our securities, refinance debt, or dispose of certain assets to fund our operating activities and capital needs.

To the extent these sources of capital are insufficient to meet our needs, we may also

conduct additional public or private offerings of our securities, refinance debt, or dispose of certain assets to fund our operating activities and capital needs.

Material Cash Requirements

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These obligations impact our short-term and long-term liquidity and capital resource needs.

For the three months ended March 31, 2025, there were no material changes to the contractual obligations we previously described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 that was filed with the SEC on January 30, 2025.

For the three and six months ended June 30, 2025, there were no material changes to the contractual obligations we previously described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 that was filed with the SEC on January 30, 2025.

In the ordinary course of business, we enter into land purchase contracts in order to procure lots for the construction of our homes.

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Our obligations with respect to purchase contracts and option contracts are generally limited to the forfeiture of the related non-refundable cash deposits.

As of March 31, 2025, we had outstanding purchase contracts and option contracts for 43,117 lots totaling approximately $3.0 billion and we had $111.0 million of deposits for land contracts, of which $70.5 million were non-refundable cash deposits pertaining to land contracts.

We strive to strategically manage our lot pipeline, while selectively reducing our land acquisition and development activities by terminating certain contracts in markets that do not meet our investment criteria, in light of current market conditions, in order to maintain a balance between the number of owned lots as compared to lots we control through option and other contracts.

This balance allows us flexibility to adjust to market conditions as they develop.

As of June 30, 2025, we had outstanding purchase contracts and option contracts for 31,282 lots totaling approximately $2.5 billion and we had $103.1 million of deposits for land contracts, of which $70.1 million were non-refundable cash deposits pertaining to land contracts.

For contracts for which cash deposits were non-refundable, and subject to the terms of the outstanding contracts continuing to meet our investment criteria, we currently anticipate performing on the majority of our purchase and option contracts during the next 24 months.

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Our outstanding indebtedness is described in detail in Note 10 – Debt in the Notes to the Condensed Consolidated Financial Statements .

We are required to meet certain covenants, and as of March 31, 2025, we were in compliance with all such covenants and requirements under the agreements governing our revolving line of credit, mortgage repurchase facilities, and construction loan agreements.

We are required to meet certain covenants, and as of June 30, 2025, we were in compliance with all such covenants and requirements under the agreements governing our revolving line of credit, mortgage repurchase facilities, and construction loan agreements.

See Note 10 – Debt in the Notes to the Condensed Consolidated Financial Statements for further detail.

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

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

6.750% senior notes, due June 2027 (1)

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(1) The carrying value of the senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost 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, as described below.

(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 described below.

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.

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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

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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.

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Unless terminated earlier, the revolving line of credit will mature on November 1, 2028, and the principal amount thereunder, together with all accrued unpaid interest and other amounts owing thereunder, if any, will be payable in full on such date.

Subject to the terms and conditions of the Credit Agreement, we may request once per year a one-year extension of the maturity date and up to three times during the term of

the revolving line of credit, subject to the approval of the lenders and the Administrative Agent.

Subject to the terms and conditions of the Credit Agreement, we may request once per year a one-year extension of the maturity date and up to three times during the term of the revolving line of credit, subject to the approval of the lenders and the Administrative Agent.

The Credit Agreement contains customary affirmative and negative covenants (including limitations on our ability to grant liens, incur additional debt, pay dividends, redeem our common stock, make certain investments, issue certain equity securities, engage in transactions with affiliates and engage in certain merger, consolidation or asset sale transactions), as well as customary events of default.

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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

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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.

Letters of Credit and Performance Bonds

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.

Although significant development and construction activities have been completed related to the improvements at these sites, the letters of credit and performance and other bonds are not generally fully released until all development and construction activities are completed.

Stock Repurchases

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.

Under the terms of these programs, shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws.

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 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 $63.26 per share, respectively.

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.

Under the terms of our stock repurchase program, shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws.

The actual manner, timing, amount and value of repurchases under the stock repurchase program is determined by management at its discretion and depends on a number of factors, including, among others, the market price of our common stock, trading volume, our available cash balance, our anticipated working capital needs, other capital management objectives and opportunities, applicable legal requirements, applicable tax effects including the 1% excise tax instituted under the Inflation Reduction Act of 2022, and general market and economic conditions.

We finance any stock repurchases through available cash and our revolving line of credit.

Repurchases also may be made under a trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934, which would permit shares to be repurchased when we otherwise may be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions.

Our stock repurchase programs have no expiration dates and may be extended, suspended or discontinued by our Board of Directors at any time without notice at our discretion.

All shares of common stock repurchased under the programs will be cancelled and returned to the status of authorized but unissued shares of common stock.

Repurchases also may be made under a trading plan established under Rule 10b5-1 under the Securities Exchange Act of 1934, which would permit shares to be repurchased when we otherwise may be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions.

Our stock repurchase program has been approved by our Board of Directors and has no expiration dates and may be extended, suspended or discontinued by our Board of Directors at any time without notice at our discretion.

All shares of common stock repurchased under the program will be cancelled and returned to the status of authorized but unissued shares of common stock.

Cash Dividends

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 (in thousands, except per share information):

Three months ended March 31, 2025

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 (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

We expect to continue paying our quarterly cash dividends to stockholders for the remainder of 2025.

However, the declaration and payment of future cash dividends on our common stock, whether at current levels or at all, are at the discretion of our Board of Directors and depend upon, among other things, our expected future earnings, cash flows, capital requirements, access to external financing, debt structure and any adjustments thereto, operational and financial investment strategy and general financial condition, as well as general business conditions.

Cash Flows— Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

For the three months ended March 31, 2025 and 2024, the comparison of cash flows is as follows:

Cash Flows— Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

For the six months ended June 30, 2025 and 2024, the comparison of cash flows is as follows:

 Our primary sources of cash flows from operations are from the sale of single-family attached and detached homes and mortgages.

Our primary uses of cash flows from operations are the acquisition of land and expenditures associated with the construction of our single-family attached and detached homes and the origination of mortgages held for sale.

Net cash used in operating activities was $36.6 million during the three months ended March 31, 2025 as compared to net cash provided by operating activities of $21.6 million during the prior year period.

This change is primarily a result of (1) a $24.9 million decrease in net income, (2) changes in cash balances held in escrow, and (3) expenditures related to the development, construction, and management of multi-family rental properties by our Century Living segment within prepaid and other assets during the three months ended March 31, 2025.

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, and cash flows from development activities and the disposition of properties are recorded as operating activities on the condensed consolidated statement of cash flows.

 Net cash used in investing activities decreased to $4.0 million during the three months ended March 31, 2025, compared to $64.6 million during the prior year period.

This decrease was primarily related to (1) $32.7 million in expenditures related to our acquisition of Landmark during the three months ended March 31, 2024 and (2) $26.0 million in expenditures related to the development, construction, and management of multi-family rental properties by our Century Living segment during the three months ended March 31, 2024.

 Net cash used in financing activities was $1.5 million during the three months ended March 31, 2025, compared to $54.7 million during the prior year period.

This decrease in net cash used in financing activities was primarily attributable to a $101.5 million increase in net borrowings under our revolving line of credit during the current year period, and was partially offset by a $39.5 million increase in stock repurchases during the current year period, in each case compared to the prior year period.

As of March 31, 2025, our cash and cash equivalents and restricted cash balance was $133.2 million, as compared to $175.3 million as of December 31, 2024.

Net cash used in operating activities was $47.6 million during the six months ended June 30, 2025 as compared to net cash used in operating activities of $78.5 million during the prior year period.

This decrease in net cash used is primarily a result of reduced expenditures related to land acquisition and expenditures associated with the construction of homes during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

This was offset by (1) a $73.8 million decrease in net income during the current year period (2) and changes in cash balances held in escrow, in each case compared to the prior year period.

 Net cash provided by investing activities increased to $29.6 million during the six months ended June 30, 2025, compared to $87.6 million used in investing activities during the prior year period.

This change was primarily related to (1) $42.8 million cash proceeds related to the sale of our mortgage servicing rights portfolio during the six months ended June 30, 2025, (2) $42.4 million in expenditures related to the development, construction, and management of multi-family rental properties by our Century Living segment during the 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 and we determined that these operations have become part of our ordinary activities, and cash flows from development activities and the disposition of properties are recorded as operating activities on the condensed consolidated statement of cash flows, and (3) $32.7 million in expenditures related to our acquisition of Landmark during the six months ended June 30, 2024.

 Net cash used in financing activities was $31.0 million during the six months ended June 30, 2025, compared to $52.6 million net cash provided by financing activities during the prior year period.

This change was primarily attributable to a (1) a $60.9 million increase in net payments for our mortgage repurchase facilities, and (2) a $50.5 million increase in stock repurchases during the current year period, in each case compared to the prior year period.

As of June 30, 2025, our cash and cash equivalents and restricted cash balance was $126.4 million, as compared to $175.3 million as of December 31, 2024.

Non-GAAP Financial Measures

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EBITDA and Adjusted EBITDA

The following table presents EBITDA and adjusted EBITDA for the three months ended March 31, 2025 and 2024.

The following table presents EBITDA and adjusted EBITDA for the three and six months ended June 30, 2025 and 2024.

EBITDA and adjusted EBITDA are non-GAAP financial measures we use as a supplemental measure in evaluating operating performance.

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(dollars in thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Income tax expense

Interest in cost of home sales revenues

Interest expense (income)

Interest income

Depreciation and amortization expense

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(in thousands, except share and per share information)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Weighted average common shares outstanding - basic

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Adjusted diluted earnings per share

(1) The tax rates used in calculating adjusted net income for the three months ended March 31, 2025 and 2024 were 25.0% and 23.7%, respectively, which are reflective of our GAAP tax rates for the applicable periods.

(1) The tax rates used in calculating adjusted net income for the three and six months ended June 30, 2025 were each 25.5%, respectively, which are reflective of our GAAP tax rates for the six months ended June 30, 2025.

The tax rates used in calculating adjusted net income for the three and six months ended June 30, 2024 were each 24.1%, respectively, which are reflective of our GAAP tax rates for the applicable periods.

QUANTIT ATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rates

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices.

Our primary exposure to market risk is interest rate risk associated with our Credit Agreemen t and construction loan agreements.

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, inflation, foreign currency exchange rates and commodity prices.

For additional information regarding our market risk, refer to the “Quantitative and Qualitative Disclosures About Market Risk” section of our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no material changes in our market risk since December 31, 2024.

There have been no material changes in our market risk since December 31, 2024, except as discussed below and any future impact on market risk from the implementation and/or potential implementation by the current U.S.

Presidential Administration of significant additional tariffs and/or duties on several countries and territories.

Interest Rates

Our primary exposure to market risk is interest rate risk associated with our Credit Agreemen t and construction loan agreements, as discussed in more detail in our Annual Report on Form 10-K for the year ended December 31, 2024 and elsewhere in this report, and the impact of interest rate changes on the affordability of mortgage financing to homebuyers, which affects demand for our homes.

Federal Reserve did not change the U.S.

Federal funds interest rate during the first six months of 2025, and we cannot provide any assurance as to the impact of any future potential changes to the U.S.

Federal funds interest rate on mortgage rates or our current or future business.

Our homebuilding operations have been and may continue to be adversely impacted by inflation, primarily from higher land, financing, labor, material, and construction costs.

The Federal Reserve did not change the federal funds interest rate during the first quarter of 2025, and we cannot provide any assurance as to the impact of any future potential changes to the federal funds interest rate or mortgage rates on our current or future business.

Inflation has led and could continue to lead to higher mortgage rates, which has and could continue to significantly affect the affordability of mortgage financing to homebuyers and lead to weakened demand for our homes, as well as increased cancellations compared to prior year periods.

In addition, the implementation and/or potential implementation by the current U.S.

Presidential Administration of significant additional tariffs and/or duties on several countries and territories could result in an inflationary environment adversely affecting our business.

Historically, the homebuilding industry experiences seasonal fluctuations in quarterly operating results and capital requirements.

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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 2. Management’s Discussion and Analysis