Century Communities, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS. Century Communities, Inc. Condensed Consolidated Balance Sheets As of June 30, 2025 and December 31, 2024 (in thousands, except share and per share amounts) June 30, December 31, 2025 2024 Assets (unaudited) (audited) Cash and cash equivalents $ 93,246 $ 149,998 Cash held in escrow 34,349 3,004 Accounts receivable 68,893 50,318 Inventories 3,509,639 3,454,337 Mortgage loans held for sale 184,390 236,926 Prepaid expenses and other assets 539,684 419,384 Property and equipment, net 86,865 155,176 Deferred tax assets, net 21,315 22,220 Goodwill 41,109 41,109 Total assets $ 4,579,490 $ 4,532,472 Liabilities and stockholders' equity Liabilities: Accounts payable $ 145,269 $ 133,086 Accrued expenses and other liabilities 283,588 302,317 Notes payable 1,135,202 1,107,909 Revolving line of credit 270,000 135,500 Mortgage repurchase facilities 181,440 232,804 Total liabilities 2,015,499 1,911,616 Stockholders' equity: Preferred stock, $ 0.01 par value, 50,000,000 shares authorized, none outstanding — — 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 297 310 Additional paid-in capital 414,002 526,959 Retained earnings 2,149,692 2,093,587 Total stockholders' equity 2,563,991 2,620,856 Total liabilities and stockholders' equity $ 4,579,490 $ 4,532,472 See Notes to Unaudited Condensed Consolidated Financial Statements 3 Table of Contents Century Communities, Inc. Unaudited Condensed Consolidated Statements of Operations For the Three and Six Months Ended June 30, 2025 and 2024 (in thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenues Homebuilding revenues Home sales revenues $ 976,467 $ 1,017,414 $ 1,860,204 $ 1,939,816 Land sales and other revenues 483 377 1,445 1,593 Total homebuilding revenues 976,950 1,017,791 1,861,649 1,941,409 Financial services revenues 23,774 21,659 42,308 46,585 Total revenues 1,000,724 1,039,450 1,903,957 1,987,994 Homebuilding cost of revenues Cost of home sales revenues ( 797,162 ) ( 787,556 ) ( 1,504,666 ) ( 1,513,127 ) Cost of land sales and other revenues ( 69 ) — ( 897 ) ( 37 ) Total homebuilding cost of revenues ( 797,231 ) ( 787,556 ) ( 1,505,563 ) ( 1,513,164 ) Financial services costs ( 17,550 ) ( 15,996 ) ( 33,724 ) ( 30,873 ) Selling, general and administrative ( 128,837 ) ( 125,973 ) ( 249,596 ) ( 240,082 ) Inventory impairment ( 7,360 ) ( 570 ) ( 7,771 ) ( 570 ) Other (expense) income, net ( 2,663 ) 1,278 ( 7,702 ) ( 8,353 ) Income before income tax expense 47,083 110,633 99,601 194,952 Income tax expense ( 12,229 ) ( 26,909 ) ( 25,363 ) ( 46,897 ) Net income $ 34,854 $ 83,724 $ 74,238 $ 148,055 Earnings per share: Basic $ 1.15 $ 2.65 $ 2.43 $ 4.67 Diluted $ 1.14 $ 2.61 $ 2.40 $ 4.60 Weighted average common shares outstanding: Basic 30,366,109 31,648,130 30,582,376 31,728,544 Diluted 30,680,708 32,092,789 30,912,086 32,165,798 See Notes to Unaudited Condensed Consolidated Financial Statements 4 Table of Contents Century Communities, Inc. Unaudited Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2025 and 2024 (in thousands) Six Months Ended June 30, 2025 2024 Operating activities Net income $ 74,238 $ 148,055 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 12,862 11,165 Stock-based compensation expense 8,233 10,710 Fair value adjustments of mortgage-related assets and liabilities 782 ( 4,578 ) Inventory impairment 7,771 570 Impairment on other investment — 7,722 Abandonment of lot option contracts 4,148 1,818 Deferred income taxes 905 ( 428 ) (Gain) loss on disposition of assets and other ( 36 ) ( 2,187 ) Changes in assets and liabilities: Cash held in escrow ( 31,345 ) 57,022 Accounts receivable ( 13,845 ) ( 1,442 ) Inventories ( 85,927 ) ( 246,776 ) Mortgage loans held for sale 54,491 ( 7,631 ) Prepaid expenses and other assets ( 70,038 ) ( 32,058 ) Accounts payable 12,183 11,402 Accrued expenses and other liabilities ( 22,047 ) ( 31,824 ) Net cash used in operating activities ( 47,625 ) ( 78,460 ) Investing activities Purchases of property and equipment ( 9,887 ) ( 23,492 ) Proceeds from sale of property and equipment 106 11,014 Proceeds from sale of mortgage servicing rights 42,756 — Expenditures related to development of rental properties — ( 42,431 ) Payments for business combination — ( 32,716 ) Other investing activities ( 3,340 ) — Net cash provided by (used in) investing activities 29,635 ( 87,625 ) Financing activities Borrowings under revolving credit facilities 1,395,000 656,000 Payments on revolving credit facilities ( 1,260,500 ) ( 545,000 ) Borrowing under construction loan agreements 25,251 27,965 Proceeds from issuance of insurance premium notes and other 12,266 11,166 Principal payments on insurance premium notes and other ( 11,019 ) ( 27,053 ) Debt issuance costs ( 1,342 ) — Net (payments) proceeds for mortgage repurchase facilities ( 51,364 ) 9,518 Withholding of common stock upon vesting of stock-based compensation awards ( 17,236 ) ( 10,424 ) Repurchases of common stock under stock repurchase program ( 103,616 ) ( 53,139 ) Dividend payments ( 17,705 ) ( 16,481 ) Other financing activities ( 685 ) — Net cash (used in) provided by financing activities ( 30,950 ) 52,552 Net decrease $ ( 48,940 ) $ ( 113,533 ) Cash and cash equivalents and Restricted cash Beginning of period 175,323 242,003 End of period $ 126,383 $ 128,470 Supplemental cash flow disclosure Cash paid for income taxes $ 34,980 $ 55,611 Cash and cash equivalents and Restricted cash Cash and cash equivalents $ 93,246 $ 106,682 Restricted cash (Note 6) 33,137 21,788 Cash and cash equivalents and Restricted cash $ 126,383 $ 128,470 See Notes to Unaudited Condensed Consolidated Financial Statements 5 Table of Contents Century Communities, Inc. Unaudited Condensed Consolidated Statements of Stockholders’ Equity (in thousands) For the Three Months Ended June 30, 2025 and 2024 Common Stock Shares Amount Additional Paid-In Capital Retained Earnings Total Stockholders' Equity Balance at March 31, 2025 30,547 $ 305 $ 454,265 $ 2,123,933 $ 2,578,503 Vesting of stock-based compensation awards 17 — — — — Withholding of common stock upon vesting of stock-based compensation awards — — ( 6 ) — ( 6 ) Repurchases of common stock ( 884 ) ( 8 ) ( 48,030 ) — ( 48,038 ) Stock-based compensation expense — 7,941 — 7,941 Cash dividends declared and dividend equivalents — — 312 ( 9,095 ) ( 8,783 ) Other — — ( 480 ) ( 480 ) Net income — — — 34,854 34,854 Balance at June 30, 2025 29,680 $ 297 $ 414,002 $ 2,149,692 $ 2,563,991 Balance at March 31, 2024 31,791 $ 318 $ 569,581 $ 1,849,377 $ 2,419,276 Vesting of stock-based compensation awards 11 — — — — Withholding of common stock upon vesting of stock-based compensation awards ( 1 ) — ( 10 ) — ( 10 ) Repurchases of common stock ( 465 ) ( 5 ) ( 37,025 ) ( 37,030 ) Stock-based compensation expense — — 7,914 — 7,914 Cash dividends declared and dividend equivalents — — 113 ( 8,330 ) ( 8,217 ) Net income — — — 83,724 83,724 Balance at June 30, 2024 31,336 $ 313 $ 540,573 $ 1,924,771 $ 2,465,657 For the Six Months Ended June 30, 2025 and 2024 Common Stock Shares Amount Additional Paid-In Capital Retained Earnings Total Stockholders' Equity Balance at December 31, 2024 30,961 $ 310 $ 526,959 $ 2,093,587 $ 2,620,856 Vesting of stock-based compensation awards 582 5 ( 5 ) — — Withholding of common stock upon vesting of stock-based compensation awards ( 226 ) ( 2 ) ( 17,234 ) — ( 17,236 ) Repurchases of common stock ( 1,637 ) ( 16 ) ( 103,600 ) — ( 103,616 ) Stock-based compensation expense — — 8,233 — 8,233 Cash dividends declared and dividend equivalents — — 428 ( 18,133 ) ( 17,705 ) Other — — ( 779 ) — ( 779 ) Net income — — — 74,238 74,238 Balance at June 30, 2025 29,680 $ 297 $ 414,002 $ 2,149,692 $ 2,563,991 Balance at December 31, 2023 31,775 $ 318 $ 592,989 $ 1,793,629 $ 2,386,936 Vesting of stock-based compensation awards 334 3 ( 3 ) — — Withholding of common stock upon vesting of stock-based compensation awards ( 121 ) ( 1 ) ( 10,423 ) — ( 10,424 ) Repurchases of common stock ( 652 ) ( 7 ) ( 53,132 ) — ( 53,139 ) Stock-based compensation expense — — 10,710 — 10,710 Cash dividends declared and dividend equivalents — — 432 ( 16,913 ) ( 16,481 ) Net income — — — 148,055 148,055 Balance at June 30, 2024 31,336 $ 313 $ 540,573 $ 1,924,771 $ 2,465,657 See Notes to Unaudited Condensed Consolidated Financial Statements 6 Table of Contents Century Communities, Inc. Notes to Unaudited Condensed Consolidated Financial Statements June 30, 2025 1. Basis of Presentation Century Communities, Inc. (which we refer to as “we,” “CCS,” or the “Company”), together with its subsidiaries, is engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 16 states. In many of our projects, in addition to building homes, we entitle and develop the underlying land. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand has an emphasis on serving the affordable homebuilding market but offers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade selections. 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 homebuilding operations are organized into the following five reportable segments: West, Mountain, Texas, Southeast, and Century Complete. Our indirect wholly-owned subsidiaries, Inspire Home Loans Inc., Parkway Title, LLC, IHL Home Insurance Agency, LLC, and IHL Escrow Inc., which provide mortgage, title, insurance brokerage and escrow services, respectively, primarily to our homebuyers, have been identified as our Financial Services segment. Additionally, our Century Living segment is engaged in the development, construction, management, and disposition of multi-family rental properties, currently all located in Colorado. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (which we refer to as “GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (which we refer to as the “SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of our financial position and results of operations for the periods presented. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The financial statements and related notes do not include all information and footnotes required by GAAP and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2024, which are included 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. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company, as well as all subsidiaries in which we have a controlling interest, and variable interest entities for which the Company is deemed to be the primary beneficiary. We do not have any variable interest entities in which we are deemed the primary beneficiary. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. 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 In November 2024, the Financial Accounting Standards Board ( which we refer to as “FASB”) issued Accounting Standards Update ( which we refer to as “ASU”) No. 2024-03, “ Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) : Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. ASU 2024-03 will become effective for us for the fiscal year ending December 31, 2027. Early adoption is permitted, and guidance should be applied prospectively, with an option to apply guidance retrospectively. We are currently evaluating the impact of the adoption of ASU 2024-03 on our consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, “ Income Taxes (Topic 740) : Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires more disaggregated income tax disclosures, including additional information in the rate reconciliation 7 Table of Contents 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, but we do not expect the impact to be significant. 2. Reporting Segments Our homebuilding operations are engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 16 states. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand is managed by geographic location, and each of our four geographic regions offers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade selections. Each of our four geographic regions is considered a separate operating segment. 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 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)  Mountain (Arizona, Colorado, Nevada, and Utah)  Texas  Southeast (Florida, Georgia, North Carolina, South Carolina, and Tennessee)  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. Our Corporate operations are a non-operating segment, as it serves to support our homebuilding operations, and to a lesser extent our Financial Services operations, through various functions, such as our executive, finance, treasury, human resources, accounting and legal departments. Our Executive Chairman and our Chief Executive Officer, collectively, have been determined to be our Chief Operating Decision Makers (“CODMs”) to make key operating decisions and assess performance. The management of our four Century Communities geographic regions, Century Complete, our Financial Services segment, and our Century Living segment reports to our CODMs. The CODMs evaluate the segment’s operating performance and allocates resources for all of our reportable segments based on income before income tax expense. For all of the segments, the CODMs use segment income before income tax expense in the annual budget and forecasting process. The CODMs consider budget-to-actual forecast variances for income before tax expense on a monthly basis for evaluating performance of each segment and making decisions about allocating capital and other resources to each segment. The measure of segment assets is reported on the consolidated balance sheets as total assets. Except for those accounting policies for Century Living which are described below, the accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 . 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 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. Accordingly, we have determined that these multi-family rental operations have become part of our ordinary activities, and revenue is recognized from the sale of these properties when performance obligations are satisfied, generally when the respective properties are delivered and title has passed to the buyers, and r ental income and expenses from these properties during lease-up is recognized as other income on the condensed consolidated statement of operations. 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. 8 Table of Contents 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 West Mountain Texas Southeast Century Complete Financial Services Century Living Corporate Total Revenue $ 201,894 $ 206,387 $ 147,460 $ 172,474 $ 248,735 $ 23,774 $ — $ — $ 1,000,724 Cost of home sales ( 159,451 ) ( 170,619 ) ( 121,515 ) ( 141,138 ) ( 204,756 ) — — 317 ( 797,162 ) Inventory impairment — — — ( 3,803 ) ( 3,557 ) — — — ( 7,360 ) Selling, general and administrative ( 17,094 ) ( 18,327 ) ( 17,587 ) ( 15,775 ) ( 24,779 ) — ( 161 ) ( 35,114 ) ( 128,837 ) Financial services costs — — — — — ( 17,550 ) — — ( 17,550 ) Other segment items (1) ( 358 ) ( 2,322 ) ( 232 ) ( 572 ) ( 648 ) — 1,623 ( 223 ) ( 2,732 ) Income (loss) before tax expense $ 24,991 $ 15,119 $ 8,126 $ 11,186 $ 14,995 $ 6,224 $ 1,462 $ ( 35,020 ) $ 47,083 Three months ended June 30, 2024 West Mountain Texas Southeast Century Complete Financial Services Century Living Corporate Total Revenue $ 203,677 $ 258,921 $ 146,007 $ 154,149 $ 255,037 $ 21,659 $ — $ — $ 1,039,450 Cost of home sales ( 155,454 ) ( 202,572 ) ( 113,306 ) ( 112,875 ) ( 199,625 ) — — ( 3,724 ) ( 787,556 ) Inventory impairment — — — — ( 570 ) — — — ( 570 ) Selling, general and administrative ( 16,005 ) ( 21,392 ) ( 14,899 ) ( 15,010 ) ( 25,874 ) — ( 534 ) ( 32,259 ) ( 125,973 ) Financial services costs — — — — — ( 15,996 ) — — ( 15,996 ) Other segment items (1) ( 49 ) ( 592 ) 29 ( 421 ) 68 — ( 115 ) 2,358 1,278 Income (loss) before tax expense $ 32,169 $ 34,365 $ 17,831 $ 25,843 $ 29,036 $ 5,663 $ ( 649 ) $ ( 33,625 ) $ 110,633 Six months ended June 30, 2025 West Mountain Texas Southeast Century Complete Financial Services Century Living Corporate Total Revenue $ 383,616 $ 431,418 $ 284,102 $ 306,919 $ 455,594 $ 42,308 $ — $ — $ 1,903,957 Cost of home sales ( 300,960 ) ( 351,300 ) ( 230,820 ) ( 246,192 ) ( 373,526 ) — — ( 1,868 ) ( 1,504,666 ) Inventory impairment — — — ( 3,803 ) ( 3,968 ) — — — ( 7,771 ) Selling, general and administrative ( 34,105 ) ( 38,747 ) ( 34,531 ) ( 30,725 ) ( 47,460 ) — ( 382 ) ( 63,646 ) ( 249,596 ) Financial services costs — — — — — ( 33,724 ) — — ( 33,724 ) Other segment items (1) ( 2,165 ) ( 2,810 ) ( 274 ) ( 833 ) ( 1,823 ) — 416 ( 1,110 ) ( 8,599 ) Income (loss) before tax expense $ 46,386 $ 38,561 $ 18,477 $ 25,366 $ 28,817 $ 8,584 $ 34 $ ( 66,624 ) $ 99,601 9 Table of Contents Six months ended June 30, 2024 West Mountain Texas Southeast Century Complete Financial Services Century Living Corporate Total Revenue $ 376,325 $ 513,200 $ 277,280 $ 315,807 $ 458,797 $ 46,585 $ — $ — $ 1,987,994 Cost of home sales ( 285,746 ) ( 405,102 ) ( 215,990 ) ( 237,711 ) ( 362,047 ) — — ( 6,531 ) ( 1,513,127 ) Inventory impairment — — - — ( 570 ) — — — ( 570 ) Selling, general and administrative ( 31,375 ) ( 43,186 ) ( 29,244 ) ( 30,597 ) ( 46,017 ) — ( 981 ) ( 58,682 ) ( 240,082 ) Financial services costs — — - — — ( 30,873 ) — — ( 30,873 ) Other segment items (1) ( 328 ) ( 2,739 ) ( 343 ) ( 860 ) ( 27 ) — ( 412 ) ( 3,681 ) ( 8,390 ) Income (loss) before tax expense $ 58,876 $ 62,173 $ 31,703 $ 46,639 $ 50,136 $ 15,712 $ ( 1,393 ) $ ( 68,894 ) $ 194,952 (1) Includes cost of land sales and other revenues, and other income (expense). The following table summarizes total assets by segment (in thousands): June 30, December 31, 2025 2024 West $ 881,976 $ 780,991 Mountain 1,017,738 1,026,047 Texas 894,191 834,815 Southeast 595,819 616,747 Century Complete 448,249 468,256 Financial Services 321,370 478,730 Century Living 266,789 217,899 Corporate 153,358 108,987 Total assets $ 4,579,490 $ 4,532,472 Century Living assets include primarily multi-family rental properties under construction and properties that are in lease-up, which are included in prepaid and other assets on the condensed consolidated balance sheets. Corporate assets include primarily costs associated with certain cash and cash equivalents, certain property and equipment, deferred tax assets, certain receivables, and prepaid insurance. 3. Business Combinations On January 22, 2024, we closed the acquisition of substantially all the assets and assumed certain liabilities of Landmark Homes of Tennessee, Inc. (“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 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. We concluded that the acquisition represented a business combination, as we determined that the fair value of the gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets, and the acquired assets and processes have the ability to create outputs in the form of revenue from the sale of single-family residences. 4. Inventories Inventories included the following (in thousands): June 30, December 31, 2025 2024 Homes under construction $ 1,517,905 $ 1,614,630 Land and land development 1,897,794 1,755,382 Capitalized interest 93,940 84,325 Total inventories $ 3,509,639 $ 3,454,337 10 Table of Contents 5. Financial Services Our Financial Services are principally comprised of our mortgage lending operations, Inspire Home Loans Inc. (which we refer to as “Inspire”). Inspire is a full-service mortgage lender and primarily originates mortgage loans for our homebuyers. Inspire sells substantially all of the loans it originates either as loans with servicing rights released, or with servicing rights retained, in the secondary mortgage market within a short period of time after origination, generally within 30 days. Inspire primarily finances these loans using its mortgage repurchase facilities. Mortgage loans held for sale and mortgage servicing rights are carried at fair value, with gains and losses from the changes in fair value reflected in financial services revenue on the consolidated statements of operations. 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 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; (2) the fair value of originated mortgage servicing rights; (3) the change in fair value of mortgage loans held for sale; (4) the change in fair value of derivatives instruments, including interest rate lock commitments and forward commitments on mortgage-backed securities; (5) provision for or benefit from investor reserves; 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, 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. Derivative instruments used to economically hedge our market and interest rate risk are carried at fair value. Derivative instruments typically include interest rate lock commitments and forward commitments on mortgage-backed securities. Changes in fair value of these derivatives as well as any gains or losses upon settlement, are reflected in financial services revenue on our condensed consolidated statements of operations. Refer to Note 13 – Fair Value Disclosures for further information regarding our derivative instruments. 6. Prepaid Expenses and Other Assets Prepaid expenses and other assets included the following (in thousands): June 30, December 31, 2025 2024 Prepaid insurance $ 24,461 $ 27,384 Lot option and escrow deposits 103,124 92,494 Performance deposits 10,644 10,561 Restricted cash (1) 33,137 25,325 Multi-family rental properties inventory (2) 248,176 — Multi-family rental properties under construction (2) — 119,441 Mortgage loans held for investment at fair value 19,952 21,478 Mortgage loans held for investment at amortized cost 12,463 10,380 Mortgage servicing rights 1,215 42,404 Other assets and prepaid expenses 86,512 69,917 Total prepaid expenses and other assets $ 539,684 $ 419,384 11 Table of Contents (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 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. 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 the beginning of the period. Multi-family rental properties inventory includes multi-family rental properties that are under construction and properties that are in lease-up. 7. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities included the following (in thousands): June 30, December 31, 2025 2024 Earnest money deposits $ 8,651 $ 8,786 Warranty reserve 13,265 12,762 Self-insurance reserve 37,242 32,970 Accrued compensation costs 47,507 82,020 Land development and home construction accruals 115,070 112,392 Accrued interest 12,631 12,457 Income taxes payable — — Other accrued liabilities 49,222 40,930 Total accrued expenses and other liabilities $ 283,588 $ 302,317 8. Warranties Estimated future direct warranty costs are accrued and charged to cost of home sales revenues in the period when the related home sales revenues are recognized. Amounts accrued, which are included in accrued expenses and other liabilities on the condensed consolidated balance sheets, are based upon historical experience rates. 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 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, 2025 2024 2025 2024 Beginning balance $ 11,470 $ 11,212 $ 12,762 $ 11,524 Warranty expense provisions 2,475 2,470 4,664 5,140 Payments ( 1,257 ) ( 1,841 ) ( 2,801 ) ( 3,532 ) Warranty adjustment 577 ( 243 ) ( 1,360 ) ( 1,534 ) Ending balance $ 13,265 $ 11,598 $ 13,265 $ 11,598 9. Self-Insurance Reserve We maintain general liability insurance coverage, including coverage for certain construction defects after homes have been delivered and premise operations during construction. These insurance policies are designed to protect us against a portion of the risk of loss from claims, subject to certain self-insured per occurrence and aggregate retentions, deductibles, and available policy limits. In circumstances where we have elected to retain a higher portion of the overall risk for construction defect claims in return for a lower initial premium, we reserve for the estimated self-insured retention costs that we will incur that are above our coverage limits or that are not covered by our insurance policies. The reserve is recorded on an undiscounted basis at the time revenue is recognized for each home closing. Amounts accrued, which are included in accrued expenses and other liabilities on the condensed consolidated balance sheets, are based upon third party actuarial analyses that are primarily based on industry data and partially on our historical claims, which include estimates of claims incurred but not yet reported. Adjustments to estimated reserves are recorded in the period in which the change in estimate occurs. 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 12 Table of Contents 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 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, 2025 2024 2025 2024 Beginning balance $ 35,448 $ 25,652 $ 32,970 $ 23,659 Self-insurance expense provisions 2,702 2,717 5,342 5,228 Payments ( 908 ) ( 685 ) ( 1,070 ) ( 1,203 ) Self-insurance adjustment — — — — Ending balance $ 37,242 $ 27,684 $ 37,242 $ 27,684 10. Debt Our outstanding debt obligations included the following as of June 30, 2025 and December 31, 2024 (in thousands): June 30, December 31, 2025 2024 6.750 % senior notes, due June 2027 (1) $ 498,435 $ 498,027 3.875 % senior notes, due August 2029 (1) 496,814 496,428 Other financing obligations (2) 139,953 113,454 Notes payable 1,135,202 1,107,909 Revolving line of credit 270,000 135,500 Mortgage repurchase facilities 181,440 232,804 Total debt $ 1,586,642 $ 1,476,213 (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 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 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 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 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 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 Certain wholly owned subsidiaries of Century Living, LLC are parties to construction loan agreements with various banks (which we collectively refer to as “the lenders”). These construction loan agreements collectively provide that we may borrow up to an aggregate of $ 204.7 million from the lenders for purposes of construction of multi-family projects in Colorado, with advances made by the lenders upon the satisfaction of certain conditions. The obligations under construction loan agreements are guaranteed by certain of our subsidiaries. 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 13 Table of Contents 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 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 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. Funds are available under the revolving line of credit for the construction of homes, for the acquisition and development of land, land under development and lots for the eventual construction of homes thereon, and for working capital in the ordinary course of business. 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. 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. Borrowings under the Credit Agreement bear interest at a floating rate equal to Term SOFR or Daily Simple SOFR (in each case as defined in the Credit Agreement), plus an applicable margin between 1.45 % and 2.30 % per annum, or if selected by us, a base rate plus an applicable margin between 0.45 % and 1.30 % per annum. The “applicable margins” described above are determined by a schedule based on our leverage ratio, as defined in the Credit Agreement. 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 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 Inspire is party to mortgage warehouse facilities with J.P. 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 June 30, 2025, secured by the mortgage loans financed thereunder. The repurchase facilities have varying short term maturity dates through June 1, 2026 . 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 June 30, 2025. 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 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. 11. Interest on Senior Notes and Revolving Line of Credit 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. 14 Table of Contents Our interest costs were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Interest capitalized beginning of period $ 89,010 $ 75,172 $ 84,325 $ 72,598 Interest capitalized during period 19,134 16,350 36,604 30,957 Less: capitalized interest in cost of sales ( 14,204 ) ( 13,592 ) ( 26,989 ) ( 25,625 ) Interest capitalized end of period $ 93,940 $ 77,930 $ 93,940 $ 77,930 12 . Income Taxes At the end of each interim period, we are required to estimate our annual effective tax rate for the fiscal year and to use that rate to provide for income taxes for the current year-to-date reporting period. 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 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. 13. Fair Value Disclosures Fair value measurements are used for the Company’s mortgage loans held for sale, certain mortgage loans held for investment, mortgage servicing rights, interest rate lock commitments and other derivative instruments on a recurring basis. We also utilize fair value measurements on a non-recurring basis for inventories and intangible assets when events and circumstances indicate that the carrying value is not recoverable. The fair value hierarchy and its application to the Company’s assets and liabilities is as follows: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at the measurement date.  Mortgage loans held for sale – Fair value is based on quoted market prices for committed and uncommitted mortgage loans.  Derivative assets and liabilities – Derivative assets are associated with interest rate lock commitments and investor commitments on loans and may also be associated with forward mortgage-backed securities contracts. Derivative liabilities are associated with forward mortgage-backed securities contracts. Fair value is based on market prices for similar instruments. Level 3 – Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at the measurement date.  Mortgage servicing rights - The fair value of the mortgage servicing rights is calculated using third-party valuations. The key assumptions, which are generally unobservable inputs, used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and cost to service.  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. 15 Table of Contents 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): June 30, December 31, Balance Sheet Classification Hierarchy 2025 2024 Mortgage loans held for sale Mortgage loans held for sale Level 2 $ 184,390 $ 236,926 Mortgage loans held for investment at fair value (1) Prepaid expenses and other assets Level 3 $ 19,952 $ 21,478 Derivative assets Prepaid expenses and other assets Level 2 $ 5,151 $ 3,990 Mortgage servicing rights (2) Prepaid expenses and other assets Level 3 $ 1,215 $ 42,404 Derivative liabilities Accrued expenses and other liabilities Level 2 $ 2,391 $ — (1) A portion of our mortgage loans held for investment are recorded at fair value, which were those determined to be unsaleable and transferred from mortgage loans held for sale which are recorded at fair value. 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 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 June 30, Six Months Ended June 30, Mortgage servicing rights 2025 2024 2025 2024 Beginning of period $ 43,889 $ 32,734 $ 42,404 $ 30,932 Originations 1,193 1,545 4,928 2,779 Settlements ( 802 ) ( 550 ) ( 1,504 ) ( 1,112 ) Sales ( 47,305 ) — ( 47,305 ) — Changes in fair value 4,240 341 2,692 1,471 End of period $ 1,215 $ 34,070 $ 1,215 $ 34,070 Three Months Ended June 30, Six Months Ended June 30, Mortgage loans held-for-investment at fair value 2025 2024 2025 2024 Beginning of period $ 21,704 $ 21,620 $ 21,478 $ 21,041 Transfers from loans held for sale 466 808 975 1,956 Settlements — ( 347 ) — ( 661 ) Reduction in unpaid principal balance ( 127 ) ( 246 ) ( 301 ) ( 362 ) Changes in fair value ( 2,091 ) ( 72 ) ( 2,200 ) ( 211 ) End of period $ 19,952 $ 21,763 $ 19,952 $ 21,763 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. 16 Table of Contents 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 Hierarchy Carrying Fair Value Carrying Fair Value Cash and cash equivalents Level 1 $ 93,246 $ 93,246 $ 149,998 $ 149,998 6.750 % senior notes (1)(2) Level 2 $ 498,435 $ 500,625 $ 498,027 $ 498,750 3.875 % senior notes (1)(2) Level 2 $ 496,814 $ 461,250 $ 496,428 $ 446,875 Revolving line of credit (3) Level 2 $ 270,000 $ 270,000 $ 135,500 $ 135,500 Other financing obligations (3)(4) Level 3 $ 139,953 $ 139,953 $ 113,454 $ 113,454 Mortgage repurchase facilities (3) Level 2 $ 181,440 $ 181,440 $ 232,804 $ 232,804 (1) Estimated fair value of the senior notes is based on recent trading activity in inactive markets. (2) Carrying amounts include any associated unamortized deferred financing costs, premiums and discounts. 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 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 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. 14. Stock-Based Compensation 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. The ultimate share payout may then be adjusted by a relative total shareholder return modifier based on our three-year cumulative total stockholder return (which we refer to as “TSR”) relative to the average TSR of all companies in a defined peer group, with the potential to decrease the payout by 10% or increase it up to 20%. 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 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 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 17 Table of Contents 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): June 30, 2025 Unvested units 1,150 Unrecognized compensation cost $ 35,519 Weighted-average years to recognize compensation cost 2.0 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. Stock-based compensation expense for PSUs is initially estimated based on target performance achievement and adjusted as appropriate throughout the performance period. 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 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. 15. 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 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. 2022 Omnibus Incentive Plan (which we refer to as the “2022 Incentive Plan”), which replaced the Century Communities, Inc. Amended and Restated 2017 Omnibus Incentive Plan (which we refer to as our “2017 Incentive Plan”). 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 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 Declaration Date Record Date Paid Date Per Share Amount February 5, 2025 February 26, 2025 March 12, 2025 $ 0.29 $ 8,922 May 7, 2025 May 28, 2025 June 11, 2025 $ 0.29 $ 8,783 Six months ended June 30, 2024 Cash Dividends Declared and Paid Declaration Date Record Date Paid Date Per Share Amount February 7, 2024 February 28, 2024 March 13, 2024 $ 0.26 $ 8,264 May 15, 2024 May 29, 2024 June 12, 2024 $ 0.26 $ 8,217 18 Table of Contents 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 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. 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 stock repurchase program. 16. 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 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, 2025 2024 2025 2024 Numerator Net income $ 34,854 $ 83,724 $ 74,238 $ 148,055 Denominator Weighted average common shares outstanding - basic 30,366,109 31,648,130 30,582,376 31,728,544 Dilutive effect of stock-based compensation awards 314,599 444,659 329,710 437,254 Weighted average common shares outstanding - diluted 30,680,708 32,092,789 30,912,086 32,165,798 Earnings per share: Basic $ 1.15 $ 2.65 $ 2.43 $ 4.67 Diluted $ 1.14 $ 2.61 $ 2.40 $ 4.60 Stock-based awards are excluded from the calculation of diluted EPS in the event they are subject to unsatisfied performance conditions or are 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. 17. Commitments and Contingencies 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 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. 19 Table of Contents Legal Proceedings We are subject to claims and lawsuits that arise primarily in the ordinary course of business, which consist primarily of construction claims. It is the opinion of our management that if the claims have merit, parties other than the Company would be, at least in part, liable for the claims, and the eventual outcome of these claims will not have a material adverse effect upon our consolidated financial condition, results of operations, or cash flows. When we believe that a loss is probable and estimable, we record a charge on our condensed consolidated statements of operations for our estimated loss. Under various insurance policies, we have the ability to recoup costs in excess of applicable self-insured retentions. Estimates of such amounts are recorded in other assets on our condensed consolidated balance sheet when recovery is probable. We do not believe that the ultimate resolution of any claims and lawsuits will have a material adverse effect upon our consolidated financial position, results of operations, or cash flows. 20 Table of Contents