Century Communities, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND A NALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. As used in this Quarterly Report on Form 10-Q (which we refer to as this “Form 10-Q”), references to “we,” “us,” “our,” “Century” or the “Company” refer to Century Communities, Inc., a Delaware corporation, and, unless the context otherwise requires, its subsidiaries and affiliates. The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand our Company, business, operations and present business environment and is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. We use certain non-GAAP financial measures that we believe are important for purposes of comparison to prior periods. This information is also used by our management to measure the profitability of our ongoing operations and analyze our business performance and trends. Cautionary Note Regarding Forward-Looking Statements Some of the statements included in this Form 10-Q constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, forecasts, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual results could differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential,” “outlook,” the negative of such terms and other comparable terminology and the use of future dates. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. The forward-looking statements included in this Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking and subject to risks and uncertainties including among others:  econo mic changes, either nationally or in the regional and local markets in which we operate, including changes in interest rates and the resulting impact on the accessibility of mortgage loans to homebuyers, persistent inflation, and decreased employment levels and consumer confidence, and increased recessionary conditions;  shortages of or increased prices for labor, land or raw materials used in housing construction and resource shortages , including as a result of recent tariffs and immigration reform;  a downturn in the homebuilding industry, including a reduction in demand for our homes or a decline in real estate values or market conditions resulting in an adverse impact on our business, operating results and financial condition, including an impairment of our assets;  changes in assumptions used to make industry forecasts, population growth rates or trends affecting housing demand or prices;  volatility and uncertainty in the credit markets and broader financial markets and the impact on such markets and our ability to access them , including as a result of geopolitical conditions, the current U.S. government shutdown, and in the event of a threatened or actual sovereign default;  our future business operations, operating results and financial condition; future impairment and restructuring charges; and changes in our business and investment strategy;  availability and price of land to acquire, and our ability to acquire such land on favorable terms or at all, and dispose of it when appropriate;  the effect of and risks associated with our prior and any future acquisitions;  availability, terms and deployment of capital;  availability or cost of mortgage financing or an increase in the number of foreclosures in the market;  delays in land development or home construction resulting from adverse weather conditions or other events outside our control;  delays in completion of projects, land development or home construction, or reduced consumer demand for housing resulting from significant weather conditions and natural disasters in the geographic areas where we operate;  the impact of construction defect, product liability, and/or home warranty claims, including the adequacy of accruals and the applicability and sufficiency of our insurance coverage;  changes in, or the failure or inability to comply with, governmental laws and regulations;  the timing of r eceipt of municipal, utility and other regulatory approvals and the opening of projects and construction and completion of our homes;  the i mpact and cost of compliance with evolving environmental, health and safety and other laws and regulations and third-party challenges to required permits and other approvals and potential legal liability in connection therewith; 21 Table of Contents  the degree and nature of our competition;  the ability of our homebuyers to obtain or afford homeowners and flood insurance policies, and/or typical or lender-required policies for other hazards or events, for their homes, which may depend on the ability and willingness of insurers or government-funded or -sponsored programs to offer coverage at an affordable price or at all;  unstable economic and political conditions as well as geopolitical conflicts, which could adversely affect our supply chain by causing shortages or increases in costs for materials necessary to construct homes and/or increases to the price of gasoline and other fuels and cause higher interest rates, inflation, reduced consumer confidence and/or general economic uncertainty;  our leverage, debt service obligations and exposure to changes in interest rates and our ability to obtain additional or refinance our existing debt when needed or on favorable terms;  our ability to continue to fund and succeed in our mortgage lending business and the additional risks involved in that business;  availability of qualified personnel and contractors and our ability to obtain additional or retain existing key personnel and contractor relationships;  income tax expense variability due to changes in availability and amount of federal home tax credits and volatility associated with stock-based compensation;  our ability to continue to pay dividends and make stock repurchases in the future; and  taxation and tax policy changes, tax rate changes, new tax laws, new or revised tax law interpretations or guidance. Forward-looking statements are based on our beliefs, assumptions and expectations of future events, taking into account all information currently available to us. Forward-looking statements are not guarantees of future events or of our performance. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these events and factors are described above and in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K, and other risks and uncertainties detailed in this report, including “Part II, Item 1A. Risk Factors,” and our other reports and filings with the SEC. If a change occurs, our business, financial condition, liquidity, cash flows and results of operations may vary materially from those expressed in or implied by our forward-looking statements. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Therefore, you should not rely on these forward-looking statements as of any date subsequent to the date of this Form 10-Q. 22 Table of Contents Business Overview Century 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. While we offer homes that appeal to a broad range of entry-level, move-up, and lifestyle homebuyers, our offerings are heavily weighted towards providing affordable housing options in each of our homebuyer segments. 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 7,357 homes delivered during the first nine 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 nine months of 2025, as net new home contracts (new home contracts net of cancellations) for the three and nine months ended September 30, 2025 decreased 6.9% and 7.1%, respectively, as compared to the respective prior year periods. 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 and closing cost concessions. During the nine months ended September 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; the impact of potential future increases or decreases to the U.S. Federal funds interest rate by the U.S. Federal Reserve; interest rates; availability and cost of mortgage loans to homebuyers; financial, credit and mortgage markets; the extent to which and how long government monetary directives and actions will impact the U.S. economy; the effect of significant new tariffs and/or duties; consumer confidence; wage growth; household formations; levels of new and existing homes for sale; prevailing home and rental prices; availability and cost of land, labor and construction materials; demographic trends; housing demand; the possibility of an economic recession; the current U.S. governmental shutdown; and other factors, including those described elsewhere in this Form 10-Q. Specifically, changes in mortgage interest rates impact the costs of owning a home and affect the purchasing power of our customers and could impact homebuyer confidence. Changes in demand for our homes or cancellations due to mortgage interest rates, consumer confidence or otherwise affect our operating results in future periods, including our net sales, home deliveries, gross margin, origination volume of and revenues from our Financial Services segment, and net income. Certain tariffs and other measures implemented during 2025 have impacted trade throughout various sectors. In October 2025, certain new tariffs took effect related to various imported products used in the homebuilding industry, including cabinets, lumber, and certain other wood products. As of the date of the filing of this report, we have not experienced significant cost increases or supply chain disruptions for raw materials; however, we could experience increases in the costs of materials utilized for the construction of our homes and/or supply chain disruptions that, in turn, would impact our business and our consolidated financial statements in future reporting periods. Additionally, during the three months ended September 30, 2025, the U.S. Federal Reserve reduced the U.S. Federal funds interest rate, 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. The potential extent and effect of these and other factors on our business is highly uncertain and outside our control, and our past performance may not be indicative of our future results. 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. 23 Table of Contents Results of Operations During the three and nine months ended September 30, 2025, we generated $47.8 million and $147.4 million, respectively, in income before income tax expense, as compared to $109.9 million and $304.9 million, respectively, in the respective prior year periods. During the three and nine months ended September 30, 2025, we generated net income of $37.4 million, or $1.25 per diluted share, and $111.6 million, or $3.65 per diluted share, respectively, as compared to $83.0 million, or $2.59 per diluted share, and $231.1 million, or $7.19 per diluted share, respectively, in the respective prior year periods. ‎During the three and nine months ended September 30, 2025, we generated total revenues of $980.3 million and $2.9 billion, respectively, as compared to $1.1 billion and $3.1 billion, respectively, in the respective prior year periods. During the three and nine months ended September 30, 2025, we delivered 2,486 and 7,357 homes, respectively, with an average sales price of $384.2 thousand and $382.7 thousand, respectively. The number of homes delivered decreased by 12.3% and 5.8%, respectively, as compared to the respective prior year periods, primarily due to slower absorption rates, and average sales price per home decreased 2.4% and 2.2%, respectively, as compared to the respective prior year periods, primarily due to higher incentives in the current year periods. During the three and nine months ended September 30, 2025, net new contracts decreased 6.9% and 7.1%, respectively, to 2,386 and 7,624, respectively, as compared to the respective prior year periods. We ended the third quarter of 2025 with $130.1 million of cash and cash equivalents and $44.7 million of cash held in escrow. We had $339.0 million outstanding under our revolving line of credit, with a homebuilding debt to capital ratio of 34.5% and a net homebuilding debt to net capital ratio of 31.4%. During the three and nine months ended September 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 nine months ended September 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 62,239 lots owned and controlled at September 30, 2025. For the three and nine months ended September 30, 2025, our Financial Services segment generated income before income tax expense of $3.0 million and $11.6 million, respectively, representing a decrease of 2.7% and 38.4% from the respective prior year periods. During the three and nine months ended September 30, 2025, the number of mortgages originated decreased 13.7% and 6.3%, respectively, and the number of loans sold to third parties decreased 13.6% and 2.8%, respectively, as compared to the respective prior year periods. 24 Table of Contents The following table summarizes our results of operations for the three and nine months ended September 30, 2025 and 2024: (in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Consolidated Statements of Operations: Revenues Home sales revenues $ 955,162 $ 1,116,125 $ 2,815,365 $ 3,055,941 Land sales and other revenues 5,764 650 7,209 2,242 Total homebuilding revenues 960,926 1,116,775 2,822,574 3,058,183 Financial services revenues 19,358 20,091 61,666 66,676 Total revenues 980,284 1,136,866 2,884,240 3,124,859 Homebuilding cost of revenues Cost of home sales revenues (780,566) (873,081) (2,285,233) (2,386,208) Cost of land sales and other revenues (6,303) (170) (7,199) (207) Total homebuilding cost of revenues (786,869) (873,251) (2,292,432) (2,386,415) Financial services costs (16,371) (17,021) (50,095) (47,894) Selling, general, and administrative (119,895) (132,972) (369,491) (373,054) Inventory impairment (3,180) (1,373) (10,951) (1,942) Other (expense) income, net (6,131) (2,337) (13,832) (10,690) Income before income tax expense 47,838 109,912 147,439 304,864 Income tax expense (10,435) (26,892) (35,798) (73,789) Net income $ 37,403 $ 83,020 $ 111,641 $ 231,075 Earnings per share: Basic $ 1.26 $ 2.65 $ 3.69 $ 7.31 Diluted $ 1.25 $ 2.59 $ 3.65 $ 7.19 Adjusted diluted earnings per share (1)(2) $ 1.52 $ 2.77 $ 4.39 $ 7.66 Other Operating Information (dollars in thousands): Number of homes delivered 2,486 2,834 7,357 7,809 Average sales price of homes delivered $ 384.2 $ 393.8 $ 382.7 $ 391.3 Homebuilding gross margin percentage (3) 17.9 % 21.7 % 18.4 % 21.9 % Adjusted homebuilding gross margin excluding interest, inventory impairment, and purchase price accounting for acquired work in process inventory (1) 20.1 % 23.6 % 20.6 % 23.5 % Backlog at end of period, number of homes 1,117 1,580 1,117 1,580 Backlog at end of period, aggregate sales value $ 416,924 $ 671,404 $ 416,924 $ 671,404 Average sales price of homes in backlog $ 373.3 $ 424.9 $ 373.3 $ 424.9 Net new home contracts 2,386 2,563 7,624 8,209 Selling communities at period end 321 305 321 305 Average selling communities 321 290 319 269 Total owned and controlled lot inventory 62,239 80,121 62,239 80,121 Adjusted EBITDA (1)(2) $ 82,254 $ 139,250 $ 238,633 $ 381,329 Adjusted income before income tax expense (1)(2) $ 60,368 $ 116,855 $ 177,325 $ 324,468 Adjusted net income (1)(2) $ 45,711 $ 88,572 $ 134,271 $ 245,934 Net homebuilding debt to net capital (1) 31.4 % 32.1 % 31.4 % 32.1 % (1) This is a non-GAAP financial measure and should not be used as a substitute for our operating results prepared 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 . (2) Beginning in the third quarter of 2025, we added “Abandonment of lot option contracts” as an adjustment in our non-GAAP adjusted EBITDA and adjusted net income calculation. Accordingly, we have recast the corresponding prior period information to conform to the current presentation and calculation. (3) Homebuilding gross margin percentage is inclusive of impairment charges, if applicable. We recorded impairment charges of $3.2 million and $11.0 million, respectively, during the three and nine months ended September 30, 2025, and w e recorded impairment charges of $1.4 million and $1.9 million during the three and nine months ended September 30, 2024. NM – Not meaningful ‎ 25 Table of Contents Results of Operations by Segment (dollars in thousands) 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 and nine months ended September 30, 202 4 . Three months ended September 30, 2025 West Mountain Texas Southeast Century Complete Financial Services Century Living Corporate Total New homes delivered 369 401 460 423 833 — — — 2,486 Average sales price of new homes delivered $ 591.0 $ 506.0 $ 293.8 $ 413.8 $ 268.9 $ — $ — $ — $ 384.2 Revenue $ 218,149 $ 208,058 $ 135,150 $ 175,162 $ 224,407 $ 19,358 $ — $ — $ 980,284 Cost of home sales (177,720) (167,994) (114,755) (142,502) (180,673) — — 3,078 (780,566) Financial services costs — — — — — (16,371) — — (16,371) Selling, general and administrative (17,999) (18,653) (14,590) (15,679) (22,953) — (488) (29,533) (119,895) Inventory impairment — — (512) (2,442) (226) — — — (3,180) Other segment items (1) (1,224) (6,608) (196) (1,347) (426) — 190 (2,823) (12,434) Income (loss) before tax expense $ 21,206 $ 14,803 $ 5,097 $ 13,192 $ 20,129 $ 2,987 $ (298) $ (29,278) $ 47,838 Three months ended September 30, 2024 West Mountain Texas Southeast Century Complete Financial Services Century Living Corporate Total New homes delivered 363 513 530 427 1,001 — — — 2,834 Average sales price of new homes delivered $ 662.9 $ 528.4 $ 300.9 $ 421.9 $ 264.6 $ — $ — $ — $ 393.8 Revenue $ 240,722 $ 271,305 $ 159,502 $ 180,226 $ 265,020 $ 20,091 $ — $ — $ 1,136,866 Cost of home sales (188,173) (215,798) (127,198) (135,051) (203,831) — — (3,030) (873,081) Financial services costs — — — — — (17,021) — — (17,021) Selling, general and administrative (17,115) (22,784) (17,491) (16,315) (25,897) — (689) (32,681) (132,972) Inventory impairment — — — (1,142) (231) — — — (1,373) Other segment items (1) (212) (953) (131) (500) (1,005) — — 294 (2,507) Income (loss) before tax expense $ 35,222 $ 31,770 $ 14,682 $ 27,218 $ 34,056 $ 3,070 $ (689) $ (35,417) $ 109,912 26 Table of Contents Nine months ended September 30, 2025 West Mountain Texas Southeast Century Complete Financial Services Century Living Corporate Total New homes delivered 1,007 1,226 1,418 1,127 2,579 — — — 7,357 Average sales price of new homes delivered $ 597.4 $ 517.2 $ 295.6 $ 427.5 $ 263.2 $ — $ — $ — $ 382.7 Revenue $ 601,763 $ 639,476 $ 419,252 $ 482,082 $ 680,001 $ 61,666 $ — $ — $ 2,884,240 Cost of home sales (478,680) (519,295) (345,575) (388,694) (554,199) — — 1,210 (2,285,233) Financial services costs — — — — — (50,095) — — (50,095) Selling, general and administrative (52,104) (57,400) (49,121) (46,404) (70,412) — (869) (93,181) (369,491) Inventory impairment — — (512) (6,245) (4,194) — — — (10,951) Other segment items (1) (3,389) (9,418) (470) (2,180) (2,249) — 605 (3,930) (21,031) Income (loss) before tax expense $ 67,590 $ 53,363 $ 23,574 $ 38,559 $ 48,947 $ 11,571 $ (264) $ (95,901) $ 147,439 Nine months ended September 30, 2024 West Mountain Texas Southeast Century Complete Financial Services Century Living Corporate Total New homes delivered 972 1,494 1,439 1,155 2,749 — — — 7,809 Average sales price of new homes delivered $ 634.3 $ 524.8 $ 303.4 $ 429.1 $ 263.0 $ — $ — $ — $ 391.3 Revenue $ 617,047 $ 784,506 $ 436,782 $ 496,032 $ 723,816 $ 66,676 $ — $ — $ 3,124,859 Cost of home sales (473,895) (620,923) (343,188) (372,763) (565,877) — — (9,562) (2,386,208) Financial services costs — — — — — (47,894) — — (47,894) Selling, general and administrative (48,491) (65,970) (46,735) (46,912) (71,912) — (1,670) (91,364) (373,054) Inventory impairment — — — (1,142) (800) — — — (1,942) Other segment items (1) (563) (3,670) (474) (1,358) (1,035) — (413) (3,384) (10,897) Income (loss) before tax expense $ 94,098 $ 93,943 $ 46,385 $ 73,857 $ 84,192 $ 18,782 $ (2,083) $ (104,310) $ 304,864 (1) Includes cost of land sales and other revenues, and other income (expense). West During the three and nine months ended September 30, 2025, our West segment generated income before income tax expense of $21.2 million and $ 67.6 million, respectively, representing decreases of 39.8% and 28.2% from the respective prior year periods, which were primarily driven by decreases in revenue and homebuilding gross margin. During the three and nine months ended September 30, 2025, revenue decreased $22.6 million and $15.3 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 10.8% and 5.8%, respectively, in the average sales price per home, and partially offset by increases of 1.7% and 3.6%, respectively, in the number of homes delivered. 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, due primarily to higher incentives in the respective current year periods. Mountain During the three and nine months ended September 30, 2025, our Mountain segment generated income before income tax expense of $14.8 million and $53.4 million, respectively, representing decreases of 53.4% and 43.2% from the respective prior year periods, which were primarily driven by decreases in revenue and homebuilding gross margin. During the three and nine months ended September 30, 2025, revenue decreased $63.2 million and $145.0 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 21.8% and 17.9%, respectively, in the number of homes delivered, and decreases of 4.2% and 1.4%, 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, due primarily to higher incentives in the respective current year periods. 27 Table of Contents Texas During the three and nine months ended September 30, 2025, our Texas segment generated income before income tax expense of $5.1 million and $23.6 million, respectively, representing decreases of 65.3% and 49.2% from the respective prior year periods, which were primarily driven by decreases in revenue and homebuilding gross margin. During the three and nine months ended September 30, 2025, revenue decreased $24.4 million and $17.5 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 13.2% and 1.5%, respectively, in the number of homes delivered, and decreases of 2.4% and 2.6%, 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, due primarily to higher incentives in the respective current year periods and impairment charges of $0.5 million during the three months ended September 30, 2025. Southeast During the three and nine months ended September 30, 2025, our Southeast segment generated income before income tax expense of $13.2 million and $38.6 million, respectively, representing decreases of 51.5% and 47.8% from the respective prior year periods, which were primarily driven by decreases in revenue and homebuilding gross margin. During the three and nine months ended September 30, 2025, revenue decreased $5.1 million and $14.0 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 0.9% and 2.4%, respectively, in the number of homes delivered, and decreases of 1.9% and 0.4%, 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, due primarily to higher incentives in the respective current year periods and impairment charges of $2.4 million and $6.2 million during the three and nine months ended September 30, 2025, respectively. Century Complete During the three and nine months ended September 30, 2025, our Century Complete segment generated income before income tax expense of $20.1 million and $48.9 million, respectively, representing decreases of 40.9% and 41.9% from the respective prior year periods, which were primarily driven by decreases in revenue and homebuilding gross margin. During the three and nine months ended September 30, 2025, revenue decreased $40.6 million and $43.8 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 16.8% and 6.2%, respectively, in the number of homes delivered, and partially offset by increases of 1.6% 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 increases in average sales price per home were driven by the mix of deliveries within individual communities. Homebuilding gross margin decreased from the respective prior year periods, due primarily to higher incentives in the respective current year periods and impairment charges during the three and nine months ended September 30, 2025 of $0.2 million and $4.2 million, respectively. Financial Services Our Financial Services segment originates mortgages for primarily our homebuyers, and as such, the volume of loans originated typically correlates to our number of homes delivered. 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. For the three and nine months ended September 30, 2025, our Financial Services segment generated income before income tax expense of $3.0 million and $11.6 million, respectively, representing a decrease of 2.7% and 38.4% from the respective prior year periods. During the three and nine months ended September 30, 2025, the number of mortgages originated decreased 13.7% and 6.3%, respectively, and the number of loans sold to third parties decreased 13.6% and 2.8%, respectively, as compared to the respective prior year periods. The decrease in income before income tax expense for the three-month comparison was primarily driven by lower margins on mortgages originated during the period and partially offset by fair value adjustments related to our mortgage servicing rights portfolio. The decrease in income before income tax expense for the nine-month comparison was primarily driven by lower margins on mortgages originated during the period and fair value adjustments related to our mortgage loans held for investment, and was partially offset by the benefit of a sale of mortgage servicing rights during the second quarter of 2025. 28 Table of Contents 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Total originations: Number of loans 1,607 1,862 4,796 5,118 Principal $ 578,011 $ 663,789 $ 1,700,470 $ 1,819,786 Capture rate of Century homebuyers 84 % 84 % 84 % 82 % Century Communities 89 % 89 % 86 % 87 % Century Complete 74 % 74 % 78 % 72 % Average FICO score 727 729 726 728 Century Communities 730 736 731 735 Century Complete 722 714 716 714 Loans sold to third parties: Number of loans sold 1,619 1,873 4,957 5,102 Principal $ 580,971 $ 661,670 $ 1,755,136 $ 1,807,406 Century Living 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 nine months ended September 30, 2025, the Company had three multi-family rental properties, two of which were complete and currently available for leasing. These three projects represent over 1,000 total multi-family units, including 327 under active construction and 725 completed units, of which 565 units were leased as of September 30, 2025 . Corporate During the three and nine months ended September 30, 2025, our Corporate segment generated losses of $29.3 million and $95.9 million, respectively, as compared to losses of $35.4 million and $104.3 million, respectively, during the same respective periods in 2024. The decrease in loss for the three-month comparison was primarily driven by a decrease in compensation cost during the current year period as compared to the prior year period. The decrease in loss for the nine-month comparison was primarily due to decreased compensation costs during the current year period as compared to the prior year period, as well as a $7.7 million in prior year impairment charges related to other investments during the nine months ended September 30, 2024. 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 for the three and nine months ended September 30, 2025 to 17.9% and 18.4%, respectively, as compared to 21.7% and 21.9% for the same respective periods in 2024. The decreases were primarily driven by higher incentives in the current year periods. 29 Table of Contents 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 September 30, 2025 % 2024 % Home sales revenues $ 955,162 100.0 % $ 1,116,125 100.0 % Cost of home sales revenues (780,566) (81.7) % (873,081) (78.2) % Inventory impairment (3,180) (0.3) % (1,373) (0.1) % Homebuilding gross margin 171,416 17.9 % 241,671 21.7 % Add: Inventory impairment 3,180 0.3 % 1,373 0.1 % Adjusted homebuilding gross margin excluding inventory impairment (1) 174,596 18.3 % 243,044 21.8 % Add: Interest in cost of home sales revenues 15,005 1.6 % 16,492 1.5 % Add: Purchase price accounting for acquired work in process inventory 2,830 0.3 % 3,446 0.3 % Adjusted homebuilding gross margin excluding interest, inventory impairment and purchase price accounting for acquired work in process inventory (1) $ 192,431 20.1 % $ 262,982 23.6 % Nine Months Ended September 30, 2025 % 2024 % Home sales revenues $ 2,815,365 100.0 % $ 3,055,941 100.0 % Cost of home sales revenues (2,285,233) (81.2) % (2,386,208) (78.1) % Inventory impairment (10,951) (0.4) % (1,942) (0.1) % Homebuilding gross margin 519,181 18.4 % 667,791 21.9 % Add: Inventory impairment 10,951 0.4 % 1,942 0.1 % Adjusted homebuilding gross margin excluding inventory impairment (1) 530,132 18.8 % 669,733 21.9 % Add: Interest in cost of home sales revenues 41,994 1.5 % 42,117 1.4 % Add: Purchase price accounting for acquired work in process inventory 6,763 0.2 % 5,999 0.2 % Adjusted homebuilding gross margin excluding interest, inventory impairment and purchase price accounting for acquired work in process inventory (1) $ 578,889 20.6 % $ 717,849 23.5 % (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 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 nine months ended September 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 20.1% and 20.6%, respectively, as compared to 23.6% and 23.5% 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. 30 Table of Contents Selling, General and Administrative Expense (dollars in thousands) Three Months Ended September 30, Change 2025 2024 Amount % Selling, general and administrative $ 119,895 $ 132,972 $ (13,077) (9.8) % As a percentage of home sales revenue 12.6 % 11.9 % Nine Months Ended September 30, Change 2025 2024 Amount % Selling, general and administrative $ 369,491 $ 373,054 $ (3,563) (1.0) % As a percentage of home sales revenue 13.1 % 12.2 % Our selling, general and administrative expense decreased $13.1 million and $3.6 million for the three and nine months ended September 30, 2025 as compared to the same respective periods in 2024. These decreases were primarily attributable to decreased compensation costs, including adjustments in stock-based compensation expense to reflect a decreased estimate in the number of shares which will ultimately vest and be issued upon settlement of certain performance share unit awards. These decreases were partially offset by increased advertising costs and other costs due to a higher active community count during the current year periods. During the three and nine months ended September 30, 2025, our selling, general and administrative expense as a percentage of home sales revenue increased 70 basis points and 90 basis points, respectively, driven primarily by decreased revenue on a partially fixed cost base. Income Tax Expense 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 25.0%, is driven by our blended federal and state statutory rate of 24.8%, and certain permanent differences between GAAP and tax, including disallowed deductions for executive compensation, and offset by estimated federal energy home credits for current year home deliveries. For the nine months ended September 30, 2025, our estimated annual rate of 25.0% was benefitted by discrete items which had a net impact of decreasing our rate by 0.7%, including federal energy home tax credits claimed in excess of previous estimates and 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. We are currently evaluating other elements of the legislation, but do not expect it to have a material effect on our effective tax rate for the year ending December 31, 2025. For the three months ended September 30, 2025 and 2024, we recorded income tax expense of $10.4 million and $26.9 million, respectively. For the nine months ended September 30, 2025 and 2024, we recorded income tax expense of $35.8 million and $73.8 million, respectively. Segment Assets (dollars in thousands) September 30, December 31 Increase (Decrease) 2025 2024 Amount Change West $ 911,023 $ 780,991 $ 130,032 16.6 % Mountain 1,000,791 1,026,047 (25,256) (2.5) % Texas 928,899 834,815 94,084 11.3 % Southeast 623,225 616,747 6,478 1.1 % Century Complete 440,557 468,256 (27,699) (5.9) % Financial Services 326,215 478,730 (152,515) (31.9) % Century Living 282,636 217,899 64,737 29.7 % Corporate 180,629 108,987 71,642 65.7 % Total assets $ 4,693,975 $ 4,532,472 $ 161,503 3.6 % 31 Table of Contents Total assets increased to $4.7 billion as of September 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 approximately $3.0 billion of unpaid principal balance of our portfolio during the nine months ended September 30, 2025. Homebuilding lots owned and controlled September 30, 2025 December 31, 2024 % Change Owned Controlled Total Owned Controlled Total Owned Controlled Total West 3,709 2,207 5,916 4,211 4,286 8,497 (11.9) % (48.5) % (30.4) % Mountain 8,522 1,292 9,814 9,037 4,052 13,089 (5.7) % (68.1) % (25.0) % Texas 14,713 3,198 17,911 12,632 8,935 21,567 16.5 % (64.2) % (17.0) % Southeast 5,221 7,857 13,078 5,173 12,270 17,443 0.9 % (36.0) % (25.0) % Century Complete 4,318 11,202 15,520 4,703 15,333 20,036 (8.2) % (26.9) % (22.5) % Total 36,483 25,756 62,239 35,756 44,876 80,632 2.0 % (42.6) % (22.8) % During the three and nine months ended September 30, 2025, we continued to strategically manage our lot pipeline, resulting in 62,239 lots owned and controlled at September 30, 2025, compared to 80,632 at December 31, 2024. Of our total lots owned and controlled as of September 30, 2025, 58.6% were owned and 41.4% 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 Net new home contracts Three Months Ended Nine Months Ended September 30, Increase (Decrease) September 30, Increase (Decrease) 2025 2024 Amount % Change 2025 2024 Amount % Change West 337 365 (28) (7.7) % 1,052 1,181 (129) (10.9) % Mountain 418 463 (45) (9.7) % 1,216 1,626 (410) (25.2) % Texas 433 454 (21) (4.6) % 1,436 1,488 (52) (3.5) % Southeast 388 396 (8) (2.0) % 1,159 1,232 (73) (5.9) % Century Complete 810 885 (75) (8.5) % 2,761 2,682 79 2.9 % Total 2,386 2,563 (177) (6.9) % 7,624 8,209 (585) (7.1) % Net new home contracts (new home contracts net of cancellations) for the three months ended September 30, 2025 decreased by 177 homes, or 6.9%, to 2,386 as compared to 2,563 for the same period in 2024. Net new home contracts for the nine months ended September 30, 2025 decreased by 585 homes, or 7.1%, to 7,624 as compared to 8,209 for the same period in 2024. 32 Table of Contents 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 and nine months ended September 30, 2025 and 2024 by segment is included in the table below: Three Months Ended September 30, Increase (Decrease) 2025 2024 Amount % Change West 3.1 4.5 (1.4) (31.1) % Mountain 2.8 3.3 (0.5) (15.2) % Texas 2.0 2.4 (0.4) (16.7) % Southeast 2.8 3.5 (0.7) (20.0) % Century Complete 2.3 2.6 (0.3) (11.5) % Total 2.5 2.9 (0.4) (13.8) % Nine Months Ended September 30, Increase (Decrease) 2025 2024 Amount % Change West 3.4 4.7 (1.3) (27.7) % Mountain 2.8 3.8 (1.0) (26.3) % Texas 2.1 3.3 (1.2) (36.4) % Southeast 2.9 4.3 (1.4) (32.6) % Century Complete 2.6 2.7 (0.1) (3.7) % Total 2.7 3.4 (0.7) (20.6) % During the three and nine months ended September 30, 2025, our absorption rates decreased by 13.8% and 20.6%, respectively, to 2.5 per month and 2.7 per month, respectively, as compared to the same respective periods in 2024, primarily driven by slowing demand during the first nine 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 Selling Communities Average Selling Communities Average Selling Communities As of September 30, Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 2025 2024 West 38 27 36 27 34 28 Mountain 53 49 49 47 49 47 Texas 73 74 73 64 75 50 Southeast 45 38 46 38 44 32 Century Complete 112 117 117 114 117 112 Total 321 305 321 290 319 269 Our selling communities increased by 16 communities to 321 communities at September 30, 2025 as compared to 305 at September 30, 2024. This 5.2 % increase was a result of an increased land pipeline that resulted in new community openings in excess of community closeouts. 33 Table of Contents Backlog (dollars in thousands) As of September 30, 2025 2024 % Change Homes Dollar Value Average Sales Price Homes Dollar Value Average Sales Price Homes Dollar Value Average Sales Price West 204 $ 115,035 $ 563.9 315 $ 196,385 $ 623.4 (35.2) % (41.4) % (9.5) % Mountain 139 73,330 527.6 295 171,990 583.0 (52.9) % (57.4) % (9.5) % Texas 195 59,212 303.6 315 99,066 314.5 (38.1) % (40.2) % (3.5) % Southeast 139 61,170 440.1 219 94,202 430.1 (36.5) % (35.1) % 2.3 % Century Complete 440 108,177 245.9 436 109,761 251.7 0.9 % (1.4) % (2.3) % Total / Weighted Average 1,117 $ 416,924 $ 373.3 1,580 $ 671,404 $ 424.9 (29.3) % (37.9) % (12.1) % ‎ 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 September 30, 2025, we had 1,117 homes in backlog, which decreased as compared to 1,580 homes in backlog at September 30, 2024, with a total value of $416.9 million, as compared to $671.4 million at September 30, 2024. Backlog dollar value decreased due to the decrease in the number of backlog units, and a 12.1% decrease in the average sales price of backlog units, generally due to higher incentives, and partially offset by mix within individual communities. Supplemental Guarantor Information Our 6.625% senior notes due 2033 (which we refer to collectively as our “2033 Notes”) and our 3.875% senior notes due 2029 (which we refer to collectively as our “2029 Notes” and collectively with our 2033 Notes, the “Senior Notes”) are our unsecured senior obligations and are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by substantially all of our direct and indirect wholly-owned operating subsidiaries (which we refer to collectively as the “Guarantors”). Our subsidiaries associated with our Financial Services operations (which we refer to as the “Non-Guarantors”) do not guarantee the Senior Notes. The guarantees are senior unsecured obligations of the Guarantors that rank equal with all existing and future senior debt of the Guarantors and senior to all existing and future subordinated debt of the Guarantors. The guarantees are effectively subordinated to any secured debt of the Guarantors. As of September 30, 2025, Century Communities, Inc. had $1.0 billion in total principal amount of Senior Notes outstanding. Each of the indentures governing our Senior Notes provides that the guarantees of a Guarantor will be automatically and unconditionally released and discharged: (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 applicable indenture), which sale, transfer, exchange or other disposition does not constitute an “Asset Sale” (as defined in the applicable indenture) 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 applicable indenture); (3) unless a default has occurred and is continuing, upon the release or discharge of such Guarantor from its guarantee of any indebtedness for borrowed money of the Company and the Guarantors so long as such Guarantor would not then otherwise be required to provide a guarantee pursuant to the applicable indenture; provided that if such Guarantor has incurred any indebtedness in reliance on its status as a Guarantor in compliance with applicable provisions of the applicable indenture, such Guarantor’s obligations under such indebtedness, as the case may be, so incurred are satisfied in full and discharged or are otherwise permitted to be incurred by a Restricted Subsidiary (other than a Guarantor) in compliance with applicable provisions of the applicable indenture; (4) upon the designation of such Guarantor as an “Unrestricted Subsidiary” (as defined in the applicable indenture), in accordance with the applicable indenture; (5) if the Company exercises its legal defeasance option or covenant defeasance option under the applicable indenture or if the obligations of the Company and the Guarantors are discharged in compliance with applicable provisions of the applicable indenture, upon such exercise or discharge; or (6) in connection with the dissolution of such Guarantor under applicable law in accordance with the applicable indenture. If a Guarantor were to become a debtor in a case under the US Bankruptcy Code, a court may decline to enforce its guarantee of the Senior Notes. This may occur when, among other factors, it is found that the Guarantor originally received less than fair consideration for the guarantee and the Guarantor would be rendered insolvent by enforcement of the guarantee. On the basis of historical financial information, operating history and other factors, we believe that each of the Guarantors, after giving effect to the issuance of its guarantee of the Senior Notes when the guarantee was issued, was not insolvent and did not and has not incurred debts beyond its ability to pay such debts as they mature. The Company cannot predict, however, what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard. 34 Table of Contents The offer and sale of the Senior Notes and the related guarantees were issued in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), and other applicable securities laws. Unless we subsequently register the resale of the Senior Notes and related guarantees, they may be offered or sold only in transactions that are exempt from the registration requirements under the Securities Act and the applicable securities laws of any other jurisdiction. The Guarantors’ condensed supplemental financial information is presented in this report as if the guarantees of the Senior Notes existed during the periods presented. If any Guarantors are released from their respective guarantees in future periods, the changes are reflected prospectively. We have determined that separate, full financial statements of the Guarantors would not be material to investors, and accordingly, supplemental financial information is presented below. The following summarized financial information is presented for Century Communities, Inc. and the Guarantors on a combined basis after eliminating intercompany transactions and balances among Century Communities, Inc. and the Guarantors, as well as their investment in, and equity in earnings from, the Non-Guarantors. Century Communities, Inc. and Guarantors Summarized Balance Sheet Data (in thousands) September 30, 2025 December 31, 2024 Assets Cash and cash equivalents $ 283 $ 522 Cash held in escrow 44,717 3,004 Accounts receivable 63,255 39,460 Due from non-guarantors — 26,980 Inventories 3,584,246 3,454,337 Prepaid expenses and other assets 511,316 329,620 Property and equipment, net 91,429 154,767 Deferred tax assets, net 22,702 22,220 Goodwill 41,109 41,109 Total assets $ 4,359,057 $ 4,072,019 Liabilities and stockholders’ equity Liabilities: Accounts payable $ 166,955 $ 130,941 Accrued expenses and other liabilities 254,549 270,534 Due to non-guarantors 98,875 — Notes payable 1,147,370 1,107,909 Revolving line of credit 339,000 135,500 Total liabilities 2,006,749 1,644,884 Stockholders’ equity 2,352,308 2,427,135 Total liabilities and stockholders’ equity $ 4,359,057 $ 4,072,019 Summarized Statements of Operations Data (in thousands) Nine Months Ended Year Ended September 30, 2025 December 31, 2024 Total homebuilding revenues $ 2,822,574 $ 4,305,391 Total homebuilding cost of revenues (2,292,432) (3,369,338) Selling, general and administrative (369,491) (516,489) Inventory impairment (10,951) (8,778) Other expense (19,698) (5,436) Income before income tax expense 130,002 405,350 Income tax expense (31,564) (97,864) Net income $ 98,438 $ 307,486 ‎ 35 Table of Contents Critical Accounting Policies Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates , and the estimates included in our financial statements might be impacted if we used different assumptions or conditions. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on January 30, 2025, in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies.” Liquidity and Capital Resources Overview Our liquidity, consisting of our cash and cash equivalents and cash held in escrow and current capacity on our revolving line of credit, was $835.8 million as of September 30, 2025 and $918.0 million as of December 31, 2024 . Our principal uses of capital for the three and nine months ended September 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. Early stages of development or expansion require significant cash outlays for land acquisitions, entitlements and other approvals, and construction of model homes, roads, utilities, general landscaping and other amenities. Because these costs are a component of our inventory and not recognized in our consolidated statements of operations until a home closes, we incur significant cash outlays prior to our recognition of earnings. In the later stages of community development, cash inflows may significantly exceed earnings reported for financial statement purposes, as the cash outflow associated with home and land construction was previously incurred. From a liquidity standpoint, we continue to acquire and develop lots in our markets when they meet our current investment criteria. During the nine months ended September 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 $339.0 million outstanding under our revolving line of credit as of September 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. Our Century Living operations use excess cash from our operations, as well as project specific secured financing under construction loan agreements, to fund development of multi-family projects. We believe that we will be able to fund our current liquidity needs for at least the next twelve months with our cash on hand, cash generated from operations, and cash expected to be available from our revolving line of credit or through accessing debt or equity capital, as needed or appropriate, although no assurance can be provided that such additional debt or equity capital will be available or on acceptable terms based on the macro-economy and market conditions at the time. 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. We believe we are well positioned from a cash and liquidity standpoint to operate in an uncertain environment and to pursue other ways to properly deploy capital to enhance returns, which may include taking advantage of strategic opportunities as they arise. Long-term Liquidity and Capital Resources Beyond the next twelve months, we believe that our principal uses of capital will be land and inventory purchases and other expenditures, as well as principal and interest payments on our long-term debt obligations. We believe that we will be able to fund our long-term liquidity needs with cash generated from operations and cash expected to be available from our revolving line of credit or through accessing debt or equity capital, as needed or appropriate, although no assurance can be provided that such additional debt or equity capital will be available, or on favorable terms, especially if interest rates remain high. 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 36 Table of Contents 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 In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future in addition to our outstanding debt obligations and debt service requirements described below. These obligations impact our short-term and long-term liquidity and capital resource needs. For the three and nine months ended September 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, other than the issuance of $500.0 million aggregate principal amount of our 6.625% senior notes due 2033 and the extinguishment and redemption of $500.0 million in outstanding principal of our former 6.750% senior notes due 2027, as described in more detail below. In the ordinary course of business, we enter into land purchase contracts in order to procure lots for the construction of our homes. We are subject to customary obligations associated with entering into contracts for the purchase of land and improved lots. Purchase and option contracts for the purchase of land enable us to defer acquiring portions of properties owned by third parties until we have determined whether to exercise our option, which may serve to reduce our financial risks associated with long-term land holdings. These purchase contracts typically require a cash deposit, and the purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements, including obtaining applicable property and development entitlements. We also utilize option contracts with land sellers and others as a method of acquiring land in staged takedowns, to help us manage the financial and market risk associated with land holdings, and to reduce the use of funds from our corporate financing sources. Option contracts generally require payment by us of a non-refundable deposit for the right to acquire lots over a specified period of time at pre-determined prices. Our obligations with respect to purchase contracts and option contracts are generally limited to the forfeiture of the related non-refundable cash deposits. 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 September 30, 2025, we had outstanding purchase contracts and option contracts for 25,756 lots totaling approximately $1.8 billion and we had $92.6 million of deposits for land contracts, of which $69.0 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. Our performance, including the timing and amount of purchase, if any, under these outstanding purchase and option contracts is subject to change and dependent on future market conditions. Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into option takedown arrangements, the availability of capital to financial intermediaries to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more or less prevalent in certain geographic regions. In addition, in the ordinary course of business, we explore, and from time to time, enter into purchase agreements to opportunistically acquire other homebuilders to add existing and future lots to our land portfolio and augment the organic expansion of our land portfolio. These acquisitions are often legally structured as asset acquisitions for cash and conditioned upon a due diligence investigation by us of the business for a limited period of time, in addition to other standard and customary closing conditions. Outstanding Debt Obligations and Debt Service Requirements One of our principal liquidity needs is the payment of principal and interest on our outstanding indebtedness. 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 September 30, 2025, we were in compliance with all such covenants and requirements under the agreements governing our senior notes, revolving line of credit, construction loan agreements, and mortgage repurchase facilities. See Note 10 – Debt in the Notes to the Condensed Consolidated Financial Statements for further detail. 37 Table of Contents Our outstanding debt obligations included the following as of September 30, 2025 and December 31, 2024, respectively (in thousands): September 30, December 31, 2025 2024 6.750% senior notes, due June 2027 (1) $ — $ 498,027 3.875% senior notes, due August 2029 (1) 497,008 496,428 6.625% senior notes, due September 2033 (1) 493,135 — Other financing obligations (2) 157,227 113,454 Notes payable 1,147,370 1,107,909 Revolving line of credit 339,000 135,500 Mortgage repurchase facilities 176,604 232,804 Total debt $ 1,662,974 $ 1,476,213 (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 September 30, 2025, other financing obligations included $26.1 million related to insurance premium notes and certain secured borrowings, as well as $131.1 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. We may from time to time seek to refinance or increase our outstanding debt or retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, redemptions or otherwise. Such repurchases, exchanges or redemptions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may or may not be material during any particular reporting period. Issuance of 6.625% Senior Notes Due 2033 During the three months ended September 30, 2025, we entered into an indenture with U.S. Bank Trust Company, National Association, as trustee pursuant to which we issued $500.0 million aggregate principal amount of our 6.625% Senior Notes due 2033 (the “2033 Notes”). The 2033 Notes were issued at 100% of their principal amount and we received proceeds of $493.1 million, net of $6.9 million in issuance costs. The indenture contains certain restrictive covenants on issuing future secured debt and other transactions and contains various optional redemption provisions to redeem the 2033 Notes, in whole or in part, at a time before, or on or after, September 15, 2028, and a put provision triggered by certain change of control events. The aggregate principal balance of the 2033 Notes is due in September 2033. Interest on the 2033 Notes will accrue from September 17, 2025 at a rate of 6.625% per annum, and will be payable semi-annually in cash in March and September of each year, beginning in March 2026. As of September 30, 2025, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $493.1 million. Extinguishment of 6.750% Senior Notes Due 2027 During the three months ended September 30, 2025, we legally extinguished $500.0 million in outstanding principal of our 6.750% Senior Notes due 2027 at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest, totaling $511.4 million. The extinguishment transaction resulted in a loss on debt extinguishment of $1.4 million included in other expense in the condensed consolidated statements of operations. 3.875% Senior Notes Due 2029 As of September 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 and contains various optional redemption provisions to redeem the 2029 Notes, in whole or in part, at a time before, or on or after, February 15, 2029, and a put provision triggered by certain change of control events. As of September 30, 2025, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $497.0 million. Construction Loan Agreements Certain wholly owned subsidiaries of Century Living, LLC are parties to secured 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. Portions of the obligations under the secured construction loan agreements are 38 Table of Contents guaranteed by us. Borrowings under the construction loan agreements bear interest at various rates, including a fixed rate and floating interest rates per annum equal to the Secured Overnight Financing Rate (which we refer to as “SOFR”) plus an applicable margin. The outstanding principal balances and all accrued and unpaid interest is due on varying maturity dates from March 17, 2026 through February 28, 2029, with certain of the construction loan agreements allowing for the option to extend the maturity dates for a period of 12 months if certain conditions are satisfied. 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 September 30, 2025 and December 31, 2024, $131.1 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 September 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 September 30, 2025 and December 31, 2024, $339.0 million and $135.5 million, respectively, was outstanding under the revolving line of credit, with borrowings that bore an interest rate of 5.7% 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 September 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 5.8% as of September 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 September 30, 2025 and December 31, 2024, we had $176.6 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 September 30, 2025 and December 31, 2024, we had issued and outstanding letters of credit of $74.7 million and $97.5 million, respectively, and we had issued and outstanding performance and other bonds of $450.1 million and $466.0 million, respectively. Although significant development and construction activities have been completed 39 Table of Contents 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 stock repurchase program authorizes us to repurchase up to 4.5 million shares of our outstanding common stock, of which 2.8 million shares remained available to be repurchased as of September 30, 2025. During the three and nine months ended September 30, 2025, an aggregate of 296.9 thousand and 1.9 million shares, respectively, were repurchased under our stock repurchase program for a total purchase price of approximately $20.0 million and $123.6 million, respectively, and a weighted average price of $67.36 and $63.91 per share, respectively. We did not repurchase any shares of common stock during the three months ended September 30, 2024. During the nine months ended September 30, 2024, an aggregate of 651.9 thousand shares were repurchased for a total purchase price of approximately $53.1 million and a weighted average price of $81.49 per share. 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 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 and nine months ended September 30, 2025 and 2024, respectively (in thousands, except per share information): Nine months ended September 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 August 13, 2025 August 27, 2025 September 10, 2025 $ 0.29 $ 8,607 Nine months ended September 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 August 14, 2024 August 28, 2024 September 11, 2024 $ 0.26 $ 8,148 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. 40 Table of Contents Cash Flows— Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024 For the nine months ended September 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 $57.7 million during the nine months ended September 30, 2025 as compared to net cash used in operating activities of $174.0 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 nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. This was offset by (1) a $119.4 million decrease in net income during the current year period and (2) changes in cash balances held in escrow, in each case compared to the prior year period.  Net cash provided by investing activities was $30.6 million during the nine months ended September 30, 2025, compared to net cash used in investing activities of $277.7 million during the prior year period. This change was primarily related to (1) $44.9 million in cash proceeds related to the sale of our mortgage servicing rights portfolio during the nine months ended September 30, 2025, (2) $157.1 million in expenditures related to our acquisitions of Anglia and Landmark during the nine months ended September 30, 2024, and (3) $98.0 million in expenditures related to the development, construction, and management of multi-family rental properties by our Century Living segment during the nine months ended September 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 shortly after lease stabilization 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 now recorded as operating activities on the condensed consolidated statement of cash flows.  Net cash provided by financing activities was $14.9 million during the nine months ended September 30, 2025, compared to net cash provided by financing activities of $388.6 million during the prior year period. This change was primarily attributable to (1) a $70.5 million increase in stock repurchases (2) a $64.1 million increase in net payments for our mortgage repurchase facilities, and (3) a $36.7 million decrease in borrowings under construction loan agreements, in each case during the current year period as compared to the prior year period. As of September 30, 2025, our cash and cash equivalents and restricted cash balance was $163.2 million, as compared to $175.3 million as of December 31, 2024. ‎ 41 Table of Contents Non-GAAP Financial Measures In this Form 10-Q, we use certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, net homebuilding debt to net capital, adjusted net income and adjusted diluted earnings per share. These non-GAAP financial measures are presented to provide investors additional information to facilitate the comparison of our past and present operations. We believe these non-GAAP financial measures provide useful information to investors because they are used to evaluate our performance on a comparable year-over-year or period-over-period basis. These non-GAAP financial measures are not in accordance with, or an alternative for, GAAP measures and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive or standard set of accounting rules or principles. Accordingly, the calculation of our non-GAAP financial measures may differ from the definitions of other companies using the same or similar names limiting, to some extent, the usefulness of such measures for comparison purposes. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with our financial results as determined in accordance with GAAP. These measures should only be used to evaluate our financial results in conjunction with the corresponding GAAP measures. Accordingly, we qualify our use of non-GAAP financial information in a statement when non-GAAP financial information is presented. EBITDA and Adjusted EBITDA The following table presents EBITDA and adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024. EBITDA and adjusted EBITDA are non-GAAP financial measures we use as a supplemental measure in evaluating operating performance. We define EBITDA as net income before (i) income tax expense, (ii) interest in cost of home sales revenues, (iii) other interest expense (income), and (iv) depreciation and amortization expense. We define adjusted EBITDA as EBITDA before inventory impairment, abandonment of lot option contracts, restructuring costs, loss on debt extinguishment, impairment on other investment, and purchase price accounting for acquired work in process inventory, in each case as applicable during a period. We believe EBITDA and adjusted EBITDA provide an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization, and items considered to be non-recurring. Accordingly, our management believes that these measurements are useful for comparing general operating performance from period to period. Neither EBITDA nor adjusted EBITDA should be considered in addition to, and not as a substitute for, consolidated net income in accordance with GAAP as a measure of performance. Our presentation of adjusted EBITDA should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items. Each of our EBITDA and adjusted EBITDA is limited as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results of operations as reported under GAAP. (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 % Change 2025 2024 % Change Net income $ 37,403 $ 83,020 (54.9) % $ 111,641 $ 231,075 (51.7) % Income tax expense 10,435 26,892 (61.2) % 35,798 73,789 (51.5) % Interest in cost of home sales revenues 15,005 16,492 (9.0) % 41,994 42,117 (0.3) % Interest expense (income) 876 (369) (337.4) % 445 (2,693) (116.5) % Depreciation and amortization expense 6,005 6,272 (4.3) % 18,868 17,437 8.2 % EBITDA $ 69,724 $ 132,307 (47.3) % $ 208,746 $ 361,725 (42.3) % Inventory impairment 3,180 1,373 131.6 % 10,951 1,942 463.9 % Abandonment of lot option contracts (1) 5,159 2,124 142.9 % 9,306 3,941 136.1 % Restructuring costs — — NM 1,505 — NM Loss on debt extinguishment 1,361 — NM 1,361 — NM Impairment on other investment — — NM — 7,722 NM Purchase price accounting for acquired work in process inventory 2,830 3,446 (17.9) % 6,763 5,999 12.7 % Adjusted EBITDA $ 82,254 $ 139,250 (40.9) % $ 238,633 $ 381,329 (37.4) % NM – Not Meaningful (1) Beginning in the third quarter of 2025, we added “Abandonment of lot option contracts” as an adjustment in our non-GAAP adjusted EBITDA calculation. Accordingly, we have recast the corresponding prior period information to conform to the current presentation and calculation. ‎ 42 Table of Contents Net Homebuilding Debt to Net Capital The following table presents our ratio of net homebuilding debt to net capital, which is a non-GAAP financial measure. We calculate this by dividing net homebuilding debt (homebuilding debt less cash and cash equivalents, and cash held in escrow) by net capital (net homebuilding debt plus total stockholders’ equity). Homebuilding debt is our total debt minus our outstanding borrowings under our construction loan agreements and our repurchase facilities. The most directly comparable GAAP measure is the ratio of homebuilding debt to total capital. We believe the ratio of net homebuilding debt to net capital is a relevant and useful financial measure to investors in understanding the leverage employed in our operations and as an indicator of our ability to obtain external financing. (dollars in thousands) September 30, December 31, 2025 2024 Notes payable $ 1,147,370 $ 1,107,909 Revolving line of credit 339,000 135,500 Construction loan agreements (131,151) (102,436) Total homebuilding debt 1,355,219 1,140,973 Total stockholders' equity 2,578,022 2,620,856 Total capital $ 3,933,241 $ 3,761,829 Homebuilding debt to capital 34.5% 30.3% Total homebuilding debt $ 1,355,219 $ 1,140,973 Cash and cash equivalents (130,075) (149,998) Cash held in escrow (44,717) (3,004) Net homebuilding debt 1,180,427 987,971 Total stockholders' equity 2,578,022 2,620,856 Net capital $ 3,758,449 $ 3,608,827 Net homebuilding debt to net capital 31.4% 27.4% ‎ 43 Table of Contents Adjusted Net Income and Adjusted Diluted Earnings per Share Adjusted net income and adjusted diluted earnings per share (which we refer to as “Adjusted EPS”) are non-GAAP financial measures that we believe are useful to management, investors and other users of our financial information in evaluating our operating results and understanding our operating trends without the effect of certain non-recurring items. We believe excluding certain non-recurring items provides more comparable assessment of our financial results from period to period. We define adjusted net income as consolidated net income before (i) income tax expense; (ii) inventory impairment; (iii) abandonment of lot option contracts; (iv) restructuring costs; (v) loss on debt extinguishment; (vii) impairment on other investment; and (vii) purchase price accounting for acquired work in process inventory; in each case, as applicable during a period, less adjusted income tax expense, calculated using our estimated annual effective tax rate after discrete items for the applicable period. Adjusted EPS is calculated by dividing adjusted net income by weighted average common shares – diluted. (in thousands, except share and per share information) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Numerator Net income $ 37,403 $ 83,020 $ 111,641 $ 231,075 Denominator Weighted average common shares outstanding - basic 29,645,795 31,336,756 30,266,752 31,596,995 Dilutive effect of stock-based compensation awards 373,358 688,259 344,259 520,922 Weighted average common shares outstanding - diluted 30,019,153 32,025,015 30,611,011 32,117,917 Earnings per share: Basic $ 1.26 $ 2.65 $ 3.69 $ 7.31 Diluted $ 1.25 $ 2.59 $ 3.65 $ 7.19 Adjusted earnings per share Numerator Net income $ 37,403 $ 83,020 $ 111,641 $ 231,075 Income tax expense 10,435 26,892 35,798 73,789 Income before income tax expense 47,838 109,912 147,439 304,864 Inventory impairment 3,180 1,373 10,951 1,942 Abandonment of lot option contracts (1) 5,159 2,124 9,306 3,941 Restructuring costs — — 1,505 — Loss on debt extinguishment 1,361 — 1,361 — Impairment on other investment — — — 7,722 Purchase price accounting for acquired work in process inventory 2,830 3,446 6,763 5,999 Adjusted income before income tax expense 60,368 116,855 177,325 324,468 Adjusted income tax expense (2) (14,657) (28,283) (43,054) (78,534) Adjusted net income $ 45,711 $ 88,572 $ 134,271 $ 245,934 Denominator - Diluted 30,019,153 32,025,015 30,611,011 32,117,917 Adjusted diluted earnings per share $ 1.52 $ 2.77 $ 4.39 $ 7.66 (1) Beginning in the third quarter of 2025, we added “Abandonment of lot option contracts” as an adjustment in our non-GAAP adjusted net income calculation. Accordingly, we have recast the corresponding prior period information to conform to the current presentation and calculation. (2) The tax rates used in calculating adjusted net income for the three and nine months ended September 30, 2025 were each 24.3%, respectively, which are reflective of our GAAP tax rates for the nine months ended September 30, 2025. The tax rates used in calculating adjusted net income for the three and nine months ended September 30, 2024 were each 24.2%, respectively, which are reflective of our GAAP tax rates for the nine months ended September 30, 2024. ‎ 44 Table of Contents ITEM 3. QUANTIT ATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 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, 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 and the operation of our Financial Services business. Exposure to market risk includes the impact of interest rate changes on our interest expense and the affordability of mortgage financing to homebuyers, which affects demand for our homes, 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. During the three months ended September 30, 2025, the U.S. Federal Reserve reduced the U.S. Federal funds interest rate. 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 Financial Services business, which is significantly tied to the sale of our homes utilizes mortgage-backed securities forward commitments, option contracts and investor commitments to protect the value of rate-locked commitments and loans held for sale from fluctuations in mortgage-related interest rates. To mitigate interest risk associated with loans held for sale, we typically use derivative financial instruments to economically hedge our exposure to risk from the time a borrower locks a loan until the time the loan is securitized. We also typically hedge our interest rate exposure through entering into interest rate swap futures. Inflation Our homebuilding operations have been and may continue to be adversely impacted by inflation, primarily from higher land, financing, labor, material, and construction costs. 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. Seasonality Historically, the homebuilding industry experiences seasonal fluctuations in quarterly operating results and capital requirements. We typically experience the highest new home order activity during the spring, although this activity is also highly dependent on the number of active selling communities, timing of new community openings, and other market factors. Since it typically takes approximately four months to construct a new home, we typically deliver more homes in the second half of the year as spring and summer home starts convert to home deliveries. Because of this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters, and the majority of our cash receipts from home deliveries occurs during the second half of the year. This seasonality pattern may be affected by volatility in the homebuilding industry, supply chain challenges, subcontractor and labor shortages, and changes in demand for our homes.