What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-04-23 compared with 2025-10-23 · 222 added, 316 removed, 408 unchanged (57% of the section changed)

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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 cyclical nature of the homebuilding industry, which is particularly susceptible to economic 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 and cost of mortgage loans to homebuyers, persistent inflation, decreased employment levels and job insecurity concerns due in part to the rapid adoption of artificial intelligence, cautious consumer sentiment, affordability concerns, and increased recessionary conditions;

 unstable economic and political conditions as well as geopolitical conflicts, including most recently in the Middle East, 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, general economic uncertainty, and/or other adverse effects;

 other shortages of or increased prices for labor, land or raw materials used in housing construction and resource shortages, including as a result of, among other factors, supply chain disruptions, tariffs, and immigration laws or the enforcement thereof

 the availability of qualified personnel and contractors and our ability to obtain additional or retain existing key personnel and contractor relationships and successfully transition key executive positions in the future;

 the availability and price of land to acquire, and our ability to acquire such land on favorable terms or at all or dispose of it when appropriate or on favorable terms or at all;

 a downturn in the homebuilding industry, including a reduction in demand for our homes, increased cancellation rates, or a decline in real estate values or market conditions resulting in an adverse impact on our business, operating results and financial condition, which may include an elevated use of sales incentives adversely affecting our margins and possible future impairment or restructuring charges;

 changes in assumptions used to make industry forecasts, population growth rates, or trends affecting housing availability, demand or prices;

 the availability or cost of mortgage financing and the substantial increase in the use of adjustable-rate mortgages which involve additional risk since rates fluctuate based on current interest rates potentially leading to increased cancellation rates and foreclosure rates;

 delays in land development, home construction or the completion of projects, or reduced consumer demand for housing, resulting from significant weather conditions or natural or manmade disasters in the geographic areas where we operate, regulatory or tax changes, or other events outside our control;

 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;

 the degree and nature of our competition, including the supply and pricing of new and existing homes and other housing alternatives, and the effect on our business and operating results;

 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;

 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;

 the timing of receipt of municipal, utility and other regulatory approvals and the opening of projects and construction and completion of our homes;

 the impact 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;

 the ability of our homebuyers to obtain or afford homeowners or 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;

 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;

 taxation and tax policy changes, tax rate changes, new tax laws, new or revised tax law interpretations or guidance.

 risks associated with and the success of our multi-family rental business;

 our future business operations, operating results and financial condition;

future impairment and restructuring charges;

and changes in our business, investment and capital allocation strategy;

 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;

 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, among other factors, geopolitical conditions, U.S.

government shutdowns, and in the event of a threatened or actual sovereign default;

 availability, terms and deployment of capital;

 the effect of and risks associated with any future acquisitions;

 income tax expense variability due to, among other factors, the expiration of or changes in the 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 at current levels or at all;

 taxation and tax policy changes, tax rate changes, new tax laws, or new or revised tax law interpretations or guidance;

 the effect of a public health issue, such as a major epidemic or pandemic on the economy and our business.

Forward-looking statements are based on our beliefs, assumptions and expectations of future events, taking into account all information currently available to us.

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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” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, 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.

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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.

entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the limited 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, centralized locations, and the internet, and generally provides no option or upgrade selections.

Our homebuilding operations are organized into the following five reportable segments:

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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.

Additionally, our Century Living segment is engaged in the development, construction, management, and sales 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.

Of the 2,013 homes delivered during the first three months of 2026 , approximately 96% of homes delivered had purchase prices below the Federal Housing Administration-insured mortgage limits and approximately 98% 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 ongoing affordability pressures for homebuyers.

Against this backdrop, including volatility in fuel and transportation prices related to the global conflict in the Middle East, we experienced softened demand during the three months ended March 31, 2026, as net new home contracts (new home contracts net of cancellations) decreased 11.6% compared to the prior year period.

Still, there remains an underlying need for affordable new homes, supported by solid demographic trends and an ongoing undersupply of homes.

In response to market conditions, we 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.

Further, during the first quarter of 2026, we experienced continued acceptance to adjustable-rate mortgages among our homebuyers.

During the three months ended March 31, 2026, cycle times remained in the approximately three- to 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;

We believe future demand for our homes remains uncertain as future economic, market and geopolitical conditions remain uncertain, in particular with respect to inflation and consumer confidence, both of which could be adversely affected by the conflict in the Middle East, especially if it persists or intensifies;

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

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the possibility of an economic recession;

the current U.S.

governmental shutdown;

the effects of full or partial U.S.

governmental shutdowns;

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;

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 loans and revenues from our Financial Services segment, and net income.

Recent disruptions to energy markets related to geopolitical developments in the Middle East have increased fuel and transportation prices, and certain tariffs that became effective in late 2025 relate to various imported products used in the homebuilding industry, including cabinets, lumber, and certain other wood products.

As of March 31, 2026, 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.

Mortgage rates remained elevated during the quarter and are influenced by a range of market factors, and we cannot provide any assurance as to the impact of future market or policy developments on mortgage rates or our current or future business.

Further, federal policymakers have engaged with industry participants on housing affordability and supply issues, though the timing and impact of any resulting legislative or policy actions remain uncertain and are not expected to materially affect

housing conditions in the near term.

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.

We believe we are well-positioned to benefit from the favorable demographics and an ongoing undersupply of homes 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, our efficiencies in direct construction costs and cycle times, and our current and future inventories of attractive land positions, including our use of a flexible land strategy.

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.

During the three months ended March 31, 2026, we generated $33.3 million in income before income tax expense, as compared to $52.5 million in the prior year period.

During the three months ended March 31, 2026, we generated net income of $24.4 million, or $0.84 per diluted share, as compared to $39.4 million, or $1.26 per diluted share, in the prior year period.

‎During the three months ended March 31, 2026, we generated total revenues of $789.7 million, including land sales and other revenues of $33.2 million, as compared to $903.2 million in the prior year period.

During the three months ended March 31, 2026, we delivered 2,013 new homes with an average sales price of $364.7 thousand.

Our new home deliveries decreased by 11.9% compared to the prior year period, primarily due to slower absorption rates as a result of lower demand amid challenging homebuilding market conditions, and the average sales price per new home decreased 5.7% as compared to the prior year period, primarily due to an increased use of incentives during the first quarter of 2026.

During the three months ended March 31, 2026, net new contracts decreased 11.6% to 2,379 as compared to the prior year period.

We continue to take a balanced approach to capital allocation, guided by market conditions and our priorities of investing in land and land development to support future growth and returning capital to our stockholders.

We ended the first quarter of 2026 with $78.2 million of cash and cash equivalents and $11.6 million of cash held in escrow.

We had $203.7 million outstanding under our revolving line of credit, with a homebuilding debt to capital ratio of 32.2% and a net homebuilding debt to net capital ratio of 30.5%.

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.

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

We have continued to strategically manage our lot pipeline in order to maintain a balance between the number of owned lots as compared to lots we control through option and other contracts, resulting in 58,537 lots owned and controlled at March 31, 2026.

During the three months ended March 31, 2026, we repurchased an aggregate of 617.1 thousand shares under our stock repurchase program for a total purchase price of approximately $40.0 million and a weighted average price of $64.82 per share.

Also during the first quarter, we paid a quarterly cash dividend to our stockholders of $0.32 per share, a 10% increase from the $0.29 per share quarterly dividend paid during the three months ended March 31, 2025.

For the three months ended March 31, 2026, our Financial Services segment generated income before income tax expense of $7.6 million as compared to $2.4 million in the prior year period, primarily driven by favorable fair value adjustments during the period.

During the three months ended March 31, 2026, the number of mortgages originated decreased 7.4% and the number of loans sold to third parties increased 2.2% as compared to the prior year period.

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:

(in thousands, except per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Consolidated Statements of Operations:

Three Months Ended March 31,

Increase (Decrease)

Condensed Consolidated Statements of Operations:

Home sales revenues

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Financial services costs

Selling, general, and administrative

Inventory impairment

Other (expense) income, net

Selling, general and administrative expense

Other income (expense), net

Income before income tax expense

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Other Operating Information

(dollars in thousands):

Number of homes delivered

Average sales price of homes delivered

Number of new homes delivered

Average sales price of new homes delivered

Homebuilding gross margin percentage

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Adjusted net income (2)(3)

Homebuilding debt to capital

Net homebuilding debt to net capital (2)

(1) Beginning in the fourth quarter of 2025, inventory impairment was reclassified to be included in cost of home sales revenues in our consolidated statements of operations rather than presented as a separate line item and prior year period amounts have been reclassified to conform to this presentation.

(2) 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

See the reconciliations to the most comparable GAAP measure and other information within our “—Homebuilding Gross Margin” and “—Non-GAAP Financial Measures” sections in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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

(3) 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 calculations, and we have recast the corresponding prior year period adjusted EBITDA and adjusted net income amounts to conform to the current presentation and calculation.

(4) Beginning in the fourth quarter of 2025, we added “Stock-based compensation expense” as an adjustment in our non-GAAP adjusted EBITDA calculation.

Accordingly, we have recast the corresponding prior year period adjusted EBITDA amount to conform to the current presentation and calculation.

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

Century Complete

Financial Services

Century Living

New homes delivered

Average sales price of new homes delivered

Cost of home sales

Financial services costs

Selling, general and administrative

Inventory impairment

Other segment items (1)

Income (loss) before tax expense

Three months ended September 30, 2024

Century Complete

Financial Services

Century Living

New homes delivered

Average sales price of new homes delivered

Cost of home sales

Financial services costs

Selling, general and administrative

Inventory impairment

Other segment items (1)

Income (loss) before tax expense

Nine months ended September 30, 2025

Three Months Ended March 31, 2026

Century Complete

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Financial services costs

Selling, general and administrative

Inventory impairment

Selling, general and administrative expense

Other segment items (2)

Income (loss) before tax expense

Nine months ended September 30, 2024

Three Months Ended March 31, 2025

Century Complete

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Financial services costs

Selling, general and administrative

Inventory impairment

Selling, general and administrative expense

Other segment items (2)

Income (loss) before tax expense

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

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.

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.

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.

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.

During the three months ended March 31, 2026, our West segment generated income before income tax expense of $9.9 million, representing a decrease of 53.5% compared to the prior year period, which was primarily driven by a decrease in revenue and homebuilding gross margin.

During the three months ended March 31, 2026, revenue decreased $24.2 million as compared to the prior year period, primarily driven by an 8.6% decrease in the number of homes delivered and a 5.2% decrease in the average sales price per home.

The decrease in the number of homes delivered was primarily driven by slower absorption rates and the average sales price per home decrease was driven by increased use of incentives.

During the three months ended March 31, 2026, homebuilding gross margin decreased from the prior year period, due primarily to increased use of incentives as compared to the prior year period.

During the three months ended March 31, 2026, our Mountain segment generated income before income tax expense of $8.8 million, representing a decrease of 62.6% compared to the prior year period, which was primarily driven by a decrease in revenue and homebuilding gross margin.

During the three months ended March 31, 2026, revenue decreased $64.8 million as compared to the prior year period, primarily driven by a 19.8% decrease in the number of homes delivered and an 11.2% decrease in the average sales price per home.

The decrease in the number of homes delivered was primarily driven by slower absorption rates and the average sales price

per home decrease was driven by increased use of incentives.

During the three months ended March 31, 2026, homebuilding gross margin decreased from the prior year period, due primarily to increased use of incentives as compared to the prior year period.

During the three months ended March 31, 2026, our Texas segment generated income before income tax expense of $2.8 million, representing a decrease of 72.9% compared to the prior year period, which was primarily driven by a decrease in revenue and homebuilding gross margin.

During the three months ended March 31, 2026, revenue decreased $30.9 million as compared to the prior year period, primarily driven by an 18.8% decrease in the number of homes delivered and a 4.8% decrease in the average sales price per home.

The decrease in the number of homes delivered was primarily driven by slower absorption rates and the average sales price per home decrease was driven by increased use of incentives.

During the three months ended March 31, 2026, homebuilding gross margin decreased from the prior year period, due primarily to increased use of incentives as compared to the prior year period.

During the three months ended March 31, 2026, our Southeast segment generated income before income tax expense of $19.4 million, representing an increase of 36.8% from the prior year period, which was primarily driven by increased revenue and partially offset by a decrease in homebuilding gross margin.

During the three months ended March 31, 2026, revenue increased $22.2 million as compared to the prior year period, primarily driven by a $32.5 million land sales transaction in Georgia reflected as land sales and other revenue, as well as a 4.0% increase in the number of homes delivered, and partially offset by an 11.2% decrease in the average sales price per home.

The increase in the number of homes delivered was primarily driven by improved absorption rates and the average sales price per home decrease was driven by increased use of incentives.

During the three months ended March 31, 2026, homebuilding gross margin decreased from the prior year period, due primarily to increased use of incentives as compared to the prior year period.

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.

During the three months ended March 31, 2026, our Century Complete segment generated income before income tax expense of $13.6 million, representing a decrease of 1.8% compared to the prior year period, which was primarily driven by a decrease in revenue.

During the three months ended March 31, 2026, revenue decreased $19.7 million as compared to the prior year period, primarily driven by a 10.9% decrease in the number of homes delivered and partially offset by a 1.6% increase in the average sales price per home.

The decrease in the number of homes delivered was primarily driven by slower absorption rates and the average sales price per home increase was driven by the mix of deliveries within individual communities and partially offset by increased use of incentives.

During the three months ended March 31, 2026, homebuilding gross margin increased from the prior year period, driven by the mix of deliveries within individual communities, and partially offset by increased use of incentives as compared to the prior year period.

Financial Services

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

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.

During the three months ended March 31, 2026, the number of mortgages originated decreased 7.4% and the number of loans sold to third parties increased 2.2% as compared to the prior year period.

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,

Three Months Ended March 31,

Total originations:

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Century Living

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

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.

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,

Home sales revenues

Cost of home sales revenues

Inventory impairment

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

For the three months ended March 31, 2026, our Century Living segment generated income before income tax expense of $67.0 thousand as compared to a loss of $1.4 million in the prior year period, As of March 31, 2026, the Company had three multi-family rental properties in Colorado, of which two were available for leasing.

These three projects represent nearly 870 total multi-family units, including 443 under development and active construction and 425 completed units, of which 357 units were leased as of March 31, 2026.

As of March 31, 2025, we had three multi-family rental properties under active construction, and subsequently sold one multi-family rental property during the fourth quarter of 2025.

During the three months ended March 31, 2026, our Corporate segment generated a loss of $28.9 million, as compared to a loss of $31.6 million during the prior year period.

The decrease was primarily related to $1.5 million restructuring costs recognized during the three months ended March 31, 2025.

Homebuilding Gross Margin

Inventory impairment

Adjusted homebuilding gross margin excluding inventory impairment (1)

Interest in cost of home sales revenues

Purchase price accounting for acquired work in process inventory

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

Nine Months Ended September 30,

Homebuilding gross margin represents home sales revenues less cost of home sales revenues.

Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, decreased to 17.8% for the three months ended March 31, 2026, as compared to 19.9% for the three months ended March 31, 2025.

The decrease was primarily driven by increased use of incentives during the three months ended March 31, 2026 as compared to the prior year period.

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

The following table also provides reconciliations of our non-GAAP adjusted homebuilding gross margin excluding inventory impairment and as further adjusted to exclude interest in cost of home sales revenues and the effect of purchase price accounting for acquired work in process inventory to homebuilding gross margin, which is the most comparable GAAP measure.

Three Months Ended March 31,

Home sales revenues

Cost of home sales revenues

Inventory impairment

Homebuilding gross margin

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(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.

See the reconciliations to the most comparable GAAP measure, homebuilding gross margin, and other information presented in the table above and in the narrative below and under the heading “—Non-GAAP Financial Measures.” An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

For the three months ended March 31, 2026, 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 19.7% as compared to 21.6% for the prior year period.

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 year periods and to homebuilding gross margins of our competitors.

Selling, General and Administrative Expense

(dollars in thousands)

Three Months Ended September 30,

Selling, general and administrative

As a percentage of home sales revenue

Nine Months Ended September 30,

Selling, general and administrative

Three Months Ended March 31,

Selling, general and administrative expense

As a percentage of home sales revenue

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.

Our selling, general and administrative expense decreased $4.7 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily driven by decreased commissions expense and other administrative expenses, partially offset by increased advertising costs.

As a percentage of home sales revenue, our selling, general and administrative expense increased 210 basis points during the three months ended March 31, 2026, 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.

Our 2026 estimated annual effective tax rate, before discrete items, of 26.3%, is driven by our blended federal and state statutory rate of 24.6%, and certain permanent differences between GAAP and tax, including disallowed deductions for executive compensation, partially offset by estimated federal energy home credits for current year home deliveries, which combined resulted in a net increase in our effective tax rate of 1.7%.

For the three months ended March 31, 2026, our estimated annual rate of 26.3% was impacted by discrete items which increased our rate by 0.5%, primarily related to a shortfall in tax deductions for stock-based compensation awards that vested during the period.

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.

As a result, our income tax expense and effective tax rate for 2026 will not reflect a benefit from such tax credits as to homes delivered after June 30, 2026.

For the three months ended March 31, 2026 and 2025, we recorded income tax expense of $8.9 million and $13.1 million, respectively.

Segment Assets

(dollars in thousands)

September 30,

Increase (Decrease)

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Century Living

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.

Total assets increased by $49.9 million, or 1.1%, to $4.5 billion at March 31, 2026 as compared to December 31, 2025, primarily due to (1) changes in our inventory balances within our homebuilding segments related to the timing of home and land development construction activities, (2) changes in our Century Living multi-family rental properties inventory balances related to the timing of disposition, development, and construction activities and (3) a decrease in our Financial Services assets primarily related to a decrease in mortgage loans held for sale.

Homebuilding lots owned and controlled

September 30, 2025

March 31, 2026

December 31, 2025

Century Complete

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.

We have continued to strategically manage our lot pipeline resulting in 58,537 lots owned and controlled at March 31, 2026, compared to 60,916 at December 31, 2025.

Of our total lots owned and controlled as of March 31, 2026, 58.7% were owned and 41.3% were controlled, as compared to 57.1% owned and 42.9% controlled as of December 31, 2025.

Other Homebuilding Operating Data

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Three Months Ended

Nine Months Ended

September 30,

Increase (Decrease)

September 30,

Increase (Decrease)

Century Complete

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.

Net new home contracts (new home contracts net of cancellations) for the three months ended March 31, 2026 decreased by 313 homes, or 11.6%, to 2,379 as compared to 2,692 for the same period in 2025.

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)

Century Complete

Nine Months Ended September 30,

Our overall average monthly “absorption rate” (calculated as monthly net new home contracts divided by average selling communities) for the three months ended March 31, 2026 and 2025 by segment is included in the table below:

Three Months Ended March 31,

Increase (Decrease)

Century Complete

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.

During the three months ended March 31, 2025, our average monthly absorption rates decreased by 7.1% to 2.6 per month as compared to the same period in 2025, primarily driven by lower demand amid challenging homebuilding market conditions impacted by elevated mortgage rates, macro-economic and geopolitical uncertainty, including recent volatility in fuel and transportation prices related to the conflict in the Middle East, and broader concerns about affordability by homebuyers.

Selling communities

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Average Selling Communities

As of September 30,

Three Months Ended September 30,

Nine Months Ended September 30,

As of March 31,

Three Months Ended March 31,

Century Complete

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.

Our selling communities decreased by 2 communities to 316 communities as of March 31, 2026, as compared to 318 communities at March 31, 2025.

This 0.6% decrease was driven by our Southeast and Century Complete segment as a result of community closeouts in excess of new community openings during the current year period.

(dollars in thousands)

As of September 30,

As of March 31,

Average Sales Price

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

As of 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.

As of March 31, 2026, we had 1,155 homes in backlog, which represents a decrease of 8.2% as compared to 1,258 homes in backlog at March 31, 2025.

The total value of our backlog was $438.5 million as of March 31, 2026 as compared to $521.1 million as of March 31, 2025.

Backlog dollar value decreased 15.9% due to the decrease in the number of backlog units, and the average sales price of backlog units decreased 8.4% generally due to increased use of incentives and mix within individual communities.

Supplemental Guarantor Information

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

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

As of March 31, 2026, Century Communities, Inc.

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

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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.

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.

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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.

1 unchanged sentence

Summarized Balance Sheet Data (in thousands)

September 30, 2025

March 31, 2026

December 31, 2025

2 unchanged sentences

Accounts receivable

Due from non-guarantors

Prepaid expenses and other assets

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Summarized Statements of Operations Data (in thousands)

Nine Months Ended

September 30, 2025

December 31, 2024

Three Months Ended

March 31, 2026

Total homebuilding revenues

Total homebuilding cost of revenues

Selling, general and administrative

Inventory impairment

Selling, general and administrative expense

Other expense

7 unchanged sentences

Liquidity and Capital Resources

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.

Our liquidity, consisting of our cash and cash equivalents and cash held in escrow and current capacity under our revolving line of credit, was $886.1 million as of March 31, 2026 and $1.1 billion as of December 31, 202 5.

Our principal uses of capital for the three months ended March 31, 2026 were our land purchases, land development, home construction, construction of multi-family rental properties, stock 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.

Because these costs are a component of our inventory and not recognized in our condensed 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.

From a liquidity standpoint, we continue to acquire and develop lots in our markets when they meet our current investment criteria and dispose of lots when they do not meet our investment criteria.

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.

We had $203.7 million outstanding under our revolving line of credit as of March 31, 2026, as compared to $51.5 million outstanding as of December 31, 2025.

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.

We believe that we will be able to fund our current liquidity needs for at least the next 12 months with our cash on hand, anticipated cash generated from operations, and cash expected to be available under 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.

1 unchanged sentence

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.

Beyond the next 12 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 anticipated cash generated from operations and cash expected to be available under 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.

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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.

For the three months ended March 31, 2026, 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, 2025 that was filed with the SEC on January 29, 2026.

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

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

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.

We strive to strategically manage our lot pipeline, while selectively reducing our lot pipeline 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.

We believe this balance provides us flexibility to adjust to market conditions as they develop.

As of March 31, 2026, we had outstanding purchase contracts and option contracts for an aggregate of 24,184 lots totaling approximately $1.9 billion and we had an aggregate of $97.1 million of deposits for land contracts, of which $86.4 million were non-refundable cash deposits pertaining to land contracts.

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

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Our outstanding indebtedness is described in detail in Note 9 – 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.

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

September 30,

6.750% senior notes, due June 2027 (1)

We are required to meet certain covenants, and as of March 31, 2026, 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.

Our outstanding debt obligations included the following as of March 31, 2026 and December 31, 2025, respectively (in thousands):

3.875% senior notes, due August 2029 (1)

6.625% senior notes, due September 2033 (1)

Construction loan agreements

Other financing obligations (2)

2 unchanged sentences

Mortgage repurchase facilities

(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.

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

(2) As of March 31, 2026 and December 31, 2025, other financing obligations included insurance premium notes and certain secured borrowings, which bore a weighted average interest rate of 5.5% and 5.8%, respectively.

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.

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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.

As of March 31, 2026, we had outstanding $500.0 million in aggregate principal amount of our 3.875% Senior Notes due 2029 (the “2029 Notes”), 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.

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, on, or after, February 15, 2029, and a put provision triggered by certain change of control events.

As of March 31, 2026, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $497.4 million.

6.625% Senior Notes Due 2033

As of March 31, 2026, we had outstanding $500.0 million in aggregate principal amount of our 6.625% Senior Notes due 2033 (the “2033 Notes”), which principal balance is due in September 2033.

Prior to that date, interest only payments are due semi-annually in March and September 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 2033 Notes, in whole or in part, at a time before, on, or after, September 15, 2028, and a put provision triggered by certain change of control events.

As of March 31, 2026, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $493.6 million.

Construction Loan Agreements

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These construction loan agreements collectively provide that we may borrow up to an aggregate of $140.1 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

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.

Portions of the obligations under the secured construction loan agreements are guaranteed by us.

Borrowings under the construction loan agreements bear interest at various rates, including 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 December 31, 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.

As of March 31, 2026 and December 31, 2025, $104.8 million and $90.3 million was outstanding under the construction loan agreements respectively, with borrowings that bore a weighted average interest rate of 6.0% and 6.1% as of March 31, 2026 and December 31, 2025, respectively, and we were in compliance with all covenants thereunder.

Revolving Line of Credit

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

As of 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.

As of March 31, 2026 and December 31, 2025, $203.7 million and $51.5 million, respectively, was outstanding under the revolving line of credit, with borrowings that bore an interest rate of 5.2% and 5.2%, respectively, and we were in compliance with all covenants under the Credit Agreement.

Mortgage Repurchase Facilities – Financial Services

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

Bank National Association and Truist Bank, which provide Inspire with uncommitted repurchase facilities of up to an aggregate of $375.0 million as of 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.

Bank National Association and Truist Bank, which provide Inspire with uncommitted repurchase facilities of up to an aggregate of $375.0 million as of March 31, 2026, secured by the mortgage loans financed thereunder.

The repurchase facilities have varying short term maturity dates through November 13, 2026.

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

As of 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.

As of March 31, 2026 and December 31, 2025, we had $211.2 million and $289.3 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

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.

As of March 31, 2026 and December 31, 2025, we had issued and outstanding letters of credit under various facilities of $60.2 million and $65.3 million, respectively, and we had issued and outstanding performance and other bonds of $407.8 million and $445.1 million, respectively.

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

Stock Repurchases

Our 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.

Our stock repurchase program authorizes us to repurchase up to 4.5 million shares of our outstanding common stock, of which 1.8 million shares remained available to be repurchased as of March 31, 2026.

During the three months ended March 31, 2026 and 2025, an aggregate of 617.1 thousand shares and 753.3 thousand shares, respectively, were repurchased under our stock repurchase program for a total purchase price of approximately $40.0 million and $55.6 million, respectively, and a weighted average price of $64.82 and

$73.76 per share, respectively, excluding the excise tax accrued on our net share repurchases as a result of the Inflation Reduction Act of 2022.

Under the terms of 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.

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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.

Our stock repurchase program has been approved by our Board of Directors and has no expiration date 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

The following table sets forth cash dividends declared by our Board of Directors to holders of record of our common stock during the three months ended March 31, 2026 and 2025, respectively (in thousands, except per share information):

Three Months Ended March 31, 2026

Cash Dividends Declared and Paid

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March 11, 2026

June 11, 2025

August 13, 2025

August 27, 2025

September 10, 2025

Nine months ended September 30, 2024

Three Months Ended March 31, 2025

Cash Dividends Declared and Paid

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March 12, 2025

June 12, 2024

August 14, 2024

August 28, 2024

September 11, 2024

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

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

Cash Flows— 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:

While we expect to continue to pay quarterly cash dividends on our common stock during 2026, the declaration and payment of future cash dividends on our common stock, whether at current levels or at all, are at the discretion of our Board of Directors and depend upon, among other things, our expected future earnings, cash flows, capital requirements, access to external financing, debt structure and any adjustments thereto, operational and financial investment strategy, and general financial condition, as well as general business conditions.

Cash Flows— Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

For the three months ended March 31, 2026 and 2025, 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.

Net cash used in operating activities was $50.3 million during the three months ended March 31, 2026 as compared to $36.6 million during the prior year period.

The increase in net cash used was primarily a result of (1) increased expenditures associated with the construction of homes during the three months ended March 31, 2026 as compared to March 31, 2025 and (2) a $15.0 million decrease in net income during the first quarter of 2026 compared to the prior year period, partially offset by benefits from changes in cash balances held in escrow and a decrease in mortgage loans held for sale, reflecting the timing of loan originations and sales, compared to the prior year period.

 Net cash used in investing activities was $8.2 million during the three months ended March 31, 2026, compared to $4.0 million during the prior year period.

This change was primarily related to increased expenditures related to property and equipment during the current year period.

 Net cash provided by financing activities was $27.5 million during the three months ended March 31, 2026, compared to net cash used in financing activities of $1.5 million during the prior year period.

This change was primarily attributable to (1) a $50.7 million increase in net borrowings under our revolving credit facility and (2) a $15.6 million decrease in stock repurchases, partially offset by a $49.6 million increase in net payments for mortgage repurchase facilities, in each case during the current year period as compared to the prior year period.

As of March 31, 2026, our cash and cash equivalents and restricted cash balance was $108.5 million, as compared to $139.6 million as of December 31, 2025.

Non-GAAP Financial Measures

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EBITDA and Adjusted EBITDA

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

The following table presents EBITDA and adjusted EBITDA for the three months ended March 31, 2026 and 2025.

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 define adjusted EBITDA as EBITDA before inventory impairment, abandonment of lot option contracts, stock-based compensation expense, 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.

EBITDA and 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.

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(dollars in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Income tax expense

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Abandonment of lot option contracts (1)

Stock-based compensation expense (2)

Restructuring costs

Loss on debt extinguishment

Impairment on other investment

Purchase price accounting for acquired work in process inventory

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Accordingly, we have recast the corresponding prior period information to conform to the current presentation and calculation.

(2) Beginning in the fourth quarter of 2025, we added “Stock-based compensation expense” 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.

Net Homebuilding Debt to Net Capital

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(dollars in thousands)

September 30,

Notes payable

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(in thousands, except share and per share information)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Weighted average common shares outstanding - basic

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Restructuring costs

Loss on debt extinguishment

Impairment on other investment

Purchase price accounting for acquired work in process inventory

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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.

(2) The tax rates used in calculating adjusted net income for the three months ended March 31, 2026 and 2025 were 26.8% and 25.0%, respectively, which reflect our GAAP tax rates for the applicable period.

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.

There have been no material changes in our market risk since December 31, 2025.

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.

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 fiscal year ended December 31, 2025 and elsewhere in this report.

Additionally, mortgage rates remained elevated during the quarter and are influenced by a range of market factors, and we cannot provide any assurance as to the impact of future market or policy developments 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.

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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.

Recent disruptions to energy markets related to geopolitical developments in the Middle East impacted fuel and transportation costs and led, in part, to a 3.3% increase in inflation in March 2026 as compared to the prior year period.

Prolonged volatility in energy prices could further pressure construction costs and negatively impact consumer confidence.

Additionally, 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 and operating results.

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.

Since it typically takes approximately three to 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.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis