Century Communities, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND A NALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. As used in this Quarterly Report on Form 10-Q (which we refer to as this “Form 10-Q”), references to “we,” “us,” “our,” “Century” or the “Company” refer to Century Communities, Inc., a Delaware corporation, and, unless the context otherwise requires, its subsidiaries and affiliates. The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand our Company, business, operations and present business environment and is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We use certain non-GAAP financial measures that we believe are important for purposes of comparison to prior periods. This information is also used by our management to measure the profitability of our ongoing operations and analyze our business performance and trends. Cautionary Note Regarding Forward-Looking Statements Some of the statements included in this Form 10-Q constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, forecasts, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual results could differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential,” “outlook,” the negative of such terms and other comparable terminology and the use of future dates. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. The forward-looking statements included in this Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking and subject to risks and uncertainties including among others:  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; 19 Table of Contents  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 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;  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; and  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. Forward-looking statements are not guarantees of future events or of our performance. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these events and factors are described above and in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K 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. If a change occurs, our business, financial condition, liquidity, cash flows and results of operations may vary materially from those expressed in or implied by our forward-looking statements. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Therefore, you should not rely on these forward-looking statements as of any date subsequent to the date of this Form 10-Q. 20 Table of Contents Business Overview Century is engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 16 states. In many of our projects, in addition to building homes, we entitle and develop the underlying land. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand has an emphasis on serving the affordable homebuilding market but offers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the 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: West, Mountain, Texas, Southeast, and Century Complete. Our indirect wholly-owned subsidiaries, Inspire Home Loans Inc., Parkway Title, LLC, IHL Home Insurance Agency, LLC, and IHL Escrow Inc., which provide mortgage, title, insurance brokerage and escrow services, respectively, primarily to our homebuyers, have been identified as our Financial Services segment. Additionally, our Century Living segment is engaged in the development, construction, management, and 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 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 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. Federal funds interest rate by the U.S. Federal Reserve; interest rates; availability and cost of mortgage loans to homebuyers; financial, credit and mortgage markets; the extent to which and how long government monetary directives and actions will impact the U.S. economy; the effect of significant new tariffs and/or duties; consumer confidence; wage growth; household formations; levels of new and existing homes for sale; prevailing home and rental prices; availability and cost of land, labor and construction materials; demographic trends; housing demand; the possibility of an economic recession; the 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 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. 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 21 Table of Contents 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 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 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%. 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. 22 Table of Contents 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 March 31, Increase (Decrease) 2026 2025 Amount % Condensed Consolidated Statements of Operations: Revenues Home sales revenues $ 734,106 $ 883,736 $ (149,630) (16.9) % Land sales and other revenues 33,171 962 32,209 3,348.1 % Total homebuilding revenues 767,277 884,698 (117,421) (13.3) % Financial services revenues 22,396 18,534 3,862 20.8 % Total revenues 789,673 903,232 (113,559) (12.6) % Homebuilding cost of revenues Cost of home sales revenues (1) (603,291) (707,915) 104,624 (14.8) % Cost of land sales and other revenues (22,571) (827) (21,744) 2,629.3 % Total homebuilding cost of revenues (625,862) (708,742) 82,880 (11.7) % Financial services costs (14,751) (16,174) 1,423 (8.8) % Selling, general and administrative expense (116,082) (120,760) 4,678 (3.9) % Other income (expense), net 353 (5,038) 5,391 (107.0) % Income before income tax expense 33,331 52,518 (19,187) (36.5) % Income tax expense (8,922) (13,134) 4,212 (32.1) % Net income $ 24,409 $ 39,384 $ (14,975) (38.0) % Earnings per share: Basic $ 0.84 $ 1.28 $ (0.44) (34.4) % Diluted $ 0.84 $ 1.26 $ (0.42) (33.3) % Adjusted diluted earnings per share (2)(3) $ 0.88 $ 1.39 $ (0.51) (36.7) % Other Operating Information Number of new homes delivered 2,013 2,284 (271) (11.9) % Average sales price of new homes delivered $ 364.7 $ 386.9 $ (22.2) (5.7) % Homebuilding gross margin percentage 17.8 % 19.9 % (2.1) % (10.6) % Adjusted homebuilding gross margin excluding interest, inventory impairment, and purchase price accounting for acquired work in process inventory (2) 19.7 % 21.6 % (1.9) % (8.8) % Backlog at end of period, number of homes 1,155 1,258 (103) (8.2) % Backlog at end of period, aggregate sales value $ 438,459 $ 521,050 $ (82,591) (15.9) % Average sales price of homes in backlog $ 379.6 $ 414.2 $ (34.6) (8.4) % Net new home contracts 2,379 2,692 (313) (11.6) % Selling communities at period end 316 318 (2) (0.6) % Average selling communities 309 318 (9) (2.8) % Total owned and controlled lot inventory 58,537 79,014 (20,477) (25.9) % Adjusted EBITDA (2)(3)(4) $ 55,444 $ 78,135 $ (22,691) (29.0) % Adjusted income before income tax expense (2)(3) $ 34,973 $ 57,832 $ (22,859) (39.5) % Adjusted net income (2)(3) $ 25,611 $ 43,369 $ (17,758) (40.9) % Homebuilding debt to capital 32.2 % 32.4 % (0.2) % (0.6) % Net homebuilding debt to net capital (2) 30.5 % 30.1 % 0.4 % 1.3 % (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 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. ‎ 23 Table of Contents Results of Operations by Segment (dollars in thousands) Three Months Ended March 31, 2026 West Mountain Texas Southeast Century Complete Financial Services Century Living Corporate Total New homes delivered 277 344 371 315 706 — — — 2,013 Average sales price of new homes delivered $ 568.6 $ 465.6 $ 284.7 $ 393.9 $ 264.5 $ — $ — $ — $ 364.7 Revenues $ 157,563 $ 160,216 $ 105,717 $ 156,651 $ 187,130 $ 22,396 $ — $ — $ 789,673 Cost of home sales (1) (131,471) (132,366) (87,178) (99,989) (151,769) — — (518) (603,291) Financial services costs — — — — — (14,751) — — (14,751) Selling, general and administrative expense (15,875) (19,052) (15,616) (14,536) (21,437) — (324) (29,242) (116,082) Other segment items (2) (268) (42) (115) (22,729) (355) — 391 900 (22,218) Income (loss) before tax expense $ 9,949 $ 8,756 $ 2,808 $ 19,397 $ 13,569 $ 7,645 $ 67 $ (28,860) $ 33,331 Three Months Ended March 31, 2025 West Mountain Texas Southeast Century Complete Financial Services Century Living Corporate Total New homes delivered 303 429 457 303 792 — — — 2,284 Average sales price of new homes delivered $ 599.5 $ 524.1 $ 298.9 $ 443.5 $ 260.4 $ — $ — $ — $ 386.9 Revenues $ 181,721 $ 225,031 $ 136,642 $ 134,445 $ 206,859 $ 18,534 $ — $ — $ 903,232 Cost of home sales (1) (141,509) (180,681) (109,305) (105,054) (169,181) — — (2,185) (707,915) Financial services costs — — — — — (16,174) — — (16,174) Selling, general and administrative expense (17,011) (20,419) (16,944) (14,949) (22,681) — (221) (28,535) (120,760) Other segment items (2) (1,807) (488) (42) (261) (1,175) — (1,208) (884) (5,865) Income (loss) before tax expense $ 21,394 $ 23,443 $ 10,351 $ 14,181 $ 13,822 $ 2,360 $ (1,429) $ (31,604) $ 52,518 (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) Includes cost of land sales and other revenues, and other income (expense). West 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. Mountain 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 24 Table of Contents 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. Texas 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. Southeast 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 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 Our Financial Services segment originates mortgages for primarily our homebuyers, and as such, the volume of loans originated typically correlates to our number of homes delivered. Fluctuations in financial services income before income tax may occur because some components of revenue fluctuate differently than loan volumes, and some expenses are not directly related to mortgage loan volume or to changes in the amount of revenue earned. For the three 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 related to our derivative instruments and mortgage servicing rights portfolio. 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. 25 Table of Contents The following table presents selected operational data for our Financial Services segment in relation to our loan origination activities (dollars in thousands): Three Months Ended March 31, 2026 2025 Total originations: Number of loans 1,358 1,467 Principal $ 471,449 $ 512,627 Capture rate of Century homebuyers 80 % 84 % Century Communities 83 % 80 % Century Complete 74 % 82 % Average FICO score 719 726 Century Communities 723 733 Century Complete 710 712 Loans sold to third parties: Number of loans sold 1,598 1,563 Principal $ 556,495 $ 544,580 Century Living 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. Corporate 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 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. 26 Table of Contents 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, 2026 % 2025 % Home sales revenues $ 734,106 100.0 % $ 883,736 100.0 % Cost of home sales revenues (603,291) (82.2) % (707,915) (80.1) % Homebuilding gross margin 130,815 17.8 % 175,821 19.9 % Add: Inventory impairment — 0.0 % 411 0.0 % Adjusted homebuilding gross margin excluding inventory impairment (1) 130,815 17.8 % 176,232 19.9 % Add: Interest in cost of home sales revenues 13,170 1.8 % 12,785 1.4 % Add: Purchase price accounting for acquired work in process inventory 688 0.1 % 1,892 0.2 % Adjusted homebuilding gross margin excluding interest, inventory impairment and purchase price accounting for acquired work in process inventory (1) $ 144,673 19.7 % $ 190,909 21.6 % (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, 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 March 31, Change 2026 2025 Amount % Selling, general and administrative expense $ 116,082 $ 120,760 $ (4,678) (3.9) % As a percentage of home sales revenue 15.8 % 13.7 % 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 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%. 27 Table of Contents 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 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) March 31, December 31 Increase (Decrease) 2026 2025 Amount Change West $ 887,949 $ 891,808 $ (3,859) (0.4) % Mountain 972,348 941,617 30,731 3.3 % Texas 972,926 891,763 81,163 9.1 % Southeast 588,039 581,228 6,811 1.2 % Century Complete 414,192 389,954 24,238 6.2 % Financial Services 326,697 436,515 (109,818) (25.2) % Century Living 226,315 198,815 27,500 13.8 % Corporate 121,319 128,195 (6,876) (5.4) % Total assets $ 4,509,785 $ 4,459,895 $ 49,890 1.1 % 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 March 31, 2026 December 31, 2025 % Change Owned Controlled Total Owned Controlled Total Owned Controlled Total West 3,517 2,524 6,041 3,432 2,354 5,786 2.5 % 7.2 % 4.4 % Mountain 7,813 2,018 9,831 7,972 2,169 10,141 (2.0) % (7.0) % (3.1) % Texas 14,148 2,943 17,091 14,298 3,348 17,646 (1.0) % (12.1) % (3.1) % Southeast 4,850 5,526 10,376 5,240 6,293 11,533 (7.4) % (12.2) % (10.0) % Century Complete 4,025 11,173 15,198 3,858 11,952 15,810 4.3 % (6.5) % (3.9) % Total 34,353 24,184 58,537 34,800 26,116 60,916 (1.3) % (7.4) % (3.9) % 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. 28 Table of Contents Other Homebuilding Operating Data Net new home contracts Three Months Ended March 31, Increase (Decrease) 2026 2025 Amount % Change West 336 392 (56) (14.3) % Mountain 426 462 (36) (7.8) % Texas 473 499 (26) (5.2) % Southeast 359 387 (28) (7.2) % Century Complete 785 952 (167) (17.5) % Total 2,379 2,692 (313) (11.6) % 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 months ended March 31, 2026 and 2025 by segment is included in the table below: Three Months Ended March 31, Increase (Decrease) 2026 2025 Amount % Change West 2.9 4.1 (1.2) (29.3) % Mountain 2.6 3.1 (0.5) (16.1) % Texas 2.0 2.1 (0.1) (4.8) % Southeast 3.7 3.0 0.7 23.3 % Century Complete 2.4 2.8 (0.4) (14.3) % Total 2.6 2.8 (0.2) (7.1) % 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 Selling Communities Average Selling Communities As of March 31, Three Months Ended March 31, 2026 2025 2026 2025 West 40 34 38 32 Mountain 55 48 54 50 Texas 82 78 77 79 Southeast 31 42 32 42 Century Complete 108 116 108 115 Total 316 318 309 318 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. 29 Table of Contents Backlog (dollars in thousands) As of March 31, 2026 2025 % Change Homes Dollar Value Average Sales Price Homes Dollar Value Average Sales Price Homes Dollar Value Average Sales Price West 178 $ 105,463 $ 592.5 248 $ 158,029 $ 637.2 (28.2) % (33.3) % (7.0) % Mountain 190 103,890 546.8 182 102,309 562.1 4.4 % 1.5 % (2.7) % Texas 238 69,227 290.9 219 65,973 301.2 8.7 % 4.9 % (3.4) % Southeast 144 58,671 407.4 191 87,755 459.5 (24.6) % (33.1) % (11.3) % Century Complete 405 101,208 249.9 418 106,984 255.9 (3.1) % (5.4) % (2.4) % Total / Weighted Average 1,155 $ 438,459 $ 379.6 1,258 $ 521,050 $ 414.2 (8.2) % (15.9) % (8.4) % ‎ Backlog reflects the number of homes, net of cancellations, for which we have entered into a sales contract with a customer but for which we have not yet delivered the home. As of March 31, 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 Our 6.625% senior notes due 2033 (which we refer to collectively as our “2033 Notes”) and our 3.875% senior notes due 2029 (which we refer to collectively as our “2029 Notes” and collectively with our 2033 Notes, the “Senior Notes”) are our unsecured senior obligations and are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by substantially all of our direct and indirect wholly-owned operating subsidiaries (which we refer to collectively as the “Guarantors”). Our subsidiaries associated with our Financial Services operations (which we refer to as the “Non-Guarantors”) do not guarantee the Senior Notes. The guarantees are senior unsecured obligations of the Guarantors that rank equal with all existing and future senior debt of the Guarantors and senior to all existing and future subordinated debt of the Guarantors. The guarantees are effectively subordinated to any secured debt of the Guarantors. As of March 31, 2026, Century Communities, Inc. had $1.0 billion in total principal amount of Senior Notes outstanding. Each of the indentures governing our Senior Notes provides that the guarantees of a Guarantor will be automatically and unconditionally released and discharged: (1) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the equity interests of such Guarantor after which the applicable Guarantor is no longer a “Restricted Subsidiary” (as defined in the applicable indenture), which sale, transfer, exchange or other disposition does not constitute an “Asset Sale” (as defined in the applicable indenture) or is made in compliance with applicable provisions of the applicable indenture; (2) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the assets of such Guarantor, which sale, transfer, exchange or other disposition does not constitute an Asset Sale or is made in compliance with applicable provisions of the applicable indenture; provided, that after such sale, transfer, exchange or other disposition, such Guarantor is an “Immaterial Subsidiary” (as defined in the applicable indenture); (3) unless a default has occurred and is continuing, upon the release or discharge of such Guarantor from its guarantee of any indebtedness for borrowed money of the Company and the Guarantors so long as such Guarantor would not then otherwise be required to provide a guarantee pursuant to the applicable indenture; provided that if such Guarantor has incurred any indebtedness in reliance on its status as a Guarantor in compliance with applicable provisions of the applicable indenture, such Guarantor’s obligations under such indebtedness, as the case may be, so incurred are satisfied in full and discharged or are otherwise permitted to be incurred by a Restricted Subsidiary (other than a Guarantor) in compliance with applicable provisions of the applicable indenture; (4) upon the designation of such Guarantor as an “Unrestricted Subsidiary” (as defined in the applicable indenture), in accordance with the applicable indenture; (5) if the Company exercises its legal defeasance option or covenant defeasance option under the applicable indenture or if the obligations of the Company and the Guarantors are discharged in compliance with applicable provisions of the applicable indenture, upon such exercise or discharge; or (6) in connection with the dissolution of such Guarantor under applicable law in accordance with the applicable indenture. If a Guarantor were to become a debtor in a case under the US Bankruptcy Code, a court may decline to enforce its guarantee of the Senior Notes. This may occur when, among other factors, it is found that the Guarantor originally received less than fair consideration 30 Table of Contents for the guarantee and the Guarantor would be rendered insolvent by enforcement of the guarantee. On the basis of historical financial information, operating history and other factors, we believe that each of the Guarantors, after giving effect to the issuance of its guarantee of the Senior Notes when the guarantee was issued, was not insolvent and did not and has not incurred debts beyond its ability to pay such debts as they mature. The Company cannot predict, however, what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard. The offer and sale of the Senior Notes and the related guarantees were issued in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), and other applicable securities laws. Unless we subsequently register the resale of the Senior Notes and related guarantees, they may be offered or sold only in transactions that are exempt from the registration requirements under the Securities Act and the applicable securities laws of any other jurisdiction. The Guarantors’ condensed supplemental financial information is presented in this report as if the guarantees of the Senior Notes existed during the periods presented. If any Guarantors are released from their respective guarantees in future periods, the changes are reflected prospectively. We have determined that separate, full financial statements of the Guarantors would not be material to investors, and accordingly, supplemental financial information is presented below. Century Communities, Inc. and Guarantors Summarized Balance Sheet Data (in thousands) March 31, 2026 December 31, 2025 Assets Cash and cash equivalents $ 133 $ 96 Cash held in escrow 11,621 48,571 Accounts receivable 52,113 53,327 Inventories 3,525,742 3,361,158 Prepaid expenses and other assets 443,468 410,899 Property and equipment, net 70,532 69,025 Deferred tax assets, net 37,351 38,176 Goodwill 41,109 41,109 Total assets $ 4,182,069 $ 4,022,361 Liabilities and stockholders’ equity Liabilities: Accounts payable $ 150,493 $ 111,493 Accrued expenses and other liabilities 264,606 280,914 Due to non-guarantors 144,362 128,827 Notes payable 1,112,751 1,102,376 Revolving line of credit 203,700 51,500 Total liabilities 1,875,912 1,675,110 Stockholders’ equity 2,306,157 2,347,251 Total liabilities and stockholders’ equity $ 4,182,069 $ 4,022,361 Summarized Statements of Operations Data (in thousands) Three Months Ended March 31, 2026 Total homebuilding revenues $ 767,277 Total homebuilding cost of revenues (625,862) Selling, general and administrative expense (116,082) Other expense (2,140) Income before income tax expense 23,193 Income tax expense (6,208) Net income $ 16,985 ‎ 31 Table of Contents Critical Accounting Policies Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates , and the estimates included in our financial statements might be impacted if we used different assumptions or conditions. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on January 29, 2026, in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies.” Liquidity and Capital Resources Overview Our liquidity, consisting of our cash and cash equivalents and cash held in escrow and current capacity 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 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 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 $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 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. We believe we are well positioned from a cash and liquidity standpoint to operate in an uncertain environment and to pursue other ways to properly deploy capital to enhance returns, which may include taking advantage of strategic opportunities as they arise. Long-term Liquidity and Capital Resources Beyond the next 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. In a higher interest rate environment, we may incur additional interest expense on borrowings that bear floating interest rates, such as under our revolving line of credit, repurchase facilities, and construction loan agreements. To the extent these sources of capital are insufficient to meet our needs, we may also 32 Table of Contents conduct additional public or private offerings of our securities, refinance debt, or dispose of certain assets to fund our operating activities and capital needs. Material Cash Requirements In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future in addition to our outstanding debt obligations and debt service requirements described below. These obligations impact our short-term and long-term liquidity and capital resource needs. For the three 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. We are subject to customary obligations associated with entering into contracts for the purchase of land and improved lots. Purchase and option contracts for the purchase of land enable us to defer acquiring portions of properties owned by third parties until we have determined whether to exercise our option, which may serve to reduce our financial risks associated with long-term land holdings. These purchase contracts typically require a cash deposit, and the purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements, including obtaining applicable property and development entitlements. We also utilize option contracts with land sellers and others as a method of acquiring land in staged takedowns, to help us manage the financial and market risk associated with land holdings, and to reduce the use of funds from our corporate financing sources. Option contracts generally require payment by us of a non-refundable deposit for the right to acquire lots over a specified period of time at pre-determined prices. Our obligations with respect to purchase contracts and option contracts are generally limited to the forfeiture of the related non-refundable cash deposits. We strive to strategically manage our lot pipeline, while selectively reducing our 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. Our performance, including the timing and amount of purchase, if any, under these outstanding purchase and option contracts is subject to change and dependent on future market conditions. Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into option takedown arrangements, the availability of capital to financial intermediaries to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more or less prevalent in certain geographic regions. In addition, in the ordinary course of business, we explore, and from time to time, enter into purchase agreements to opportunistically acquire other homebuilders to add existing and future lots to our land portfolio and augment the organic expansion of our land portfolio. These acquisitions are often legally structured as asset acquisitions for cash and conditioned upon a due diligence investigation by us of the business for a limited period of time, in addition to other standard and customary closing conditions. Outstanding Debt Obligations and Debt Service Requirements One of our principal liquidity needs is the payment of principal and interest on our outstanding indebtedness. Our outstanding indebtedness is described in detail in Note 9 – Debt in the Notes to the Condensed Consolidated Financial Statements. 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. 33 Table of Contents Our outstanding debt obligations included the following as of March 31, 2026 and December 31, 2025, respectively (in thousands): March 31, December 31, 2026 2025 3.875% senior notes, due August 2029 (1) $ 497,394 $ 497,201 6.625% senior notes, due September 2033 (1) 493,571 493,355 Construction loan agreements 104,838 90,269 Other financing obligations (2) 16,948 21,551 Notes payable 1,112,751 1,102,376 Revolving line of credit 203,700 51,500 Mortgage repurchase facilities 211,170 289,269 Total debt $ 1,527,621 $ 1,443,145 (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. Such repurchases, exchanges or redemptions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may or may not be material during any particular reporting period. 3.875% Senior Notes Due 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, 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 Certain wholly owned subsidiaries of Century Living, LLC are parties to secured construction loan agreements with various banks (which we collectively refer to as “the lenders”). These construction loan agreements collectively provide that we may borrow up to an aggregate of $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 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. 34 Table of Contents 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 We are party to a credit agreement (the “Credit Agreement”) with U.S. Bank National Association, as Administrative Agent, and the lenders party thereto, which provides us with a senior unsecured revolving credit facility (which we refer to as the “revolving line of credit”) of up to $1.0 billion. The revolving line of credit includes a $250.0 million sublimit for letters of credit. Subject to the terms and conditions of the Credit Agreement, we are entitled to request an increase in the size of the revolving line of credit by an amount not exceeding $400.0 million; and pursuant to those terms, on April 22, 2025, we increased our revolving line of credit from $900.0 million to $1.0 billion, resulting in $300.0 million remaining for possible future increases. The obligations under the Credit Agreement are guaranteed by certain of our subsidiaries. Funds are available under the revolving line of credit for the construction of homes, for the acquisition and development of land, land under development and lots for the eventual construction of homes thereon, and for working capital in the ordinary course of business. Unless terminated earlier, the revolving line of credit will mature on November 1, 2028, and the principal amount thereunder, together with all accrued unpaid interest and other amounts owing thereunder, if any, will be payable in full on such date. Subject to the terms and conditions of the Credit Agreement, we may request once per year a one-year extension of the maturity date and up to three times during the term of the revolving line of credit, subject to the approval of the lenders and the Administrative Agent. The Credit Agreement contains customary affirmative and negative covenants (including limitations on our ability to grant liens, incur additional debt, pay dividends, redeem our common stock, make certain investments, issue certain equity securities, engage in transactions with affiliates and engage in certain merger, consolidation or asset sale transactions), as well as customary events of default. Borrowings under the Credit Agreement bear interest at a floating rate equal to Term SOFR or Daily Simple SOFR (in each case as defined in the Credit Agreement), plus an applicable margin between 1.45% and 2.30% per annum, or if selected by us, a base rate plus an applicable margin between 0.45% and 1.30% per annum. The “applicable margins” described above are determined by a schedule based on our leverage ratio, as defined in the Credit Agreement. The Credit Agreement also provides for customary fees including commitment fees payable to each lender ranging from 0.20% to 0.35% per annum based on our leverage ratio of the unused portion of the revolving line of credit and other customary fees. As of 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 Inspire is party to mortgage warehouse facilities with J.P. Morgan Chase Bank, N.A., U.S. Bank National Association and Truist Bank, which provide Inspire with uncommitted repurchase facilities of up to an aggregate of $375.0 million as of March 31, 2026, secured by the mortgage loans financed thereunder. The repurchase facilities have varying short term maturity dates through November 13, 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 5.4% and 5.4% as of March 31, 2026 and December 31, 2025, respectively. Amounts outstanding under the repurchase facilities are not guaranteed by us or any of our subsidiaries, and the agreements contain various affirmative and negative covenants applicable to Inspire that are customary for arrangements of this type. As of March 31, 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 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 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 35 Table of Contents $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. The actual manner, timing, amount and value of repurchases under the stock repurchase program is determined by management at its discretion and depends on a number of factors, including, among others, the market price of our common stock, trading volume, our available cash balance, our anticipated working capital needs, other capital management objectives and opportunities, applicable legal requirements, applicable tax effects including the 1% excise tax instituted under the Inflation Reduction Act of 2022, and general market and economic conditions. We finance any stock repurchases through available cash and our revolving line of credit. Repurchases also may be made under a trading plan established under Rule 10b5-1 under the Securities Exchange Act of 1934, which would permit shares to be repurchased when we otherwise may be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. Our stock repurchase program has been approved by our Board of Directors and has no expiration 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 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 Declaration Date Record Date Payable Date Per Share Amount February 4, 2026 February 25, 2026 March 11, 2026 $ 0.32 $ 9,313 Three Months Ended March 31, 2025 Cash Dividends Declared and Paid Declaration Date Record Date Payable Date Per Share Amount February 5, 2025 February 26, 2025 March 12, 2025 $ 0.29 $ 8,922 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. 36 Table of Contents 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 $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. ‎ 37 Table of Contents Non-GAAP Financial Measures In this Form 10-Q, we use certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, net homebuilding debt to net capital, adjusted net income and adjusted diluted earnings per share. These non-GAAP financial measures are presented to provide investors additional information to facilitate the comparison of our past and present operations. We believe these non-GAAP financial measures provide useful information to investors because they are used to evaluate our performance on a comparable year-over-year or period-over-period basis. These non-GAAP financial measures are not in accordance with, or an alternative for, GAAP measures and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive or standard set of accounting rules or principles. Accordingly, the calculation of our non-GAAP financial measures may differ from the definitions of other companies using the same or similar names limiting, to some extent, the usefulness of such measures for comparison purposes. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with our financial results as determined in accordance with GAAP. These measures should only be used to evaluate our financial results in conjunction with the corresponding GAAP measures. Accordingly, we qualify our use of non-GAAP financial information in a statement when non-GAAP financial information is presented. EBITDA and Adjusted EBITDA The following table presents EBITDA and adjusted EBITDA for the three 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, 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. 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. Each of our EBITDA and adjusted EBITDA is limited as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results of operations as reported under GAAP. (dollars in thousands) Three Months Ended March 31, 2026 2025 % Change Net income $ 24,409 $ 39,384 (38.0) % Income tax expense 8,922 13,134 (32.1) % Interest in cost of home sales revenues 13,170 12,785 3.0 % Interest expense (income) 169 798 (78.8) % Depreciation and amortization expense 5,352 6,428 (16.7) % EBITDA $ 52,022 $ 72,529 (28.3) % Inventory impairment — 411 (100.0) % Abandonment of lot option contracts (1) 954 1,506 (36.7) % Stock-based compensation expense (2) 1,780 292 509.6 % Restructuring costs — 1,505 (100.0) % Purchase price accounting for acquired work in process inventory 688 1,892 (63.6) % Adjusted EBITDA $ 55,444 $ 78,135 (29.0) % NM – Not Meaningful (1) Beginning in the third quarter of 2025, we added “Abandonment of lot option contracts” as an adjustment in our non-GAAP adjusted EBITDA calculation. Accordingly, we have recast the corresponding prior period information to conform to the current presentation and calculation. (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. ‎ 38 Table of Contents Net Homebuilding Debt to Net Capital The following table presents our ratio of net homebuilding debt to net capital, which is a non-GAAP financial measure. We calculate this by dividing net homebuilding debt (homebuilding debt less cash and cash equivalents, and cash held in escrow) by net capital (net homebuilding debt plus total stockholders’ equity). Homebuilding debt is our total debt minus our outstanding borrowings under our construction loan agreements and our repurchase facilities. The most directly comparable GAAP measure is the ratio of homebuilding debt to total capital. We believe the ratio of net homebuilding debt to net capital is a relevant and useful financial measure to investors in understanding the leverage employed in our operations and as an indicator of our ability to obtain external financing. (dollars in thousands) March 31, December 31, 2026 2025 Notes payable $ 1,112,751 $ 1,102,376 Revolving line of credit 203,700 51,500 Construction loan agreements (104,838) (90,269) Total homebuilding debt 1,211,613 1,063,607 Total stockholders' equity 2,553,199 2,591,732 Total capital $ 3,764,812 $ 3,655,339 Homebuilding debt to capital 32.2% 29.1% Total homebuilding debt $ 1,211,613 $ 1,063,607 Cash and cash equivalents (78,182) (109,443) Cash held in escrow (11,621) (48,571) Net homebuilding debt 1,121,810 905,593 Total stockholders' equity 2,553,199 2,591,732 Net capital $ 3,675,009 $ 3,497,325 Net homebuilding debt to net capital 30.5% 25.9% ‎ 39 Table of Contents Adjusted Net Income and Adjusted Diluted Earnings per Share Adjusted net income and adjusted diluted earnings per share (which we refer to as “Adjusted EPS”) are non-GAAP financial measures that we believe are useful to management, investors and other users of our financial information in evaluating our operating results and understanding our operating trends without the effect of certain non-recurring items. We believe excluding certain non-recurring items provides more comparable assessment of our financial results from period to period. We define adjusted net income as consolidated net income before (i) income tax expense; (ii) inventory impairment; (iii) abandonment of lot option contracts; (iv) restructuring costs; (v) loss on debt extinguishment; (vii) impairment on other investment; and (vii) purchase price accounting for acquired work in process inventory; in each case, as applicable during a period, less adjusted income tax expense, calculated using our estimated annual effective tax rate after discrete items for the applicable period. Adjusted EPS is calculated by dividing adjusted net income by weighted average common shares – diluted. (in thousands, except share and per share information) Three Months Ended March 31, 2026 2025 Numerator Net income $ 24,409 $ 39,384 Denominator Weighted average common shares outstanding - basic 29,189,596 30,801,046 Dilutive effect of stock-based compensation awards 27,907 344,821 Weighted average common shares outstanding - diluted 29,217,503 31,145,867 Earnings per share: Basic $ 0.84 $ 1.28 Diluted $ 0.84 $ 1.26 Adjusted earnings per share Numerator Net income $ 24,409 $ 39,384 Income tax expense 8,922 13,134 Income before income tax expense 33,331 52,518 Inventory impairment — 411 Abandonment of lot option contracts (1) 954 1,506 Restructuring costs — 1,505 Purchase price accounting for acquired work in process inventory 688 1,892 Adjusted income before income tax expense 34,973 57,832 Adjusted income tax expense (2) (9,362) (14,463) Adjusted net income $ 25,611 $ 43,369 Denominator - Diluted 29,217,503 31,145,867 Adjusted diluted earnings per share $ 0.88 $ 1.39 (1) Beginning in the third quarter of 2025, we added “Abandonment of lot option contracts” as an adjustment in our non-GAAP adjusted net income calculation. Accordingly, we have recast the corresponding prior period information to conform to the current presentation and calculation. (2) The tax rates used in calculating adjusted net income for the three months ended March 31, 2026 and 2025 were 26.8% and 25.0%, respectively, which reflect our GAAP tax rates for the applicable period. ‎ 40 Table of Contents ITEM 3. QUANTIT ATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, inflation, foreign currency exchange rates and commodity prices. For additional information regarding our market risk, refer to the “Quantitative and Qualitative Disclosures About Market Risk” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. 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 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. To mitigate interest risk associated with loans held for sale, we typically use derivative financial instruments to economically hedge our exposure to risk from the time a borrower locks a loan until the time the loan is securitized. We also typically hedge our interest rate exposure through entering into interest rate swap futures. Inflation Our homebuilding operations have been and may continue to be adversely impacted by inflation, primarily from higher land, financing, labor, material, and construction costs. Inflation has led and could continue to lead to higher mortgage rates, which has and could continue to significantly affect the affordability of mortgage financing to homebuyers and lead to weakened demand for our homes, as well as increased cancellations compared to prior year periods. 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. Seasonality Historically, the homebuilding industry experiences seasonal fluctuations in quarterly operating results and capital requirements. We typically experience the highest new home order activity during the spring, although this activity is also highly dependent on the number of active selling communities, timing of new community openings, and other market factors. Since it typically takes approximately 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. This seasonality pattern may be affected by volatility in the homebuilding industry, supply chain challenges, subcontractor and labor shortages, and changes in demand for our homes.