What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-23 compared with 2026-04-23 · 240 added, 165 removed, 465 unchanged (47% 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:

 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;

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 in the Middle East, which have adversely affected and could continue to 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

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 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;

 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 a continued 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 or decline 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;

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

 changes in, or the failure or inability to comply with, governmental laws and regulations and the evolving nature of such 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;

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

 availability, terms and deployment of capital;

 availability, terms and deployment of our capital and possible challenges to our capital allocation;

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

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

 the effect of recent federal housing legislation;

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

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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.

Of the 4,519 homes delivered during the first six 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, cautious homebuyer sentiment, and ongoing affordability pressures for homebuyers.

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

Demand for our homes improved during the three months ended June 30, 2026, as net new home contracts (new home contracts net of cancellations) increased modestly compared to the prior year period.

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.

Further, during the first six months of 2026, we experienced continued acceptance to adjustable-rate mortgages among our homebuyers, which adjustable-rate mortgages accounted for nearly 35% of the mortgages that we originated by volume of principal during second quarter of 2026, an increase from first quarter 2026 levels of approximately 30% and well above first quarter 2025 levels of less than 5%.

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.

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 have been and may continue to be adversely affected by the conflict in the Middle East, especially if it persists or intensifies;

continued elevated interest rates and 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;

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

the effect of significant new tariffs and/or duties;

the effect of tariffs and/or duties;

consumer confidence;

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housing demand;

increased energy and fuel prices;

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;

Changes in demand for our homes or cancellations due to mortgage interest rates, consumer confidence, or otherwise, could 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.

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 June 30, 2026, we have not experienced significant cost increases or supply chain disruptions for raw materials and construction cycle times remained approximately three to four months during the first six months of 2026;

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

housing conditions in the near term.

Mortgage rates remained elevated during the first six months of 2026 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, in July 2026, a broad package of federal housing provisions became law, though the timing and magnitude of any impact on

the housing market conditions remains uncertain.

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.

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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.

During the three and six months ended June 30, 2026, we generated $49.1 million and $82.4 million in income before income tax expense, as compared to $47.1 million and $99.6 million in the respective prior year periods.

During the three and six months ended June 30, 2026, we generated net income of $36.1 million, or $1.26 per diluted share, and $60.6 million, or $2.09 per diluted share, respectively, as compared to $34.9 million, or $1.14 per diluted share, and $74.2 million, or $2.40 per diluted share in the respective prior year periods.

‎During the three and six months ended June 30, 2026, we generated total revenues of $927.2 million and $1.7 billion, respectively, as compared to $1.0 billion and $1.9 billion in the respective prior year periods.

During the three and six months ended June 30, 2026, we delivered 2,506 and 4,519 new homes with an average sales price of $358.2 thousand and $361.1 thousand, respectively.

Our new home deliveries decreased by 3.1% and 7.2%, respectively, as compared to the respective prior year periods, 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 5.1% and 5.4% as compared to the respective prior year periods, primarily due to an increased use of incentives during the three and six months ended June 30, 2026.

For the three months ended June 30, 2026, net new contracts increased 2.7% to 2,615, and for the six months ended June 30, 2026, net new contracts decreased 4.7% to 4,994, in each case compared to the prior year period.

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

We ended the second quarter of 2026 with $92.3 million of cash and cash equivalents and $39.7 million of cash held in escrow.

We had $329.6 million outstanding under our revolving line of credit, with a homebuilding debt to capital ratio of 34.2% and a net homebuilding debt to net capital ratio of 31.9%.

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:

During the three and six months ended June 30, 2026, we repurchased an aggregate of 352.8 thousand and 969.9 thousand shares, respectively, under our stock repurchase program for a total purchase price of approximately $19.6 million and $59.6 million, respectively, and a weighted average per share price of $55.54 and $61.44, respectively.

Also, during each of the first two quarters of 2026, 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 each of the first two quarters of 2025.

For the three and six months ended June 30, 2026, our Financial Services segment generated income before income tax expense of $9.9 million and $17.5 million, respectively, as compared to $6.2 million and $8.6 million in the respective prior year periods .

During the three months ended June 30, 2026, the number of mortgages originated increased 0.9%, and during the six months ended June 30, 2026, the number of mortgages originated decreased 2.9%, in each case, as compared to the prior year period.

During the three and six months ended June 30, 2026, the number of loans sold to third parties decreased 6.9% and 2.6%, respectively, as compared to the respective prior year periods.

The following table summarizes our results of operations for the three and six months ended June 30, 2026 and 2025:

(in thousands, except per share amounts)

Three Months Ended March 31,

Increase (Decrease)

Three Months Ended June 30,

Six Months Ended June 30,

Condensed Consolidated Statements of Operations:

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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.

(3) Beginning in the third quarter of 2025, we added “Abandonment of lot option contracts” as an adjustment in our non-GAAP adjusted EBITDA (Earnings Before Interest, Depreciation, and Amortization) 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.

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(dollars in thousands)

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Century Complete

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Average sales price of new homes delivered

Cost of home sales (1)

Cost of home sales revenues (1)

Financial services costs

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Income (loss) before tax expense

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Century Complete

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Average sales price of new homes delivered

Cost of home sales (1)

Cost of home sales revenues (1)

Financial services costs

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Income (loss) before tax expense

Six Months Ended June 30, 2026

Century Complete

Financial Services

Century Living

New homes delivered

Average sales price of new homes delivered

Cost of home sales revenues (1)

Financial services costs

Selling, general and administrative expense

Other segment items (2)

Income (loss) before tax expense

Six Months Ended June 30, 2025

Century Complete

Financial Services

Century Living

New homes delivered

Average sales price of new homes delivered

Cost of home sales revenues (1)

Financial services costs

Selling, general and administrative expense

Other segment items (2)

Income (loss) before tax expense

(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).

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.

During the three and six months ended June 30, 2026, our West segment generated income before income tax expense of $10.1 million and $20.1 million, respectively, representing decreases of 59.5% and 56.7%, respectively, as compared to the respective prior year periods.

These decreases were primarily driven by decreases in revenue and homebuilding gross margin percentage.

During the three and six months ended June 30, 2026, revenue decreased $18.6 million and $42.8 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 3.9% and 6.1%, respectively, in the number of homes delivered and decreases of 5.6% and 5.4%, respectively, in the average sales price per home.

The decreases in the number of homes delivered were primarily attributable to slower absorption rates and the decreases in average sales price per home resulted from increased use of incentives.

During the three and six months ended June 30, 2026, homebuilding gross margin percentage decreased from the respective prior year periods, due primarily to increased use of incentives as compared to the respective prior year periods.

During the three and six months ended June 30, 2026, our Mountain segment generated income before income tax expense of $13.5 million and $22.2 million, respectively, representing decreases of 11.0% and 42.4%, respectively, as compared to the respective prior

year periods.

These decreases were primarily driven by decreases in revenue and homebuilding gross margin percentage.

For the three-month comparison, revenue decreased $8.1 million compared to the prior year period, primarily due to an 8.5% decrease in the average sales price per home resulting from increased use of incentives, partially offset by a 5.1% increase in homes delivered attributable to improved absorption rates.

For the six-month comparison, revenue decreased $73.0 million compared to the prior year period, primarily due to a 7.9% decline in homes delivered as a result of slower absorption rates, as well as a 9.8% decrease in the average sales price per home driven by increased use of incentives.

During the three and six months ended June 30, 2026, our Texas segment generated income before income tax expense of $10.5 million and $13.3 million, respectively.

For the three-month comparison, income before income tax expense increased 29.3% as compared to the prior year period, which was primarily driven by an increase in revenue and homebuilding gross margin percentage.

For the three-month comparison, revenue increased $9.4 million compared to the prior year period, primarily due to a 5.2% increase in homes delivered, driven by a higher average number of selling communities, and partially offset by a 1.2% decrease in the average sales price per home resulting from increased use of incentives.

During the three months ended June 30, 2026, homebuilding gross margin percentage increased from the prior year period, driven by lower direct construction costs, and partially offset by increased use of incentives as compared to the prior year period.

For the six-month comparison, income before income tax expense decreased 27.9% as compared to the prior year period, which was primarily driven by a decrease in revenue and homebuilding gross margin percentage.

For the six-month comparison, revenue decreased $21.5 million compared to the prior year period, primarily due to a 6.3% decline in homes delivered as a result of slower absorption rates, as well as a 2.8% decrease in the average sales price per home driven by increased use of incentives.

During the six months ended June 30, 2026, homebuilding gross margin percentage decreased from the prior year period, due primarily to increased use of incentives as compared to the prior year period.

During the three and six months ended June 30, 2026, our Southeast segment generated income before income tax expense of $11.4 million and $30.8 million, respectively.

For the three-month comparison, income before income tax expense remained relatively consistent, increasing 2.2% as compared to the respective prior year period.

For the six-month comparison, income before income tax expense increased 21.5% as compared to the respective prior year period, primarily driven by a land sale transaction in Georgia during the first quarter of 2026.

Revenue decreased $33.7 million and $11.5 million, respectively, during the three and six months ended June 30, 2026 as compared to the respective prior year periods, primarily driven by decreases of 9.7% and 3.8%, respectively, in the number of homes delivered and decreases of 10.9% and 10.9%, respectively, in the average sales price per home.

The decrease in revenue for the six-month comparison was partially offset by the first quarter land sale transaction of $32.5 million included in land sales and other revenue.

The decreases in the number of homes delivered were primarily driven by a lower average number of selling communities, and the decreases in average sales price per home resulted from increased use of incentives.

During the three and six months ended June 30, 2026, homebuilding gross margin percentage increased from the respective prior year periods, driven by lower direct construction costs and the absence of prior period impairment charges of $3.8 million, and was partially offset by the impact of increased use of incentives as compared to the respective prior year periods.

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.

During the three and six months ended June 30, 2026, our Century Complete segment generated income before income tax expense of $20.8 million and $34.4 million, respectively, representing increases of 38.8% and 19.3%, respectively, as compared to the respective prior year periods.

These increases were primarily driven by increases in homebuilding gross margin percentage.

During the three and six months ended June 30, 2026, revenue decreased $24.2 million and $43.9 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 7.9% and 9.2%, respectively, in the number of homes delivered and decreases of 2.1% and 0.5%, respectively, in the average sales price per home.

The decreases in the number of homes delivered were primarily driven by a lower average number of selling communities and the decreases in average sales price per home resulted from increased use of incentives.

During the three and six months ended June 30, 2026, homebuilding gross margin percentage increased from the respective prior year periods, driven by lower direct construction costs and the absence of prior period impairment charges of $3.6 million and $4.0 million, respectively, and was partially offset by increased use of incentives as compared to the respective prior year periods.

Financial Services

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

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.

For the three-month comparison, the increase was primarily attributable to favorable

fair value adjustments related to our locked loan pipeline and hedge activity, partially offset by the benefit recognized from the sale of our mortgage servicing rights portfolio in the prior year period.

For the six-month comparison, the increase was primarily attributable to favorable fair value adjustments related to our locked loan pipeline and hedge activity and mortgage servicing rights portfolio, partially offset by the benefit recognized from the sale of our mortgage servicing rights portfolio in the prior year period.

During the three and six months ended June 30, 2026, the number of loans sold to third parties decreased 6.9% and 2.6%, respectively, as compared to the respective prior year periods.

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Total originations:

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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.

For the three and six months ended June 30, 2026, our Century Living segment generated losses before income tax expense of $115 thousand and $48 thousand, respectively, as compared to income before income tax expense of $1.5 million and $34 thousand, respectively, in the respective prior year periods.

As of June 30, 2026, the Company had three multi-family rental properties in Colorado, of which two were available for leasing.

As of June 30, 2026, these three projects represented nearly 870 total multi-family units, including 443 under active construction and 425 completed units, and 417 units were leased.

As of June 30, 2025, we had three multi-family rental properties, one of which was completed and two of which were under active construction.

We subsequently sold one multi-family rental property during the fourth quarter of 2025.

During the three and six months ended June 30, 2026, our Corporate segment generated losses of $27.0 million and $55.9 million, respectively, as compared to losses of $35.0 million and $66.6 million, respectively, during the respective prior year periods.

For the three-month comparison, the decrease was primarily related to decreased compensation costs during the three months ended June 30, 2026.

For the six-month comparison, the decrease was primarily related to decreased compensation costs during the six months ended June 30, 2026 and $1.5 million in restructuring costs recognized during the six months ended June 30, 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.

Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, increased to 18.1% for the three months ended June 30, 2026 from 17.6% for the prior year period and decreased to 18.0% for the six months ended June 30, 2026 from 18.7% for the period year period.

The increase for the three-month comparison was primarily driven by lower direct construction costs and the absence of prior period impairment charges, and was partially offset by increased use of incentives during the three months ended June 30, 2026.

The decrease for the six-month comparison was primarily driven by increased use of incentives during the six months ended June 30, 2026 as compared to the same respective 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,

Three Months Ended June 30,

Home sales revenues

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

Six Months Ended June 30,

Home sales revenues

Cost of home sales revenues

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)

(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.

For the three and six months ended June 30, 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 20.0% and 19.8%, respectively, as compared to 20.0% and 20.8%, respectively, for the same respective periods in 2025.

We believe the above non-GAAP adjusted homebuilding gross margin 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,

Three Months Ended June 30,

Selling, general and administrative expense

As a percentage of home sales revenue

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.

Six Months Ended June 30,

Selling, general and administrative expense

As a percentage of home sales revenue

Our selling, general and administrative expense decreased $1.4 million and $6.1 million, respectively, for the three and six months ended June 30, 2026 as compared to the same respective periods in 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 100 basis points and 150 basis points during the three and six months ended June 30, 2026, respectively, driven primarily by decreased revenue on a partially fixed cost base.

Income Tax Expense

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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.

For the six months ended June 30, 2026, our estimated annual rate of 26.3% was impacted by discrete items which increased our rate by 0.2%, 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.

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

For the three months ended June 30, 2026 and 2025, we recorded income tax expense of $12.9 million and $12.2 million, respectively.

For the six months ended June 30, 2026 and 2025, we recorded income tax expense of $21.8 million and $25.4 million, respectively.

Segment Assets

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Century Living

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.

Total assets increased by $231.4 million, or 5.2%, to $4.7 billion at June 30, 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

June 30, 2026

December 31, 2025

Century Complete

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.

We have continued to strategically manage our lot pipeline resulting in 60,128 lots owned and controlled at June 30, 2026, compared to 60,916 at December 31, 2025.

Of our total lots owned and controlled as of June 30, 2026, 56.0% were owned and 44.0% 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

Six Months Ended

Increase (Decrease)

Century Complete

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.

Net new home contracts (new home contracts net of cancellations) for the three months ended June 30, 2026 increased by 69 homes, or 2.7%, to 2,615 as compared to 2,546 for the same period in 2025.

Net new home contracts (new home contracts net of cancellations) for the six months ended June 30, 2026 decreased by 244 homes, or 4.7%, to 4,994 as compared to 5,238 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,

Our overall average monthly “absorption rate” (calculated as monthly net new home contracts divided by average selling communities) for the three and six months ended June 30, 2026 and 2025 by segment is included in the table below:

Three Months Ended June 30,

Increase (Decrease)

Century Complete

During the three months ended March 31, 2025, our 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.

Six Months Ended June 30,

Increase (Decrease)

Century Complete

During the three months ended June 30, 2026, our total average monthly absorption rate remained flat at 2.7 per month and during the six months ended June, 30 2026, our total average monthly absorption rate decreased by 7.1% to 2.6 per month, in each case as compared

to the prior year period.

Market conditions during the three and six months ended June 30, 2026 continued to be impacted by elevated mortgage rates, macro-economic and geopolitical uncertainty, including 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 March 31,

Three Months Ended March 31,

Average Selling Communities

As of June 30,

Three Months Ended June 30,

Six Months Ended June 30,

Century Complete

Our selling communities 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.

Our selling communities increased by 3 communities to 330 communities as of June 30, 2026, as compared to 327 communities at June 30, 2025.

This 0.9% increase was driven by our West, Mountain, and Texas segments as a result of new community openings in excess of community closeouts during the current year period.

(dollars in thousands)

As of March 31,

As of June 30,

Average Sales Price

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

As of March 31, 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.

As of June 30, 2026, we had 1,264 homes in backlog, which represents an increase of 3.9% as compared to 1,217 homes in backlog at June 30, 2025.

The total value of our backlog was $469.3 million as of June 30, 2026 as compared to $466.0 million as of June 30, 2025.

Backlog dollar value increased 0.7% due to the increase in the number of backlog units, and the average sales price of backlog units decreased 3.0% generally due to increased use of incentives and mix within individual communities, in each case as of June 30, 2026 as compared to June 30, 2025.

Supplemental Guarantor Information

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

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

As of June 30, 2026, Century Communities, Inc.

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

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(1) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the equity interests of such Guarantor after which the applicable Guarantor is no longer a “Restricted Subsidiary” (as defined in the 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;

(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);

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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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and Guarantors

Summarized Balance Sheet Data (in thousands)

March 31, 2026

Summarized Condensed Supplemental Balance Sheet Data (in thousands)

June 30, 2026

December 31, 2025

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Total liabilities and stockholders’ equity

Summarized Statements of Operations Data (in thousands)

Three Months Ended

March 31, 2026

Summarized Condensed Supplemental Statements of Operations Data (in thousands)

Six Months Ended

June 30, 2026

Total homebuilding revenues

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Liquidity and Capital Resources

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.

Our liquidity, consisting of our cash and cash equivalents and cash held in escrow and current capacity under our revolving line of credit, was $802.4 million as of June 30, 2026, compared to $1.1 billion as of December 31, 202 5.

Our principal uses of capital for the three and six months ended June 30, 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.

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.

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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.

We had $329.6 million outstanding under our revolving line of credit as of June 30, 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.

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

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

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

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

Material Cash Requirements

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

For the three months ended March 31, 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.

For the three and six months ended June 30, 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, other than an increase in borrowings under our line of credit as of June 30, 2026 to $329.6 million, as compared to $51.5 million as of December 31, 2025, which borrowings are subject to variable interest rates .

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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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.

As of June 30, 2026, we had outstanding purchase contracts and option contracts for an aggregate of 26,447 lots totaling approximately $2.0 billion and we had an aggregate of $92.2 million of deposits for land contracts, of which $85.1 million were non-refundable cash deposits pertaining to land contracts.

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

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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.

These acquisitions may be legally structured as asset or entity acquisitions 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

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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 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):

We are required to meet certain covenants, and as of June 30, 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 June 30, 2026 and December 31, 2025, respectively (in thousands):

3.875% senior notes, due August 2029 (1)

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(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.

(2) As of June 30, 2026 and December 31, 2025, other financing obligations included certain secured borrowings and insurance premium notes, which bore a weighted average interest rate of 6.0% and 5.8%, respectively.

From time to time, we may seek to incur additional debt obligations, refinance or increase our outstanding debt, or retire or purchase our outstanding debt through additional debt issuances, cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, redemptions or otherwise.

Such additional debt issuances, repurchases, exchanges or redemptions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual obligations and 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.

As of June 30, 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.

As of June 30, 2026, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $497.6 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.

As of June 30, 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.

As of June 30, 2026, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $493.8 million.

Construction Loan Agreements

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Interest on our construction loan agreements is capitalized to the multi-family properties assets included in prepaid expenses and other assets on the condensed consolidated balance sheets while the related multi-family rental properties are being actively developed.

As of March 31, 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.

As of June 30, 2026 and December 31, 2025, $119.0 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 June 30, 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 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.

As of June 30, 2026 and December 31, 2025, $329.6 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.

Morgan Chase Bank, N.A.

Bank National Association, which provide Inspire with uncommitted repurchase facilities, and Truist Bank, which provides Inspire with a committed repurchase facility,

collectively providing up to an aggregate of $300.0 million as of June 30, 2026, secured by the mortgage loans financed thereunder.

The repurchase facilities have varying short term maturity dates through May 28, 2027.

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 5.2% and 5.4% as of June 30, 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.

As of June 30, 2026 and December 31, 2025, we had $232.5 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.

As of June 30, 2026 and December 31, 2025, we had issued and outstanding letters of credit under various facilities of $56.2 million and $65.3 million, respectively, and we had issued and outstanding performance and other bonds of $426.7 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

$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.

Our stock repurchase program authorizes us to repurchase up to 4.5 million shares of our outstanding common stock, of which 1.5 million shares remained available to be repurchased as of June 30, 2026.

During the three and six months ended June 30, 2026, an aggregate of 352.8 thousand shares and 969.9 thousand shares, respectively, were repurchased under our stock repurchase program for a total purchase price of approximately $19.6 million and $59.6 million, respectively, and a weighted average per share price of $55.54 and $61.44, respectively, excluding the excise tax accrued on our net share repurchases as a result of the Inflation Reduction Act of 2022.

During the three and six months ended June 30, 2025, an aggregate of 883.6 thousand shares and 1.6 million shares, respectively, were repurchased for a total purchase price of approximately $48.0 million and $103.6 million, respectively, and a weighted average per share price of $54.35 and $63.28, respectively.

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

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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

The following table sets forth cash dividends declared by our Board of Directors to holders of record of our common stock during the three and six months ended June 30, 2026 and 2025, respectively (in thousands, except per share information):

Six Months Ended June 30, 2026

Cash Dividends Declared and Paid

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March 11, 2026

Three Months Ended March 31, 2025

June 10, 2026

Six Months Ended June 30, 2025

Cash Dividends Declared and Paid

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March 12, 2025

June 11, 2025

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:

Cash Flows— Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025

For the six months ended June 30, 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.

Net cash used in operating activities was $132.4 million during the six months ended June 30, 2026 as compared to $47.6 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 six months ended June 30, 2026 as compared to the six months ended June 30, 2025 and (2) a $13.7 million decrease in net income during the first six months of 2026 compared to the prior year period, partially offset by benefits from the net changes in assets and liabilities, including cash balances held in escrow, as compared to the prior year period.

 Net cash used in investing activities was $41.1 million during the six months ended June 30, 2026, compared to net cash provided by investing activities of $29.6 million during the prior year period.

This change was primarily related to $42.8 million in cash proceeds related to the sale of our mortgage servicing rights portfolio during the six months ended June 30, 2025.

 Net cash provided by financing activities was $153.4 million during the six months ended June 30, 2026, compared to net cash used in financing activities of $31.0 million during the prior year period.

This change was primarily attributable to (1) a $143.6 million increase in net borrowings under our revolving line of credit facility and (2) a $44.0 million decrease in stock repurchases, in each case during the current year period as compared to the prior year period.

As of June 30, 2026, our cash and cash equivalents and restricted cash balance was $119.4 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 months ended March 31, 2026 and 2025.

The following table presents EBITDA and adjusted EBITDA for the three and six months ended June 30, 2026 and 2025.

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

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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.

Our presentation of adjusted EBITDA should not be construed as an indication that our future results will be unaffected by unusual or other specified factors that management believes affect comparability.

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,

Three Months Ended June 30,

Six Months Ended June 30,

Income tax expense

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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 believe excluding specified items that management believes affect comparability 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;

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(v) loss on debt extinguishment;

(vii) impairment on other investment;

(vi) impairment on other investment;

and (vii) purchase price accounting for acquired work in process inventory;

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(in thousands, except share and per share information)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Weighted average common shares outstanding - basic

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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.

(2) The tax rates used in calculating adjusted net income for the three and six months ended June 30, 2026 were each 26.5%, respectively, which are reflective of our GAAP tax rates for the six months ended June 30, 2026.

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

QUANTIT ATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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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.

There have been no material changes in our market risk since December 31, 2025, other than an increase in borrowings under our line of credit as of June 30, 2026 to $329.6 million, as compared to $51.5 million as of December 31, 2025, which borrowings are subject to variable interest rates.

Interest Rates

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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.

Additionally, mortgage rates remained elevated during the first six months of 2026 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.

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.

Disruptions to energy markets related to geopolitical developments in the Middle East during the first six months of 2026 impacted fuel and transportation costs and contributed to inflationary conditions during the 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.

Presidential Administration of 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.

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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