3 unchanged sentences
The following table presents a summary of our consolidated results of operations (dollars in thousands, except per share amounts):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 Variance
12 unchanged sentences
$ 1.61 $ 2.04 (21) % $ 4.60 $ 5.94 (23) %
−Removed: In the 2025 second quarter, market conditions softened, primarily due to housing affordability concerns, compounded by the variability in persistently elevated mortgage interest rates, as well as macroeconomic and geopolitical uncertainties that have precipitated a marked weakening in consumer confidence and caused homebuyers to hesitate on making purchase decisions.
−Removed: Reflecting these market conditions, demand during the Spring selling season was more subdued relative to the past few years, and despite a healthy level of traffic in our communities, our 3,460 net orders for the 2025 second quarter were down 13% year over year, and our monthly net order pace per community was 4.5, compared to 5.5 for the year-earlier period.
−Removed: Also contributing to the year-over-year decline in our net orders were municipal delays in a number of our planned community openings, with some shifting to later in the second quarter or into the third quarter.
−Removed: Even with the delayed openings, our average community count for the 2025 second quarter increased 5% year over year to 254, and our ending community count was 253, up 2%.
+Added: The 2025 third quarter housing market environment was softer compared to the year-earlier period, primarily due to ongoing affordability concerns and tepid consumer confidence that caused homebuyers to hesitate on making purchase decisions during the first nine months of our fiscal year.
+Added: Despite these near-term headwinds, the longer-term outlook for the housing market remains favorable, driven by demographic trends and the continued undersupply of homes.
+Added: Consumer interest in homebuying was resilient during the third quarter, as we experienced a steady level of traffic in our communities.
+Added: Additionally, we were encouraged to see stabilization in demand early in the third quarter, which was sustained as the quarter progressed along with a moderation in mortgage interest rates.
+Added: However, reflecting the prevailing market conditions, our 2,950 net orders for the quarter decreased 4% year over year.
+Added: We generated a monthly net order pace per community of 3.8, compared to 4.1 for the year-earlier quarter when we had a lower average community count.
+Added: The average community count for the 2025 third quarter increased 3% year over year to 259, while our ending community count rose 4% to 264, as we continued to invest in our business to support long-term growth.
In navigating the current environment, we have focused on delivering the most compelling value to our buyers through pricing transparency and a simplified sales approach.
−Removed: With this strategy, which we began implementing on a community-by-community basis in mid-February to stimulate demand and continued during the 2025 second quarter, we reduced selling prices relative to applicable market conditions and lowered or eliminated other homebuyer concessions, which is expected to partly offset the average selling price and housing gross profit margin impacts of those price changes in the reporting period when the corresponding homes are delivered.
−Removed: As most of the net orders in the period since we implemented this approach have not yet closed, the associated pricing adjustments did not significantly affect our average selling price or housing gross profit margin on homes delivered for the three months and six months ended May 31, 2025.
−Removed: While this calibrated repositioning of our communities helped us generate solid net orders in March, with an absorption pace that was approaching a seasonally more normalized level, demand slowed in April and May as weakening consumer confidence and rising and variable mortgage interest rates in those months resulted in heightened hesitancy from homebuyers.
−Removed: Reflecting the price reductions we implemented, and expanded on in certain underperforming communities to align with local demand dynamics, the value of our net orders for the 2025 second quarter was down 21% year over year driven by the 13% decline in net orders and an 8% decrease in their average selling price to $465,600.
−Removed: Homebuilding revenues for the three months ended May 31, 2025 and 2024 were generated solely from housing operations.
−Removed: Our 2025 second-quarter housing revenues declined 10% year over year to $1.52 billion due to an 11% decrease in the number of homes delivered to 3,120, partly offset by a slight increase in their average selling price to $488,700.
−Removed: Approximately 50% of our homes delivered in the 2025 second quarter were to first-time homebuyers.
−Removed: Our homes delivered as a percentage of backlog at the beginning of the quarter grew to 70% for the 2025 second quarter, from 61% for the year-earlier quarter, mainly due to our improved build times and an increase in the percentage of homes sold and delivered within the same quarter.
−Removed: Homebuilding operating income for the three months ended May 31, 2025 was $131.5 million, compared to $188.2 million for the year-earlier period.
−Removed: As a percentage of revenues, homebuilding operating income was 8.6% for the 2025 second quarter compared to 11.1% for the corresponding 2024 period, primarily reflecting a lower housing gross profit margin and an increase in selling, general and administrative expenses as a percentage of housing revenues.
−Removed: Our housing gross profit margin for the 2025 second quarter decreased to 19.3%, compared to 21.1% for the year-earlier quarter, due to price reductions and other homebuyer concessions, higher relative land costs, geographic mix and reduced operating leverage from lower housing revenues, partly offset by lower construction costs.
−Removed: Our selling, general and administrative expenses as a percentage of housing revenues of 10.7% for the 2025 second quarter increased 60 basis points year over year, primarily reflecting higher marketing expenses and decreased operating leverage from lower housing revenues.
−Removed: Total pretax income for the 2025 second quarter was $142.4 million, down from $221.1 million for the year-earlier quarter, which included a $12.5 million gain associated with the sale of a privately held technology company in which we had an ownership interest.
−Removed: Net income and diluted earnings per share for the three months ended May 31, 2025 decreased 36% and 30%, respectively, year over year.
−Removed: Our diluted earnings per share for the 2025 second quarter reflected lower net income, partly offset by the favorable impact of our common stock repurchases over the past several quarters .
+Added: With this strategy, which we began implementing on a community-by-community basis in mid-February to stimulate demand, we reduced selling prices relative to applicable market conditions.
+Added: We also lowered or eliminated other homebuyer concessions, which is expected to partly offset the average selling price and housing gross profit margin impacts of those price changes in the reporting period when the corresponding homes are delivered.
+Added: Reflecting the price reductions we have made with this strategy, the value of our net orders for the 2025 third quarter was down 15% year over year, driven by the 4% decline in net orders and an 11% decrease in their average selling price to $445,600.
+Added: Homebuilding revenues for the three months ended August 31, 2025 were comprised of housing revenues and nominal land sale revenues.
+Added: For the three months ended August 31, 2024, homebuilding revenues were generated solely from housing operations.
+Added: Our 2025 third-quarter housing revenues were down 8% year over year to $1.61 billion, due to a 7% decrease in the number of homes delivered to 3,393 and a slight decline in their average selling price to $475,700.
+Added: Approximately 50% of our homes delivered in the 2025 third quarter were to first-time homebuyers.
+Added: Our homes delivered as a percentage of backlog at the beginning of the quarter grew to 71% for the 2025 third quarter, from 58% for the year-earlier quarter, mainly due to our improved build times and an increase in the percentage of homes sold and delivered within the same quarter.
+Added: Homebuilding operating income for the three months ended August 31, 2025 was $131.2 million, compared to $189.0 million for the year-earlier period.
+Added: As a percentage of revenues, homebuilding operating income was 8.1% for the 2025 third quarter compared to 10.8% for the corresponding 2024 period, primarily reflecting a lower housing gross profit margin.
+Added: Excluding total inventory-related charges of $11.3 million for the current quarter and $1.2 million for the year-earlier quarter, the homebuilding operating income margin was 8.8%, compared to 10.9%.
+Added: Our housing gross profit margin for the 2025 third quarter decreased to 18.2%,
+Added: compared to 20.6% for the year-earlier quarter, reflecting price reductions, higher relative land costs, and geographic mix, partly offset by lower construction costs.
+Added: Excluding the above-mentioned inventory-related charges, the housing gross profit margin for the current quarter was 18.9%, compared to 20.7% for the year-earlier quarter.
+Added: Our selling, general and administrative expenses as a percentage of housing revenues of 10.0% for the 2025 third quarter increased 20 basis points year over year, primarily due to decreased operating leverage from lower housing revenues, partly offset by lower general and administrative expenses.
+Added: Total pretax income for the 2025 third quarter was $143.2 million, down from $207.4 million for the year-earlier quarter.
+Added: Net income and diluted earnings per share for the three months ended August 31, 2025 decreased 30% and 21%, respectively, year over year.
+Added: Our diluted earnings per share for the 2025 third quarter reflected lower net income, partly offset by the favorable impact of our common stock repurchases over the past several quarters .
We take a balanced approach in allocating capital, relative to prevailing market conditions, toward our priorities of investing in land and land development to support future growth and returning capital to our stockholders.
−Removed: In the current environment and given our existing land pipeline, we are scaling back our investments in land and land development while increasing our share repurchases.
−Removed: Reflecting this shift, we reduced our investments for the 2025 second quarter by 23% year over year to $513.9 million, and repurchased $200.0 million of our outstanding common stock.
−Removed: For the 2025 first half, we invested $1.43 billion in land and land development, representing a 14% increase from the corresponding year-earlier period, and repurchased approximately 4.5 million shares of our common stock at a total cost of $250.0 million.
−Removed: We ended the 2025 second quarter with total liquidity of $1.19 billion, including cash and cash equivalents and $881.7 million of available capacity under the Credit Facility.
−Removed: We had $200.0 million of cash borrowings outstanding under the Credit Facility at May 31, 2025.
−Removed: Considering the softer market conditions, we have revised our projections for 2025.
−Removed: Although our ending backlog value at May 31, 2025 decreased 27% year over year to approximately $2.29 billion, we believe we are well positioned to achieve our updated projections for the 2025 third quarter and full year, as described below under “Outlook.”
+Added: In the current environment and given our existing land pipeline, we began scaling back our investments in land and land development in the 2025 second quarter while increasing our share repurchases.
+Added: In our 2025 third quarter, we maintained our land investments at a level that we believe will support our current growth projections.
+Added: Our investments for the 2025 third quarter decreased by 39% year over year to $514.1 million, and we repurchased $188.5 million of our outstanding common stock, compared to $150.0 million in the year-earlier quarter.
+Added: For the nine months ended August 31, 2025, we invested $1.95 billion in land and land development, representing a 7% decrease from the corresponding year-earlier period, and repurchased approximately 7.8 million shares of our common stock at a total cost of $438.5 million, compared to approximately 3.5 million shares of our common stock at a total cost of $250.0 million in the year-earlier period.
+Added: We ended the 2025 third quarter with total liquidity of $1.16 billion, including cash and cash equivalents and $831.7 million of available capacity under the Credit Facility.
+Added: We had $250.0 million of cash borrowings outstanding under the Credit Facility at August 31, 2025.
+Added: Although our ending backlog value at August 31, 2025 decreased 32% year over year to approximately $1.99 billion, we believe we are well positioned to achieve our updated projections for the 2025 fourth quarter and full year, as described below under “Outlook.”
Financial Results .
The following table presents a summary of certain financial and operational data for our homebuilding operations (dollars in thousands, except average selling price):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 2025 2024
10 unchanged sentences
Operating income 131,163 188,950 389,965 534,809
−Removed: Interest income
+Added: Interest income and other
1,870 4,073 5,628 29,379
−Removed: Equity in income (loss) of unconsolidated joint ventures
+Added: Equity in income of unconsolidated joint ventures
1,509 3,453 5,002 3,232
Homebuilding pretax income $ 134,542 $ 196,476 $ 400,595 $ 567,420
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 2025 2024
5 unchanged sentences
Operating income as a percentage of revenues 8.1 % 10.8 % 8.6 % 10.9 %
−Removed: Homebuilding revenues for the three months ended May 31, 2025 and 2024 were generated solely from housing operations.
−Removed: Housing revenues for the 2025 second quarter declined 10% from the year-earlier quarter due to an 11% decrease in the number of homes delivered, partly offset by a slight increase in their overall average selling price.
−Removed: Our 2025 second-quarter housing revenues were down year over year in each of our homebuilding reporting segments, with decreases ranging from 1% in our Southwest segment to 25% in our Central segment.
−Removed: The decline in the number of homes delivered mainly reflected our having 23% fewer homes in backlog at the beginning of the 2025 second quarter, as compared to the year-earlier quarter.
−Removed: For the six months ended May 31, 2025, homebuilding revenues were generated solely from housing operations.
−Removed: In the year-earlier period, homebuilding revenues were generated from housing operations and land sales.
−Removed: Housing revenues for the six months ended May 31, 2025 decreased 8% from the corresponding 2024 period due to a 10% decline in the number of homes delivered, partially offset by a 3% increase in their average selling price.
−Removed: There were no land sales for the three months and six months ended May 31, 2025 and the three months ended May 31, 2024.
−Removed: Land sale revenues for the six months ended May 31, 2024 totaled $3.6 million.
+Added: Homebuilding revenues for the three months ended August 31, 2025 were comprised of housing revenues and nominal land sale revenues.
+Added: In the three months ended August 31, 2024, homebuilding revenues were generated solely from housing operations.
+Added: Housing revenues for the 2025 third quarter declined 8% from the year-earlier quarter, driven by a 7% decrease in the number of homes delivered and a slight decline in their overall average selling price.
+Added: Our 2025 third-quarter housing revenues reflected year-over-year decreases of 13% in our West Coast homebuilding reporting segment and 17% in our Central segment, partially offset by increases of 7% and 1% in our Southwest and Southeast segments, respectively.
+Added: The decline in the number of homes delivered mainly reflected our having 24% fewer homes in backlog at the beginning of the 2025 third quarter, as compared to the year-earlier quarter.
+Added: For the nine months ended August 31, 2025 and 2024, homebuilding revenues were generated from housing operations and land sales.
+Added: Housing revenues for the nine months ended August 31, 2025 decreased 8% from the corresponding 2024 period due to a 9% decline in the number of homes delivered, partly offset by a slight increase in their average selling price.
+Added: Land sale revenues for the three months and nine months ended August 31, 2025 totaled $.5 million.
+Added: There were no land sales during the three months ended August 31, 2024.
+Added: For the nine months ended August 31, 2024, land sale revenues totaled $3.6 million.
Generally, land sale revenues fluctuate with our decisions to maintain or decrease our land ownership position in certain markets based upon the volume of our holdings, our business strategy, the strength and number of developers and other land buyers in particular markets at given points in time, the availability of opportunities to sell land at acceptable prices and prevailing market conditions.
Operating Income .
−Removed: Our homebuilding operating income for the three months ended May 31, 2025 decreased 30% year over year due to lower housing gross profits, partly offset by lower selling, general and administrative expenses.
−Removed: Operating income for the 2025 second quarter included inventory-related charges of $5.6 million, compared to $1.2 million in the year-earlier quarter.
−Removed: As a percentage of revenues, our operating income for the three months ended May 31, 2025 was 8.6%, compared to 11.1% for the corresponding 2024 period, mainly due to a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of housing revenues.
−Removed: Excluding inventory-related charges, our operating income as a percentage of revenues was 9.0% for the 2025 second quarter, compared to 11.1% for the year-earlier quarter.
−Removed: For the six months ended May 31, 2025, our operating income declined 25% from the year-earlier period, reflecting a decrease in housing gross profits and the absence of land sale profits, partly offset by lower selling, general and administrative expenses.
−Removed: Operating income for the six months ended May 31, 2025 included inventory-related charges of $7.0 million, compared to $2.5 million of such charges for the corresponding 2024 period.
−Removed: As a percentage of revenues, our operating income for the six months ended May 31, 2025 decreased 200 basis points year over year to 8.9%, mainly reflecting a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of revenues.
−Removed: Excluding inventory-related charges, our operating income as a percentage of revenues declined 190 basis points to 9.1% for the six months ended May 31, 2025 from 11.0% for the corresponding year-earlier period.
−Removed: • Housing Gross Profits – Housing gross profits of $294.7 million for the three months ended May 31, 2025 were down 18% year over year, reflecting lower housing revenues and a 180 basis-point decrease in our housing gross profit margin to 19.3%.
−Removed: The decline in the housing gross profit margin was due to price reductions and other homebuyer concessions, higher relative land costs, geographic mix and reduced operating leverage from lower housing revenues, partly offset by lower construction costs.
−Removed: As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations, which is included in construction and land costs, was 1.7% for both the three months ended May 31, 2025 and 2024.
−Removed: Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 19.7% for the 2025 second quarter decreased 150 basis points year over year.
−Removed: For the six months ended May 31, 2025, our housing gross profits of $574.3 million decreased from $673.1 million for the year-earlier period due to lower housing revenues and a 160 basis-point decline in our housing gross profit margin.
−Removed: The housing gross profit margin primarily reflected the same factors described above for the three months ended May 31, 2025.
−Removed: As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations was 1.7% for the six months ended May 31, 2025, compared to 1.8% for the corresponding 2024 period.
−Removed: Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 20.0% for the six months ended May 31, 2025 decreased 140 basis points year over year.
+Added: Our homebuilding operating income for the three months ended August 31, 2025 decreased 31% year over year due to lower housing gross profits, partly offset by lower selling, general and administrative expenses.
+Added: Operating income for the 2025 third quarter included inventory-related charges of $11.3 million, compared to $1.2 million in the year-earlier quarter.
+Added: As a percentage of revenues, our operating income for the three months ended August 31, 2025 was 8.1%, compared to 10.8% for the corresponding 2024 period, mainly due to a lower housing gross profit margin.
+Added: Excluding inventory-related charges, our operating income as a percentage of revenues was 8.8% for the 2025 third quarter, compared to 10.9% for the year-earlier quarter.
+Added: For the nine months ended August 31, 2025, our homebuilding operating income declined 27% from the year-earlier period, reflecting a decrease in housing gross profits and the absence of land sale profits, partly offset by lower selling, general and administrative expenses.
+Added: Operating income for the nine months ended August 31, 2025 included inventory-related charges of $18.4 million, compared to $3.7 million of such charges for the corresponding 2024 period.
+Added: As a percentage of revenues, our operating income for the nine months ended August 31, 2025 decreased 230 basis points year over year to 8.6%, mainly reflecting a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of revenues.
+Added: Excluding inventory-related charges, our operating income as a percentage of revenues declined 200 basis points to 9.0% for the nine months ended August 31, 2025 from 11.0% for the corresponding year-earlier period.
+Added: • Housing Gross Profits – Housing gross profits of $293.4 million for the three months ended August 31, 2025 were down 19% year over year, reflecting lower housing revenues and a 240 basis-point decrease in our housing gross profit margin to 18.2%.
+Added: The decline in the housing gross profit margin reflected price reductions, higher relative land costs, and geographic mix, partly offset by lower construction costs.
+Added: As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations, which is included in construction and land costs, was 1.7% for the three months ended August 31, 2025 and 1.6% for the three months ended August 31, 2024.
+Added: Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 18.9% for the 2025 third quarter decreased 180 basis points year over year.
+Added: For the nine months ended August 31, 2025, our housing gross profits of $867.7 million decreased from $1.03 billion for the year-earlier period due to lower housing revenues and a 190 basis-point decline in our housing gross profit margin.
+Added: The housing gross profit margin primarily reflected the same factors described above for the three months ended August 31, 2025.
+Added: As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations was 1.7% for both the nine months ended August 31, 2025 and 2024.
+Added: Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 19.6% for the nine months ended August 31, 2025 decreased 150 basis points year over year.
The calculation of adjusted housing gross profit margin, which we believe provides a clearer measure of the performance of our business, is described below under “Non-GAAP Financial Measures.”
−Removed: • Land Sale Profits – There was no land sale activity in the three months and six months ended May 31, 2025 and the three months ended May 31, 2024.
−Removed: Land sale profits for the six months ended May 31, 2024 totaled $1.5 million.
+Added: • Land Sale Profits – Land sales generated essentially break-even results for the three months and nine months ended August 31, 2025.
+Added: There were no land sales during the three months ended August 31, 2024, while land sale profits for the nine months ended August 31, 2024 totaled $1.5 million.
• Selling, General and Administrative Expenses – The following table presents the components of our selling, general and administrative expenses (dollars in thousands):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 % of Housing Revenues 2024 % of Housing Revenues 2025 % of Housing Revenues 2024 % of Housing Revenues
4 unchanged sentences
(a) Commission expenses include sales commissions on homes delivered paid to internal sales counselors and external real estate brokers.
−Removed: Selling, general and administrative expenses for the three months ended May 31, 2025 decreased 5% from the year-earlier quarter.
−Removed: As a percentage of housing revenues, our selling, general and administrative expenses for the 2025 second quarter increased 60 basis points.
−Removed: For the six months ended May 31, 2025, selling, general and administrative expenses decreased 4% year over year.
−Removed: As a percentage of housing revenues, selling, general and administrative expenses for the six months ended May 31, 2025 increased 40 basis points.
−Removed: The year-over-year increases in selling, general and administrative expenses as a percentage of revenues for the three-month and six-month periods ended May 31, 2025 primarily reflected higher marketing expenses and decreased operating leverage from lower housing revenues.
+Added: Reflecting our continued focus on prudently managing our costs and aligning our overhead structure with our volume of homes delivered, selling, general and administrative expenses for both the three-month and nine-month periods ended August 31, 2025 decreased 5% from the corresponding year-earlier periods.
+Added: As a percentage of housing revenues, our selling, general and administrative expenses for the three-month and nine-month periods ended August 31, 2025 increased 20 basis points and 40 basis points, respectively, year over year.
+Added: The increase in selling, general and administrative expenses as a percentage of revenues for the three months ended August 31, 2025 primarily reflected decreased operating leverage from lower housing revenues, partly offset by lower general and administrative expenses.
+Added: For the nine months ended August 31, 2025, selling, general and administrative expenses as a percentage of revenues rose from the corresponding year-earlier period mainly due to higher marketing expenses and decreased operating leverage, partly offset by lower general and administrative expenses.
Interest Income/Expense and Other .
−Removed: Interest income and other for the three months and six months ended May 31, 2025 was comprised solely of interest income.
−Removed: For the three months and six months ended May 31, 2024, interest income and other was comprised of interest income and a $12.5 million gain associated with the sale of a privately held technology company in which we had an ownership interest.
−Removed: Interest income, which is generated from short-term investments, was $1.7 million for the three months ended May 31, 2025, compared to $6.9 million for the year-earlier quarter.
−Removed: For the six months ended May 31, 2025, interest income was $3.8 million, compared to $12.8 million for the corresponding 2024 period.
−Removed: The year-over-year decreases for the three-month and six-month periods ended May 31, 2025 reflected our lower average balance of cash equivalents and a lower interest rate in the 2025 periods.
+Added: Interest income and other for the three months and nine months ended August 31, 2025 and the three months ended August 31, 2024 was comprised solely of interest income.
+Added: For the nine months ended August 31, 2024, interest income and other was comprised of interest income and a $12.5 million gain associated with the sale of a privately held technology company in which we had an ownership interest.
+Added: Interest income, which is generated from short-term investments, was $1.9 million for the three months ended August 31, 2025, compared to $4.1 million for the year-earlier quarter.
+Added: For the nine months ended August 31, 2025, interest income was $5.6 million, compared to $16.9 million for the corresponding 2024 period.
+Added: The year-over-year decreases for the three-month and nine-month periods ended August 31, 2025 reflected our lower average balance of cash equivalents and a lower interest rate in the 2025 periods.
Generally, increases and decreases in interest income are attributable to changes in the interest-bearing average balances of short-term investments and fluctuations in interest rates.
We incur interest principally from our borrowings to finance land acquisitions, land development, home construction and other operating and capital needs.
−Removed: All interest incurred during the three-month and six-month periods ended May 31, 2025 and 2024 was capitalized as the average amount of our inventory qualifying for interest capitalization was higher than our average debt level for each period.
+Added: All interest incurred during the three-month and nine-month periods ended August 31, 2025 and 2024 was capitalized as the average amount of our inventory qualifying for interest capitalization was higher than our average debt level for each period.
Accordingly, we had no interest expense for these periods.
−Removed: Further information regarding our interest incurred and capitalized is provided in Note 6 – Inventories in the Notes to Consolidated Financial Statements in this report.
−Removed: Equity in Income (Loss) of Unconsolidated Joint Ventures .
−Removed: Our equity in income of unconsolidated joint ventures was $1.1 million for the three months ended May 31, 2025 and nominal for the three months ended May 31, 2024.
−Removed: For the six months ended May 31, 2025, our equity in income of unconsolidated joint ventures was $3.5 million, compared to a nominal equity in loss of unconsolidated joint ventures for the corresponding 2024 period.
−Removed: The year-over-year improvement for the 2025 periods
−Removed: mainly reflected an increase in the number of homes delivered by an unconsolidated joint venture in California, which delivered its first homes in the 2024 second quarter.
+Added: Further information regarding our
+Added: interest incurred and capitalized is provided in Note 6 – Inventories in the Notes to Consolidated Financial Statements in this report.
+Added: Equity in Income of Unconsolidated Joint Ventures .
+Added: Our equity in income of unconsolidated joint ventures was $1.5 million for the three months ended August 31, 2025, compared to $3.5 million for the year-earlier period, mainly reflecting a decrease in the number of homes delivered by an unconsolidated joint venture in California, which delivered its first homes in the 2024 second quarter.
+Added: For the nine months ended August 31, 2025, our equity in income of unconsolidated joint ventures increased to $5.0 million, compared to $3.2 million for the corresponding 2024 period, primarily due to an increase in the number of homes delivered by the same California-based unconsolidated joint venture.
Further information regarding our investments in homebuilding unconsolidated joint ventures is provided in Note 9 – Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report.
1 unchanged sentence
The following table presents information about our net orders, cancellation rate, ending backlog and community count (dollars in thousands):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 2025 2024
8 unchanged sentences
(b) Cancellation rate represents the total number of contracts for new homes cancelled during a period divided by the total (gross) orders for new homes generated during the same period.
−Removed: Net orders for the 2025 second quarter decreased 13%, compared to the year-earlier quarter, and the pace of monthly net orders per community was 4.5 in the 2025 second quarter, compared to 5.5 in the corresponding 2024 quarter, reflecting both lower net orders and a higher average community count.
−Removed: The decreases in our net orders and monthly pace per community reflected market conditions in the 2025 second quarter, with demand in the Spring selling season more subdued relative to the past few years due to housing affordability concerns, compounded by the variability in persistently elevated mortgage interest rates, as well as macroeconomic and geopolitical uncertainties that have precipitated a marked weakening in consumer confidence and caused homebuyers to hesitate on making purchase decisions.
−Removed: Also contributing to the year-over-year decline in our net orders were municipal delays in a number of our planned community openings, with some shifting to later in the second quarter or into the 2025 third quarter.
+Added: Net orders for the 2025 third quarter decreased 4%, compared to the year-earlier quarter, and the pace of monthly net orders per community was 3.8 in the 2025 third quarter, compared to 4.1 in the corresponding 2024 quarter, driven by both lower net orders and a higher average community count.
+Added: The decreases in our net orders and monthly pace per community reflected prevailing market conditions in the 2025 third quarter, with softer demand relative to the year-earlier quarter due to ongoing affordability concerns and tepid consumer confidence that caused homebuyers to hesitate on making purchase decisions during the first nine months of our fiscal year.
In navigating the current environment, we have focused on delivering the most compelling value to our buyers through pricing transparency and a simplified sales approach.
−Removed: With this strategy, which we began implementing on a community-by-community basis in mid-February to stimulate demand and continued during the 2025 second quarter, we reduced selling prices relative to applicable market conditions and lowered or eliminated other homebuyer concessions, which is expected to partly offset the average selling price and housing gross profit margin impacts of those price changes in the reporting period when the corresponding homes are delivered.
−Removed: As most of the net orders in the period since we implemented this approach have not yet closed, the associated pricing adjustments did not significantly affect our average selling price or housing gross profit margin on homes delivered for the three months and six months ended May 31, 2025.
−Removed: While this calibrated repositioning of our communities helped us generate solid net orders in March, with an absorption pace that was approaching a seasonally more normalized level, demand slowed in April and May as weakening consumer confidence and rising and variable mortgage interest rates in those months resulted in heightened hesitancy from homebuyers.
−Removed: Reflecting the price reductions we implemented, and expanded on in certain underperforming communities to align with local demand dynamics, the value of our net orders for the 2025 second quarter was down 21% year over year driven by the 13% decline in net orders and an 8% decrease in their average selling price to $465,600.
−Removed: Our cancellation rate as a percentage of gross orders for the three months ended May 31, 2025 increased slightly from the year-earlier period.
−Removed: The number of homes in our backlog and our backlog value at May 31, 2025 decreased 24% and 27%, respectively, from May 31, 2024.
−Removed: The decline in our overall backlog value reflected decreases in each of our homebuilding reporting segments, ranging from 18% in our Southeast segment to 32% in our Southwest segment.
+Added: With this strategy, which we began implementing on a community-by-community basis in mid-February to stimulate demand, we reduced selling prices relative to applicable market conditions.
+Added: We also lowered or eliminated other homebuyer concessions, which is expected to partly offset the average selling price and housing gross profit margin impacts of those price changes in the reporting period when the corresponding homes are delivered.
+Added: Reflecting the price reductions we have made with this strategy, the value of our net orders for the 2025 third quarter was down 15% year over year driven by the 4% decline in net orders and an 11% decrease in their average selling price to $445,600.
+Added: Our cancellation rate as a percentage of gross orders for the three months ended August 31, 2025 increased slightly from the year-earlier period.
+Added: The number of homes in our backlog at August 31, 2025 decreased 24% compared to August 31, 2024.
+Added: Our overall backlog value at August 31, 2025 declined 32% year over year due to the lower number of homes in backlog and a 10% decrease in their average selling price, reflecting the price reductions implemented during 2025.
+Added: Backlog value was down year over year in each of our homebuilding reporting segments, with decreases ranging from 14% in our Southeast segment to 48% in our Southwest segment.
Based on our historical experience, a portion of the homes in backlog will not result in homes delivered due to cancellations.
1 unchanged sentence
We use the term “community count” to refer to the number of communities open for sale with at least five homes left to sell at the end of a reporting period.
−Removed: Our ending community count for the 2025 second quarter grew 2% from the year-earlier quarter.
−Removed: Our average community count for the three months ended May 31, 2025 increased 5% from the year-earlier period.
−Removed: While we increased our investments in land and land development on a year-over-year basis for the six months ended May 31, 2025 to help drive future growth, as discussed below under “Liquidity and Capital Resources,” with the softer market conditions we are scaling back our investments in land and land development, which in the 2025 second quarter decreased 23% compared to the year-earlier quarter.
+Added: Our ending community count for the 2025 third quarter grew 4% from the year-earlier quarter.
+Added: Our average community count for the three months ended August 31, 2025 increased 3% from the year-earlier period.
+Added: While we continued to invest in land and land development during the nine months ended August 31, 2025 to help drive future growth, as discussed below under “Liquidity and Capital Resources,” we began scaling back these investments in the 2025 second quarter in response to softer market conditions.
+Added: As a result, our investments in land and land development for the three-month and nine-month periods ended August 31, 2025 decreased 39% and 7%, respectively, compared to the corresponding year-earlier periods.
HOMEBUILDING REPORTING SEGMENTS
1 unchanged sentence
The following tables present information about our homes delivered, net orders, cancellation rates as a percentage of gross orders, net order value, average community count and ending backlog (number of homes and value) by homebuilding reporting segment (dollars in thousands):
−Removed: Three Months Ended May 31,
+Added: Three Months Ended August 31,
Homes Delivered Net Orders Cancellation Rates
12 unchanged sentences
Total $ 1,314,607 $ 1,543,148 (15) % 259 251 3 %
−Removed: Six Months Ended May 31,
+Added: Nine Months Ended August 31,
Homes Delivered Net Orders Cancellation Rates
5 unchanged sentences
Total 9,283 10,191 9,182 10,405 16 % 14 %
+Added: Nine Months Ended August 31,
Net Order Value Average Community Count
20 unchanged sentences
In addition to the results of our homebuilding reporting segments presented below, our consolidated homebuilding operating income includes the results of Corporate and other, a non-operating segment.
−Removed: Corporate and other had operating losses of $40.4 million and $38.6 million in the three months ended May 31, 2025 and 2024, respectively.
−Removed: For the six months ended May 31, 2025, Corporate and other had an operating loss of $76.9 million, compared to an operating loss of $73.7 million for the corresponding year-earlier period.
−Removed: The financial results of our homebuilding reporting segments for the three months ended May 31, 2025 and 2024 were impacted to varying degrees by price reductions and other homebuyer concessions we extended to buyers in conjunction with our targeted sales strategies, as well as product and geographic mix shifts of homes delivered.
+Added: Corporate and other had operating losses of $36.4 million and $37.9 million in the three months ended August 31, 2025 and 2024, respectively.
+Added: For the nine months ended August 31, 2025, Corporate and other had an operating loss of $113.3 million, compared to $111.6 million for the corresponding year-earlier period.
+Added: The financial results of our homebuilding reporting segments for the three months ended August 31, 2025 and 2024 were impacted to varying degrees by price reductions and other homebuyer concessions we extended to buyers in conjunction with our sales strategies, as well as product and geographic mix shifts of homes delivered.
The following table presents financial information related to our West Coast segment (dollars in thousands, except average selling price):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 Variance 2025 2024 Variance
3 unchanged sentences
Operating income $ 69,649 $ 95,669 (27) % $ 211,735 $ 248,689 (15) %
+Added: Three Months Ended August 31, Nine Months Ended August 31,
+Added: 2025 2024 Variance 2025 2024 Variance
Homes delivered 972 1,150 (15) % 2,789 3,021 (8) %
1 unchanged sentence
Operating income as a percentage of revenues 10.5 % 12.6 % (210) bps 11.0 % 12.3 % (130) bps
−Removed: In the three months and six months ended May 31, 2025 and the three months ended May 31, 2024, this segment’s revenues were generated solely from housing operations.
−Removed: In the six months ended May 31, 2024, this segment’s revenues were comprised of housing revenues and nominal land sale revenues.
−Removed: The year-over-year decline in housing revenues for the three months ended May 31, 2025 reflected a decrease in the number of homes delivered, partly offset by an increase in their average selling price.
−Removed: For the six months ended May 31, 2025, housing revenues of $1.26 billion were essentially even with the
−Removed: corresponding year-earlier period as a decrease in the number of homes delivered was offset by an increase in their average selling price.
−Removed: Operating income for the three months and six months ended May 31, 2025 declined year over year due to lower housing gross profits, partly offset by lower selling, general and administrative expenses.
−Removed: Operating income as a percentage of revenues for the 2025 second quarter was down from the year-earlier quarter due to an 80 basis-point decrease in the housing gross profit margin to 18.3% and a 10 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 6.9%.
−Removed: For the six months ended May 31, 2025, operating income as a percentage of revenues declined from the corresponding 2024 period, mainly reflecting a 110 basis-point decrease in the housing gross profit margin to 18.4%, partly offset by a 20 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.1%.
−Removed: The year-over-year decrease in the housing gross profit margin for the three months and six months ended May 31, 2025 was primarily due to price reductions and other homebuyer concessions and higher relative land costs, partly offset by lower construction costs.
−Removed: For the three months ended May 31, 2025, inventory-related charges associated with housing operations were $1.2 million, compared to $.6 million for the year-earlier period.
−Removed: For the six months ended May 31, 2025, inventory-related charges associated with housing operations were $1.8 million, compared to $1.9 million for the year-earlier period.
+Added: In the three months and nine months ended August 31, 2025 and the three months ended August 31, 2024, this segment’s revenues were generated solely from housing operations.
+Added: In the nine months ended August 31, 2024, this segment’s revenues were comprised of housing revenues and nominal land sale revenues.
+Added: The year-over-year decline in housing revenues for the three months ended August 31, 2025 was due to a decrease in the number of homes delivered, partly offset by an increase in their average selling price.
+Added: For the nine months ended August 31, 2025, housing revenues were down 4% from $2.02 billion for the corresponding year-earlier period, reflecting the same factors.
+Added: Operating income for the three months and nine months ended August 31, 2025 declined year over year due to lower housing gross profits, partly offset by lower selling, general and administrative expenses.
+Added: Operating income as a percentage of revenues for the 2025 third quarter was down from the year-earlier quarter due to a 140 basis-point decrease in the housing gross profit margin to 17.4% and a 70 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 6.9%.
+Added: For the nine months ended August 31, 2025, operating income as a percentage of revenues declined from the corresponding 2024 period, mainly reflecting a 120 basis-point decrease in the housing gross profit margin to 18.0% and a 10 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 7.0%.
+Added: The year-over-year decrease in the housing gross profit margin for the three months and nine months ended August 31, 2025 was primarily due to higher relative land costs, partly offset by lower construction costs.
+Added: For the three months ended August 31, 2025, inventory-related charges associated with housing operations were $1.1 million, compared to $.5 million for the year-earlier period.
+Added: For the nine months ended August 31, 2025, inventory-related charges associated with housing operations were $3.0 million, compared to $2.4 million for the year-earlier period.
+Added: The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for both the three months and nine months ended August 31, 2025 was primarily due to reduced operating leverage from lower housing revenues and higher marketing and other expenses associated with our expanded community count in this segment.
+Added: For the nine months ended August 31, 2025, these impacts were partly offset by lower general and administrative costs.
The following table presents financial information related to our Southwest segment (dollars in thousands, except average selling price):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 Variance 2025 2024 Variance
8 unchanged sentences
Operating income as a percentage of revenues 17.1 % 17.6 % (50) bps 17.8 % 17.3 % 50 bps
−Removed: In the three-month and six-month periods ended May 31, 2025 and 2024, this segment’s revenues were generated solely from housing operations.
−Removed: This segment’s housing revenues for the three-month and six-month periods ended May 31, 2025 declined slightly year over year, reflecting a decrease in the number of homes delivered, largely offset by an increase in their average selling price.
−Removed: Operating income for the three months ended May 31, 2025 increased slightly year over year due to lower selling, general and administrative expenses as housing gross profits were essentially even with the year-earlier period.
−Removed: As a percentage of revenues, this segment’s operating income for the 2025 second quarter grew from the year-earlier quarter, reflecting a 30 basis-point increase in the housing gross profit margin to 24.7% and a 10 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.1%.
−Removed: For the six months ended May 31, 2025, operating income increased from the corresponding year-earlier period due to higher housing gross profits and lower selling, general and administrative expenses.
−Removed: Operating income as a percentage of revenues for the six months ended May 31, 2025 grew from the corresponding 2024 period, reflecting an 80 basis-point increase in the housing gross profit margin to 25.2% and a 20 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.0%.
−Removed: The year-over-year expansion in the housing gross profit margin for the three-month and six-month periods ended May 31, 2025 primarily reflected lower relative construction and land costs, partly offset by price reductions and other homebuyer concessions.
−Removed: For the three-month and six-month periods ended May 31, 2025, inventory-related charges associated with housing operations were $.8 million and $1.1 million, respectively.
−Removed: For the three-month and six-month periods ended May 31, 2024, inventory-related charges associated with housing operations were nominal.
+Added: In the three-month and nine-month periods ended August 31, 2025 and 2024, this segment’s revenues were generated solely from housing operations.
+Added: This segment’s housing revenues for the three months ended August 31, 2025 increased year over year, driven by a higher average selling price of homes delivered, as the number of homes delivered was consistent with the prior-year period.
+Added: For the nine months ended August 31, 2025, this segment’s housing revenues rose slightly compared to the year-earlier period, reflecting an increase in the average selling price of homes delivered, largely offset by a decrease in the number of homes delivered.
+Added: Operating income for the three-month and nine-month periods ended August 31, 2025 increased year over year due to higher housing gross profits and lower selling, general and administrative expenses.
+Added: As a percentage of revenues, this segment’s operating income for the 2025 third quarter declined from the year-earlier quarter, reflecting a 120 basis-point decrease in the housing gross profit margin to 24.1%, partly offset by a 70 basis-point improvement in selling,
+Added: general and administrative expenses as a percentage of housing revenues to 7.0%.
+Added: For the nine months ended August 31, 2025, operating income as a percentage of revenues grew from the corresponding 2024 period due to a 40 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.0% and a 10 basis-point increase in the housing gross profit margin to 24.8%.
+Added: The year-over-year decrease in the housing gross profit margin for the three months ended August 31, 2025 primarily reflected higher relative land costs, partly offset by lower construction costs and increased operating leverage on higher housing revenues.
+Added: Inventory-related charges associated with housing operations for the three months ended August 31, 2025 were $.5 million, compared to no such charges for the year-earlier period.
+Added: For the nine months ended August 31, 2025, the housing gross profit margin mainly reflected lower construction costs, largely offset by higher relative land costs.
+Added: Inventory-related charges associated with housing operations for the nine months ended August 31, 2025 were $1.6 million, compared to a nominal amount for the corresponding year-earlier period.
+Added: The year-over-year improvement in selling, general and administrative expenses as a percentage of housing revenues for both the three months and nine months ended August 31, 2025 was primarily due to increased operating leverage from higher housing revenues and lower general and administrative expenses.
The following table presents financial information related to our Central segment (dollars in thousands, except average selling price):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 Variance 2025 2024 Variance
8 unchanged sentences
Operating income as a percentage of revenues 5.9 % 11.6 % (570) bps 7.4 % 12.0 % (460) bps
−Removed: In the three months and six months ended May 31, 2025 and the three months ended May 31, 2024, this segment’s revenues were generated solely from housing operations.
−Removed: In the six months ended May 31, 2024, this segment’s revenues were comprised of housing revenues and land sale revenues.
−Removed: Housing revenues for the three months ended May 31, 2025 were down from the year-earlier period due to decreases in both the number of homes delivered and their average selling price.
−Removed: For the six months ended May 31, 2025, housing revenues decreased 19% year over year, from $693.1 million, for the same reasons.
−Removed: Land sale revenues totaled $3.2 million for the six months ended May 31, 2024.
−Removed: Operating income for the three months and six months ended May 31, 2025 declined from the corresponding year-earlier periods mainly due to lower housing gross profits, partly offset by lower selling, general and administrative expenses.
−Removed: Also contributing to the year-over-year decrease in operating income for the six months ended May 31, 2025 was the absence of land sale profits in the current period, compared to $1.1 million of land sale profits in the corresponding year-earlier period.
−Removed: This segment’s operating income as a percentage of revenues for the 2025 second quarter decreased from the year-earlier period, primarily due to a 380 basis-point decline in the housing gross profit margin to 18.3% and a 130 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 10.9%.
−Removed: For the six months ended May 31, 2025, this segment’s operating income as a percentage of revenues decreased from the year-earlier period, mainly due to a 280 basis-point decline in the housing gross profit margin to 19.2% and a 110 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 11.0%.
−Removed: The housing gross profit margin for the three months and six months ended May 31, 2025 declined year over year due to price reductions and other homebuyer concessions, higher relative land costs, geographic mix and reduced operating leverage from lower housing revenues, partly offset by lower construction costs.
−Removed: Inventory-related charges associated with housing operations for the three months ended May 31, 2025 were $1.8 million, compared to $.3 million for the year-earlier period.
−Removed: For the six months ended May 31, 2025, inventory-related charges associated with housing operations were $2.1 million, compared to $.3 million for the year-earlier period.
−Removed: The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for the three months and six months ended May 31, 2025 was mainly due to higher marketing expenses and decreased operating leverage from lower housing revenues.
+Added: In the three months and nine months ended August 31, 2025 and the three months ended August 31, 2024, this segment’s revenues were generated solely from housing operations.
+Added: In the nine months ended August 31, 2024, this segment’s revenues were comprised of housing revenues and land sale revenues.
+Added: Housing revenues for the three months ended August 31, 2025 were down from the year-earlier period due to decreases in both the number of homes delivered and their average selling price.
+Added: For the nine months ended August 31, 2025, housing revenues decreased 18% year over year, from $1.07 billion, for the same reasons.
+Added: Land sale revenues totaled $3.2 million for the nine months ended August 31, 2024.
+Added: Operating income for the three months and nine months ended August 31, 2025 declined from the corresponding year-earlier periods mainly due to lower housing gross profits, partly offset by lower selling, general and administrative expenses.
+Added: Also contributing to the year-over-year decrease in operating income for the nine months ended August 31, 2025 was the absence of land sales in the current period, compared to $1.1 million of land sale profits in the corresponding year-earlier period.
+Added: This segment’s operating income as a percentage of revenues for the 2025 third quarter decreased from the year-earlier period, primarily due to a 590 basis-point decline in the housing gross profit margin to 15.9%, partly offset by a 20 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 10.0%.
+Added: For the nine months ended August 31, 2025, this segment’s operating income as a percentage of revenues decreased from the year-earlier period, mainly reflecting a 390 basis-point decline in the housing gross profit margin to 18.0% and a 70 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 10.6%.
+Added: The housing gross profit margin for the three months ended August 31, 2025 declined year over year mainly due to price reductions, higher relative land costs, geographic mix, an increase in inventory-related charges and reduced operating leverage from lower housing revenues.
+Added: Inventory-related charges associated with housing operations for the three months ended August 31, 2025 were $7.2 million, compared to $.5 million for the year-earlier period.
+Added: For the nine months ended August 31, 2025, the year-over-year decrease in the housing gross profit margin primarily reflected the same reasons described above for the three months ended August 31, 2025, partly offset by lower construction costs.
+Added: Inventory-related charges associated with housing operations for the nine months ended August 31, 2025 were $9.4 million, compared to $.7 million for the year-earlier period.
+Added: The inventory-related charges in the three months and nine months ended August 31, 2025 mainly reflected our decisions to make changes in our operational strategies aimed at more quickly monetizing our investment in a certain
+Added: community in this segment.
+Added: For the three months ended August 31, 2025, the year-over-year improvement in selling, general and administrative expenses as a percentage of housing revenues was mainly due to lower general and administrative expenses, partly offset by decreased operating leverage from lower housing revenues.
+Added: For the nine months ended August 31, 2025, the year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues primarily reflected higher marketing expenses and decreased operating leverage from lower housing revenues.
The following table presents financial information related to our Southeast segment (dollars in thousands, except average selling price):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 Variance 2025 2024 Variance
5 unchanged sentences
Operating income $ 22,225 $ 33,003 (33) % $ 55,532 $ 103,805 (47) %
−Removed: Three Months Ended May 31, Six Months Ended May 31,
−Removed: 2025 2024 Variance 2025 2024 Variance
Homes delivered 797 727 10 % 1,969 2,089 (6) %
1 unchanged sentence
Operating income as a percentage of revenues 7.3 % 11.0 % (370) bps 7.2 % 12.0 % (480) bps
−Removed: This segment’s revenues for the three months and six months ended May 31, 2025 and 2024 were generated solely from housing operations.
−Removed: Housing revenues for the three months and six months ended May 31, 2025 declined from the corresponding year-earlier periods due to decreases in both the number of homes delivered and their average selling price.
−Removed: Operating income for the three months and six months ended May 31, 2025 was down year over year, reflecting lower housing gross profits, partly offset by lower selling, general and administrative expenses.
−Removed: As a percentage of revenues, operating income for the 2025 second quarter declined from the year-earlier quarter due to a 400 basis-point decline in the housing gross profit margin to 17.3% and a 90 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 9.8%.
−Removed: Operating income as a percentage of revenues for the six months ended May 31, 2025 decreased from the corresponding year-earlier period due to a 390 basis-point decline in the housing gross profit margin to 17.5% and a 140 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 10.3%.
−Removed: The year-over-year decrease in the housing gross profit margin for the three months and six months ended May 31, 2025 reflected price reductions and other homebuyer concessions, higher relative land costs, geographic mix and reduced operating leverage from lower housing revenues.
−Removed: Inventory-related charges associated with housing operations for the three-month and six-month periods ended May 31, 2025 were $1.7 million and $1.9 million, respectively, compared to a nominal amount for each of the year-earlier periods.
−Removed: The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for the three months and six months ended May 31, 2025 was mainly due to decreased operating leverage from lower housing revenues as well as higher costs, including higher marketing and other expenses associated with our expanded community count in this segment.
+Added: This segment’s revenues for the three months and nine months ended August 31, 2025 were comprised of housing revenues and nominal land sale revenues.
+Added: For the three months and nine months ended August 31, 2024, this segment’s revenues were generated solely from housing operations.
+Added: Housing revenues for the three months ended August 31, 2025 rose slightly from the year-earlier period to $303.0 million due to an increase in the number of homes delivered, partly offset by a decrease in their average selling price.
+Added: Housing revenues for the nine months ended August 31, 2025 declined 12% from the corresponding year-earlier period to $767.3 million due to decreases in both the number of homes delivered and their average selling price.
+Added: Operating income for the three months and nine months ended August 31, 2025 was down year over year, mainly reflecting lower housing gross profits.
+Added: As a percentage of revenues, operating income for the 2025 third quarter declined from the year-earlier quarter due to a 370 basis-point decline in the housing gross profit margin to 16.3%, with selling, general and administrative expenses as a percentage of housing revenues remaining flat at 9.0%.
+Added: Operating income as a percentage of revenues for the nine months ended August 31, 2025 decreased from the corresponding year-earlier period due to a 390 basis-point decline in the housing gross profit margin to 17.0% and a 90 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 9.8%.
+Added: The year-over-year decrease in the housing gross profit margin for the three months ended August 31, 2025 mainly reflected price reductions, higher relative land costs, geographic mix, and an increase in inventory-related charges, partly offset by increased operating leverage from higher housing revenues.
+Added: Inventory-related charges associated with housing operations for the three months ended August 31, 2025 were $2.5 million, compared to $.2 million for the year-earlier quarter.
+Added: For the nine months ended August 31, 2025, the year-over-year decline in the housing gross profit margin was primarily due to price reductions, higher relative land costs, geographic mix, increased inventory-related charges, and decreased operating leverage from lower housing revenues, partly offset by lower construction costs.
+Added: Inventory-related charges associated with housing operations for the nine months ended August 31, 2025 were $4.4 million, compared to $.4 million for the year-earlier period.
+Added: The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for the nine months ended August 31, 2025 was mainly due to decreased operating leverage from lower housing revenues as well as higher costs, including higher marketing and other expenses associated with our expanded community count in this segment.
FINANCIAL SERVICES REPORTING SEGMENT
The following table presents a summary of selected financial and operational data for our financial services reporting segment (dollars in thousands):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 2025 2024
15 unchanged sentences
(a) Loan originations and sales occurred within KBHS.
−Removed: Financial services revenues for the three months and six months ended May 31, 2025 declined 41% and 33%, respectively, from the corresponding year-earlier periods due to decreases in both insurance commissions and title services revenues.
−Removed: Insurance commissions were lower in the 2025 periods due to the contract assets for estimated future renewal commissions remaining relatively steady, as an increase in the number of policies in force was offset by a slight decrease in the average commission per policy.
−Removed: In contrast, the corresponding 2024 periods benefited from growth in these contract assets driven by an increase in the number of policies in force and fairly stable average commission rates.
+Added: Financial services revenues for the three months and nine months ended August 31, 2025 declined 9% and 26%, respectively, from the corresponding year-earlier periods due to decreases in both insurance commissions and title services revenues.
+Added: Insurance commissions were lower in the 2025 periods due to less variability in the contract assets for estimated future renewal commissions, compared to the corresponding prior-year periods.
+Added: For the three months ended August 31, 2025, a modest increase in the average commission per policy was mostly offset by a modest decrease in the number of policies in force.
+Added: For the nine months ended August 31, 2025, an increase in the number of policies in force was largely offset by a decrease in the average commission per policy.
+Added: In contrast, the corresponding 2024 periods benefited from growth in the contract assets for estimated future renewal commissions driven by an increase in the number of policies in force, partly offset by a decrease in the average commission rates.
Title services revenues decreased year over year mainly due to fewer homes delivered in the 2025 periods.
Pretax income.
−Removed: Financial services pretax income for the three months and six months ended May 31, 2025 was down 38% and 37%, respectively, from the corresponding year-earlier periods, largely due to the above-mentioned decrease in insurance commissions revenues and a decline in the equity in income of our unconsolidated joint venture, KBHS.
−Removed: In the 2025 second quarter, the equity in income of our unconsolidated joint venture was $4.9 million, compared to $6.4 million in the year-earlier quarter, reflecting a decrease in KBHS’ income.
−Removed: The year-over-year decrease in KBHS’ income primarily reflected a loss in the fair value of IRLCs of $2.1 million in the current quarter, compared to a gain in the fair value of IRLCs of $1.3 million in the year-earlier quarter.
−Removed: For the six months ended May 31, 2025, the equity in income of our unconsolidated joint venture was $9.2 million, compared to $13.5 million in the year-earlier quarter, reflecting a decrease in KBHS’ income.
−Removed: The year-over-year decrease in KBHS’ income primarily reflected a loss in the fair value of IRLCs of $3.6 million in the current quarter, compared to a gain in the fair value of IRLCs of $4.2 million in the year-earlier quarter.
−Removed: Also contributing to the year-over-year decrease in KBHS’ income for the three months and six months ended May 31, 2025 was a decline in the number of loans originated, which reflected a decrease in the number of homes we delivered, partly offset by an increase in the percentage of homebuyers using KBHS.
+Added: Financial services pretax income for the three months and nine months ended August 31, 2025 was down 21% and 32%, respectively, from the corresponding year-earlier periods.
+Added: These declines were due to the above-mentioned decreases in insurance commissions and title services revenues as well as a decrease in the equity in income of our unconsolidated joint venture, KBHS.
+Added: For the three months and nine months ended August 31, 2025, the equity in income of our unconsolidated joint venture was down 28% and 31%, respectively, from the corresponding year-earlier periods, reflecting a decrease in KBHS’ income.
+Added: The year-over-year decline in KBHS’ income for the three months ended August 31, 2025 mainly reflected a loss in the fair value of IRLCs of $3.0 million in the current period, compared to a $.4 million loss in the year-earlier period.
+Added: For the nine months ended August 31, 2025, the decrease in KBHS’ income primarily reflected a loss in the fair value of IRLCs of $6.6 million in the current period, compared to a gain in the fair value of IRLCs of $3.8 million in the year-earlier period.
+Added: Also contributing to the year-over-year decrease in KBHS’ income for the three months and nine months ended August 31, 2025 was a decline in the number of loans originated, which reflected a decrease in the number of homes we delivered as well as a lower percentage of homebuyers using KBHS.
Further information regarding our investments in unconsolidated joint ventures, including KBHS, is provided in Note 9 – Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report.
1 unchanged sentence
Our income tax expense and effective tax rates were as follows (dollars in thousands):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 2025 2024
1 unchanged sentence
Effective tax rate 23.3 % 24.2 % 23.0 % 23.0 %
−Removed: Our effective tax rate for the three months ended May 31, 2025 increased from the year-earlier period, mainly due to a $1.7 million decrease in the Section 45L tax credits we recognized primarily from building energy-efficient homes and a $.4 million decrease in excess tax benefits related to stock-based compensation.
−Removed: For the six months ended May 31, 2025, our effective tax rate increased from the year-earlier period primarily due to a $4.1 million decrease in Section 45L tax credits and a $1.1 million decrease in excess tax benefits related to stock-based compensation.
−Removed: The year-over-year decreases in Section 45L tax credits for the three months and six months ended May 31, 2025 reflect the impact of guidance the IRS issued in 2023 that heightened the Section 45L energy-efficiency qualification standard for homes built in California relative to other states and our decision to build homes in many of our markets beginning in 2025 that are highly energy efficient and qualify for ENERGY STAR certification but do not qualify for Section 45L tax credits.
+Added: Our effective tax rate for the three months ended August 31, 2025 decreased from the year-earlier period, primarily reflecting a $1.4 million increase in Section 45L tax credits, mainly due to additional tax credits recognized based on certifications verified during the quarter, and a $.2 million increase in excess tax benefits related to stock-based compensation, partly offset by a $1.2 million increase in non-deductible executive compensation expense.
+Added: For the nine months ended August 31, 2025, our effective tax rate remained consistent with the year-earlier period.
+Added: IRS guidance issued in 2023 heightened the Section 45L energy-efficiency qualification standard for homes built in California relative to other states.
+Added: This guidance, along with our decision to build homes in many of our markets beginning in 2025 that are highly energy efficient and qualify for ENERGY STAR certification but do not qualify for Section 45L tax credits, impacted the tax credits we recognized for the nine months ended August 31, 2025 relative to the corresponding prior-year period.
We believe the additional costs necessary to satisfy the higher standards for some of our homes outweigh the possible benefits of meeting those standards for both our business and our buyers.
−Removed: H.R.1, the One Big Beautiful Bill Act, was signed into law on July 4, 2025, disallowing Section 45L tax credits for new energy-efficient homes delivered after June 30, 2026.
−Removed: As a result, our income tax expense and effective tax rate would not reflect a benefit from such tax credits as to homes delivered after that date.
+Added: On July 4, 2025, the OBBBA was signed into law.
+Added: Among its provisions is the repeal of Section 45L tax credits for new energy-efficient homes delivered after June 30, 2026.
+Added: As a result, beginning in our 2026 third quarter, our income tax expense and effective tax rate will no longer reflect a benefit from such tax credits as to homes delivered after the effective date.
+Added: We are currently evaluating other elements of the legislation, but do not expect it to have a material effect on our effective tax rate for the year ending November 30, 2025.
Further information regarding our income taxes is provided in Note 13 – Income Taxes in the Notes to Consolidated Financial Statements in this report.
2 unchanged sentences
We believe this non-GAAP financial measure is relevant and useful to investors in understanding our operations, and may be helpful in comparing us with other companies in the homebuilding industry to the extent they provide similar information.
−Removed: However, because it is not calculated in accordance with GAAP, this non-GAAP financial measure may not be completely comparable to other companies in the homebuilding industry and, thus, should not be considered in isolation or as
−Removed: an alternative to operating performance and/or financial measures prescribed by GAAP.
+Added: However, because it is not calculated in accordance with GAAP, this non-GAAP financial measure may not be completely comparable to other companies in the homebuilding industry and, thus, should not be considered in isolation or as an alternative to operating performance and/or financial measures prescribed by GAAP.
Rather, this non-GAAP financial measure should be used to supplement the most directly comparable GAAP financial measure in order to provide a greater understanding of the factors and trends affecting our operations.
1 unchanged sentence
The following table reconciles our housing gross profit margin calculated in accordance with GAAP to the non-GAAP financial measure of our adjusted housing gross profit margin (dollars in thousands):
−Removed: Three Months Ended May 31, Six Months Ended May 31,
+Added: Three Months Ended August 31, Nine Months Ended August 31,
2025 2024 2025 2024
32 unchanged sentences
• repurchases of our common stock.
−Removed: We ended the 2025 second quarter with total liquidity of $1.19 billion, including cash and cash equivalents and $881.7 million of available capacity under the Credit Facility, with $200.0 million of cash borrowings outstanding.
−Removed: Cash and cash equivalents
−Removed: totaled $308.9 million at May 31, 2025, compared to $598.0 million at November 30, 2024.
−Removed: Cash equivalents included in the total were $161.2 million at May 31, 2025 and $385.1 million at November 30, 2024, and were mainly invested in interest-bearing bank deposit accounts and money market funds.
−Removed: Based on our financial position as of May 31, 2025, and our business forecast as discussed below under “Outlook,” we have no material concerns related to our liquidity.
+Added: We ended the 2025 third quarter with total liquidity of $1.16 billion, including cash and cash equivalents and $831.7 million of available capacity under the Credit Facility, with $250.0 million of cash borrowings outstanding.
+Added: Cash and cash equivalents totaled $330.6 million at August 31, 2025, compared to $598.0 million at November 30, 2024.
+Added: Cash equivalents included in the total were $164.7 million at August 31, 2025 and $385.1 million at November 30, 2024, and were mainly invested in interest-bearing bank deposit accounts and money market funds.
+Added: Based on our financial position as of August 31, 2025, and our business forecast as discussed below under “Outlook,” we have no material concerns related to our liquidity.
We believe that our existing cash and cash equivalents, our anticipated cash flows from operations and amounts available under our Credit Facility will be sufficient to fund our anticipated operating and land-related investment needs for at least the next 12 months.
Cash Requirements .
−Removed: In the six months ended May 31, 2025, there have been no significant changes in our cash requirements from those reported in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended November 30, 2024.
+Added: In the nine months ended August 31, 2025, there have been no significant changes in our cash requirements from those reported in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended November 30, 2024.
Investments in Land and Land Development.
In the 2025 first quarter, our investments in land and land development increased 57% year over year to $920.3 million, which included our opportunistic purchase of two sizable land parcels in our Southwest homebuilding reporting segment to replace a large community that is approaching close out.
−Removed: As a result of the heightened first-quarter investment level, our existing land pipeline and softer market conditions, however, we are scaling back our investments in land and land development.
−Removed: Reflecting this shift, our investments for the 2025 second quarter decreased 23% year over year to $513.9 million.
−Removed: For the six months ended May 31, 2025, our investments in land and land development grew 14% year over year to $1.43 billion.
−Removed: Land acquisition expenditures, which are included in our investments in land and land development, increased to $661.9 million, or 46% of our total investments, for the six months ended May 31, 2025, from $491.9 million, or approximately 39% of our total investments, for the corresponding period of 2024.
−Removed: While we made investments in land and land development in each of our homebuilding reporting segments during the six months ended May 31, 2025 and 2024, approximately 49% and 53%, respectively, of these investments for each period were made in our West Coast homebuilding reporting segment.
−Removed: For the 2025 second half, although we expect a year-over-year decrease in our land-related investments, we intend to continue to invest in and develop land positions within attractive submarkets and selectively acquire or control additional land that meets our investment standards, depending significantly on market conditions and available opportunities that meet our investment return standards.
+Added: As a result of the heightened first-quarter investment level, our existing land pipeline and softer market conditions, however, we began scaling back our investments in land and land development in the 2025 second quarter.
+Added: In our 2025 third quarter, we maintained our land investments at a level that we believe will support our current growth projections.
+Added: Our investments for the 2025 third quarter decreased 39% year over year to $514.1 million.
+Added: For the nine months ended August 31, 2025, our investments in land and land development declined 7% year over year to $1.95 billion.
+Added: Land acquisition expenditures, which are included in our investments in land and land development, decreased to $771.3 million, or 40% of our total investments, for the nine months ended August 31, 2025, compared to $916.9 million, or approximately 44% of our total investments, for the corresponding period of 2024.
+Added: While we made investments in land and land development in each of our homebuilding reporting segments during the
+Added: nine months ended August 31, 2025 and 2024, approximately 51% and 55%, respectively, of these investments for each period were made in our West Coast homebuilding reporting segment.
+Added: For the 2025 fourth quarter, although we expect a year-over-year decrease in our land-related investments, we intend to continue to invest in and develop land positions within attractive submarkets and selectively acquire or control additional land that meets our investment standards, depending significantly on market conditions and available opportunities that meet our investment return standards.
The following table presents the number of lots we owned or controlled under land option contracts and other similar contracts and the carrying value of inventory by homebuilding reporting segment (dollars in thousands):
−Removed: May 31, 2025 November 30, 2024 Variance
+Added: August 31, 2025 November 30, 2024 Variance
Segment Lots Carrying Value Lots Carrying Value Lots Carrying Value
4 unchanged sentences
Total 65,251 $ 5,838,816 76,703 $ 5,528,020 (11,452) $ 310,796
−Removed: The carrying value of lots we owned or controlled under land option contracts and other similar contracts at May 31, 2025 increased 7% from November 30, 2024, reflecting land investments during the six months ended May 31, 2025, partly offset by homes delivered and our abandonment of 14,271 previously controlled lots.
−Removed: The number of lots we owned or controlled as of May 31, 2025 decreased 2% from November 30, 2024.
−Removed: The number of lots in inventory as of May 31, 2025 included 13,808 lots under contract where the associated deposits were refundable at our discretion, compared to 18,923 of such lots at November 30, 2024.
−Removed: Our lots controlled under land option contracts and other similar contracts as a percentage of total lots was 47% at May 31, 2025, compared to 49% at November 30, 2024.
+Added: The carrying value of lots we owned or controlled under land option contracts and other similar contracts at August 31, 2025 increased 6% from November 30, 2024, mainly due to land and land development investments during the nine months ended August 31, 2025.
+Added: The number of lots we owned or controlled as of August 31, 2025 decreased 15% from November 30, 2024, largely reflecting homes delivered and our strategic abandonment of 21,054 previously controlled lots, partly offset by newly optioned lots during the period.
+Added: The number of lots in inventory as of August 31, 2025 included 6,310 lots under contract where the associated deposits were refundable at our discretion, compared to 18,923 of such lots at November 30, 2024.
+Added: Our lots controlled under land option contracts and other similar contracts as a percentage of total lots was 42% at August 31, 2025, compared to 49% at November 30, 2024.
Generally, this percentage fluctuates with our decisions to control (or abandon) lots under land option contracts and other similar contracts or to purchase (or sell owned) lots based on available opportunities and our investment return standards.
3 unchanged sentences
In some cases, our decision to exercise a land option contract or other similar contract may be conditioned on the land seller obtaining necessary entitlements, such as zoning rights and environmental and development approvals, and/or physically developing the underlying land by a pre-determined date.
−Removed: We typically have the ability not to
−Removed: exercise our rights to the underlying land for any reason and, if applicable, forfeit our deposits without further penalty or obligation to the sellers.
−Removed: If we were to acquire all the land we had under land option contracts and other similar contracts at May 31, 2025, we estimate the remaining purchase price to be paid would be as follows:
+Added: We typically have the ability not to exercise our rights to the underlying land for any reason and, if applicable, forfeit our deposits without further penalty or obligation to the sellers.
+Added: If we were to acquire all the land we had under land option contracts and other similar contracts at August 31, 2025, we estimate the remaining purchase price to be paid would be as follows:
2025 – $392.5 million;
−Removed: 2026 – $1.03 billion;
2026 – $894.3 million;
1 unchanged sentence
2028 – $148.0 million;
−Removed: and thereafter – $9.2 million.
+Added: 2029 – $69.3 million;
+Added: and thereafter – $0.
The table below summarizes our cash and cash equivalents, and total liquidity (in thousands):
15 unchanged sentences
$ 1,943,582 $ 1,691,679 $ 251,903
−Removed: Our financial leverage, as measured by the ratio of debt to capital, increased 280 basis points to 32.2% at May 31, 2025, compared to 29.4% at November 30, 2024 due to cash borrowings outstanding under the Credit Facility.
+Added: Our financial leverage, as measured by the ratio of debt to capital, increased 380 basis points to 33.2% at August 31, 2025, compared to 29.4% at November 30, 2024 due to cash borrowings outstanding under the Credit Facility.
The ratio of debt to capital is calculated by dividing notes payable by capital (notes payable plus stockholders’ equity).
2 unchanged sentences
Under the LOC Facility, which expires on February 13, 2028, we may issue up to $100.0 million of letters of credit.
−Removed: As of May 31, 2025 and November 30, 2024, we had letters of credit outstanding under the LOC Facility of $74.4 million and $73.3 million, respectively.
+Added: As of August 31, 2025 and November 30, 2024, we had letters of credit outstanding under the LOC Facility of $62.4 million and $73.3 million, respectively.
Performance Bonds .
−Removed: As discussed in Note 16 – Commitments and Contingencies in the Notes to Consolidated Financial Statements in this report, we had $1.44 billion and $1.33 billion of performance bonds outstanding at May 31, 2025 and November 30, 2024, respectively.
+Added: As discussed in Note 16 – Commitments and Contingencies in the Notes to Consolidated Financial Statements in this report, we had $1.39 billion and $1.33 billion of performance bonds outstanding at August 31, 2025 and November 30, 2024, respectively.
Unsecured Revolving Credit Facility .
2 unchanged sentences
The amount of the Credit Facility available for cash borrowings and the issuance of letters of credit depends on the total cash borrowings and letters of credit outstanding under the Credit Facility and the maximum available amount under the terms of the Credit Facility.
−Removed: As of May 31, 2025, we had $200.0 million of cash borrowings and $8.3 million of letters of credit outstanding under the Credit Facility.
+Added: As of August 31, 2025, we had $250.0 million of cash borrowings and $8.3 million of letters of credit outstanding under the Credit Facility.
The Credit Facility is further described in Note 14 – Notes Payable in the Notes to Consolidated Financial Statements in this report.
10 unchanged sentences
In addition, under the Credit Facility and the Term Loan, our equity investments in joint ventures and non-guarantor subsidiaries and other unconsolidated entities as of the end of each fiscal quarter cannot exceed the sum of (a) $104.8 million and (b) 20% of consolidated tangible net worth.
−Removed: Further, for so long as we do not hold an investment grade rating, as defined under the Credit Facility and the Term Loan, the Credit Facility and the Term Loan do not permit our borrowing base indebtedness, which, subject to certain exceptions, is the aggregate principal amount of our and certain of our subsidiaries’ outstanding indebtedness for borrowed money and non-collateralized financial letters of credit, to be greater than our borrowing base (a measure relating to our inventory and unrestricted cash assets).
+Added: Further, for so long as we do not hold an investment grade rating, as defined under the Credit Facility and the Term Loan, the Credit Facility and the Term Loan do not permit our borrowing base
+Added: indebtedness, which, subject to certain exceptions, is the aggregate principal amount of our and certain of our subsidiaries’ outstanding indebtedness for borrowed money and non-collateralized financial letters of credit, to be greater than our borrowing base (a measure relating to our inventory and unrestricted cash assets).
The covenants and other requirements under the Credit Facility and the Term Loan represent the most restrictive covenants that we are subject to with respect to our notes payable.
−Removed: The following table summarizes the financial covenants and other requirements under the Credit Facility and the Term Loan, and our actual levels or ratios (as applicable) with respect to those covenants and other requirements, in each case as of May 31, 2025:
+Added: The following table summarizes the financial covenants and other requirements under the Credit Facility and the Term Loan, and our actual levels or ratios (as applicable) with respect to those covenants and other requirements, in each case as of August 31, 2025:
Financial Covenants and Other Requirements Covenant Requirement Actual
9 unchanged sentences
In addition, the indenture contains certain limitations related to mergers, consolidations, and sales of assets.
−Removed: As of May 31, 2025, we were in compliance with the applicable terms of all of our covenants and other requirements under the Credit Facility, the Term Loan, the senior notes, the indenture, the LOC Facility and the mortgages and land contracts due to land sellers and other loans.
+Added: As of August 31, 2025, we were in compliance with the applicable terms of all of our covenants and other requirements under the Credit Facility, the Term Loan, the senior notes, the indenture, the LOC Facility and the mortgages and land contracts due to land sellers and other loans.
Our ability to access the Credit Facility for cash borrowings and letters of credit and our ability to secure future debt financing depend, in part, on our ability to remain in such compliance.
Our ability to access the Credit Facility’s full borrowing capacity, as well as the LOC Facility’s full issuance capacity, also depends on the ability and willingness of the applicable lenders and financial institutions, including any substitute or additional lenders and financial institutions, to meet their commitments to fund loans, extend credit or provide payment guarantees to or for us under those instruments.
−Removed: There are no agreements that restrict our payment of dividends other than the Credit Facility and the Term Loan, which would restrict our payment of certain dividends, such as cash dividends on our common stock, if a default under the Credit Facility or
−Removed: the Term Loan exists at the time of any such payment, or if any such payment would result in such a default (other than dividends paid within 60 days after declaration, if there was no default at the time of declaration).
+Added: There are no agreements that restrict our payment of dividends other than the Credit Facility and the Term Loan, which would restrict our payment of certain dividends, such as cash dividends on our common stock, if a default under the Credit Facility or the Term Loan exists at the time of any such payment, or if any such payment would result in such a default (other than dividends paid within 60 days after declaration, if there was no default at the time of declaration).
Depending on available terms, we finance certain land acquisitions with purchase-money financing from land sellers or with other forms of financing from third parties.
−Removed: At May 31, 2025, we had outstanding mortgages and land contracts due to land sellers and other loans payable in connection with such financing of $3.1 million, secured primarily by the underlying property, which had an aggregate carrying value of $15.0 million.
+Added: At August 31, 2025, we had outstanding mortgages and land contracts due to land sellers and other loans payable in connection with such financing of $3.1 million, secured primarily by the underlying property, which had an aggregate carrying value of $24.4 million.
Senior Unsecured Term Loan .
3 unchanged sentences
As discussed in Note 9 – Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report, we have investments in unconsolidated joint ventures in various markets where our homebuilding operations are located.
−Removed: As of May 31, 2025, one of our unconsolidated joint ventures had borrowings outstanding under a term loan with a third-party lender and secured by the underlying property and related project assets.
−Removed: None of our other homebuilding unconsolidated joint ventures had outstanding debt at May 31, 2025.
+Added: As of August 31, 2025, one of our unconsolidated joint ventures had borrowings outstanding under a term loan with a third-party lender and secured by the underlying property and related project assets.
+Added: None of our other homebuilding unconsolidated joint ventures had outstanding debt at August 31, 2025.
Consolidated Cash Flows .
The following table presents a summary of net cash provided by (used in) our operating, investing and financing activities (in thousands):
−Removed: Six Months Ended May 31,
+Added: Nine Months Ended August 31,
Net cash provided by (used in):
6 unchanged sentences
Generally, our net operating cash flows fluctuate mainly based on changes in our inventories and our profitability.
−Removed: Our net cash used in operating activities for the six months ended May 31, 2025 mainly reflected a net increase in inventories of $390.6 million and a net decrease in accounts payable, accrued expenses and other liabilities of $68.3 million, partly offset by net income of $217.4 million and a net decrease in receivables of $20.7 million.
−Removed: In the six months ended May 31, 2024, our net cash provided by operating activities primarily reflected net income of $307.1 million, partly offset by a net increase in inventories of $195.3 million and a net decrease in accounts payable, accrued expenses and other liabilities of $40.6 million.
+Added: Our net cash provided by operating activities for the nine months ended August 31, 2025 mainly reflected net income of $327.3 million and a net decrease in receivables of $7.2 million, partly offset by a net increase in inventories of $330.0 million and a net decrease in accounts payable, accrued expenses and other liabilities of $63.8 million.
+Added: In the nine months ended August 31, 2024, our net cash provided by operating activities primarily reflected net income of $464.4 million and a net decrease in receivables of $6.2 million, partly offset by a net increase in inventories of $504.4 million and a net decrease in accounts payable, accrued expenses and other liabilities of $14.4 million.
Investing Activities .
−Removed: In the six months ended May 31, 2025, our net cash used in investing activities reflected $22.7 million used for net purchases of property and equipment, partially offset by a $2.3 million return of investments in unconsolidated joint ventures.
−Removed: In the six months ended May 31, 2024, the net cash used for investing activities included $19.8 million for net purchases of property and equipment and $10.9 million for contributions to unconsolidated joint ventures, partly offset by $1.7 million of proceeds from the sale of a privately held technology company in which we had an ownership interest.
+Added: In the nine months ended August 31, 2025, our net cash used in investing activities reflected $34.6 million used for net purchases of property and equipment and $10.6 million for contributions to unconsolidated joint ventures, partially offset by a $3.0 million return of investments in unconsolidated joint ventures.
+Added: In the nine months ended August 31, 2024, the net cash used in investing activities included $29.2 million for net purchases of property and equipment and $12.6 million for contributions to unconsolidated joint ventures, partly offset by a $2.0 million return of investments in unconsolidated joint ventures and $1.7 million of proceeds from the sale of a privately held technology company in which we had an ownership interest.
Financing Activities .
−Removed: In the six months ended May 31, 2025, cash was provided by $200.0 million of net borrowings under the Credit Facility and $.4 million of issuances of common stock under employee stock plans.
−Removed: The cash provided was partly offset by stock repurchases of $250.0 million, dividend payments on our common stock of $36.5 million, and tax payments associated with stock-based compensation awards of $15.9 million.
−Removed: In the six months ended May 31, 2024, our uses of cash included stock repurchases of $100.0 million, dividend payments on our common stock of $35.1 million, tax payments associated with stock-based compensation awards of $16.5 million, and payments on mortgages and land contracts due to land sellers and other loans of $1.7 million.
+Added: In the nine months ended August 31, 2025, cash was used for stock repurchases of $438.5 million, dividend payments on our common stock of $52.8 million, and tax payments associated with stock-based compensation awards of $15.9 million.
+Added: The cash used was partly offset by $250.0 million of net borrowings under the Credit Facility and $.7 million of issuances of common stock under employee stock plans.
+Added: In the nine months ended August 31, 2024, our uses of cash included stock repurchases of $250.0 million, dividend payments on our common stock of $53.5 million, tax payments associated with stock-based compensation awards of $16.5 million, and payments on mortgages and land contracts due to land sellers and other loans of $2.8 million.
The cash used was partially offset by $9.3 million of issuances of common stock under employee stock plans.
−Removed: In the 2025 and 2024 second quarters, our board of directors declared, and we paid, a quarterly cash dividend of $.25 per share.
−Removed: Quarterly dividends declared and paid during the six months ended May 31, 2025 and 2024 totaled $.50 and $.45 per share, respectively.
+Added: In the 2025 and 2024 third quarters, our board of directors declared, and we paid, a quarterly cash dividend of $.25 per share.
+Added: Quarterly dividends declared and paid during the nine months ended August 31, 2025 and 2024 totaled $.75 and $.70 per share, respectively.
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.
2 unchanged sentences
As of November 30, 2024, there was $700.0 million of remaining availability under this share repurchase authorization.
−Removed: In the 2025 first half, we repurchased 4.5 million shares of our common stock at a total cost of $250.0 million.
+Added: In the 2025 first nine months, we repurchased 7.8 million shares of our common stock at a total cost of $438.5 million.
Repurchases under the authorization may occur periodically through open market purchases, privately negotiated transactions or otherwise, with the timing and amount at management’s discretion and dependent on market, business and other conditions.
This share repurchase authorization will continue in effect until fully used or earlier terminated or suspended by our board of directors, and does not obligate us to purchase any shares.
−Removed: As of May 31, 2025, there was $450.0 million of remaining availability under this share repurchase authorization.
+Added: As of August 31, 2025, there was $261.5 million of remaining availability under this share repurchase authorization.
As of the date of this report, and as stated above, we believe we have adequate capital resources and sufficient access to external financing sources to satisfy our current and reasonably anticipated requirements for funds to conduct our operations and meet other needs in the ordinary course of our business.
−Removed: For the remainder of 2025, we expect to use or redeploy our cash resources or cash borrowings under the Credit Facility to support our business within the context of prevailing market conditions.
−Removed: During this time, we may also engage in capital markets, bank loan, project debt or other financial transactions, including the repurchase of debt or equity securities or potential new issuances of debt or equity securities to support our business needs.
+Added: For the 2025 fourth quarter, we expect to use or redeploy our cash resources or cash borrowings under the Credit Facility to support our business within the context of prevailing market conditions.
+Added: During this time, we may also engage in capital markets, bank loan, project debt or other financial transactions, including the repurchase of debt or equity securities or potential new issuances of debt or equity securities to support our
+Added: business needs.
The amounts involved in these transactions, if any, may be material.
2 unchanged sentences
Supplemental Guarantor Financial Information
−Removed: As of May 31, 2025, we had $1.34 billion in aggregate principal amount of outstanding senior notes, $200.0 million of borrowings outstanding under the Credit Facility and $360.0 million in aggregate principal amount of borrowings outstanding under the Term Loan.
+Added: As of August 31, 2025, we had $1.34 billion in aggregate principal amount of outstanding senior notes, $250.0 million of borrowings outstanding under the Credit Facility and $360.0 million in aggregate principal amount of borrowings outstanding under the Term Loan.
Our obligations to pay principal and interest on the senior notes and borrowings, if any, under the Credit Facility and the Term Loan are guaranteed on a joint and several basis by our Guarantor Subsidiaries.
18 unchanged sentences
Stockholders’ equity 3,539,212 3,729,310
−Removed: Six Months Ended
−Removed: Summarized Statement of Operations Data (in thousands)
+Added: Summarized Statement of Operations Data (in thousands) Nine Months Ended
+Added: August 31, 2025
Revenues $ 4,107,293
6 unchanged sentences
The preparation of our consolidated financial statements requires the use of judgment in the application of accounting policies and estimates of uncertain matters.
−Removed: There have been no significant changes to our critical accounting policies and estimates during the six months ended May 31, 2025 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended November 30, 2024.
+Added: There have been no significant changes to our critical accounting policies and estimates during the nine months ended August 31, 2025 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended November 30, 2024.
Recent Accounting Pronouncements
There are no recent accounting pronouncements that are expected to have a material impact on our consolidated financial statements.
−Removed: Although we continue to view the long-term outlook for the housing market favorably, we expect the softer market conditions that we experienced in the 2025 first half, driven primarily by housing affordability concerns, compounded by ongoing elevated mortgage interest rates and macroeconomic and geopolitical uncertainties, to persist for the remainder of the year.
−Removed: These conditions have precipitated a marked weakening in consumer confidence and caused homebuyers to hesitate on making purchase decisions, resulting in subdued demand during the Spring selling season relative to the past few years.
−Removed: Reflecting this environment, despite a healthy level of traffic in our communities, we experienced year-over-year decreases in our 2025 second quarter net orders of 13%, ending backlog of 24% and ending backlog value of 27%.
−Removed: The value of our net orders for the 2025 second quarter was down 21% year over year driven by the 13% decline in net orders and an 8% decrease in their average selling price to $465,600, largely due to price reductions we implemented beginning in mid-February 2025 in conjunction with our strategic focus on delivering the most compelling value to our buyers through pricing transparency and a simplified sales approach.
−Removed: As most of the net orders in the period since we implemented this approach have not yet closed, the associated pricing adjustments did not significantly affect our average selling price or housing gross profit margin on homes delivered for the three months and six months ended May 31, 2025.
−Removed: However, we expect it to moderate our average selling prices and housing gross profit margins for the remainder of the year.
+Added: We continue to view the long-term outlook for the housing market favorably, based on demographic trends and the continued undersupply of homes.
+Added: While market conditions were softer in the first three quarters of 2025 relative to the corresponding year-earlier periods, demand stabilized in the third quarter, which was sustained as the quarter progressed along with a moderation in mortgage interest rates.
+Added: Looking ahead to the fourth quarter, we expect ongoing affordability concerns and cautious consumer sentiment to continue to temper housing demand.
+Added: At the same time, we are encouraged by the moderation in mortgage interest rates in the third quarter and believe that continued moderation, if it occurs, should support greater demand for homeownership by improving affordability.
+Added: Reflecting the prevailing environment, despite a steady level of traffic in our communities, we experienced year-over-year decreases in our 2025 third quarter net orders of 4%, ending backlog of 24% and ending backlog value of 32%.
+Added: The value of our net orders for the 2025 third quarter was down 15% year over year driven by the decline in net orders and an 11% decrease in their average selling price to $445,600, largely due to price reductions we implemented beginning in mid-February 2025 as part of our strategic focus on delivering the most compelling value to our buyers through pricing transparency and a simplified sales approach.
+Added: We expect these price reductions to moderate our overall average selling price and housing gross profit margin on homes delivered for the 2025 fourth quarter.
In navigating the current environment, we intend to remain nimble, balancing pace and price at the community level to optimize our assets for the highest possible returns.
−Removed: For the remainder of 2025, we intend to continue to invest in and develop land
−Removed: positions within attractive submarkets and acquire or control additional land that meets our investment standards, depending significantly on market conditions and available opportunities.
−Removed: However, given our existing land pipeline, we are scaling back our investments in land and land development to align with current conditions.
−Removed: As a result, we anticipate a year-over-year decrease in our land-related investments in the 2025 second half.
+Added: In executing on this approach in the fourth quarter, which is a seasonally inelastic demand period in which other builders have typically pursued aggressive, incentive-oriented sales strategies, we plan to focus on generating net orders that maximize margins, returns and cash flow over volume.
+Added: We will also emphasize our Built to Order homes while continuing to sell through our inventory.
+Added: Our Built to Order homes are our core competency, a key competitive differentiator, and, particularly with the significant reduction in our build times since 2024, an appealing proposition to buyers.
+Added: In the 2025 fourth quarter, we expect to continue to invest in and develop land positions within attractive submarkets and acquire or control additional land that meets our investment standards, depending significantly on market conditions and available opportunities.
+Added: However, given our existing land pipeline, since the 2025 second quarter, we have been scaling back our investments in land and land development to align with current conditions.
+Added: As a result, we anticipate a year-over-year decrease in our land-related investments in the 2025 fourth quarter.
Additionally, we intend to continue to prioritize capital efficiency, developing lots where possible in smaller phases and balancing development with our starts pace to manage our inventory of finished lots.
At the same time, and consistent with our balanced approach to capital allocation, we plan to continue returning capital to our stockholders, primarily through additional share repurchases.
−Removed: As of May 31, 2025, we had $450.0 million of remaining availability under our current board of directors share repurchase authorization.
−Removed: This provides us the opportunity to repurchase our common stock in the remainder of 2025, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our common stock, and the housing market and general economic conditions.
−Removed: Subject to these factors, we expect to repurchase between $100.0 million and $200.0 million of our common stock in the 2025 third quarter.
−Removed: Considering the foregoing, we have revised our projections for 2025 that were made in our Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2025, and our present outlook for the 2025 third quarter and the 2025 full year as to certain metrics is as follows:
−Removed: 2025 Third Quarter
+Added: As of August 31, 2025, we had $261.5 million of remaining availability under our current board of directors share repurchase authorization.
+Added: This provides us the opportunity to repurchase
+Added: our common stock in the 2025 fourth quarter, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our common stock, and the housing market and general economic conditions.
+Added: Subject to these factors, we expect to repurchase between $50.0 million and $150.0 million of our common stock in our 2025 fourth quarter, and to continue repurchases in our 2026 fiscal year.
+Added: Considering the foregoing, we have revised our projections for 2025 that were made in our Quarterly Report on Form 10-Q for the quarterly period ended May 31, 2025.
+Added: Our present outlook for the 2025 fourth quarter and the 2025 full year as to certain metrics is as follows:
+Added: 2025 Fourth Quarter
• We expect to generate housing revenues in the range of $1.60 billion to $1.70 billion, compared to $1.99 billion for the corresponding 2024 period, and anticipate our average selling price to be between $465,000 and $475,000, compared to $501,000 in the year-earlier period.
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• We expect our housing gross profit margin will be in the range of 18.0% to 18.4%, assuming no inventory-related charges, compared to 20.9% for the corresponding 2024 quarter.
−Removed: • We expect our selling, general and administrative expenses as a percentage of housing revenues will be in the range of 10.3% to 10.7%, compared to 9.8% for the 2024 third quarter.
+Added: • We expect our selling, general and administrative expenses as a percentage of housing revenues to be in the range of 9.3% to 9.7%, compared to 9.4% for the 2024 fourth quarter.
• We expect our effective tax rate will be approximately 23.0%, compared to 23.1% for the year-earlier quarter.
−Removed: • We expect our ending community count to be roughly 250, compared to 254 for the corresponding 2024 quarter.
2025 Full Year
• We expect our housing revenues to be in the range of $6.10 billion to $6.20 billion, compared to $6.90 billion for 2024.
−Removed: • We expect our average selling price to be in the range of $480,000 to $490,000, compared to $486,900 for 2024.
−Removed: • We expect our homebuilding operating income margin as a percentage of revenues to be in the range of 8.6% to 9.0%, assuming no inventory-related charges, compared to 11.1% for 2024.
+Added: • We expect our average selling price will be approximately $483,000, compared to $486,900 for 2024.
+Added: • We expect our homebuilding operating income margin as a percentage of revenues to be approximately 8.9%, assuming no inventory-related charges, compared to 11.1% for 2024.
• We expect our housing gross profit margin to be in the range of 19.2% to 19.3%, assuming no inventory-related charges, compared to 21.1% for 2024.
• We expect our selling, general and administrative expenses as a percentage of housing revenues to be in the range of 10.2% to 10.3%, compared to 10.0% for 2024.
−Removed: • We expect our effective tax rate to be approximately 24.0%, compared to 23.0% for 2024.
+Added: • We expect our effective tax rate will be approximately 23.0%, essentially the same as 2024.
• We expect our ending community count to be approximately 260, compared to 258 for 2024.
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trade policy and recently implemented and proposed tariffs, and other countries’ countervailing measures, on raw building materials, such as steel, lumber, drywall and concrete, and/or finished products.
−Removed: Though certain tariffs and countervailing measures instituted in 2025
−Removed: have influenced pricing in adjacent sectors, we have not experienced significant cost increases or raw material/finished product availability constraints as of the date of this filing.
+Added: Though certain tariffs and countervailing measures instituted in 2025 have influenced pricing in adjacent sectors, we have not experienced significant cost increases or raw material/finished product availability constraints as of the date of this filing.
However, if the U.S.
or foreign governments take actions that cause tariff-related cost or availability pressures to escalate or expand, we could experience significant construction cost increases and/or supply chain disruptions that, in turn, would impact our business and our consolidated financial statements in future reporting periods.
−Removed: Additionally, while the Federal Reserve reduced interest rates three times in 2024, and may lower rates further in 2025 or later periods, it has since December 2024 kept rates unchanged and we cannot provide any assurance it will or that any interest rate reduction(s), or other monetary policy changes, will positively affect demand or our business, results of operations or consolidated financial statements.
−Removed: The potential extent and effect of these and other factors on our business is highly uncertain, unpredictable and outside our control, and our past performance, including in the 2025 second quarter, should not be considered indicative of our future results on any metric or set of metrics, including, but not limited to, our net orders, backlog, revenues, margins and returns.
+Added: Additionally, while the Federal Reserve reduced interest rates in September 2025, and may lower rates further in 2025 or later periods, we cannot provide any assurance it will or that any interest rate reduction(s), or other monetary policy changes, will positively affect demand or our business, results of operations or consolidated financial statements.
+Added: The potential extent and effect of these and other factors on our business is highly uncertain, unpredictable and outside our control, and our past performance, including in the three months and nine months ended August 31, 2025, should not be considered indicative of our future results on any metric or set of metrics, including, but not limited to, our net orders, backlog, revenues, margins and returns.
Forward-Looking Statements
45 unchanged sentences
• consumer interest in our new home communities and products, particularly from first-time homebuyers and higher-income consumers;
−Removed: • our ability to generate orders and convert our backlog of orders to home deliveries and revenues, particularly in key markets in California, and the costs and margin impact we incur from the incentives or concessions we may provide to buyers to do so;
+Added: • our ability to generate orders and convert our backlog of orders to home deliveries and revenues, particularly in key markets in California, and the costs and margin impact we incur from any incentives or concessions we may provide to buyers to do so;
• our ability to successfully implement our business strategies and achieve any associated financial and operational targets and objectives, including those discussed in this report or in any of our other public filings, presentations or disclosures;
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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.