9 unchanged sentences
• Homes closed decreased 22.3% to 4,685 homes from 6,028 homes.
−Removed: Including the bulk sale of 103 leased, single-family homes, homes closed decreased 8.9% to 6,131 homes from 6,729 homes.
−Removed: • Average sales price per home closed increased 4.2% to $365,394 from $350,510.
−Removed: • Gross margin as a percentage of home sales revenues increased to 24.2% from 23.0%.
−Removed: • Adjusted gross margin (non-GAAP) as a percentage of home sales revenues increased to 26.3% from 24.7%.
+Added: • Average sales price per home closed decreased 0.4% to $364,035 from $365,394.
+Added: • Gross margin as a percentage of home sales revenues decreased to 20.7% from 24.2%.
+Added: • Adjusted gross margin (non-GAAP) as a percentage of home sales revenues decreased to 24.0% from 26.3%.
• Net income before income taxes decreased 62.0% to $98.5 million from $258.9 million.
• Net income decreased 63.0% to $72.6 million from $196.1 million.
−Removed: • EBITDA (non-GAAP) as a percentage of home sales revenues increased to 13.8% from 12.6%.
−Removed: • Active communities at the end of 2024 increased 29.1% to 151 from 117.
+Added: • EBITDA (non-GAAP) as a percentage of home sales revenues decreased to 8.7% from 13.8%.
+Added: • Adjusted EBITDA (non-GAAP) as a percentage of home sales revenues decreased to 9.1% from 13.8%.
+Added: • Active communities at the end of 2025 decreased 4.6% to 144 from 151.
• Total owned and controlled lots decreased 14.2% to 60,842 lots at December 31, 2025 from 70,899 lots at December 31, 2024.
−Removed: For reconciliations of the non-GAAP financial measures of adjusted gross margin and EBITDA to the most directly comparable GAAP financial measures, please see “— Non-GAAP Measures .”
+Added: For reconciliations of the non-GAAP financial measures of adjusted gross margin, EBITDA and adjusted EBITDA to the most directly comparable GAAP financial measures, please see “— Non-GAAP Measures .”
Results of Operations
2 unchanged sentences
2025 2024 2023
−Removed: (dollars in thousands, except per share data and average home sales price)
Statement of Income Data:
+Added: (dollars in thousands, except per share data and average home sales price)
Home sales revenues $ 1,705,504 $ 2,202,598 $ 2,358,580
6 unchanged sentences
Income tax provision 25,934 62,842 62,527
−Removed: $ 196,071 $ 199,227 $ 326,567
+Added: Net income $ 72,552 $ 196,071 $ 199,227
Basic earnings per share $ 3.13 $ 8.33 $ 8.48
2 unchanged sentences
Average community count 144.4 130.5 103.9
−Removed: 130.5 103.9 91.9
Community count at end of period 144 151 117
Home closings 4,685 6,028 6,729
−Removed: 6,028 6,729 6,621
Average sales price per home closed $ 364,035 $ 365,394 $ 350,510
10 unchanged sentences
8.7 % 13.8 % 12.6 %
+Added: Adjusted EBITDA (4)
+Added: $ 155,068 $ 304,092 $ 297,530
+Added: Adjusted EBITDA margin % (2)(4)
+Added: 9.1 % 13.8 % 12.6 %
(1) Gross margin is home sales revenues less cost of sales.
1 unchanged sentence
(3) Adjusted gross margin is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance.
−Removed: We define adjusted gross margin as gross margin less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales.
−Removed: Our management believes this information is useful because it isolates the impact that capitalized interest and purchase accounting adjustments have on gross margin.
−Removed: However, because adjusted gross margin information excludes capitalized interest and purchase accounting adjustments, which have real economic effects and could impact our results, the utility of adjusted gross margin information as a measure of our operating performance may be limited.
−Removed: In addition, other companies may not calculate adjusted gross margin information in the same manner that we do.
−Removed: Accordingly, adjusted gross margin information should be considered only as a supplement to gross margin information as a measure of our performance.
+Added: We define gross margin excluding inventory impairment as gross margin less inventory impairment charges.
+Added: We define adjusted gross margin as gross margin excluding inventory impairment, less capitalized interest, and adjustments resulting from the application of purchase accounting included in the cost of sales.
+Added: Our management believes adjusted gross margin is useful because it isolates the impact that capitalized interest, purchase accounting adjustments and inventory impairment have on gross margin.
+Added: However, because adjusted gross margin excludes capitalized interest, purchase accounting adjustments and inventory impairment, which have real economic effects and could impact our results, the utility of adjusted gross margin as a measure of our operating performance may be limited.
+Added: In addition, other companies may not calculate adjusted gross margin in the same manner that we do.
+Added: Accordingly, adjusted gross margin should be considered only as a supplement to gross margin as a measure of our performance.
Please see “ —Non-GAAP Measures ” for a reconciliation of adjusted gross margin to gross margin, which is the GAAP financial measure that our management believes to be most directly comparable.
−Removed: (4) EBITDA is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance.
+Added: (4) EBITDA and adjusted EBITDA are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance.
We define EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization and (iv) capitalized interest charged to the cost of sales.
−Removed: Our management believes that the presentation of EBITDA provides useful information to investors regarding our results of operations because it assists both investors and management in analyzing and benchmarking the performance and value of our business.
−Removed: EBITDA provides an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization and items considered to be unusual or non-recurring.
−Removed: Accordingly, our management believes that this measure is useful for comparing general operating performance from period to period.
−Removed: Other companies may define this measure differently and, as a result, our measure of EBITDA may not be directly comparable to the measures of other companies.
−Removed: Although we use EBITDA as a financial measure to assess the performance of our business, the use of this measure is limited because it does not include certain material costs, such as interest and
−Removed: taxes, necessary to operate our business.
−Removed: EBITDA should be considered in addition to, and not as a substitute for, net income in accordance with GAAP as a measure of performance.
−Removed: Our presentation of EBITDA should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items.
−Removed: Our use of EBITDA is limited as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our results as reported under GAAP.
−Removed: Please see “ —Non-GAAP Measures ” for reconciliations of EBITDA to net income, which is the GAAP financial measure that our management believes to be most directly comparable.
+Added: We define adjusted EBITDA as EBITDA before inventory impairment, as applicable during a period.
+Added: Our management believes that the presentation of EBITDA and adjusted EBITDA provides useful information to investors regarding our results of operations because it assists both investors and management in analyzing and benchmarking the performance and value of our business.
+Added: EBITDA and adjusted EBITDA provide indicators of
+Added: general economic performance that are not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization and items considered to be unusual or non-recurring.
+Added: Accordingly, management believes that these measures are useful for comparing general operating performance from period to period.
+Added: Other companies may define these measures differently and, as a result, our measures of EBITDA and adjusted EBITDA may not be directly comparable to the measures of other companies.
+Added: Although we use EBITDA and adjusted EBITDA as financial measures to assess the performance of our business, the use of these measures is limited because they do not include certain material costs, such as interest and taxes, necessary to operate our business.
+Added: EBITDA and adjusted EBITDA should be considered in addition to, and not as substitutes for, net income in accordance with GAAP as a measure of performance.
+Added: Our presentation of EBITDA and adjusted EBITDA should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items.
+Added: Our use of EBITDA and adjusted EBITDA is limited as an analytical tool, and you should not consider these measures in isolation or as substitutes for analysis of our results as reported under GAAP.
+Added: Please see “ —Non-GAAP Measures ” for reconciliations of EBITDA and adjusted EBITDA to net income, which is the GAAP financial measure that our management believes to be most directly comparable.
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
−Removed: Our home sales revenues, home closings, average sales price per home closed (ASP), average community count and average monthly absorption rate by reportable segment for the years ended December 31, 2024 and 2023, and our community count as of December 31, 2024 and 2023, were as follows (revenues in thousands):
+Added: Our home sales revenues, home closings, average sales price per home closed (ASP), average community count and average monthly absorption rate by reportable segment for the years ended December 31, 2025 and 2024, and our community count by reportable segment as of December 31, 2025 and 2024, were as follows (revenues in thousands):
Year Ended December 31, 2025 As of December 31, 2025
−Removed: Reportable Segment Revenues Home Closings ASP Average Community Count Average
−Removed: Absorption Rate Community Count at End of Period
+Added: Reportable Segment Revenues Home Closings ASP Average Community Count Average Monthly Absorption Rate Community Count at End of Period
Central $ 419,240 1,340 $ 312,866 47.5 2.4 48
5 unchanged sentences
Year Ended December 31, 2024 As of December 31, 2024
−Removed: Reportable Segment Revenues Home Closings ASP Average Community Count Average
−Removed: Absorption Rate Community Count at End of Period
+Added: Reportable Segment Revenues Home Closings ASP Average Community Count Average Monthly Absorption Rate Community Count at End of Period
Central $ 564,608 1,757 $ 321,348 44.8 3.3 50
6 unchanged sentences
Home sales revenues for the year ended December 31, 2025 were $1.7 billion, a decrease of $497.1 million, or 22.6%, from $2.2 billion for the year ended December 31, 2024.
−Removed: The decrease in home sales revenues was primarily due to a 10.4% decrease in homes closed, offset by an increase in the average sales price per home closed, during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
−Removed: We closed 6,028 homes during 2024, as compared to 6,729 homes closed during 2023.
+Added: The decrease in home sales revenues was primarily due to a 22.3% decrease in the number of homes closed and a decrease in the average sales price per home closed during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
The overall decrease in home closings was a result of a lower absorption rate, partially offset by a higher average community count, during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
−Removed: Our average community count at December 31, 2024 increased to 130.5 from 103.9 at December 31, 2023.
−Removed: The overall increase in average community count is related to timing associated with new community openings, offset by the close out of some communities and transition between certain active communities during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
−Removed: The average sales price per home closed during the year ended December 31, 2024 was $365,394, an increase of $14,885, or 4.2%, from the average sales price per home closed of $350,510 for the year ended December 31, 2023.
−Removed: The increase in the average sales price per home closed was primarily due to geographic mix and a favorable pricing environment.
+Added: The overall increase in average community count related to timing associated with new community openings, offset by the close out of some communities and transition between certain active communities during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
+Added: The average sales price per home closed during the year ended December 31, 2025 was $364,035, a decrease of $1,359, or 0.4%, from the average sales price per home closed of $365,394 for the year ended December 31, 2024.
+Added: The decrease in the average sales price per home closed was primarily due to an increase in wholesale home closings and to a lesser extent geographic mix.
The overall decrease in absorption rate generally relates to the impact of ongoing affordability constraints, new community openings, and the overall increase in community count.
−Removed: Included within our home sales revenues for the year ended December 31, 2024 was $164.1 million in wholesale revenues resulting from 552 home closings, representing 9.2% of the 6,028 total homes closed during the year ended December 31, 2024.
−Removed: Included within our home sales revenues for the year ended December 31, 2023 was $202.3 million in wholesale revenues resulting from 679 home closings, representing 10.1% of the 6,729 total homes closed during the year ended December 31, 2023.
−Removed: • Home sales revenues in our Central reportable segment decreased by $166.1 million, or 22.7%, during the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to a 21.6% decrease in the number of homes closed and a slight decrease in the average sales price per home closed.
−Removed: The decrease in home closings was primarily the result of a lower absorption rate, partially offset by an increase in the average community count.
−Removed: • Home sales revenues in our Southeast reportable segment decreased by $18.6 million, or 3.3%, during the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to a 4.7% decrease in the number of homes closed, offset by a slight increase in the average sales price per home closed.
−Removed: The decrease in home closings was the result of a lower absorption rate, partially offset by a 9.7% increase in the average community count.
−Removed: • Home sales revenues in our Northwest reportable segment increased by $7.2 million, or 2.9%, during the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to an 8.8% increase in the average sales price per home closed, partially offset by a 5.5% decrease in the number of homes closed.
−Removed: The decrease in the number of homes closed was the result of a lower absorption rate, offset by a 40.2% increase in the average community count.
−Removed: • Home sales revenues in our West reportable segment increased by $91.6 million, or 24.0%, during the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to a 14.9% increase in the number of homes closed and a 7.9% increase in the average sales price per home closed.
−Removed: The increase in home closings was the result of a 55.0% increase in the average community count, partially offset by a lower absorption rate.
+Added: Included within our home sales revenues for the year ended December 31, 2025 was $230.3 million in wholesale revenues resulting from 737 home closings, representing 15.7% of the 4,685 total number of homes closed during the year ended December 31, 2025.
+Added: Included within our home sales revenues for the year ended December 31, 2024 was $164.1 million in wholesale revenues resulting from 552 home closings, representing 9.2% of the 6,028 total number of homes closed during the year ended December 31, 2024.
+Added: The increase in home closings as a percentage of revenues through our wholesale channel was primarily related to higher demand from our wholesale channel customers during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
+Added: • Home sales revenues in our Central reportable segment decreased by $145.4 million, or 25.7%, during the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to a 23.7% decrease in the number of homes closed and a 2.6% decrease in the average sales price per home closed.
+Added: The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
+Added: • Home sales revenues in our Southeast reportable segment decreased by $66.0 million, or 12.3%, during the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to a 12.5% decrease in the number of homes closed, partially offset by an increase in the average sales price per home closed.
+Added: The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
+Added: • Home sales revenues in our Northwest reportable segment decreased by $69.4 million, or 26.9%, during the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to a 20.5% decrease in the number of homes closed and an 8.0% decrease in the average sales price per home closed.
+Added: The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
+Added: • Home sales revenues in our West reportable segment decreased by $85.4 million, or 18.1%, during the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to a 22.9% decrease in the number of homes closed, partially offset by a 6.2% increase in the average sales price per home closed.
+Added: The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
• Home sales revenues in our Florida reportable segment decreased by $130.8 million, or 35.5%, during the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to a 35.7% decrease in the number of homes closed, partially offset by a 0.4% increase in the average sales price per home closed.
−Removed: The decrease in home closings was the result of a lower absorption rate, partially offset by a 17.2% increase in the average community count.
+Added: The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
Cost of Sales and Gross Margin (home sales revenues less cost of sales).
−Removed: Cost of sales decreased for the year ended December 31, 2024 to $1.7 billion, a decrease of $147.1 million, or 8.1%, from $1.8 billion for the year ended December 31, 2023.
−Removed: This overall decrease was primarily due to a 10.4% decrease in homes closed.
+Added: Cost of sales for the year ended December 31, 2025 was $1.4 billion, a decrease of $317.4 million, or 19.0%, from $1.7 billion for the year ended December 31, 2024.
+Added: This overall decrease was primarily due to a 22.3% decrease in the number of homes closed.
Gross margin for the year ended December 31, 2025 was $353.5 million, a decrease of $179.7 million, or 33.7%, from $533.3 million for the year ended December 31, 2024.
−Removed: Gross margin as a percentage of home sales revenues was 24.2% for the year ended December 31, 2024 and 23.0% for the year ended December 31, 2023.
−Removed: The increase in gross margin as a percentage of home sales revenues was primarily due to a higher average sales price per home closed, partially offset by a combination of higher lot costs and higher capitalized interest as a percentage of revenue as well as the impact of sales incentives offered during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
+Added: Gross margin as a percentage of home sales revenues (inclusive of an inventory impairment charge) was 20.7% for the year ended December 31, 2025 and 24.2% for the year ended December 31, 2024.
+Added: The decrease in gross margin as a percentage of home sales revenues during the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily due to a lower average sales price per home closed, a higher number of wholesale closings, higher house costs, higher lot costs, higher capitalized interest and higher indirect overhead as a percentage of revenue, as well as an inventory impairment charge of $6.7 million, of which $3.9 million was related to our Florida reportable segment and $2.8 million was related to our Central reportable segment.
+Added: This was partially offset by a decrease in warranty related costs as well as a decrease in sales incentives offered during the year ended December 31, 2025.
Selling Expenses.
−Removed: Selling expenses for the year ended December 31, 2024 were $200.0 million, an increase of $8.4 million, or 4.4%, from $191.6 million for the year ended December 31, 2023.
−Removed: The increase in selling expenses was primarily due to an increase in advertising expense and an increase in personnel costs as a result of an increase in communities, offset by a decrease in sales commissions.
−Removed: Sales commissions decreased to $95.8 million for the year ended December 31, 2024 from $102.8 million for the year ended December 31, 2023 primarily due to a decrease in home sales revenues during 2024 as compared to 2023.
+Added: Selling expenses for the year ended December 31, 2025 were $162.1 million, a decrease of $37.8 million, or 18.9%, from $200.0 million for the year ended December 31, 2024.
+Added: The decrease in selling expenses was primarily due to a decrease in the number of homes closed for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
+Added: Sales commissions decreased to $66.4 million during the year ended December 31, 2025 from $95.8 million for the year ended December 31, 2024, primarily due to a decrease in the number of homes closed.
Selling expenses as a percentage of home sales revenues were 9.5% and 9.1% for the years ended December 31, 2025 and 2024, respectively.
−Removed: The increase in selling expenses as a percentage of home sales revenues was primarily due to higher advertising expenses, fewer wholesale home closings and higher other personnel expenses incurred during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
+Added: The increase in selling expenses as a percentage of home sales revenues was primarily due to a decrease in home sales revenues during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
General and Administrative.
−Removed: General and administrative expenses for the year ended December 31, 2024 were $121.2 million, an increase of $3.8 million, or 3.3%, from $117.4 million for the year ended December 31, 2023.
−Removed: The increase in the amount of general and administrative expenses was primarily a result of increased indirect overhead expenses and professional fees, partially offset by a decrease in payroll related costs for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
+Added: General and administrative expenses for the year ended December 31, 2025 were $111.6 million, a decrease of $9.6 million, or 7.9%, from $121.2 million for the year ended December 31, 2024.
+Added: The decrease in general and administrative expenses was primarily due to a decrease in bonuses and indirect overhead costs, partially offset by
+Added: an increase in other general and administrative expense.
General and administrative expenses as a percentage of home sales revenues were 6.5% and 5.5% for the years ended December 31, 2025 and 2024, respectively.
−Removed: The increase in general and administrative expenses as a percentage of home sales revenues reflects our increased personnel and associated overhead costs, partially offset by a decrease in payroll related costs during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
−Removed: Other Income.
−Removed: Other income, net of other expenses was $46.8 million for the year ended December 31, 2024, an increase of $18.3 million from $28.5 million for the year ended December 31, 2023.
−Removed: The increase in other income, net of other expenses, primarily reflects gains realized from the bulk sale of 103 leased, single-family homes and the sale of residential lots for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
+Added: The increase in general and administrative expenses as a percentage of home sales revenues was primarily due to lower home sales revenues during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
+Added: Other Income, Net.
+Added: Other income, net of other expenses was $18.7 million for the year ended December 31, 2025, a decrease of $28.1 million from $46.8 million for the year ended December 31, 2024.
+Added: The decrease in other income, net of other expenses, primarily reflected the decrease in the gain on sale of assets, income associated with our investment in unconsolidated entities, and the decrease in interest income.
Operating Income and Net Income before Income Taxes.
1 unchanged sentence
Net income before income taxes for the year ended December 31, 2025 was $98.5 million, a decrease of $160.4 million, or 62.0%, from $258.9 million for the year ended December 31, 2024.
−Removed: The overall decreases in operating income and net income before income taxes were primarily due to overall lower home closings at a lower absorption rate, and higher advertising and other costs associated with the increase in average community count during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
−Removed: The following reportable segments contributed to net income before income taxes during the year ended December 31, 2024 as follows:
+Added: The overall decreases in operating income and net income before income taxes were primarily due to overall lower home closings at a lower absorption rate, lower gross margin, the increase in other costs associated with the increase in average community count, and an inventory impairment charge during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
+Added: Our reportable segments contributed to net income before income taxes during the year ended December 31, 2025 as follows:
Central - $23.8 million, or 24.1%;
4 unchanged sentences
Income Taxes .
−Removed: Income tax provision for the year ended December 31, 2024 was $62.8 million, an increase of $0.3 million, or 0.5%, from income tax provision of $62.5 million for the year ended December 31, 2023.
−Removed: The increase in our effective tax rate to 24.3% from 23.9% was primarily due to an increase in the rate for the deductions in excess of compensation cost for share-based payments, and the rate for state income taxes, net of the federal benefit, offset by a decrease in the rate for the compensation limitation under Section 162(m) of the Internal Revenue Code, as amended, and the retroactive extension of the federal energy efficient homes tax credits for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
+Added: Income tax provision for the year ended December 31, 2025 was $25.9 million, a decrease of $36.9 million, or 58.7%, from income tax provision of $62.8 million for the year ended December 31, 2024.
+Added: The decrease in our income tax provision was primarily due to the overall decrease in net income before income taxes.
+Added: The increase in our effective tax rate to 26.3% for the year ended December 31, 2025 from 24.3% for the year ended December 31, 2024 was primarily a result of an increase in the rate for state income taxes, net of the federal benefit, the compensation cost in excess of deductions for share-based payments, and the compensation limitation under Section 162(m) of the Internal Revenue Code, as amended.
Net income for the year ended December 31, 2025 was $72.6 million, a decrease of $123.5 million, or 63.0%, from $196.1 million for the year ended December 31, 2024.
−Removed: The decrease in net income was primarily attributed to overall lower homes closed and lower home sales revenues, partially offset by a higher gross margin during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
+Added: The decrease in net income was primarily attributed to overall lower number of homes closed, lower home sales revenues and gross margin, as well as an inventory impairment charge during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Non-GAAP Measures
−Removed: In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”), we have provided information in this Annual Report on Form 10-K relating to adjusted gross margin and EBITDA.
−Removed: Adjusted Gross Margin
−Removed: Adjusted gross margin is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance.
−Removed: We define adjusted gross margin as gross margin less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales.
−Removed: Our management believes this information is useful because it isolates the impact that capitalized interest and purchase accounting adjustments have on gross margin.
−Removed: However, because adjusted gross margin information excludes capitalized interest and purchase accounting adjustments, which have real economic effects and could impact our results, the utility of adjusted gross margin information as a measure of our operating performance may be limited.
−Removed: In addition, other companies may not calculate adjusted gross margin information in the same manner that we do.
−Removed: Accordingly, adjusted gross margin information should be considered only as a supplement to gross margin information as a measure of our performance.
−Removed: The following table reconciles adjusted gross margin to gross margin, which is the GAAP financial measure that our management believes to be most directly comparable (dollars in thousands):
+Added: In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”), we have provided information in this Annual Report on Form 10-K relating to adjusted net income, adjusted basic earnings per share, adjusted diluted earnings per share, gross margin excluding inventory impairment, adjusted gross margin, EBITDA, adjusted EBITDA, and net debt to capital ratio.
+Added: Gross Margin Excluding Inventory impairment and Adjusted Gross Margin
+Added: Gross margin excluding inventory impairment and adjusted gross margin are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance.
+Added: We define gross margin excluding inventory impairment as gross margin less inventory impairment charges.
+Added: We define adjusted gross margin as gross margin excluding inventory impairments, less capitalized interest, and adjustments resulting from the application of purchase accounting included in the cost of sales.
+Added: Our management believes gross margin excluding inventory impairment and adjusted gross margin are useful because they isolate the impact that capitalized interest, purchase accounting adjustments, and inventory impairment have on gross margin.
+Added: However, because gross margin excluding inventory impairment and adjusted gross margin exclude capitalized interest, purchase accounting adjustments, and inventory impairment, which have real economic effects and could impact our results, the utility of gross margin excluding inventory impairment and adjusted gross margin as measures of our operating performance may be limited.
+Added: In addition, other companies may not calculate gross margin excluding inventory impairment and adjusted gross margin in the same manner that we do.
+Added: Accordingly, gross margin excluding inventory impairment and adjusted gross margin should be considered only as supplements to gross margin as a measure of our performance.
+Added: The following table reconciles gross margin excluding inventory impairment and adjusted gross margin to to gross margin, which is the GAAP financial measure that our management believes to be most directly comparable (dollars in thousands):
Year Ended December 31,
3 unchanged sentences
Gross margin $ 353,546 $ 533,288 $ 542,187
+Added: Inventory impairment
+Added: Gross margin excluding inventory impairment $ 360,263 $ 533,288 $ 542,187
Capitalized interest charged to cost of sales 45,543 42,071 33,368
4 unchanged sentences
20.7 % 24.2 % 23.0 %
+Added: Gross margin % excluding inventory impairment (2)
+Added: 21.1 % 24.2 % 23.0 %
Adjusted gross margin % (2)
2 unchanged sentences
(2) Calculated as a percentage of home sales revenues.
−Removed: EBITDA is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance.
+Added: EBITDA and Adjusted EBITDA
+Added: EBITDA and adjusted EBITDA are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance.
We define EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization and (iv) capitalized interest charged to the cost of sales.
−Removed: Our management believes that the presentation of EBITDA provides useful information to investors regarding our results of operations because it assists both investors and management in analyzing and benchmarking the performance and value of our business.
−Removed: EBITDA provides an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization and items considered to be unusual or non-recurring.
−Removed: Accordingly, our management believes that this measure is useful for comparing general operating performance from period to period.
−Removed: Other companies may define this measure differently and, as a result, our measure of EBITDA may not be directly comparable to the measures of other companies.
−Removed: Although we use EBITDA as a financial measure to assess the performance of our business, the use of this measure is limited because it does not include certain material costs, such as interest and taxes, necessary to operate our business.
−Removed: EBITDA should be considered in addition to, and not as a substitute for, net income in accordance with GAAP as a measure of performance.
−Removed: Our presentation of EBITDA should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items.
−Removed: Our use of EBITDA is limited as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our results as reported under GAAP.
+Added: We define adjusted EBITDA as EBITDA before inventory impairment, as applicable during a period.
+Added: Our management believes that the presentation of EBITDA and adjusted EBITDA provides useful information to investors regarding our results of operations because it assists both investors and management in analyzing and benchmarking the performance and value of our business.
+Added: EBITDA and adjusted EBITDA provide indicators of general economic performance that are not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization and items considered to be unusual or non-recurring.
+Added: Accordingly, our management believes that these measures are useful for comparing general operating performance from period to period.
+Added: Other companies may define these measures differently and, as a result, our measures of EBITDA and adjusted EBITDA may not be directly comparable to the measures of other companies.
+Added: Although we use EBITDA and adjusted EBITDA as financial measures to assess the performance of our business, the use of these measures is limited because they do not include certain material costs, such as interest and taxes, necessary to operate our business.
+Added: EBITDA and adjusted EBITDA should be considered in addition to, and not as substitutes for, net income in accordance with GAAP as a measure of performance.
+Added: Our presentation of EBITDA and adjusted EBITDA should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items.
+Added: Our use of EBITDA and adjusted EBITDA is limited as an analytical tool, and you should not consider these measures in isolation or as substitutes for analysis of our results as reported under GAAP.
Some of these limitations are:
−Removed: (i) it does not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments, including for purchase of land;
−Removed: (ii) it does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;
−Removed: (iii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and EBITDA does not reflect any cash requirements for such replacements or improvements;
−Removed: (iv) it does not adjust for all non-cash income or expense items that are reflected in our statements of cash flows;
−Removed: (v) it does not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations;
−Removed: (vi) other companies in our industry may calculate it differently than we do, limiting its usefulness as a comparative measure.
−Removed: Because of these limitations, our EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations.
−Removed: We compensate for these limitations by using our EBITDA along with other comparative tools, together with GAAP measures, to assist in the evaluation of operating performance.
+Added: (i) they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments, including for purchase of land;
+Added: (ii) they do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;
+Added: (iii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and EBITDA and adjusted EBITDA do not reflect any cash requirements for such replacements or improvements;
+Added: (iv) they do not adjust for all non-cash income or expense items that are reflected in our statements of cash flows;
+Added: (v) they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations;
+Added: (vi) other companies in our industry may calculate them differently than we do, limiting their usefulness as a comparative measure.
+Added: Because of these limitations, our EBITDA and adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations.
+Added: We compensate for these limitations by using our EBITDA and adjusted EBITDA along with other comparative tools, together with GAAP measures, to assist in the evaluation of operating performance.
These GAAP measures include operating income, net income and cash flow data.
−Removed: We have significant uses of cash flows, including capital expenditures, interest payments and other non-recurring charges, which are not reflected in our EBITDA.
−Removed: EBITDA is not intended as an alternative to net income as an indicator of our operating performance, as an alternative to any other measure of performance in conformity with GAAP or as an alternative to cash flows as a measure of liquidity.
−Removed: You should therefore not place undue reliance on our EBITDA calculated using these measures.
−Removed: The following table reconciles EBITDA to net income, which is the GAAP financial measure that our management believes to be most directly comparable (dollars in thousands):
+Added: We have significant uses of cash flows, including capital expenditures, interest payments and other non-recurring charges, which are not reflected in our EBITDA and adjusted EBITDA.
+Added: EBITDA and adjusted EBITDA are not intended as alternatives to net income as indicators of our operating performance,as alternatives to any other measure of performance in conformity with GAAP or as alternatives to cash flows as a measure of liquidity.
+Added: You should therefore not place undue reliance on our EBITDA and adjusted EBITDA calculated using these measures.
+Added: The following table reconciles EBITDA and adjusted EBITDA to net income, which is the GAAP financial measure that our management believes to be most directly comparable (dollars in thousands):
Year Ended December 31,
1 unchanged sentence
Net income $ 72,552 $ 196,071 $ 199,227
−Removed: Income tax provision 62,842 62,527 91,549
+Added: Income tax provision (benefit) 25,934 62,842 62,527
Depreciation and amortization 4,322 3,108 2,408
1 unchanged sentence
EBITDA $ 148,351 $ 304,092 $ 297,530
+Added: Inventory impairment 6,717 — —
+Added: Adjusted EBITDA $ 155,068 $ 304,092 $ 297,530
EBITDA margin % (1)
8.7 % 13.8 % 12.6 %
+Added: Adjusted EBITDA margin % (1)
+Added: 9.1 % 13.8 % 12.6 %
(1) Calculated as a percentage of home sales revenues.
+Added: Net Debt to Capital Ratio
+Added: Net debt to capital ratio is a non-GAAP financial measure used by management as a supplemental measure in understanding the leverage employed in our operations and as an indicator of our ability to obtain financing.
+Added: We define net debt to capital ratio as net debt (which is total debt minus cash and cash equivalents) divided by net debt plus total equity.
+Added: Our management believes that the presentation of net debt to capital ratio provides useful information to investors regarding our financial leverage and our ability to meet long-term obligations.
+Added: By excluding cash and cash equivalents from total debt, the ratio offers a clearer view of our capital structure and financial flexibility.
+Added: Our management uses this metric to monitor our capital efficiency and to evaluate the effectiveness of our capital management strategies over time.
+Added: Other companies may define this measure differently and, as a result, our measure of net debt to capital ratio may not be directly comparable to the measures of other companies.
+Added: The following table reconciles net debt to capital ratio (a non-GAAP financial measure) to debt to capital ratio, which is the GAAP financial measure that our management believes to be most directly comparable (dollars in thousands):
+Added: Total debt (Notes payable)
+Added: $ 1,656,803 $ 1,480,718
+Added: 2,096,289 2,037,228
+Added: Total capital
+Added: $ 3,753,092 $ 3,517,946
+Added: Debt to capital ratio
+Added: 44.1 % 42.1 %
+Added: Total debt (Notes payable)
+Added: $ 1,656,803 $ 1,480,718
+Added: Cash and cash equivalents
+Added: 61,247 53,197
+Added: $ 1,595,556 $ 1,427,521
+Added: 2,096,289 2,037,228
+Added: Total net capital
+Added: $ 3,691,845 $ 3,464,749
+Added: Net debt to capital ratio (1)
+Added: 43.2 % 41.2 %
+Added: (1) Net debt to capital ratio is calculated as net debt (which is total debt minus cash and cash equivalents) divided by net debt plus total equity.
+Added: Adjusted Net Income, Adjusted Basic Earnings per Share, and Adjusted Diluted Earnings per Share
+Added: Adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance.
+Added: We define adjusted net income as net income less inventory impairment charges.
+Added: We define adjusted basic earnings per share as adjusted net income divided by weighted average basic shares outstanding.
+Added: We define adjusted diluted earnings per share as adjusted net income divided by weighted average diluted shares outstanding.
+Added: Our management believes that the presentation of adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share provides useful information to investors because such measures isolate the impact that inventory impairment charges have on net income and earnings per share.
+Added: However, because adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share exclude the inventory impairment charge, which has real economic effects and could impact the results, the utility of adjusted net income.
+Added: adjusted basic earnings per share, and adjusted diluted earnings per share as measures of our operating performance may be limited.
+Added: In addition, other companies may not calculate adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share in the same manner that we do.
+Added: Accordingly, adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share should be considered only as supplements to net income, basic earnings per share, and earnings per share, respectively, as measures of our performance.
+Added: The following table reconciles adjusted net income to net income, which is the GAAP financial measure that our management believes to be most directly comparable, and adjusted basic earnings per share and adjusted diluted earnings per share are calculated by dividing adjusted net income by basic or diluted weighted average shares outstanding, respectively (dollars in thousands, except earnings per share):
+Added: Three Months Ended December 31, Year Ended December 31,
+Added: 2025 2024 2025 2024
+Added: Net income $ 17,321 $ 50,870 $ 72,552 $ 196,071
+Added: Basic weighted average number of shares outstanding 23,085,786 23,497,275 23,188,965 23,529,724
+Added: Basic earnings per share $ 0.75 $ 2.16 $ 3.13 $ 8.33
+Added: Diluted weighted average number of shares outstanding 23,178,160 23,620,777 23,254,595 23,610,457
+Added: Diluted earnings per share $ 0.75 $ 2.15 $ 3.12 $ 8.30
+Added: Net income $ 17,321 $ 50,870 $ 72,552 $ 196,071
+Added: Inventory Impairment 6,717 — 6,717 —
+Added: Tax impact due to above non-GAAP reconciling item (1,641) — (1,641) —
+Added: Adjusted net income $ 22,397 $ 50,870 $ 77,628 $ 196,071
+Added: Basic weighted average number of shares outstanding 23,085,786 23,497,275 23,188,965 23,529,724
+Added: Adjusted basic earnings per share $ 0.97 $ 2.16 $ 3.35 $ 8.33
+Added: Diluted weighted average number of shares outstanding 23,178,160 23,620,777 23,254,595 23,610,457
+Added: Adjusted diluted earnings per share $ 0.97 $ 2.15 $ 3.34 $ 8.30
We sell our homes under standard purchase contracts, which generally require a homebuyer to pay a deposit at the time of signing the purchase contract.
3 unchanged sentences
If we determine that the homebuyer is not qualified to obtain mortgage financing or is not otherwise financially able to purchase the home, we will terminate the purchase contract.
−Removed: If a purchase contract has not been cancelled or terminated within 14 days after the purchase contract has been signed, then the homebuyer has met the preliminary criteria to obtain mortgage financing.
+Added: If a purchase contract has not been cancelled or terminated within 14 days after the purchase contract has been signed, then we have assumed the homebuyer will meet the preliminary criteria to obtain mortgage financing.
Only purchase contracts that are signed by homebuyers who have met the preliminary criteria to obtain mortgage financing are included in new (gross) orders.
Our “backlog” consists of homes that are under a purchase contract that has been signed by homebuyers who have met the preliminary criteria to obtain mortgage financing but have not yet closed and wholesale contracts with varying terms.
−Removed: Since our business model is generally based on building move-in ready homes before a purchase contract is signed, the majority of our homes in backlog are currently under construction or complete.
+Added: business model is generally based on building move-in ready homes before a purchase contract is signed, the majority of our homes in backlog are currently under construction or complete.
Ending backlog represents the number of homes in backlog from the previous period plus the number of net orders (new orders for homes less cancellations) generated during the current period minus the number of homes closed during the current period.
4 unchanged sentences
Backlog may be impacted by customer cancellations for various reasons that are beyond our control, and in light of our minimal required deposit, there is little negative impact to the potential homebuyer from the cancellation of the purchase contract.
−Removed: Our net orders decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 due to the increase in new communities which typically open at a slower sales pace and lower overall demand compared to 2023.
−Removed: Our wholesale orders increased 143.3% to 146 units at December 31, 2024 from 60 units at December 31, 2023.
−Removed: The number of homes in our backlog at December 31, 2024 increased 1.5% compared to December 31, 2023.
+Added: Net orders for the year ended December 31, 2025 were 5,549 homes, a decrease of 8.1% from 6,037 homes for the year ended December 31, 2024, reflecting continued affordability pressures and higher mortgage rates.
+Added: The cancellation rate increased to 32.8% in 2025 from 22.8% in 2024, primarily due to financing challenges and buyer sensitivity to market conditions.
+Added: Ending backlog grew to 1,394 homes, with an aggregate value of $501.3 million at December 31, 2025, compared to 599 homes valued at $236.5 million at December 31, 2024, which represented increases of 132.7% in units and 112.0% in value.
+Added: The increases were driven by slower conversion of homes under contract to closings and a higher volume of homes under contract at year end.
+Added: A significant portion of backlog relates to homes further along in construction and expected to close in the near term.
+Added: However, conversion to revenue remains subject to construction timing, buyer financing, and incentive levels.
+Added: Elevated cancellation rates and changes in market conditions could affect the pace of backlog conversion and future gross margins.
As of the dates set forth below, our net orders, cancellation rate and ending backlog homes and value were as follows (dollars in thousands):
−Removed: Backlog Data Year Ended December 31,
+Added: Year Ended December 31,
+Added: Backlog Data 2025 (4)
Net orders (1)
3 unchanged sentences
Ending backlog – homes (3)
+Added: 1,394 599 590
Ending backlog – value (3)
15 unchanged sentences
We generally close more homes in our second, third and fourth quarters.
−Removed: Thus, our revenues may fluctuate on a quarterly basis and we may have higher capital requirements in our second, third and fourth quarters in order to maintain our inventory levels.
+Added: Thus, our revenues may fluctuate on a quarterly basis and we may have higher
+Added: capital requirements in our second, third and fourth quarters in order to maintain our inventory levels.
Our revenues and capital requirements are generally similar across our second, third and fourth quarters.
9 unchanged sentences
In the later stages of an active community, cash inflows may exceed home sales revenues reported for financial statement purposes, as the costs associated with home and land construction were previously incurred.
+Added: Net Debt to Capital Ratio
+Added: As of December 31, 2025, our net debt to capital ratio was 43.2%.
+Added: We use this ratio as a supplemental measure of financial leverage and capital efficiency.
+Added: This ratio is calculated as net debt (which is total debt minus cash and cash equivalents) divided by net debt plus total equity.
+Added: Our net debt to capital ratio reflects our balanced approach to financing growth while maintaining liquidity.
+Added: We continue to monitor leverage levels in light of evolving market conditions to keep an eye on capital efficiency and shareholder value.
+Added: At December 31, 2025, we were in compliance with all of the covenants contained in the Credit Agreement (as defined herein), including minimum tangible net worth, maximum leverage ratio, minimum liquidity amount, and minimum EBITDA to interest expense ratio, and with all of the covenants contained in the LGI Living Loan Agreement (as defined herein).
+Added: As of December 31, 2025, $273.6 million was available to borrow under the Credit Agreement, providing ample liquidity to support operations and growth initiatives.
Short-term Liquidity and Capital Resources
−Removed: We generally rely on our ability to finance our operations by generating operating cash flows and borrowing under the Credit Agreement (as defined below) to adequately fund our short-term working capital obligations and to purchase land and other assets, develop lots and homes and repurchase shares of our common stock.
+Added: We generally rely on our ability to finance our operations by generating operating cash flows and borrowing under the Credit Agreement to adequately fund our short-term working capital obligations and to purchase land and other assets, develop lots and homes and repurchase shares of our common stock.
As needed, we will consider accessing the debt and equity capital markets as part of our ongoing financing strategy.
6 unchanged sentences
We believe that we will be able to fund our long-term liquidity needs with cash generated from operations and cash expected to be available to borrow under the Credit Agreement or through accessing debt or equity capital, as needed, although no assurance can be provided that such additional debt or equity capital will be available when needed or on terms that we find attractive.
−Removed: Additionally, we plan to further utilize,
−Removed: on a limited and strategic basis, land banking financing arrangements to maximize long-term liquidity for lot development projects where we have sufficient finished lot availability in certain markets.
+Added: Additionally, we may further utilize, on a limited and strategic basis, land banking financing arrangements to maximize long-term liquidity for lot development projects where we have sufficient finished lot availability in certain markets.
To the extent these sources of capital are insufficient to meet our needs, we may also conduct additional public or private offerings of our securities, refinance our indebtedness, or dispose of certain assets to fund our operating activities and capital needs.
19 unchanged sentences
Revolving Credit Facility
−Removed: On October 9, 2024, we entered into a Fifth Amendment to Fifth Amended and Restated Credit Agreement with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent (the “Fifth Amendment”), which amended the Fifth Amended and Restated Credit Agreement, dated as of April 28, 2021, with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent (as amended to date, including the Fifth Amendment, the “Credit Agreement”).
+Added: On August 1, 2025, we entered into a Letter Agreement with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent (the “Letter Agreement Amendment”), which amended the Fifth Amended and Restated Credit Agreement, dated as of April 28, 2021, with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent (as amended to date, including the Letter Agreement Amendment, the “Credit Agreement”).
The Credit Agreement provides for a $1.1825 billion revolving credit facility, which can be increased at the request of the Company by up to $95.0 million, subject to the terms and conditions of the Credit Agreement.
−Removed: The Credit Agreement matures on April 28, 2028 with respect to $1.085 billion, or 90.0%, of the $1.205 billion of commitments thereunder and on April 28, 2025 with respect to 10.0% of the commitments thereunder.
+Added: The Credit Agreement matures on April 28, 2029 with respect to $972.5 million, or 82.2%, of the $1.1825 billion of commitments thereunder and on April 28, 2028 with respect to 17.8% of the commitments thereunder.
Before each anniversary of the Credit Agreement, we may request a one-year extension of its maturity date.
2 unchanged sentences
The borrowing base primarily consists of a percentage of commercial land, land held for development, lots under development and finished lots held by the Company and its subsidiaries that guarantee the obligations under the Credit Agreement.
−Removed: As of December 31, 2024, the borrowing base under the Credit Agreement was $1.205 billion, of which the
−Removed: maximum available to borrow was $1.8 billion.
+Added: As of December 31, 2025, the borrowing base under the Credit Agreement was $1.9 billion, of which the maximum available to borrow was $1.9 billion.
As of December 31, 2025, borrowings under the Credit Agreement and the outstanding principal amount of the 2028 Senior Notes, the 2029 Senior Notes and the 2032 Senior Notes totaled approximately $1.6 billion, $19.5 million of letters of credit were outstanding and $273.6 million was available to borrow under the Credit Agreement.
−Removed: For a further description of the Credit Agreement, please refer to Note 6 , “Notes Payable” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
+Added: Borrowings under the Credit Agreement bear interest, payable monthly in arrears, at the Company’s option, at either (1) the Adjusted Term SOFR (defined as a term SOFR that is based on a fixed 1, 3 or 6 month interest period, as selected by the
+Added: Company, plus a 10, 15 or 25 basis point adjustment, respectively), which rate is subject to a 50 basis point floor, plus an applicable margin ranging from 145 basis points to 210 basis points (the “Applicable Margin”) based on the Company’s leverage ratio as determined in accordance with a pricing grid, or (2) the Base Rate (defined as a term SOFR that is based on a daily variable 1 month interest period plus a 10 basis point adjustment), subject to a 50 basis point floor, plus the Applicable Margin.
+Added: At December 31, 2025, the Applicable Margin was 1.85%, and SOFR was 3.72%, subject to the 0.50% SOFR floor as included in the Credit Agreement.
+Added: The Credit Agreement contains various financial covenants, including a minimum tangible net worth, a maximum leverage ratio, a minimum liquidity amount and a minimum EBITDA to interest expense ratio.
+Added: The Credit Agreement contains various covenants that, among other restrictions, (i) limit the amount of our additional debt and our ability to make certain investments and (ii) restrict the repurchase of shares and payment of dividends through December 31, 2026.
+Added: At December 31, 2025, we were in compliance with all of the covenants contained in the Credit Agreement.
+Added: LGI Living Loan Agreement
+Added: On July 23, 2025, the Company’s indirect, wholly owned special purpose subsidiary LGI Living - SFR 1, LLC (“LGI Living SFR”) entered into a Loan Agreement (the “LGI Living Loan Agreement”) with Evergreen Residential Capital, LLC, as lender.
+Added: The LGI Living Loan Agreement provides for a secured non-recourse loan for up to $50.0 million, which can be increased at the request of LGI Living SFR by up to$75.0 million (for a total of $125.0 million), subject to the terms and conditions of the LGI Living Loan Agreement.
+Added: As of December 31, 2025, the total amount of borrowings outstanding under the LGI Living Loan Agreement was $50.0 million.
+Added: The loan matures on July 8, 2030 and bears interest at a rate of 6.433% per annum, which may be adjusted in connection with an increase in the amount of the loan.
+Added: The loan is unconditionally guaranteed as to payment and performance by the Company under a limited recourse guaranty with respect to (i) certain losses and liabilities to the extent such losses or liabilities are actually incurred by the lender and (ii) the entire amount of the loan upon the occurrence of certain events.
+Added: The LGI Living Loan Agreement requires that the Company, as guarantor, maintain (i) liquidity of not less than 15% of the loan amount and (ii) maintain net worth in excess of 50% of the loan amount.
+Added: The loan is unconditionally guaranteed as to payment and performance by LGI Living - ER FIN, LLC, as the direct owner of the equity interests in LGI Living SFR, but recourse under such guaranty is limited to LGI Living - ER FIN, LLC’s equity interests in LGI Living SFR, which are pledged as collateral for the loan.
+Added: The loan is also secured by a security interest in all assets of LGI Living SFR, including a mortgage lien on certain of LGI Living SFR’s real property.
+Added: The LGI Living Loan Agreement includes certain restrictive covenants that may limit LGI Living SFR’s ability to, among other things, incur additional indebtedness or make certain investments.
+Added: The LGI Living Loan Agreement contains representations and warranties, affirmative covenants, and events of default, all of which the Company believes are customary for special purpose subsidiary real estate secured loan agreements.
+Added: If an event of default exists under the LGI Living Loan Agreement, the lender will be able to accelerate the maturity of the loan and exercise other rights and remedies.
+Added: At December 31, 2025, we were in compliance with all of the covenants contained in the LGI Living Loan Agreement.
Senior Notes Offering
1 unchanged sentence
persons in transactions outside the United States pursuant to Regulation S (“Regulation S”) under the Securities Act.
−Removed: Interest on the 2032 Senior Notes accrues at a rate of 7.000% per annum, payable semi-annually in arrears on May 15 and November 15 of each year, commencing on May 15, 2025.
+Added: Interest on the 2032 Senior Notes accrues at a rate of 7.000% per annum, payable semi-annually in arrears on May 15 and November 15 of each year.
The 2032 Senior Notes mature on November 15, 2032.
2 unchanged sentences
persons in transactions outside the United States pursuant to Regulation S.
−Removed: Interest on the 2028 Senior Notes accrues at a rate of 8.750% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2024.
+Added: Interest on the 2028 Senior Notes accrues at a rate of 8.750% per annum, payable semi-annually in arrears on June 15 and December 15 of each year.
The 2028 Senior Notes mature on December 15, 2028.
3 unchanged sentences
Interest on the 2029 Senior Notes accrues at a rate of 4.000% per annum, payable semi-annually in arrears on January 15 and July 15 of each year.
−Removed: The 2029 Senior Notes mature on July 15, 2029.
+Added: The 2029 Senior Notes mature on
+Added: July 15, 2029.
The terms of the 2029 Senior Notes are governed by an Indenture, dated as of July 6, 2018, and Third Supplemental Indenture thereto, dated as of June 28, 2021, as may be supplemented from time to time, among us, our subsidiaries that guarantee our obligations under the Credit Agreement and Wilmington Trust, National Association, as trustee.
9 unchanged sentences
In February 2022, our Board of Directors (the “Board”) approved a $200.0 million increase to our previously authorized stock repurchase program, pursuant to which we may purchase up to $550.0 million of shares of our common stock through open market transactions, privately negotiated transactions or otherwise in accordance with applicable laws.
−Removed: During the years ended December 31, 2024 and 2022, we repurchased 307,867 shares of our common stock for $30.8 million to be held as treasury stock, excluding the excise taxes accrued on our share repurchases as a result of the IRA 2022 and 892,916 shares of our common stock for $95.1 million to be held as treasury stock, respectively.
−Removed: During the year ended December 31, 2023, we did not repurchase any shares of our common stock.
−Removed: A total of 3,247,339 shares of our common stock has been repurchased since our stock repurchase program commenced.
+Added: During the three months ended December 31, 2025, we did not repurchase any shares of our common stock.
+Added: During the year ended December 31, 2025, we repurchased 409,253 shares of our common stock at a total cost, including commissions and excise taxes, of $23.6 million, to be held as treasury stock.
+Added: During the three months ended December 31, 2024, we did not repurchase any shares of our common stock.
+Added: During the year ended December 31, 2024, we repurchased 307,867 shares of our common stock at a total cost, including commissions and excise taxes, of $30.8 million, to be held as treasury stock.
+Added: A total of 3,656,592 shares of our common stock has been repurchased since our stock repurchase program commenced in 2018.
As of December 31, 2025, we may purchase up to $157.3 million of shares of our common stock under our stock repurchase program.
−Removed: The timing, amount and other terms and conditions of any repurchases
−Removed: of shares of our common stock under our stock repurchase program will be determined by our management at its discretion based on a variety of factors, including the market price of our common stock, corporate considerations, general market and economic conditions and legal requirements.
+Added: The timing, amount and other terms and conditions of any repurchases of shares of our common stock under our stock repurchase program will be determined by our management at its discretion based on a variety of factors, including the market price of our common stock, corporate considerations, general market and economic conditions and legal requirements.
Our stock repurchase program may be modified, discontinued or suspended at any time.
2 unchanged sentences
The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development.
−Removed: Net cash used in operating activities during the year ended December 31, 2024 was primarily driven by cash outflow from the $365.9 million increase in the net change in real estate inventory, which was primarily related to our homes under construction and land acquisitions and development level of activity, partially offset by net income of $196.1 million.
+Added: Net cash used in operating activities during the year ended December 31, 2025 was primarily driven by cash outflow of $257.0 million in real estate inventory, which was primarily related to our homes under construction and land acquisitions and development level of activity, an $18.8 million decrease in the net change in accrued expenses and other liabilities, a net decrease in accounts payable, partially offset by the $60.4 million increase in the net change in other assets and the $16.1 million increase in the net change related to pre-acquisition costs and deposits, inventory impairment, accounts receivable and compensation expense for equity awards.
Net cash used in operating activities was $143.7 million during the year ended December 31, 2024.
The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development.
−Removed: Net cash used in operating activities during the year ended December 31, 2023 was primarily driven by cash outflow from the $255.5 million increase in the net change in real estate inventory, which was primarily related to our homes under construction and land acquisitions and development level of activity, partially offset by net income of $199.2 million, as well as the $16.2 million increase and $18.3 million decrease in the net change in accounts receivable, and accrued expenses and other liabilities, respectively.
+Added: Net cash used in operating activities during the year ended December 31, 2024 was primarily driven by cash outflow from the $365.9 million decrease in the net change in real estate inventory, which was primarily related to our homes under construction and land acquisitions and development level of activity and partially offset by net income of $196.1 million .
Investing Activities
−Removed: Net cash provided by investing activities was $15.6 million during the year ended December 31, 2024, primarily due to the sale of property and equipment, offset by additional investments in unconsolidated entities.
−Removed: Net cash used in investing activities was $13.6 million during the year ended December 31, 2023, primarily due to additional investments in unconsolidated entities, net of return of capital from unconsolidated entities.
+Added: Net cash provided by investing activities was $27.9 million during the year ended December 31, 2025, primarily due to $24.7 million in proceeds from the sale of property and equipment and $8.6 million in return of capital, partially offset by an additional $4.5 million investment in unconsolidated entities.
+Added: Net cash used in investing activities was $15.6 million during the year ended December 31, 2024, primarily due to additional investment in unconsolidated entities.
Financing Activities
+Added: Net cash provided by financing activities was $120.1 million during the year ended December 31, 2025, primarily driven by $668.7 million of borrowings under the Credit Agreement, offset by $493.0 million of repayments on our credit agreement then in effect and payments of $29.9 million related to a financing arrangement with a third-party land banker.
+Added: In addition, during the year ended December 31, 2025, we repurchased $23.6 million of shares of our common stock under our stock repurchase program to be held as treasury stock.
Net cash provided by financing activities was $132.3 million during the year ended December 31, 2024, primarily driven by $592.3 million of borrowings under our credit agreement then in effect and $400.0 million of proceeds from the offering of our 2032 Senior Notes.
−Removed: These were partially offset by $760.0 million of repayments on our credit agreement then in effect, net of payments of $67.9 million related to a financing arrangement with a third-party land banker and by the $31.0 million in payments for shares of our common stock under our stock repurchase program.
−Removed: Net cash provided by financing activities was $87.6 million during the year ended December 31, 2023, primarily driven by $887.3 million of borrowings under our credit agreement then in effect and $50.4 million of proceeds related to financing arrangements with a third-party land banker.
−Removed: These were partially offset by $746.0 million of repayments on our credit agreement then in effect, net of payments of $95.0 million related to a financing arrangement with a third-party land banker.
+Added: These were partially offset by $760.0 million of repayments on our credit agreement then in effect and payments of $67.9 million related to a financing arrangement with a third-party land banker.
+Added: In addition, during the year ended December 31, 2024, we repurchased $31.0 million of shares of our common stock under our stock repurchase program to be held as treasury stock.
Our business can be adversely impacted by inflation, primarily from higher land, financing, labor, material and construction costs.
−Removed: In addition, inflation can lead to higher mortgage rates, which can significantly affect the affordability of mortgage financing to homebuyers.
+Added: In addition, inflation can lead to higher mortgage interest rates, which can significantly affect the affordability of mortgage financing to homebuyers.
See “Industry and Economic Risks—Inflation could adversely affect our business and financial results” in Item 1A.
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Pre-acquisition costs, land development and other common costs that benefit the entire community, including field construction supervision and related direct overhead, are allocated to individual lots or homes, as appropriate, on a pro rata basis which we believe approximates the costs that would be determined using an allocation method based on relative sales values since the individual lots or homes within a community are similar in value.
−Removed: We use judgements and assumptions to recognize the appropriate amount of cost of sales by estimating the total land development costs.
+Added: We use judgments and assumptions to recognize the appropriate amount of cost of sales by estimating the total land development costs.
We use estimates which are affected by changes to the land development project’s schedule;
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Impairment of Real Estate Inventories
−Removed: Real estate inventory is evaluated for indicators of impairment by each community during each reporting period.
−Removed: In conducting our review for indicators of impairment on a community level, we evaluate, among other things, the margins on homes that have been closed, communities with slow moving inventory, projected margins on future home sales over the life of the community, and the estimated fair value of the land.
−Removed: We pay particular attention to communities in which inventory is moving at a slower than anticipated absorption pace and communities whose average sales prices and/or margins are trending downward and are anticipated to continue to trend downward.
−Removed: Due largely to the relatively short development and construction periods for our communities and our growth, we have experienced limited circumstances during 2024, 2023 or 2022 that are indicators of impairment.
−Removed: Our future sales and margins may be impacted by our inability to realize continued growth, increased cost associated with holding and developing land, local economic factors, pressure on home sales prices, increased carrying costs, and insufficient access to labor and materials at reasonable costs.
−Removed: For individual communities with indicators of impairment, we perform additional analysis to estimate the community’s undiscounted future cash flows.
−Removed: If the estimated undiscounted future cash flows are greater than the carrying value of the asset, no impairment adjustment is required.
−Removed: If the undiscounted cash flows are less than the asset’s carrying value, the asset is impaired and is written down to its fair value.
−Removed: We estimate the fair value of communities using a discounted cash flow model;
−Removed: changes to the expected cash flows may lead to changes in the outcome of our impairment analysis.
+Added: Real estate inventory is stated at cost unless the carrying value is not recoverable, in which case the inventory is written down to its fair value in accordance with ASC 360.
+Added: At December 31, 2025, real estate inventory totaled $3.5 billion.
+Added: During the year ended December 31, 2025, we recorded $6.7 million of impairment charges related to four communities out of 144 active communities.
+Added: We evaluate each community for indicators of impairment on a quarterly basis.
+Added: Our review considers, among other factors:
+Added: gross margins realized on homes closed;
+Added: trends in average sales prices and sales incentives;
+Added: absorption rates;
+Added: estimated costs to complete development and construction;
+Added: projected margins on remaining homes to be sold;
+Added: and local market and economic conditions.
+Added: Our consolidated gross margin for the year was 20.7%.
+Added: Because community-level cash flow projections are highly sensitive to changes in sales prices, incentives, construction costs and absorption rates, relatively moderate changes in these assumptions can materially impact projected profitability and the outcome of our impairment analysis.
+Added: When indicators of impairment are present, we compare the carrying value of the community to its estimated undiscounted future cash flows.
+Added: When estimating undiscounted cash flows, we make assumptions regarding expected home sales revenue, including the number of homes available, pricing, and incentives offered by us or by other builders in comparable communities;
+Added: costs incurred to date and expected future costs such as land development, home construction, interest, indirect construction, and selling and marketing;
+Added: the impact of any alternative product offerings on sales, pricing, or building costs;
+Added: and potential alternative uses of the property.
+Added: If the carrying value exceeds estimated undiscounted cash flows, the community is written down to its estimated fair value, which is determined using a discounted cash flow model and probability-weighted analysis.
+Added: The most significant judgments in this analysis relate to projected sales prices, gross margins, and absorption rates.
+Added: These assumptions are based on current market conditions, recent operating results and our expectations of future market performance.
+Added: A sustained decline in home sales prices, an increase in incentives, higher construction or development costs, or a slowdown in absorption rates could result in additional impairment charges in future periods.
We purchase both finished lots and land to be developed.
Generally, the life cycle of a community ranges from two to five years.
−Removed: For projects we develop, the period between the acquisition of a raw piece of land and completion of the development of that land generally ranges from two to three years.
−Removed: During the life of a project, a constructed home is used as
−Removed: the community information center and then sold.
+Added: For projects we develop, the period between the acquisition of a raw piece of land and completion of the development of that land generally ranges from two to four years.
+Added: During the life of a project, a constructed home is used as the community information center and then sold.
Actual individual community lives will vary based on the size of the community, the sales absorption rate, and whether the property was purchased as raw land or finished lots.
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Warranty Reserves
−Removed: We have provided homebuyers with a one-year warranty on the house and a ten-year limited warranty for major defects in structural elements.
+Added: We generally provide homebuyers with a one-year warranty on the house and a limited warranty for major defects in structural elements, such as framing components and foundation systems, typically ranging from six to ten years depending on the applicable state.
Estimated future direct warranty costs are assessed monthly on a consistent basis as part of our policy and accrued and charged to cost of sales in connection with our home sales.
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Our warranty reserves are reviewed quarterly to assess the reasonableness and adequacy and we make adjustments to the balance of the pre-existing reserves, as needed, to reflect changes in trends and historical data as information becomes available.
−Removed: We increased our warranty reserve by $2.5 million, $2.9 million and $2.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.
+Added: We decreased our
+Added: warranty reserve by $1.6 million for the year ended December 31, 2025 and increased our warranty reserve by $2.5 million and $2.9 million for the years ended December 31, 2024 and 2023, respectively.
We utilize the liability method of accounting for income taxes.
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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.