What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-20 compared with 2025-02-26 · 170 added, 127 removed, 627 unchanged (32% of the section changed)

33 unchanged sentences

Specifically, the land development cost estimate is sensitive to significant management assumptions, including the project’s schedule, estimated cost of labor, materials and subcontractors and potential reimbursements.

Auditing the Company's land development cost measurement was complex and subjective due to the significant estimation required to determine the costs to complete land development.

How We Addressed the Matter in Our Audit We obtained an understanding and tested the design and operating effectiveness of the Company's process and controls over its land development cost measurement, including controls over management's review of the estimated costs to complete.

2 unchanged sentences

and performed observational procedures to understand the completeness of development activities included in the estimated land development costs.

In addition, we performed lookback analyses to historical actual costs to assess management’s ability to estimate and performed sensitivity analyses of the significant assumptions to evaluate the changes in total costs of land development that would result from changes in these assumptions.

In addition, we performed look back analyses to historical actual costs to assess management’s ability to estimate and performed sensitivity analyses of the significant assumptions to evaluate the changes in total costs of land development that would result from changes in these assumptions.

/s/ Ernst & Young LLP

4 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(In thousands, except share data)

Cash and cash equivalents $ 61,247 $ 53,197

16 unchanged sentences

Retained earnings 2,158,339 2,085,787

Treasury stock, at cost, 4,247,339 shares and 3,939,472 shares, respectively

Treasury stock, at cost, 4,656,592 shares as of December 31, 2025 and 4,247,339 shares as of December 31, 2024

( 409,635 ) ( 385,996 )

5 unchanged sentences

(In thousands, except share and per share data)

For the Year Ended December 31,

Year Ended December 31,

2025 2024 2023

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BALANCE—December 31, 2022 27,245,278 $ 272 $ 306,673 $ 1,690,489 $ ( 355,022 ) $ 1,642,412

26,963,915 $ 269 $ 291,577 $ 1,363,922 $ ( 259,920 ) $ 1,395,848

Net income — — — 199,227 — 199,227

Stock repurchase — — — — ( 95,102 ) ( 95,102 )

Restricted stock units granted for accrued annual bonuses — — 206 — — 206

2 unchanged sentences

BALANCE—December 31, 2023 27,521,120 $ 275 $ 321,062 $ 1,889,716 $ ( 355,022 ) $ 1,856,031

27,245,278 $ 272 $ 306,673 $ 1,690,489 $ ( 355,022 ) $ 1,642,412

Net income — — — 196,071 — 196,071

Restricted stock units granted for accrued annual bonuses — — 786 — — 786

Stock repurchase including excise tax — — — — ( 30,974 ) ( 30,974 )

Compensation expense for equity awards — — 10,483 — — 10,483

1 unchanged sentence

BALANCE—December 31, 2024 27,644,413 $ 276 $ 337,161 $ 2,085,787 $ ( 385,996 ) $ 2,037,228

27,521,120 $ 275 $ 321,062 $ 1,889,716 $ ( 355,022 ) $ 1,856,031

Net income — — — 72,552 — 72,552

Stock repurchase including excise tax

— — — — ( 30,974 ) ( 30,974 )

Restricted stock units granted for accrued annual bonuses — — 540 — — 540

Stock repurchase including excise tax — — — — ( 23,639 ) ( 23,639 )

Compensation expense for equity awards — — 6,001 — — 6,001

1 unchanged sentence

BALANCE— December 31, 2025 27,789,678 $ 277 $ 347,307 $ 2,158,339 $ ( 409,635 ) $ 2,096,289

27,644,413 $ 276 $ 337,161 $ 2,085,787 $ ( 385,996 ) $ 2,037,228

See accompanying notes to the consolidated financial statements.

10 unchanged sentences

Depreciation and amortization 4,322 3,108 2,408

Gain on sale of interest rate cap — — ( 7,055 )

Gain on disposal of assets ( 2,598 ) ( 14,013 ) ( 1,634 )

Compensation expense for equity awards 6,001 10,483 8,926

Inventory impairment 6,717 — —

Deferred income taxes ( 633 ) ( 1,108 ) ( 1,977 )

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Proceeds from sale of stock, net of offering expenses 3,607 4,831 5,260

Stock repurchases ( 30,974 ) — ( 95,102 )

Stock repurchase ( 23,639 ) ( 30,974 ) —

Net cash provided by financing activities 120,085 132,338 87,596

Net increase (decrease) in cash and cash equivalents 4,219 16,980 ( 18,516 )

Cash and cash equivalents, beginning of year 48,978 31,998 50,514

Cash and cash equivalents, end of year $ 53,197 $ 48,978 $ 31,998

Net increase in cash and cash equivalents 8,050 4,219 16,980

Cash and cash equivalents, beginning of period 53,197 48,978 31,998

Cash and cash equivalents, end of period $ 61,247 $ 53,197 $ 48,978

See accompanying notes to the consolidated financial statements.

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Inventory consists of land, land under development, finished lots, information centers, homes in progress, completed homes and real estate not owned.

Inventory is stated at cost unless the carrying amount is determined not to be recoverable, in which case the affected inventory is written down to fair value.

Land, development and other project costs, including interest and property taxes incurred during development and home construction, net of expected reimbursable development costs, are capitalized to real estate inventory.

Inventory is stated at cost unless the carrying amount is determined not to be recoverable, in which case the affected inventory is written down to fair value.Land, development and other project costs, including interest and property taxes incurred during development and home construction, net of expected reimbursable development costs, are capitalized to real estate inventory.

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.

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Interest and financing costs incurred under our debt obligations and financing arrangements, as more fully discussed in Note 6 and Note 5 , respectively, are capitalized to qualifying real estate projects under development and homes under construction.

In accordance with Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment , real estate inventory is evaluated for indicators of impairment by each community during each reporting period.

In conducting its review for indicators of impairment on a community level, management evaluates, 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.

For individual communities with indicators of impairment, additional analysis is performed to estimate the community’s undiscounted future cash flows.

If the estimated undiscounted future cash flows are greater than the carrying value of the community group of assets, no impairment adjustment is required.

If the undiscounted cash flows are less than the community’s carrying value, the asset group is impaired and is written down to its fair value.

We estimate the fair value of communities using a discounted cash flow model.

As of December 31, 2024 and 2023, the real estate inventory is stated at cost;

there were no inventory impairment charges recorded during the years ended December 31, 2024, 2023 and 2022.

We evaluate our actively selling communities for indicators of inventory impairment on a quarterly basis.

Inventory is written down when the estimated fair value is less than its carrying amount.

Indicators of impairment include, but are not limited to, significant decreases in gross margins on homes closed, significant downward trends in average selling prices, significant reductions in absorption, and operating cash flow losses at the community level.

When impairment indicators are present, we analyze cash flows at the lowest level for which there are identifiable cash flows, which we have concluded is the community level.

If the undiscounted cash flows are less than the community’s carrying value, we estimate the fair value using the estimated future discounted cash flows of the respective communities and applying a probability-weighted approach to determine the estimated future discounted cash flows.

A community with a fair value less than its carrying value is impaired and is written down to its calculated fair value.

Any losses identified are presented in our costs of goods sold and are not subsequently reversed.

During the year ended December 31, 2025, the Company tested 15 out of 144 communities and we determined that inventory with a carrying value before impairment of $ 29.6 million, related to four actively selling communities in our Central, Midwest and Florida operating segments were impaired.

As a result, we recorded inventory impairment charges of $ 6.7 million for the year ended December 31, 2025.

There were no inventory impairment charges recorded for the years ended December 31, 2024 and 2023.

We make various assumptions about the underlying factors impacting a project’s financial performance when estimating undiscounted cash flows, including the following:

expected home sales revenue, absorption pace, average sales price of homes offered for sale, the costs incurred to date and the anticipated spend remaining to complete the project, including, but not limited to, land and land development costs, home construction costs, interest and overhead costs.

The key assumptions relating to estimating future cash flows are impacted by both local market and national economic conditions, which contain inherent uncertainties.

Our quarterly assessments reflect management’s best estimates.

However, there are inherent uncertainties in these estimates and in our operations and industry, as discussed in Item 1A.

Risk Factors of this Annual Report on Form 10‑K.

As a result, we cannot predict if future impairments will occur or determine the potential magnitude of any such impairments.

In addition, the selection of discount rates involves significant judgment, and variations in these rates can materially affect the outcome of our fair value analyses.

Capitalized Interest

Interest and other financing costs are capitalized as cost of inventory during community development and home construction activities, in accordance with ASC Topic 835, Interest and expensed in cost of sales as homes in the community are closed.

Interest and other financing costs are capitalized as cost of inventory during community development and home construction activities, in accordance with Accounting Standards Codification (“ASC”) Topic 835, Interest and expensed in cost of sales as homes in the community are closed.

To the extent the debt exceeds qualified assets, a portion of the interest incurred is expensed.

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Such costs are classified as preacquisition costs, which we would have to absorb should the option not be exercised.

Therefore, whenever we enter into a land option or purchase contract with an entity and make a nonrefundable deposit, we may have a variable interest in a variable interest entity (“VIE”).

whenever we enter into a land option or purchase contract with an entity and make a nonrefundable deposit, we may have a variable interest in a variable interest entity (“VIE”).

In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE and would consolidate the VIE if we are deemed to be the primary beneficiary.

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Future direct warranty costs are accrued and charged to cost of sales in the period when the related home is closed.

Our warranty liability is based upon historical warranty cost experience and is adjusted as appropriate to reflect qualitative risks associated with the types of homes built, the geographic areas in which they are built, and potential impacts of our continued expansion.

Our warranty liability is based upon historical warranty cost experience and is adjusted as appropriate to reflect qualitative risks

associated with the types of homes built, the geographic areas in which they are built, and potential impacts of our continued expansion.

Warranty reserves are reviewed quarterly to assess the reasonableness and adequacy and adjusted, as needed, to reflect changes in trends and historical data as information becomes available.

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Once the performance target outcome is determined to be probable, the cumulative expense is adjusted, as needed, to recognize compensation expense on a straight-line basis over the award’s requisite service period.

Recently Adopted Accounting Pronouncement

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting - (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosures.

ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

It also requires disclosure of the amount and description of the composition of other segment items and interim disclosures of a reportable segment’s profit or loss and assets.

The standard is effective for the Company’s annual periods beginning in fiscal year 2024 and interim periods beginning in the first quarter of fiscal year 2025 on a retrospective basis to all periods presented.

We applied the amendment retrospectively to all periods presented.

The adoption of ASU 2023-07 impacted the presentation of the performance measures in the tables in “Segment Information” under Note 14 .

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”), which is intended to enhance the transparency and decision usefulness of income tax disclosures.

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”), which is

intended to enhance the transparency and decision usefulness of income tax disclosures.

This amendment modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold, (2) the amount of income taxes paid (net of refunds received) (disaggregated by federal, state, and foreign taxes) as well as individual jurisdictions in which income taxes paid is equal to or greater than 5 percent of total income taxes paid net of refunds, (3) the income or loss from continuing operations before income tax expense or benefit (disaggregated between domestic and foreign) and (4) income tax expense or benefit from continuing operations (disaggregated by federal, state and foreign).

The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance.

The guidance is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance.

ASU 2023-09 should be applied on a prospective basis, while retrospective application is permitted.

We are currently evaluating the impact that this standard will have on our financial statements.

We applied the amendment on a prospective basis.

In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

1 unchanged sentence

The amendments in this update are to be applied on a prospective basis, with the option for retrospective application.

The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

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We build and lease a number of single-family homes in select, existing communities.

During the years ended December 31, 2024 and 2023, we transferred $ 25.1 million and $ 13.5 million, respectively, of home assets from real estate

inventory to rental properties within property and equipment, net.

During the year ended December 31, 2024, we had a bulk sale of 103 leased, single family homes and realized gains of $ 14.0 million included in Other income, net.

During the years ended December 31, 2025 and 2024, we transferred $ 77.1 million and $ 25.1 million, respectively, of home assets from real estate inventory to rental properties within property and equipment, net.

During the year ended December 31, 2025, we had a sale of

103 currently or previously leased single-family homes and realized gains of $ 4.9 million included in Other Income, net.

We are lessors of the homes representing these home assets.

Depreciation expense incurred for the years ended December 31, 2025, 2024, and 2023 was $ 4.3 million, $ 3.1 million, and $ 2.4 million, respectively.

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Principal payments on these financing arrangements will generally coincide with the repurchase of lot takedowns from the land banker.

We expect to complete the repurchase of all lots via takedowns associated with these transactions over the course of approximately one to two years .

We expect to complete the repurchase of all lots via takedowns associated with these transactions over the course of less than a year.

Inventory Related Obligations

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Revolving Credit Agreement

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”).

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.

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.

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.

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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.

The Credit Agreement contains various financial covenants, including a minimum tangible net worth, a leverage ratio, a minimum liquidity amount and an EBITDA to interest expense ratio.

The Credit Agreement contains various covenants that, among other restrictions, limit the amount of our additional debt and our ability to make certain investments.

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.

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.

At December 31, 2025, we were in compliance with all of the covenants contained in the Credit Agreement.

LGI Living Loan Agreement

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.

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.

As of December 31, 2025, the total amount of borrowings outstanding under the LGI Living Loan Agreement was $ 50.0 million.

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.

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.

The LGI Living Loan Agreement requires that the Company maintain, as guarantor, (i) liquidity of not less than 15 % of the loan amount and (ii) maintain net worth in excess of 50 % of the loan amount.

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.

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.

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.

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.

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.

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.

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.

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.

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persons in transactions outside the United States pursuant to Regulation S.

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.

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.

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persons in transactions outside the United States pursuant to Regulation S.

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.

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.

The 2029 Senior Notes mature on July 15, 2029.

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Notes payable consist of the following (in thousands):

Notes payable under the Credit Agreement ($ 1.205 billion revolving credit facility at December 31, 2024) maturing in part on April 28, 2025 and in part on April 28, 2028;

interest paid monthly at SOFR plus 1.85 %.

Notes payable under the Credit Agreement ($ 1.1825 billion revolving credit facility at December 31, 2025, maturing in part on April 28, 2028 and in part on April 28, 2029, with interest paid monthly at SOFR plus 1.85 %;

$ 1.205 billion revolving credit facility at December 31, 2024, maturing in part on April 28, 2025 and in part on April 28, 2028, with interest paid monthly at SOFR plus 1.85 %)

$ 527,641 $ 401,946

Loan payable under the LGI Living Loan Agreement maturing on July 8, 2030;

with interest paid monthly at an annual rate of 6.433% 50,000 —

8.750 % Senior Notes due December 15, 2028;

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interest paid semi-annually at 7.000 %

400,000 400,000

Net debt issuance costs ( 20,838 ) ( 21,228 )

1 unchanged sentence

As of December 31, 2025, the annual aggregate maturities of notes payable during each of the next five fiscal years are as follows (in thousands):

2025 $ 40,028

Thereafter 400,000

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Included in interest incurred was amortization of deferred financing costs and applicable discounts for notes payable and financing arrangements of $ 9.9 million, $ 14.0 million and $ 13.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

All of the Company’s operations are domestic.

We do not have foreign subsidiaries or foreign operations therefore, no foreign income taxes are incurred or reported.

The provision for income taxes consisted of the following (in thousands):

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Total income tax provision $ 25,934 $ 62,842 $ 62,527

Income taxes paid were $ 35.3 million, $ 96.5 million and $ 56.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Income taxes paid (net of refunds) consisted of the following (in thousands):

Year Ended December 31,

2025 2024 2023

Federal $ 54,500 $ 24,500 $ 85,458

Florida — 2,485 —

California — 3,103 —

Other states (combined) 7,887 5,295 10,838

Total net cash paid for income taxes $ 62,387 $ 35,383 $ 96,296

State taxes for Florida and California did not exceed the 5% threshold for net income taxes paid in 2025 and 2023.

Domestic net income before income taxes and related income tax expense consisted of the following (in thousands):

Year Ended December 31,

2025 2024 2023

Domestic (U.S.) $ 98,486 $ 258,913 $ 261,754

Total net income before income taxes $ 98,486 $ 258,913 $ 261,754

A reconciliation of the provision for income taxes and the amount computed by applying the statutory federal income tax rate to income before provision for income taxes for the years ended December 31, 2025, 2024, and 2023 (in thousands):

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The 2025 effective tax rate differs from the federal statutory rate primarily due to state income tax expense on current year earnings and non-deductible salaries related to Section 162(m) of the U.S.

Internal Revenue Code, as amended (the “Code”), partially offset by benefits associated with the federal energy efficient homes tax credits (the “45L Tax Credits”).

The 2023 effective tax rate differs from the federal statutory rate primarily due to state income tax expense on current year earnings and non-deductible salaries related to Section 162(m) of the Code, partially offset by the windfalls for share-based payments and benefits associated with the 45L Tax Credits.

Internal Revenue Code, as amended (the “Code”).

The 2024 effective tax rate differs from the federal statutory rate primarily due to state income tax expense on current year earnings and non-deductible salaries related to Section 162(m) of the Code, partially offset by the windfalls for share-based payments and benefits associated with the federal energy efficient homes tax credits (the “45L Tax Credits”).

The 2023 effective tax rate differs from the federal statutory rate primarily due to state income tax expense on current year earnings and non-deductible salaries related to Section 162(m) of the Code, partially offset by benefits associated with the 45L Tax Credits and the windfalls for share-based payments.

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Total net deferred tax assets $ 9,904 $ 9,271

All Company operations are domestic.

and state income tax returns in jurisdictions with varying statutes of limitations.

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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.

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 Inflation Reduction Act of 2022, and 892,916 shares of our common stock for $ 95.1 million to be held as treasury stock, respectively.

During the year ended December 31, 2023, we did not repurchase any shares of our common stock.

A total of 3,247,339 shares of our common stock has been repurchased since our stock repurchase program commenced.

During the three months ended December 31, 2025, we did not repurchase any shares of our common stock.

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.

During the three months ended December 31, 2024, we did not repurchase any shares of our common stock.

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.

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.

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The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2025, 2024, and 2023 .

For the Year Ended December 31,

Year Ended December 31,

2025 2024 2023

Numerator (in thousands):

Net income (Numerator for basic and dilutive earnings per share) $ 196,071 $ 199,227 $ 326,567

Net income (Numerator for basic and diluted earnings per share) $ 72,552 $ 196,071 $ 199,227

Basic weighted average shares outstanding 23,188,965 23,529,724 23,507,136

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Diluted earnings per share $ 3.12 $ 8.30 $ 8.42

Antidilutive non-vested restricted stock units excluded from calculation of diluted earnings per share 46,146 11,412 50,003

Antidilutive non-vested restricted stock units excluded from calculations of diluted earnings per share 47,436 46,146 11,412

STOCK-BASED COMPENSATION

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In 2023, we issued 22,912 RSUs to senior management for the time-based portion of our 2023 long-term incentive compensation program and 8,256 RSUs for 2022 annual bonuses to managers, which generally cliff vest on the third anniversary of the grant date.

In addition, during the years ended December 31, 2024, 2023 and 2022, we issued 56,707 , 17,778 and 56,116 RSUs, respectively, to certain employees, executives and non-employee directors, which vest over periods ranging from one to three years .

In addition, during the years ended December 31, 2025, 2024, and 2023, we issued 46,721 , 56,707 and 17,778 RSUs, respectively, to certain employees, executives and non-employee directors, which vest

over periods ranging from one to three years.

Under the terms of the grant award agreements, all of the RSUs may only be settled in shares of our common stock.

We recognized $ 5.2 million, $ 4.9 million, and $ 3.6 million of stock-based compensation expense related to outstanding RSUs for the years ended December 31, 2024, 2023 and 2022, respectively.

At December 31, 2024, we had unrecognized

compensation cost of $ 11.0 million related to unvested RSUs, which is expected to be recognized over a weighted average period of 2.1 years.

Performance-Based Restricted Stock Units

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The PSUs can only be settled in shares of our common stock.

The following table summarizes the activity of our PSUs:

Period Granted Performance Period Target PSUs Outstanding at December 31, 2023

Target PSUs Granted Target PSUs Forfeited Target PSUs Vested Target PSUs Outstanding at December 31, 2024

Weighted Average Grant Date Fair Value

2021 2021 - 2023 43,159 — — ( 43,159 ) — $ 141.00

2022 2022 - 2024 63,304 — ( 3,032 ) — 60,272 $ 118.80

2023 2023 - 2025 72,443 — ( 3,355 ) — 69,088 $ 104.36

2024 2024 - 2026 — 70,947 ( 3,537 ) — 67,410 $ 111.94

Total 178,906 70,947 ( 9,924 ) ( 43,159 ) 196,770

At December 31, 2024, management estimates that the recipients will receive approximately 100 %, 73.3 % and 0 % of the 2024, 2023 and 2022 target number of PSUs, respectively, at the end of the applicable three-year performance cycle based on projected performance compared to the target performance metrics.

The following table summarizes the activity of our PSUs for the year ended December 31, 2025:

Shares Weighted Average Grant Date Fair Value

Balance at December 31, 2024 196,770 $ 111.38

Granted 116,227 $ 75.09

Forfeited ( 64,875 ) $ 118.8

Balance at December 31, 2025 248,122 $ 92.92

We recognized $( 1.6 ) million, $ 4.3 million and $ 2.9 million of total stock-based compensation expense related to outstanding PSUs for the years ended December 31, 2025, 2024, and 2023, respectively.

The 2021 - 2023 performance period PSUs vested and issued on March 8, 2024 at 93.6 % of the target number.

PSUs granted in 2022 were forfeited based on actual results as compared to the target performance metrics.

At December 31, 2025, we had unrecognized compensation cost of $ 0.6 million, based on the probable amount, related to unvested PSUs, which is expected to be recognized over a weighted average period of 0.3 years.

PSUs granted in 2025 and 2024 are excluded from the calculation of diluted EPS as they are subject to unsatisfied performance conditions.

Employee Stock Purchase Plan

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Employee Stock Purchase Plan (the “ESPP”) provides for employees to make quarterly elections for payroll withholdings to purchase shares of our common stock at a 15% discount from the closing price of our common stock on the purchase date, which is the last business day of each calendar quarter.

On April 24, 2025, our stockholders approved and authorized 500,000 additional shares of our common stock that may be sold under the ESPP.

The maximum number of shares of our common stock that may be sold under the ESPP is 1,000,000 shares.

During the years ended December 31, 2025, 2024, and 2023, we issued 79,132 , 54,794 and 53,078 shares of our common stock to the ESPP participants.

We received net proceeds of approximately $ 3.6 million, $ 4.8 million and $ 5.3 million related to the ESPP for 2025, 2024, and 2023, respectively.

We recognized $ 0.9 million, $ 0.9 million and $ 1.0 million in stock compensation expense related to the ESPP for 2024, 2023 and 2022, respectively.

We recognized $ 0.6 million in stock compensation expense related to the ESPP for 2025 and $ 0.9 million in stock compensation expense related to the ESPP for each of 2024 and 2023.

The ESPP contributions are not refundable (other than in the case of termination of employment) and, therefore, the shares purchasable with the amounts withheld are included in weighted-average shares outstanding for both basic and diluted earnings per share.

The maximum aggregate number of shares of our common stock which may be issued pursuant to the ESPP is 500,000 shares, and as of December 31, 2024, 51,921 shares of our common stock remain available for issuance under the ESPP.

As of December 31, 2025, 471,927 shares of our common stock remain available for issuance under the ESPP.

FAIR VALUE DISCLOSURES

ASC Topic 820, Fair Value Measurements (“ASC 820”) , defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date” within an entity’s principal market, if any.

The principal market is the market in which the reporting entity would sell the asset or transfer the liability with the most significant volume and level of activity, regardless of whether it is the market in which the entity will ultimately transact for a particular asset or liability or if a different market is potentially more advantageous.

Accordingly, this exit price concept may result in a fair value that differs from the transaction price or market price of the asset or liability.

ASC 820 provides a framework for measuring fair value under GAAP, expands disclosures about fair value measurements, and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The three levels of the fair value hierarchy are summarized as follows:

Level 1 - Fair value is based on quoted prices in active markets for identical assets or liabilities.

Level 2 - Fair value is determined using significant observable inputs, generally either quoted prices in active markets for

similar assets or liabilities, or quoted prices in markets that are not active.

Level 3 - Fair value is determined using one or more significant inputs that are unobservable in active markets at the

measurement date, such as a pricing model, discounted cash flow, or similar technique.

We utilize fair value measurements to account for certain items and account balances within our consolidated financial statements.

Fair value measurements may also be utilized on a nonrecurring basis, such as for the impairment of long-lived assets.

The fair value of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and certain accrued liabilities, approximate their carrying amounts due to the short-term nature of these instruments.

As of December 31, 2024, the Credit Agreement’s carrying value approximates market value since it has a floating interest rate, which increases or decreases with market interest rates and our leverage ratio.

In order to determine the fair value of each of the 2028 Senior Notes, the 2029 Senior Notes and the 2032 Senior Notes, the future contractual cash flows are discounted at our estimate of current market rates of interest, which were determined based upon the average interest rates of similar senior notes within the homebuilding industry (Level 2 measurement).

The following table below shows the level and measurement of liabilities at December 31, 2024 and 2023 (in thousands):

ASC 820, Fair Value Measurements, defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”.

Fair value is determined based on the principal market for the asset or liability, or, in the absence of a principal market, most advantageous market.

The principal market is the market with the greatest volume and level of activity for the assets or liability, regardless of of whether the Company ultimately transacts in that market.

As a result, a fair value determined under this exit price concept may differ from the transaction price or quoted market price for the asset or liability.

ASC 820 establishes a framework for measuring fair value under GAAP, expands disclosure requirements for fair value

measurements, and establishes a three-level fair value hierarchy that prioritizes the inputs used in valuation techniques.

The hierarchy requires the use of observable inputs when available and the minimization of unobservable inputs.

The three levels of the fair value hierarchy are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3 - Significant unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

The Company uses fair value measurements to account for certain assets and liabilities in its consolidated financial statements.

Fair value measurements are applied on both a recurring basis, such as for certain financial instruments, and on a nonrecurring basis, such as when measuring assets subject to impairment.

Fair value measurements on a nonrecurring basis occur when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, including impairment of long-lived assets and inventory.

These nonrecurring fair value measurements are generally classified within Level 3 of the fair value hierarchy due to the use of significant observable inputs.

During the year ended December 31, 2025, the Company recorded impairment charges related to inventory, which were measured at fair value and classified within Level 3 of the fair value hierarchy.

The fair value of the impaired assets was determined using valuation techniques that included discounted cash flow models and other market-based approaches.

Significant unobservable inputs used in these valuations included estimated future selling prices, projected costs, absorption rates, expected holding periods and discount rates reflecting market participant assumptions.

Changes in these assumptions could have a material impact on the estimated fair value and the amount of impairment recognized.

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and certain accrued liabilities, approximate fair value due to the short-term nature of these instruments.

As of December 31, 2025, the carrying value of amounts outstanding under the Credit Agreement approximated fair value due to the variable interest rate, which adjusts based on market interest rates and the Company’s leverage ratio.

The fair value of the 2028 Senior Notes, the 2029 Senior Notes, the 2032 Senior Notes and the LGI Living Loan Agreement was estimated by discounting future contractual cash flows using market rates for similar instruments within the homebuilding industry.

The fair value measurements are classified as Level 2 within the fair value hierarchy.

The following table below presents the Company’s liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2025 and December 31, 2024 (in thousands):

December 31, 2025 December 31, 2024

Fair Value Hierarchy Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value

2028 Senior Notes (1)

$ 400,000 $ 436,783 $ 400,000 $ 486,306

2029 Senior Notes (1)

Level 2 $ 300,000 $ 274,692 $ 300,000 $ 296,381

2032 Senior Notes (1)

$ 400,000 $ 421,247 $ — $ —

(1) See Note 6 for more details regarding the offerings of the 2028 Senior Notes, the 2029 Senior Notes and the 2032 Senior Notes.

2028 Senior Notes (1) Level 2 $ 400,000 $ 437,152 $ 400,000 $ 436,783

2029 Senior Notes (1) Level 2 $ 300,000 $ 286,726 $ 300,000 $ 274,692

2032 Senior Notes (1) Level 2 $ 400,000 $ 437,114 $ 400,000 $ 421,247

LGI Living Loan Agreement(1) Level 2 $ 50,000 $ 52,181 $ — $ —

(1) See Note 4 for more details regarding the offerings of the 2028 Senior Notes, the 2029 Senior Notes, and the 2032 Senior Notes and the LGI Living Loan Agreement.

RETIREMENT BENEFITS

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For the years ended December 31, 2025, 2024, and 2023, our matching contributions were $ 4.1 million, $ 4.5 million and $ 4.4 million, respectively.

RELATED PARTY TRANSACTIONS

The Company has entered into forward purchase commitments with LoanDepot, Inc.

Parent, the co-owner of the LGI Mortgage Solutions joint venture in which the Company holds a 50 % interest.

The commitments relate to mortgage products originated by the LGI Mortgage Solutions joint venture for the Company’s homebuyers and were entered into as part of an interest rate buydown program designed to reduce the effective interest rate for borrowers.

Total commitments during 2025 were $ 173.0 million, with $ 18.8 million unsettled at December 31, 2025 included in Other Assets.

These transactions are considered related-party due to LoanDepot, Inc.

Parent’s ownership and influence over the LGI Mortgage Solutions joint venture.

COMMITMENTS AND CONTINGENCIES

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In the opinion of management, these matters will not have a material effect on our consolidated financial position, results of operations or cash flows.

Class Action Lawsuit

On May 23, 2023, a class action lawsuit was filed by Rikki McAlister, a former sales representative, on behalf of herself and all others similarly situated, in the District Court of Arapahoe County, State of Colorado, against LGI Homes Corporate,

LLC, a subsidiary of the Company, alleging violations of Colorado employment law, including failure to pay overtime compensation, failure to provide rest periods and improper deductions from wages.

On November 21, 2023, the lawsuit was removed to the United States District Court for the District of Colorado, which granted the plaintiff’s motion for class certification on December 6, 2024.

The plaintiff in the lawsuit is requesting as damages, on behalf of the plaintiff and all members of the class, unpaid back wages, unpaid minimum wages, unpaid overtime compensation, reimbursement for unlawfully-deducted wages, compensation for rest periods not provided, certain mandatory and additional penalties, reasonable attorney’s fees and incurred costs.

We have responded to the complaint and intend to defend ourselves vigorously against the allegations.

LGI Living Loan Agreement

On July 23, 2025, the Company’s indirect, wholly owned special purpose subsidiary LGI Living SFR entered into the LGI Living Loan Agreement with Evergreen Residential Capital, LLC, as lender.

The loan under the LGI Living Loan Agreement 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.

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.

The loan under the LGI Living Loan Agreement is secured by certain of LGI Living SFR’s single-family rental properties.

As of December 31, 2025, LGI Living SFR had $ 50.0 million of borrowings outstanding under the LGI Living Loan Agreement.

Land Deposits

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$ 19,187 $ 29,040

Commitments under the land purchase contracts if the purchases are consummated $ 653,861 $ 513,941

Lots under land purchase contracts (1)

Commitments under the land purchase option and deposit contracts if the purchases are consummated (1)

285,654 653,861

Lots under land options and land purchase contracts (1)

(1) Includes land banking financing arrangements, see Note 2 and Note 3 for more details regarding real estate not owned.

As of December 31, 2024 and 2023, approximately $ 10.4 million and $ 11.4 million, respectively, of the land deposits are related to purchase contracts to deliver finished lots that are refundable under certain circumstances, such as feasibility or specific performance, and secured by mortgages or letters of credit or guaranteed by the seller or its affiliates.

As of December 31, 2025 and December 31, 2024, approximately $ 8.2 million and $ 10.4 million, respectively, of the land deposits are related to purchase contracts to deliver finished lots that are refundable under certain circumstances, such as feasibility or specific performance, and secured by mortgages or letters of credit or guaranteed by the seller or its affiliates.

Lease Obligations

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As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

ROU assets, as included in other assets on the consolidated balance sheets, were $ 5.6 and $ 4.6 million as of December 31, 2024 and 2023, respectively.

Lease obligations, as included in accrued expenses and other liabilities on the consolidated balance sheets, were $ 6.1 million and $ 4.9 million as of December 31, 2024 and 2023, respectively.

ROU assets, as included in other assets on the consolidated balance sheets, were $ 4.7 million and $ 5.6 million as of December 31, 2025 and December 31, 2024, respectively.

Lease obligations, as included in accrued expenses and other liabilities on the consolidated balance sheets, were $ 5.1 million and $ 6.1 million as of December 31, 2025 and December 31, 2024, respectively.

Operating lease cost, as included in general and administrative expense in our consolidated statements of operations, totaled $ 2.0 million, $ 2.4 million and $ 2.5 million for the years ended December 31, 2025, 2024, and 2023, respectively.

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Bonding and Letters of Credit

We have outstanding letters of credit and performance and surety bonds totaling $ 377.5 million (including $ 24.5 million of letters of credit issued under the Credit Agreement) and $ 357.0 million (including $ 28.1 million of letters of credit issued under the our credit agreement then in effect) at December 31, 2024 and 2023, respectively, related to our obligations for site improvements at various projects.

We have outstanding letters of credit and performance and surety bonds totaling $ 392.2 million (including $ 19.5 million of letters of credit issued under the Credit Agreement) and $ 377.5 million (including $ 24.5 million of letters of credit issued under the credit agreement then in effect) at December 31, 2025 and December 31, 2024, respectively, related to our obligations for site improvements at various projects.

Management does not believe that draws upon the letters of credit, surety bonds or financial guarantees if any, will have a material effect on our consolidated financial position, results of operations or cash flows.

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The following table presents our home sales revenues disaggregated by revenue stream (in thousands):

For the Year Ended December 31,

Year Ended December 31,

2025 2024 2023

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Total home sales revenues $ 1,705,504 $ 2,202,598 $ 2,358,580

Our home sales revenues are disaggregated by geography, based on our determined reportable segments.

The following table presents our home sales revenues disaggregated by geography, based on our determined reportable segments in Note 15 (in thousands):

For the Year Ended December 31,

Year Ended December 31,

2025 2024 2023

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The CODMs primarily evaluate the segments’ operating performance and allocate resources for all of our reportable segments based on net income before income taxes.

For all of the segments, the CODMs use segment income before income tax expense in the annual budget and forecasting process.

These operating results are reviewed against actual and forecasted figures, with income before income taxes being the key operating metric used to measure profit or loss.

For all of the segments, the CODMs use segment net income before income tax expense in the annual budget and forecasting process.

These operating results are reviewed against actual and forecasted figures, with net income before income taxes being the key operating metric used to measure profit or loss.

Financial information relating to our reportable segments was as follows (in thousands):

For the Year Ended December 31,

Year Ended December 31,

2025 2024 2023

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Total other segment items $ 255,060 $ 274,375 $ 280,433

$ 274,375 $ 280,433 $ 228,484

Net income (loss) before income taxes:

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Florida ( 6,529 ) 30,355 48,324

( 1,535 ) ( 4,667 ) 4,048

Corporate ( 3,142 ) ( 1,535 ) ( 4,667 )

Total net income before income taxes $ 98,486 $ 258,913 $ 261,754

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(2) The Corporate balance consists of general and administrative unallocated costs for various shared service functions and non-strategic other income.

Additionally, for the year ended December 31, 2022, the Corporate balance includes the $ 7.1 million gain on the sale of the three-year interest rate cap of LIBOR prior to its expiration.

Central $ 1,162,355 $ 1,096,500

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Total assets $ 3,927,242 $ 3,758,534

(1) The Corporate balance consists primarily of cash and investments in unconsolidated entities.

(1) The Corporate balance consists primarily of investments in unconsolidated entities.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data