What changed in this filing

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Item 1. Financial Statements

2026-04-28 compared with 2025-11-04 · 108 added, 146 removed, 371 unchanged (41% of the section changed)

3 unchanged sentences

(In thousands, except share data)

September 30, December 31,

March 31, December 31,

Cash and cash equivalents $ 60,860 $ 61,247

13 unchanged sentences

COMMITMENTS AND CONTINGENCIES

Common stock, par value $ 0.01 , 250,000,000 shares authorized, 27,735,692 shares issued and 23,079,100 shares outstanding as of September 30, 2025 and 27,644,413 shares issued and 23,397,074 shares outstanding as of December 31, 2024

Common stock, par value $ 0.01 , 250,000,000 shares authorized, 27,888,871 shares issued and 23,232,279 shares outstanding as of March 31, 2026 and 27,789,678 shares issued and 23,133,086 shares outstanding as of December 31, 2025

Additional paid-in capital 351,272 347,308

Retained earnings 2,160,499 2,158,339

Treasury stock, at cost, 4,656,592 shares as of September 30, 2025 and 4,247,339 shares as of December 31, 2024

Treasury stock, at cost, 4,656,592 shares as of March 31, 2026 and December 31, 2025

( 409,635 ) ( 409,635 )

5 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Home sales revenues $ 319,736 $ 351,420

2 unchanged sentences

General and administrative 27,861 31,202

Operating income 21,484 80,305 61,261 166,559

Operating income (loss) ( 582 ) 169

Other income, net ( 4,901 ) ( 5,555 )

17 unchanged sentences

Restricted stock units granted for accrued annual bonuses — — ( 696 ) — — ( 696 )

Stock repurchase — — — — ( 3,051 ) ( 3,051 )

Compensation expense for equity awards — — 3,418 — — 3,418

1 unchanged sentence

BALANCE— March 31, 2026 27,888,871 $ 278 $ 351,272 $ 2,160,499 $ ( 409,635 ) $ 2,102,414

Net income — — — 31,533 — 31,533

Stock repurchase — — — — ( 20,588 ) ( 20,588 )

Compensation expense for equity awards — — 2,826 — — 2,826

Stock issued under employee incentive plans 19,701 — 848 — — 848

BALANCE— June 30, 2025 27,713,227 $ 277 $ 345,189 $ 2,121,314 $ ( 409,635 ) $ 2,057,145

Net income — — — 19,704 — 19,704

Compensation expense for equity awards — — 1,606 — — 1,606

Stock issued under employee incentive plans 22,465 — 919 — — 919

BALANCE— September 30, 2025 27,735,692 $ 277 $ 347,714 $ 2,141,018 $ ( 409,635 ) $ 2,079,374

See accompanying notes to the consolidated financial statements.

LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except share data)

Common Stock Additional Paid-In Capital Retained Earnings Treasury Stock Total Equity

7 unchanged sentences

BALANCE— March 31, 2025 27,693,526 $ 277 $ 341,515 $ 2,089,781 $ ( 389,047 ) $ 2,042,526

Net income — — — 58,573 — 58,573

Stock repurchase — — — — ( 7,998 ) ( 7,998 )

Compensation expense for equity awards — — 2,841 — — 2,841

Stock issued under employee incentive plans 16,602 — 1,223 — — 1,223

BALANCE—June 30, 2024 27,612,742 $ 276 $ 331,246 $ 1,965,342 $ ( 373,022 ) $ 1,923,842

Net income — — — 69,575 — 69,575

Compensation expense for equity awards — — 2,256 — — 2,256

Stock issued under employee incentive plans 13,208 — 1,290 — — 1,290

BALANCE—September 30, 2024 27,625,950 $ 276 $ 334,792 $ 2,034,917 $ ( 373,022 ) $ 1,996,963

See accompanying notes to the consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

4 unchanged sentences

Depreciation and amortization 1,190 861

Loss on disposal of assets 5 —

Loss (gain) on disposal of assets ( 1,646 ) 2,284

Compensation expense for equity awards 3,418 2,625

Inventory impairment 4,681 —

Deferred income taxes 983 1,117

21 unchanged sentences

Net cash provided by financing activities 48,719 131,796

Net increase in cash and cash equivalents 8,782 11,925

Net increase (decrease) in cash and cash equivalents ( 387 ) 4,403

Cash and cash equivalents, beginning of period 61,247 53,197

14 unchanged sentences

Results for interim periods are not necessarily indicative of results to be expected for the full year.

The accompanying unaudited financial statements as of September 30, 2025, and for the three and nine months ended September 30, 2025 and 2024, include the accounts of the Company and its subsidiaries.

The accompanying unaudited financial statements as of March 31, 2026, and for the three months ended March 31, 2026 and 2025, include the accounts of the Company and its subsidiaries.

All intercompany balances and transactions have been eliminated in consolidation.

3 unchanged sentences

Recently Issued Accounting Pronouncements

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 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.

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

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

Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements.

5 unchanged sentences

Our real estate inventory consists of the following (in thousands):

September 30, December 31,

March 31, December 31,

Land, land under development and finished lots $ 2,585,692 $ 2,601,578

7 unchanged sentences

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

During the nine months ended September 30, 2025 and 2024, we transferred $ 58.3 million and $ 17.4 million, respectively, of home assets from real estate inventory to rental properties within property and equipment, net.

During the three months ended March 31, 2026 and 2025, we transferred $ 25.4 million and $ 13.4 million, respectively, of home assets from real estate inventory to rental properties within property and equipment, net.

We are lessors of the homes representing these home assets.

1 unchanged sentence

Accrued and other liabilities consist of the following (in thousands):

September 30, December 31,

March 31, December 31,

Real estate inventory development and construction payable $ 57,001 $ 57,103

20 unchanged sentences

Changes to our warranty accrual are as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Warranty reserves, beginning of period $ 14,500 $ 16,100

4 unchanged sentences

Revolving 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”).

We are a party to 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, 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.

4 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.

As of September 30, 2025, the borrowing base under the Credit Agreement was $ 2.1 billion, of which the maximum available to borrow was $ 2.1 billion.

As of September 30, 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 $ 1.7 billion, $ 27.0 million of letters of credit were outstanding and $ 367.9 million was available to borrow under the Credit Agreement.

As of March 31, 2026, the borrowing base under the Credit Agreement was $ 2.0 billion, of which the maximum available to borrow was $ 2.0 billion.

As of March 31, 2026, 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 $ 1.7 billion, $ 19.3 million of letters of credit were outstanding and $ 294.2 million was available to borrow under the Credit Agreement.

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 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.

At September 30, 2025, the Applicable Margin was 1.95 %, and SOFR was 4.16 %, subject to the 0.50 % SOFR floor as included in the Credit Agreement.

At March 31, 2026, the Applicable Margin was 1.85 %, and SOFR was 3.67 %, 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 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, limit the amount of our additional debt and our ability to make certain investments.

At September 30, 2025, we were in compliance with all of the covenants contained in the Credit Agreement.

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 March 31, 2026, 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 “Loan Agreement”) with Evergreen Residential Capital, LLC, as lender.

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 Loan Agreement.

As of September 30, 2025, the total amount of borrowings outstanding under the Loan Agreement was $ 50.0 million.

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 March 31, 2026, 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 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 LGI Living Loan Agreement requires that the Company, as guarantor, maintain (i) liquidity of not less than 15 % of the loan amount and (ii) 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 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 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 Loan Agreement, the lender will be able to accelerate the maturity of the loan and exercise other rights and remedies.

At September 30, 2025, we were in compliance with all of the covenants contained in the Loan Agreement.

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 March 31, 2026, we were in compliance with all of the covenants contained in the LGI Living Loan Agreement.

Senior Notes Offering

15 unchanged sentences

Notes payable consist of the following (in thousands):

September 30, 2025 December 31, 2024

Notes payable under the Credit Agreement ($ 1.1825 billion revolving credit facility at September 30, 2025, maturing in part on April 28, 2028 and in part on April 28, 2029, with interest paid monthly at SOFR plus 1.95 %;

March 31, December 31,

Notes payable under the Credit Agreement ($ 1.1825 billion revolving credit facility at March 31, 2026, maturing in part on April 28, 2028 and in part on April 28, 2029, with interest paid monthly at SOFR plus 1.85 %;

$ 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 %)

9 unchanged sentences

400,000 400,000

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

interest paid monthly at 6.44 %

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 50,000

Net debt issuance costs ( 19,413 ) ( 20,838 )

2 unchanged sentences

Interest activity, including other financing costs, for notes payable and financing arrangements for the periods presented is as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Interest incurred $ 30,177 $ 29,924

2 unchanged sentences

Cash paid for interest $ 16,032 $ 15,518

Included in interest incurred was amortization of deferred financing costs and applicable discounts for notes payable and financing arrangements of $ 2.4 million and $ 3.1 million for the three months ended September 30, 2025 and 2024, respectively, and $ 7.8 million and $ 11.5 million for the nine months ended September 30, 2025 and 2024, respectively.

Included in interest incurred was amortization of deferred financing costs and applicable discounts for notes payable and financing arrangements of $ 2.2 million and $ 2.7 million for the three months ended March 31, 2026 and 2025, respectively.

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

4 unchanged sentences

however, audit outcomes and the timing of audit adjustments are subject to significant uncertainty.

For the three months ended September 30, 2025, our effective tax rate of 26.2 % is higher than the Federal statutory rate primarily as a result of an increase in the rate for state income taxes, net of the federal benefit, and the compensation limitation under Section 162(m) of the Internal Revenue Code, as amended.

For the nine months ended September 30, 2025, our effective tax rate of 25.8 % is higher than the Federal statutory rate primarily as 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.

Income taxes paid were $ 2.4 million and $ 5.2 million for the three months ended September 30, 2025 and 2024, respectively.

Income taxes paid were $ 62.3 million and $ 33.5 million for the nine months ended September 30, 2025 and 2024, respectively.

For the three months ended March 31, 2026, our effective tax rate of 50.0 % is higher than the Federal statutory rate primarily as a result of a 23.84 % increase for a discrete item related to the compensation cost in excess of deductions for share-based payments, the compensation limitation under Section 162(m) of the Internal Revenue Code, as amended, and state income taxes, net of the federal benefit.

Income taxes paid were $ 0.2 million and $ 38.6 million for the three months ended March 31, 2026 and 2025, respectively.

Stock Repurchase Program

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 three months ended September 30, 2025, we did not repurchase any shares of our common stock.

During the nine months ended September 30, 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 September 30, 2024, we did not repurchase any shares of our common stock.

During the nine months ended September 30, 2024, we repurchased 172,990 shares of our common stock at a total cost, including commissions and excise taxes, of $ 18.0 million, to be held as treasury stock.

During the three months ended March 31, 2026, we did not repurchase any shares of our common stock.

During the three months ended March 31, 2025, we repurchased 41,685 shares of our common stock at a total cost, including commissions and excise taxes, of $ 3.1 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 September 30, 2025, we may purchase up to $ 157.3 million of shares of our common stock under our stock repurchase program.

As of March 31, 2026, we may purchase up to $ 157.3 million of shares of our common stock under our stock repurchase program.

EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Numerator (in thousands):

9 unchanged sentences

Non-performance Based Restricted Stock Units

The following table summarizes the activity of our time-vested restricted stock units (“RSUs”) for the nine months ended September 30, 2025:

Nine Months Ended September 30,

The following table summarizes the activity of our time-vested restricted stock units (“RSUs”) for the three months ended March 31, 2026:

Three Months Ended March 31, 2026

Shares Weighted Average Grant Date Fair Value

4 unchanged sentences

Ending balance 299,948 $ 68.63

We recognized $ 1.8 million and $ 1.3 million of stock-based compensation expense related to outstanding RSUs for the three months ended September 30, 2025 and 2024, respectively.

We recognized $ 5.3 million and $ 4.1 million of stock-based compensation expense related to outstanding RSUs for the nine months ended September 30, 2025 and 2024, respectively.

We recognized $ 1.5 million and $ 1.7 million of stock-based compensation expense related to outstanding RSUs for the three months ended March 31, 2026 and 2025, respectively.

Generally, the RSUs cliff vest on the third anniversary of the grant date and can only be settled in shares of our common stock.

At September 30, 2025, we had unrecognized compensation cost of $ 10.4 million related to unvested RSUs, which is expected to be recognized over a weighted average period of 2.0 years.

At March 31, 2026, we had unrecognized compensation cost of $ 11.6 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

8 unchanged sentences

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

The following table summarizes the activity of our PSUs for the nine months ended September 30, 2025:

Nine Months Ended September 30,

The following table summarizes the activity of our PSUs for the three months ended March 31, 2026:

Three Months Ended March 31, 2026

Target Shares Weighted Average Grant Date Fair Value

1 unchanged sentence

Granted 191,158 $ 44.40

Vested ( 36,883 ) $ —

Forfeited ( 32,205 ) $ 104.36

Ending balance 370,192 $ 65.81

At September 30, 2025, management estimates that the recipients will receive approximately 59.9 % of the weighted average target number of PSUs outstanding at the end of the applicable three-year performance cycle based on projected performance compared to the target performance metrics.

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

We recognized $( 0.4 ) million and $ 0.8 million of total stock-based compensation

expense related to outstanding PSUs for the three months ended September 30, 2025 and 2024, respectively.

We recognized $ 1.2 million and $ 4.0 million of total stock-based compensation expense related to outstanding PSUs for the nine months ended September 30, 2025 and 2024, respectively.

At September 30, 2025, we had unrecognized compensation cost of $ 7.5 million, based on the probable amount, related to unvested PSUs, which is expected to be recognized over a weighted average period of 2.0 years.

At March 31, 2026, management estimates that the recipients will receive approximately 51.6 % of the weighted average target number of PSUs outstanding at the end of the applicable three-year performance cycle based on projected performance compared to the target performance metrics.

We recognized $ 0.6 million and $ 0.6 million of total stock-based compensation expense related to outstanding PSUs for the three months ended March 31, 2026 and 2025, respectively.

At March 31, 2026, we had unrecognized compensation cost of $ 8.3 million, based on the probable amount, related to unvested PSUs, which is expected to be recognized over a weighted average period of 3 years.

PSUs granted in 2024, 2025, and 2026 are excluded from the calculation of diluted EPS as they are subject to unsatisfied performance conditions.

Employee Stock Purchase Plan

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

2016 Employee Stock Purchase Plan (“the ESPP”).

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

FAIR VALUE DISCLOSURES

Accounting Standards Codification (“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 September 30, 2025, 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, the 2032 Senior Notes and the Loan Agreement, 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 September 30, 2025 and December 31, 2024 (in thousands):

September 30, 2025 December 31, 2024

Accounting Standards Codification (“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, the most advantageous market.

The principal market is the market with the greatest volume and level of activity for the assets or liability, regardless 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.

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 three months ended March 31, 2026, the Company recognized $ 4.7 million of impairment charges related to inventory, which were recorded in inventory on the consolidated balance sheets and cost of sales in the consolidated statement of operations.

Of the total impairment charge, $ 2.4 million was related to our Florida reportable segment and $ 2.3 million was related to our Central reportable segment.

The impairment charges 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 March 31, 2026, 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 debt measured at fair value by level within the fair value hierarchy as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026 December 31, 2025

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

5 unchanged sentences

Level 2 $ 400,000 $ 418,153 $ 400,000 $ 437,114

Loan Agreement (1)

LGI Living Loan

Agreement (1)

Level 2 $ 50,000 $ 50,519 $ 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 Loan Agreement .

(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.

COMMITMENTS AND CONTINGENCIES

11 unchanged sentences

LGI Living Loan Agreement

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

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

The 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 Loan Agreement.

As of September 30, 2025, LGI Living SFR had $ 50.0 million of borrowings outstanding under the 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) 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 March 31, 2026, LGI Living SFR had $ 50.0 million of borrowings outstanding under the LGI Living Loan Agreement.

Land Deposits

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The following is a summary of our land purchase deposits included in pre-acquisition costs and deposits (in thousands, except for lot count):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Land deposits and option payments (1)

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

As of September 30, 2025 and December 31, 2024, approximately $ 7.0 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.

As of March 31, 2026 and December 31, 2025, approximately $ 9.3 million and $ 8.2 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 $ 5.1 million and $ 5.6 million as of September 30, 2025 and December 31, 2024, respectively.

Lease obligations, as included in accrued expenses and other

liabilities on the consolidated balance sheets, were $ 5.6 million and $ 6.1 million as of September 30, 2025 and December 31, 2024, respectively.

Operating lease cost, as included in general and administrative expense in our consolidated statements of operations, was $ 0.5 million and $ 0.6 million for the three months ended September 30, 2025 and 2024, respectively.

Operating lease cost, as included in general and administrative expense in our consolidated statements of operations, was $ 1.5 million and $ 1.8 million for the nine months ended September 30, 2025 and 2024, respectively.

Cash paid for amounts included in the measurement of lease liabilities for operating leases was $ 0.7 million and $ 1.4 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, the weighted-average discount rate was 5.9 % and our weighted-average remaining life was 2.0 years.

We do not have any significant lease contracts that have not yet commenced at September 30, 2025.

The table below shows the future minimum payments under non-cancelable operating leases at September 30, 2025 (in thousands):

ROU assets, as included in other assets on the consolidated balance sheets, were $ 4.6 million and $ 4.7 million as of March 31,

2026 and December 31, 2025, respectively.

Lease obligations, as included in accrued expenses and other liabilities on the consolidated balance sheets, were $ 5.0 million and $ 5.1 million as of March 31, 2026 and December 31, 2025, respectively.

Operating lease cost, as included in general and administrative expense in our consolidated statements of operations, was $ 0.5 million and $ 0.5 million for the three months ended March 31, 2026 and 2025, respectively.

Cash paid for amounts included in the measurement of lease liabilities for operating leases was $ 0.7 million and $ 0.6 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, the weighted-average discount rate was 5.9 % and our weighted-average remaining life was 1.8 years.

We do not have any significant lease contracts that have not yet commenced at March 31, 2026.

The table below shows the future minimum payments under non-cancelable operating leases at March 31, 2026 (in thousands):

Year Ending December 31, Operating leases

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Bonding and Letters of Credit

We have outstanding letters of credit and performance and surety bonds totaling $ 423.1 million (including $ 27.0 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 September 30, 2025 and December 31, 2024, respectively, related to our obligations for site improvements at various projects.

We have outstanding letters of credit and performance and surety bonds totaling $ 380.1 million (including $ 19.3 million of letters of credit issued under the Credit Agreement) and $ 392.2 million (including $ 19.5 million of letters of credit issued under the Credit Agreement) at March 31, 2026 and December 31, 2025, 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.

Investment in Unconsolidated Entities

As of September 30, 2025, we had two equity-method real estate joint ventures and four additional joint ventures engaged primarily to provide services, such as mortgage and insurance, to our homebuyers.

As of September 30, 2025 and December 31, 2024, we have a total of $ 21.1 million and $ 28.3 million, respectively, within other assets on the balance sheet relating to our investment in joint ventures associated with our operations.

As of March 31, 2026, we had two equity-method real estate joint ventures and five additional joint ventures engaged primarily to provide services, such as mortgage and insurance, to our homebuyers.

As of March 31, 2026 and December 31, 2025, we have a total of $ 23.1 million and $ 21.2 million, respectively, within other assets on the balance sheet relating to our investment in joint ventures associated with our operations.

Contributions into the unconsolidated entities are for the use of investing in certain real estate transactions and residential mortgage services, respectively.

Income associated with our investment in unconsolidated entities during the three and nine months ended September 30, 2025 was $( 0.03 ) million and $ 1.9 million, respectively.

Income associated with our investment in unconsolidated entities during the three and nine months ended September 30, 2024 was $ 4.6 million and $ 9.6 million, respectively.

Income associated with our investment in unconsolidated entities during the three months ended March 31, 2026 and 2025 was $ 0.4 million and $ 0.9 million, respectively.

Home Sales Revenues

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Retail home sales revenues $ 289,975 $ 296,939

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

See Note 12 for tabular presentation of this information.

SEGMENT INFORMATION

We operate one principal homebuilding business that is organized and reports by division.

We have seven operating segments (our Central, Midwest, Southeast, Mid-Atlantic, Northwest, West and Florida divisions) that we aggregate into five qualifying reportable segments at September 30, 2025:

We have seven operating segments (our Central, Midwest, Southeast, Mid-Atlantic, Northwest, West and Florida divisions) that we aggregate into five qualifying reportable segments at March 31, 2026:

our Central, Southeast, Northwest, West, and Florida divisions.

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Central $ 89,160 $ 101,146

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Cost of sales:

Central $ 76,913 $ 125,225 $ 244,089 $ 337,419

$ 73,456 $ 80,515

Southeast 56,495 77,721

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West 58,301 51,795

Florida 45,479 75,802 138,475 200,286

40,384 39,254

Total cost of sales $ 259,807 $ 277,707

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Corporate (3)

985 ( 367 ) 1,571 1,684

Total other segment items $ 55,610 $ 67,989

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Total net income before income taxes $ 4,319 $ 5,724

(1) The Company recognized $ 4.7 million of impairment charges related to inventory, of which $ 2.4 million was related to our Florida reportable segment and $ 2.3 million was related to our Central reportable segment.

(2) Other segment items reflects other sources of income and expense, including selling expenses, general and administrative expenses and other income, net.

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Central $ 1,189,620 $ 1,162,355

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

What changed 10-Q

Item 1. Financial Statements