What changed in this filing

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Item 1. Financial Statements

2026-08-04 compared with 2026-04-28 · 152 added, 108 removed, 371 unchanged (41% of the section changed)

1 unchanged sentence

LGI HOMES, INC.

CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

March 31, December 31,

June 30, December 31,

Cash and cash equivalents $ 61,081 $ 61,247

10 unchanged sentences

Accrued expenses and other liabilities 146,280 157,971

Notes payable 1,709,457 1,656,803

Notes payable, net 1,580,907 1,656,803

Total liabilities 1,785,937 1,830,953

COMMITMENTS AND CONTINGENCIES

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

COMMITMENTS AND CONTINGENCIES (Note 10)

Common stock, par value $ 0.01 , 250,000,000 shares authorized, 27,904,864 shares issued and 23,248,272 shares outstanding as of June 30, 2026 and 27,789,678 shares issued and 23,133,086 shares outstanding as of December 31, 2025

Additional paid-in capital 354,476 347,308

Retained earnings 2,187,483 2,158,339

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

Treasury stock, at cost, 4,656,592 shares as of June 30, 2026 and December 31, 2025

( 409,582 ) ( 409,635 )

1 unchanged sentence

Total liabilities and equity $ 3,918,593 $ 3,927,242

See accompanying notes to the consolidated financial statements.

See accompanying notes to the condensed consolidated financial statements.

LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

Three Months Ended March 31,

Home sales revenues $ 319,736 $ 351,420

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Homebuilding revenues $ 501,511 $ 483,485 $ 821,247 $ 834,905

Land and other revenues 14,537 4,757 27,677 36,725

Total revenues 516,048 488,242 848,924 871,630

Cost of sales

Homebuilding costs 402,117 372,877 661,924 650,584

Land and other costs 12,235 5,725 24,175 32,729

Total cost of sales 414,352 378,602 686,099 683,313

Selling expenses 44,149 41,599 76,799 83,941

General and administrative 28,571 29,401 56,432 60,603

Operating income (loss) ( 582 ) 169

Other income, net ( 7,615 ) ( 3,400 ) ( 11,316 ) ( 3,991 )

2 unchanged sentences

Net income $ 26,984 $ 31,533 $ 29,144 $ 35,527

Earnings per share:

Basic $ 1.16 $ 1.36 $ 1.26 $ 1.52

3 unchanged sentences

Diluted 23,279,553 23,265,062 23,248,046 23,364,957

See accompanying notes to the consolidated financial statements.

See accompanying notes to the condensed consolidated financial statements.

LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except share data)

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

Net income — — — 26,984 — 26,984

Stock repurchase including excise tax — — — — 53 53

Compensation expense for equity awards — — 2,249 — — 2,249

Stock issued under employee incentive plans 15,993 1 955 — — 956

BALANCE— June 30, 2026 27,904,864 $ 279 $ 354,476 $ 2,187,483 $ ( 409,582 ) $ 2,132,656

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

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

See accompanying notes to the consolidated financial statements.

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

See accompanying notes to the condensed consolidated financial statements.

LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

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Accrued expenses and other liabilities ( 4,311 ) ( 30,015 )

Net cash used in operating activities ( 55,549 ) ( 127,148 )

Net cash provided by (used in) operating activities 59,010 ( 213,521 )

Cash flows from investing activities:

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Loan issuance costs ( 75 ) ( 3,731 )

Proceeds from sale of stock, net of offering expenses 1,242 1,190

Proceeds from sale of stock 2,196 2,038

Stock repurchase — ( 23,639 )

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

Net cash provided by (used in) financing activities ( 84,699 ) 217,812

Net increase (decrease) in cash and cash equivalents ( 166 ) 6,363

1 unchanged sentence

Cash and cash equivalents, end of period $ 61,081 $ 59,560

See accompanying notes to the consolidated financial statements.

See accompanying notes to the condensed consolidated financial statements.

LGI HOMES, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ORGANIZATION AND BASIS OF PRESENTATION

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LGI Homes, Inc., a Delaware corporation (the “Company”, “we,” “us,” or “our”), is headquartered in The Woodlands, Texas.

We engage in the development of communities and the design, construction and sale of new homes in markets in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada, West Virginia, Virginia, Pennsylvania, Maryland and Utah.

The primary aspects of our business are the development of communities and the design, construction and sale of new homes in markets in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada, West Virginia, Virginia, Pennsylvania, Maryland and Utah.

Basis of Presentation

The unaudited consolidated financial statements have been prepared in accordance with U.S.

The unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

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These financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments that are of a normal recurring nature and necessary for the fair presentation of our results for the interim periods presented.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments that are of a normal recurring nature and necessary for the fair presentation of our results for the interim periods presented.

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

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.

The accompanying unaudited financial statements as of June 30, 2026, and for the three and six months ended June 30, 2026 and 2025, include the accounts of the Company and its subsidiaries.

All intercompany balances and transactions have been eliminated in consolidation.

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

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270):

Narrow-Scope Improvements”, which lists the disclosures required under ASC 270 and establishes a disclosure principle.

The disclosure principle requires entities issuing condensed statements to disclose events occurring since the end of the most recent fiscal year that have a material impact on the entity.

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, 2027.

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

REAL ESTATE INVENTORY

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

March 31, December 31,

June 30, December 31,

Land, land under development and finished lots $ 2,507,330 $ 2,601,578

Information centers 64,016 61,940

Homes in progress 321,503 261,850

Completed homes 466,783 587,219

Homes in progress 422,289 261,850

Information centers 62,965 61,940

Land held for sale 53,246 35,039

Total owned inventory 3,512,613 3,547,626

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Our real estate not owned relates to land banking financing arrangements with a third-party land banker to repurchase land that we sold to the land banker as a method of acquiring finished lots in staged takedowns, while limiting risk and minimizing the use of funds from our available cash or other financing sources.

As of June 30, 2026, we have completed the repurchase of all lots via takedowns associated with these transactions.

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

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.

During the six months ended June 30, 2026 and 2025, we transferred $ 66.3 million and $ 41.4 million, respectively, of home assets from real estate inventory to assets held for lease within property and equipment, net.

During the six months ended June 30, 2026, we reclassified land held for sale of $ 35.0 million as of December 31, 2025, from other assets to real estate inventory on the condensed consolidated balance sheet and $ 46.5 million for the six months ended June 30, 2025 from other assets to real estate inventory on the condensed consolidated statement of cash flow.

We made this reclassification to align the presentation of these assets with the classification of the related sales, which are now recorded within revenue rather than other income (see Note 11 ).

This reclassification had no impact on our previously reported total assets or total operating cash flows.

ACCRUED EXPENSES AND OTHER LIABILITIES

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

March 31, December 31,

June 30, December 31,

Real estate inventory development and construction payable $ 52,410 $ 57,103

Taxes payable 10,689 9,704

Land banking financing arrangements 4,224 7,976

Accrued compensation, bonuses and benefits 14,873 14,677

Warranty reserve 14,300 14,500

Warranty reserves 14,800 14,500

Accrued interest 13,653 14,223

Inventory related obligations 12,844 11,641

Lease liability 5,049 5,139

Contract deposits 6,161 5,845

Taxes payable 6,157 9,704

Lease liability 4,604 5,139

Other 20,778 17,163

Land banking financing arrangements — 7,976

Total accrued expenses and other liabilities $ 146,280 $ 157,971

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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 less than a year.

As of June 30, 2026, we have completed the repurchase of all lots via takedowns associated with these transactions.

Inventory Related Obligations

We own lots in certain communities in Florida and Texas that have Community Development Districts or similar utility and infrastructure development special assessment programs that allocate a fixed amount of debt service associated with development activities to each lot.

This obligation for infrastructure development is attached to the land, which is typically payable over a 30-year period and is ultimately assumed by the homebuyer when home sales are closed.

This obligation for infrastructure development is attached to the land and is ultimately assumed by the homebuyer when home sales are closed.

The obligations assumed by the homebuyer represent a non-cash cost of the lots.

Estimated Warranty Reserve

Warranty Reserves

We generally provide homebuyers with a one-year warranty on the house and a limited warranty for major defects in structural elements, such as framing components and foundation systems, typically ranging from six to ten years depending on the applicable state.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Warranty reserves, beginning of period $ 14,300 $ 16,500 $ 14,500 $ 16,100

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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 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.

As of June 30, 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 June 30, 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 $ 1.5 billion, $ 19.0 million of letters of credit were outstanding and $ 406.9 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 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.

At June 30, 2026, the Applicable Margin was 1.85 %, and SOFR was 3.64 %, 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, (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.

At June 30, 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 “LGI Living Loan Agreement”) with Evergreen Residential Capital, LLC, as lender.

On July 23, 2025, the Company’s 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.

As of June 30, 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.

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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.

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 June 30, 2026, we were in compliance with all of the covenants contained in the LGI Living Loan Agreement.

Senior Notes Offering

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Notes payable consist of the following (in thousands):

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 %;

June 30, December 31,

Notes payable under the Credit Agreement ($ 1.1825 billion revolving credit facility at June 30, 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 %)

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Interest incurred $ 28,993 $ 32,601 $ 59,170 $ 62,524

2 unchanged sentences

Cash paid for interest $ 40,831 $ 42,907 $ 56,863 $ 58,425

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.

Included in interest incurred was amortization of deferred financing costs and applicable discounts for notes payable and financing arrangements of $ 2.0 million and $ 2.7 million for the three months ended June 30, 2026 and 2025, respectively, and $ 4.2 million and $ 5.4 million for the six months ended June 30, 2026 and 2025, respectively.

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

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In the normal course of business, we are subject to tax audits in various jurisdictions, and such jurisdictions may assess additional income taxes.

We do not expect the outcome of any audit to have a material effect on our consolidated financial statements;

We do not expect the outcome of any audit to have a material effect on our condensed consolidated financial statements;

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

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.

For the three months ended June 30, 2026, our effective tax rate of 26.3 % 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, partially offset by a decrease in the rate for the federal energy efficient homes tax credits.

For the six months ended June 30, 2026, our effective tax rate of 28.8 % 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 $ 15.8 million and $ 21.3 million for the three months ended June 30, 2026 and 2025, respectively.

Income taxes paid were $ 16.0 million and $ 59.9 million for the six months ended June 30, 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 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.

open market transactions, privately negotiated transactions or otherwise in accordance with applicable laws.

During the three and six months ended June 30, 2026, we did not repurchase any shares of our common stock.

During the three and six months ended June 30, 2025, we repurchased 367,568 shares of our common stock at a total cost, including commissions and excise taxes, of $ 20.6 million and 409,253 shares of our common stock at a total cost, including commissions and excise taxes, of $ 23.6 million, respectively, 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 March 31, 2026, we may purchase up to $ 157.3 million of shares of our common stock under our stock repurchase program.

As of June 30, 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 months ended March 31, 2026 and 2025:

Three Months Ended March 31,

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2026 and 2025:

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Numerator (in thousands):

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Non-performance Based Restricted Stock Units

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

The following table summarizes the activity of our time-vested restricted stock units (“RSUs”) for the six months ended June 30, 2026:

Six Months Ended June 30, 2026

Shares Weighted Average Grant Date Fair Value

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Ending balance 299,296 $ 68.24

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.

We recognized $ 1.6 million and $ 1.8 million of stock-based compensation expense related to outstanding RSUs for the three months ended June 30, 2026 and 2025, respectively.

We recognized $ 3.0 million and $ 3.5 million of stock-based compensation expense related to outstanding RSUs for the six months ended June 30, 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 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.

At June 30, 2026, we had unrecognized compensation cost of $ 10.0 million related to unvested RSUs, which is expected to be recognized over a weighted average period of 1.9 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 for the three months ended March 31, 2026:

Three Months Ended March 31, 2026

The following table summarizes the activity of our PSUs for the six months ended June 30, 2026:

Six Months Ended June 30, 2026

Target Shares Weighted Average Grant Date Fair Value

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Ending balance 370,192 $ 65.81

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.

At June 30, 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 $ 0.7 million and $ 0.9 million of total stock-based compensation expense related to outstanding PSUs for the three months ended June 30, 2026 and 2025, respectively.

We recognized $ 1.2 million and $ 1.5 million of total stock-based compensation expense related to outstanding PSUs for the six months ended June 30, 2026 and 2025, respectively.

At June 30, 2026, we had unrecognized compensation cost of $ 7.6 million, based on the probable amount, related to unvested PSUs, which is expected to be recognized over a weighted average period of 2.8 years.

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

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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.

During the six months ended June 30, 2026, the Company recognized $ 4.7 million of impairment charges related to inventory, which were recorded in inventory on the condensed consolidated balance sheets and cost of sales in the condensed 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.

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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.

As of June 30, 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

The following table below presents the Company’s debt measured at fair value by level within the fair value hierarchy as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026 December 31, 2025

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

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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.

On July 23, 2025, the Company’s 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.

2 unchanged sentences

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

As of June 30, 2026, LGI Living SFR had $ 50.0 million of borrowings outstanding under the LGI Living Loan Agreement.

Land Deposits

2 unchanged sentences

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Land deposits and option payments (1)

3 unchanged sentences

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 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.

(1) Includes land banking financing arrangements that are now concluded.

See Note 2 and Note 3 for more details regarding real estate not owned.

As of June 30, 2026 and December 31, 2025, approximately $ 8.6 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 $ 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):

ROU assets, as included in other assets on the condensed consolidated balance sheets, were $ 4.2 million and $ 4.7 million as of June 30, 2026 and December 31, 2025, respectively.

Lease obligations, as included in accrued expenses and other liabilities on the condensed consolidated balance sheets, were $ 4.6 million and $ 5.1 million as of June 30, 2026 and December 31, 2025, respectively.

Operating lease cost, as included in general and administrative expense in our condensed consolidated statements of operations, was $ 0.5 million and $ 0.5 million for the three months ended June 30, 2026 and 2025, respectively.

Operating lease cost, as included in general and administrative expense in our condensed consolidated statements of operations, was $ 1.0 million and $ 1.0 million for the six months ended June 30, 2026 and 2025, respectively.

Cash paid for amounts included in the measurement of lease liabilities for operating leases was $ 1.3 million and $ 0.6 million for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, the weighted-average discount rate was 5.9 % and our weighted-average remaining life was 1.7 years.

We do not have any significant lease contracts that have not yet commenced at June 30, 2026.

The table below shows the future minimum payments under non-cancelable operating leases at June 30, 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 $ 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.

We have outstanding letters of credit and performance and surety bonds totaling $ 416.0 million (including $ 19.0 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 June 30, 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 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.

As of June 30, 2026, we have two equity-method real estate joint ventures and five equity-method joint ventures engaged primarily to provide services, such as mortgage and insurance, to our homebuyers.

As of June 30, 2026 and December 31, 2025, we have a total of $ 24.6 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 months ended March 31, 2026 and 2025 was $ 0.4 million and $ 0.9 million, respectively.

Home Sales Revenues

Income associated with our investment in unconsolidated entities during the three months ended June 30, 2026 and 2025 was $ 2.4 million and $ 1.0 million, respectively.

Income associated with our investment in unconsolidated entities during the six months ended June 30, 2026 and 2025 was $ 2.8 million and $ 1.9 million, respectively.

Homebuilding Revenues

We generate revenues primarily by delivering move-in ready entry-level and move-up spec homes sold under our LGI Homes brand and our move-up and luxury series spec homes sold under our Terrata Homes brand.

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

Three Months Ended March 31,

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

Wholesale home sales revenues 29,761 54,481

Total home sales revenues $ 319,736 $ 351,420

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

Land and Other Revenues

We also generate land and other revenue through lot sales and leasing.

For the three and six months ended June 30, 2025, we reclassified the income of lot sales and leasing revenues from other income to land and other revenue and land and other costs to conform to the current presentation.

This reclassification had no impact on our previously reported net income, earnings per share, or cash flows for any period presented, as it represents a change in gross presentation between revenue and cost of sales versus other income, net.

The following table presents the revenue and cost of sales for lots and leases reclassified from other income (in thousands).

Three Months Ended June 30, Six Months Ended June 30,

Land and other revenue $ 4,757 $ 36,725

Cost of sales

Land and other costs $ 5,725 $ 32,729

The following table presents our homebuilding revenues and land and other revenues disaggregated by revenue stream (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Retail homebuilding revenues $ 428,009 $ 412,056 $ 717,984 $ 708,995

Wholesale homebuilding revenues 73,502 71,429 103,263 125,910

Total homebuilding revenues 501,511 483,485 821,247 834,905

Land and other revenues 14,537 4,757 27,677 36,725

Total revenues $ 516,048 $ 488,242 $ 848,924 $ 871,630

Our homebuilding revenues and land and other revenues are disaggregated by geography, based on our determined reportable segments.

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 March 31, 2026:

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 June 30, 2026:

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

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Arizona, New Mexico, Nevada, California, Utah

In determining the most appropriate reportable segments, we consider operating segments’ economic and other characteristics, including home floor plans, average selling prices, gross margin percentage, geographical proximity, production construction processes, suppliers, subcontractors, regulatory environments, customer type and underlying demand and supply.

In determining the most appropriate reportable segments, we consider operating segments’ economic and other characteristics, including home floor plans, average selling prices, homebuilding gross margin percentage, geographical proximity, production construction processes, suppliers, subcontractors, regulatory environments, customer type and underlying demand and supply.

Each operating segment follows the same accounting policies and is managed by our management team.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Central $ 136,705 $ 115,918 $ 236,450 $ 219,349

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Florida 73,459 66,573 118,891 120,900

Total home sales revenues $ 319,736 $ 351,420

Total revenues $ 516,048 $ 488,242 $ 848,924 $ 871,630

Cost of sales:

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Florida 10,889 10,878 19,681 22,756

Corporate (3)

Total other segment items $ 65,648 $ 67,543 $ 122,006 $ 139,967

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Total net income before income taxes $ 36,591 $ 42,040 $ 40,910 $ 47,764

(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.

(1) During the six months ended June 30, 2026, 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.

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Central $ 1,107,317 $ 1,162,355

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Total assets $ 3,918,593 $ 3,927,242

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

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

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