What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-04-25 compared with 2024-10-31 · 203 added, 208 removed, 558 unchanged (42% of the section changed)

3 unchanged sentences

(in thousands, except share amounts)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Cash and cash equivalents $ 1,011,652 $ 651,555

16 unchanged sentences

Authorized 10,000,000 shares;

none issued and outstanding at September 30, 2024 and December 31, 2023

none issued and outstanding at March 31, 2025 and December 31, 2024

Common stock, par value $ 0.01 .

Authorized 125,000,000 shares;

36,179,602 and 36,425,037 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

71,830,262 and 71,921,972 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 103,930 143,036

6 unchanged sentences

(in thousands, except per share amounts)

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

2024 2023 2024 2023

Three Months Ended March 31,

Homebuilding:

11 unchanged sentences

Expense ( 4,192 ) ( 3,003 )

(Loss)/earnings from financial services unconsolidated entities and other, net ( 1,263 ) 2,462 ( 4,853 ) ( 3,074 )

Financial services profit 3,101 5,700 7,248 6,066

Earnings/(loss) from financial services unconsolidated entities and other, net 673 ( 4,040 )

Financial services profit/(loss) 3,563 ( 690 )

Commissions and other sales costs ( 94,720 ) ( 101,550 )

2 unchanged sentences

Other income, net 9,498 9,022

Loss on early extinguishment of debt — ( 907 ) ( 631 ) ( 907 )

Earnings before income taxes 160,159 234,015

7 unchanged sentences

Diluted 72,650 73,558

(1) Share and per share amounts have been retroactively adjusted to reflect the 2-for-1 stock split that was effective on January 2, 2025.

See accompanying notes to unaudited consolidated financial statements

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

3 unchanged sentences

Stock-based compensation 6,325 6,114

Loss on early extinguishment of debt 631 907

Equity in earnings from unconsolidated entities ( 626 ) ( 972 )

4 unchanged sentences

Increase in deposits on real estate under option or contract ( 62,179 ) ( 11,449 )

Decrease/(increase) in other receivables, prepaids and other assets 7,307 ( 9,447 )

Increase in accounts payable and accrued liabilities 21,387 37,085

(Increase)/decrease in other receivables, prepaids and other assets ( 37,636 ) 53,769

(Decrease)/increase in accounts payable and accrued liabilities ( 16,041 ) 27,668

(Decrease)/increase in home sale deposits ( 2,863 ) 6,191

2 unchanged sentences

Investments in unconsolidated entities ( 5,850 ) ( 1,586 )

Distributions of capital from unconsolidated entities — 43

Purchases of property and equipment ( 5,592 ) ( 6,258 )

Proceeds from sales of property and equipment 29 79

Maturities/sales of investments and securities 750 750

Payments to purchase investments and securities ( 750 ) ( 750 )

Net cash used in investing activities ( 11,413 ) ( 7,765 )

1 unchanged sentence

Repayment of loans payable and other borrowings ( 2,150 ) ( 6,922 )

Repayment of senior notes ( 250,695 ) ( 150,884 )

Proceeds from issuance of convertible senior notes 575,000 —

Proceeds from issuance of senior notes 497,195 —

Payment of debt issuance costs ( 5,073 ) —

Purchase of capped calls related to issuance of convertible senior notes ( 61,790 ) —

Dividends paid ( 30,887 ) ( 27,239 )

1 unchanged sentence

Net cash provided by/(used in) financing activities 414,086 ( 90,094 )

Net (decrease)/increase in cash and cash equivalents ( 89,668 ) 187,194

Net increase/(decrease) in cash and cash equivalents 360,097 ( 15,929 )

Cash and cash equivalents, beginning of period 651,555 921,227

7 unchanged sentences

Meritage Homes Corporation ("Meritage Homes") is a leading designer and builder of single-family attached and detached homes.

We primarily build in historically high-growth regions of the United States and offer a variety of entry-level and first move-up homes.

We primarily build in long-term high-growth markets of the United States and offer a variety of entry-level and first move-up homes.

We have operations in three regions:

West, Central and East, which are comprised of ten states:

Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee.

West, Central and East, which are comprised of twelve states:

Arizona, California, Colorado, Utah, Tennessee, Texas, Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina.

We also operate a financial services reporting segment.

7 unchanged sentences

We commenced our homebuilding operations in 1985 through our predecessor company, Monterey Homes.

Meritage Homes Corporation was incorporated in the state of Maryland in 1988 under the name of Emerald Mortgage Investments Corporation.

We changed our name to Homeplex Mortgage Investments Corporation in 1990 and merged with Monterey Homes in 1996, at which time our name was changed to Monterey Homes Corporation and later ultimately to Meritage Homes Corporation.

Meritage Homes Corporation was incorporated in the state of Maryland in 1988 under the name of Homeplex Mortgage Investments Corporation and merged with Monterey Homes in 1996, at which time our name was changed to Monterey Homes Corporation and later ultimately to Meritage Homes Corporation.

Since that time, we have engaged in homebuilding and related activities.

2 unchanged sentences

Its homebuilding activities are conducted under the name of Meritage Homes in each of our homebuilding markets.

At September 30, 2024, we were actively selling homes in 278 communities, with base prices ranging from approximately $ 241,000 to $ 1,080,000 .

At March 31, 2025, we were actively selling homes in 290 communities, with base prices ranging from approximately $ 203,000 to $ 1,092,000 .

Basis of Presentation.

1 unchanged sentence

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

These financial statements should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

These financial statements should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024 ("Annual Report").

The unaudited consolidated financial statements include the accounts of Meritage Homes and those of our consolidated subsidiaries, partnerships and other entities in which we have a controlling financial interest, and of variable interest entities (see Note 3) in which we are deemed the primary beneficiary (collectively, “us”, “we”, “our” and “the Company”).

Certain reclassifications have been made to prior year footnotes in the accompanying unaudited consolidated financial statements to conform to classifications used in the current year, including share and per share amounts and reporting segments, as discussed further below.

Intercompany balances and transactions have been eliminated in consolidation.

1 unchanged sentence

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

On November 21, 2024, our Board of Directors declared a two -for-one stock split (the "Stock Split") of Meritage’s common stock in the form of a stock dividend.

Each stockholder of record at the close of business on December 31, 2024 received one additional share of common stock for each share of common stock held, payable after the close of market on January 2, 2025.

Trading began on a split-adjusted basis on January 3, 2025.

There was no adjustment to the number of authorized shares or the par value.

As required by Accounting Standards Codification ("ASC") 260, Earnings Per Share , all share and per share amounts in the accompanying unaudited consolidated financial statements have been retroactively adjusted to reflect the Stock Split for all periods presented, inclusive of dividends and share repurchases.

Operating and Reporting Segments.

Effective January 1, 2025, we realigned our internal organizational structure and resources following continued growth and recent entry into new markets.

As a result of the change in our organizational structure, the Tennessee homebuilding operating segment was reclassified from the East reporting segment to the Central reporting segment for the purpose of making operational and resource decisions and assessing financial performance.

Prior period balances have been retroactively adjusted to reflect this reclassification.

Cash and Cash Equivalents.

Liquid investments with an initial maturity of three months or less are classified as cash equivalents.

Amounts in transit from title companies or closing agents for home closings of approximately $ 63.6 million and $ 95.7 million are included in Cash and cash equivalents at September 30, 2024 and December 31, 2023, respectively.

Real estate inventory is stated at cost unless the community or land is determined to be impaired, at which point the inventory is written down to fair value as required by Accounting Standards Codification (“ASC”) 360-10, Property, Plant and Equipment (“ASC 360-10”) .

Amounts in transit from title companies or closing agents for home closings of approximately $ 60.2 million and $ 29.0 million are included in Cash and cash equivalents at March 31, 2025 and December 31, 2024, respectively.

Real estate inventory is stated at cost unless the community or land is determined to be impaired, at which point the inventory is written down to fair value as required by ASC 360-10, Property, Plant and Equipment (“ASC 360-10”) .

Real estate inventory includes the costs of land acquisition, land development and home construction, capitalized interest, real estate taxes, and direct overhead costs incurred during development and home construction that benefit the entire community, less impairments, if any.

8 unchanged sentences

Included within our Real estate inventory is land held for development and land held for sale.

Land held for development primarily represents land and land development costs related to land where development activity is not currently underway but is expected to begin in the future.

Land held for development primarily represents land and development costs related to land where development activity is not currently underway but is expected to begin in the future.

For these parcels, we have chosen not to currently develop certain land holdings as they typically represent a portion or phases of a larger land parcel that we plan to build out over several years.

4 unchanged sentences

In determining these costs, we compile project budgets that are based on a variety of assumptions, including future construction schedules and costs to be incurred.

Actual results can differ from budgeted amounts for various reasons, including construction delays, labor or material shortages, sales orders absorptions that differ from our expectations, increases in costs that have not yet been contracted, changes in governmental requirements, or other unanticipated issues encountered during construction and development and other factors beyond our control, including weather.

Actual results can differ from budgeted amounts for various reasons, including construction delays, labor or material shortages, sales orders absorption rates that differ from our expectations, increases in costs that have not yet been contracted, changes in governmental requirements, or other unanticipated issues encountered during construction and development and other factors beyond our control, including weather.

To address uncertainty in these budgets, we assess, update and revise project budgets on a regular basis, utilizing the most current information available to estimate home construction and land development costs.

13 unchanged sentences

Since our acquisition contracts typically do not require specific performance, we do not consider such contracts to be contractual obligations to purchase the land and our total exposure under such contracts is limited to the loss of any non-refundable deposits and any related capitalized costs.

Our Deposits on real estate under option or contract were $ 207.5 million and $ 111.4 million as of September 30, 2024 and December 31, 2023, respectively.

Our Deposits on real estate under option or contract were $ 254.5 million and $ 192.4 million as of March 31, 2025 and December 31, 2024, respectively.

See Note 3 for additional information related to Deposits on real estate under option or contract.

In accordance with ASC 350, Intangibles, Goodwill and Other ("ASC 350"), we analyze goodwill on an annual basis (or whenever indication of impairment exists) through a qualitative assessment to determine whether it is necessary to perform a goodwill impairment test.

perform a goodwill impairment test.

ASC 350 states that an entity may first assess qualitative factors to determine whether it is necessary to perform a goodwill impairment test.

7 unchanged sentences

In order to meet the definition of a lease under ASC 842, the contractual arrangement must convey to us the right to control the use of an identifiable asset for a period of time in exchange for consideration.

Leases that meet the criteria of ASC 842 are recorded on

our balance sheets as right-of-use ("ROU") assets and lease liabilities.

Leases that meet the criteria of ASC 842 are recorded on our balance sheets as right-of-use ("ROU") assets and lease liabilities.

ROU assets are classified within Prepaids, other assets and goodwill on the accompanying unaudited consolidated balance sheets, while lease liabilities are classified within Accrued liabilities on the accompanying unaudited consolidated balance sheets.

The table below outlines our ROU assets and lease liabilities (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

ROU assets $ 54,713 $ 52,941

1 unchanged sentence

Off-Balance Sheet Arrangements - Joint Ventures .

We may participate in land development joint ventures as a means of accessing larger parcels of land, expanding our market opportunities, managing our risk profile, optimizing deal structure for the impacted parties and leveraging our capital.

We participate in land development joint ventures as a means of accessing larger parcels of land, expanding our market opportunities, managing our risk profile, optimizing deal structure for the impacted parties and leveraging our capital.

See Note 4 for additional discussion of our investments in unconsolidated entities .

10 unchanged sentences

The table below outlines our surety bond and letter of credit obligations (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Outstanding Estimated work

7 unchanged sentences

Accrued Liabilities .

Accrued liabilities at September 30, 2024 and December 31, 2023 consisted of the following (in thousands):

September 30, 2024 December 31, 2023

Accrued liabilities at March 31, 2025 and December 31, 2024 consisted of the following (in thousands):

March 31, 2025 December 31, 2024

Accruals related to real estate development and construction activities $ 147,448 $ 167,075

12 unchanged sentences

We regularly review our warranty reserves and adjust them, as necessary, to reflect changes in trends as information becomes available.

Based on such reviews of warranty costs incurred, we did not adjust the warranty reserve balance in the three or nine months ended September 30, 2024 or 2023.

Included in the warranty reserve balances at September 30, 2024 and December 31, 2023 are case-specific reserves for warranty matters, as discussed in Note 15.

Based on such reviews of warranty costs incurred, we did not adjust the warranty reserve balance in the three months ended March 31, 2025 or 2024.

Included in the warranty reserve balances at March 31, 2025 and December 31, 2024 are case-specific warranty reserves, as discussed in Note 15.

A summary of changes in our warranty reserves follows (in thousands):

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

2024 2023 2024 2023

Three Months Ended March 31,

Balance, beginning of period $ 32,693 $ 37,360

3 unchanged sentences

Balance, end of period $ 35,352 $ 36,364

Warranty reserves are included in Accrued liabilities on the accompanying unaudited consolidated balance sheets, and additions and adjustments to the reserves are included in Cost of home closings on the accompanying unaudited consolidated income statements.

Warranty reserves are included in Accrued liabilities on the accompanying unaudited consolidated balance sheets, and additions and adjustments to the reserves are included in Cost of home closings within the accompanying unaudited consolidated income statements.

These reserves are intended to cover costs associated with our contractual and statutory warranty obligations, which include, among other items, claims involving defective workmanship and materials.

16 unchanged sentences

Revenue from financial services includes estimated future insurance policy renewal commissions as our performance obligations are satisfied upon issuance of the initial policy with a third party broker.

The related contract assets for these estimated future renewal commissions are no t material at September 30, 2024 and December 31, 2023.

The related contract assets for these estimated future renewal commissions are no t material at March 31, 2025 and December 31, 2024.

Recent Accounting Pronouncements.

1 unchanged sentence

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which aligns interim segment disclosure requirements with existing annual requirements and includes updates to segment reporting, most notably through enhanced disclosures about significant segment expenses and the Chief Operating Decision Maker.

ASU 2023-07 is effective for our annual report covering the fiscal year beginning January 1, 2024, and for our interim reports beginning January 1, 2025.

ASU 2023-07 is required to be applied retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the impact adopting this standard will have on our financial statement disclosures.

We adopted ASU 2023-07 in our annual report covering the fiscal year beginning January 1, 2024, and for this interim report beginning January 1, 2025.

ASU 2023-07 is applied retrospectively to all prior periods presented in the accompanying unaudited consolidated financial statements.

In December 2023, the FASB issued ASU No.

1 unchanged sentence

Improvements to Income Tax Disclosures ("ASU 2023-09"), which modifies the disclosure requirements primarily related to the effective tax rate reconciliation and income taxes paid by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for us beginning January 1, 2025 and may be applied either retrospectively or prospectively.

We are currently evaluating the impact adopting this standard will have on our financial statement disclosures.

ASU 2023-09 is effective for our annual report covering the fiscal year beginning January 1, 2025 and may be applied either retrospectively or prospectively.

We are currently evaluating the impact adopting this guidance will have on our financial statement disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses.

ASU 2024-03 is effective for our annual report covering the fiscal year beginning January 1, 2027, and for our interim reports beginning January 1, 2028.

We are currently evaluating the impact adopting this guidance will have on our financial statement disclosures.

In November 2024, the FASB issued ASU No.

2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments ("ASU 2024-04"), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

We adopted ASU 2024-04 on January 1, 2025 on a prospective basis and will apply the amendments to any future settlements of convertible debt instruments.

The adoption of ASU 2024-04 did not have any impact on the accompanying unaudited consolidated financial statements.

NOTE 2 — REAL ESTATE AND CAPITALIZED INTEREST

Real estate consists of the following (in thousands):

September 30, 2024 December 31, 2023

Homes under contract under construction (1)

$ 719,430 $ 704,206

Unsold homes, completed and under construction (1)

1,599,921 1,260,855

Model homes (1)

March 31, 2025 December 31, 2024

Homes completed and under construction (1)

$ 2,454,275 $ 2,375,639

2 unchanged sentences

Total $ 5,800,954 $ 5,728,775

(1) Includes the allocated land and land development costs associated with each lot for these homes.

(1) Includes the allocated land and land development costs associated with each lot for sold and unsold homes.

(2) Includes raw land, land held for development and land held for sale, less impairments, if any.

4 unchanged sentences

A summary of our capitalized interest is as follows (in thousands):

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

2024 2023 2024 2023

Three Months Ended March 31,

Capitalized interest, beginning of period $ 53,678 $ 54,516

9 unchanged sentences

Although we do not have legal title to the underlying land, if we are the primary beneficiary we are required to consolidate the VIE in our financial statements and reflect its assets and liabilities as Real estate not owned and Liabilities related to real estate not owned, respectively.

We determined that as of September 30, 2024 and December 31, 2023, we were not the primary beneficiary of any VIEs from which we have acquired rights to land or lots under option contracts.

The table below presents a summary of our lots under option at September 30, 2024 (dollars in thousands):

We determined that as of March 31, 2025 and December 31, 2024, we were not the primary beneficiary of any VIEs from which we have acquired rights to land or lots under option contracts.

The table below presents a summary of our lots under option at March 31, 2025 (dollars in thousands):

Projected Number

18 unchanged sentences

(3) Except for our specific performance contracts recorded on the accompanying unaudited consolidated balance sheets as Real estate not owned (if any), none of our purchase or option contracts require us to purchase lots.

(4) Amount is reflected on the accompanying unaudited consolidated balance sheets in Deposits on real estate under option or contract as of September 30, 2024.

(4) Amount is reflected on the accompanying unaudited consolidated balance sheets in Deposits on real estate under option or contract as of March 31, 2025.

Generally, our options to purchase lots remain effective so long as we purchase a pre-established minimum number of lots on a pre-determined schedule in accordance with each respective agreement.

6 unchanged sentences

Based on the structure of these joint ventures, they may or may not be consolidated into our results.

As of September 30, 2024, we had one active equity-method land joint venture and one mortgage joint venture.

The primary activity of our land joint ventures is the development and sale of lots to joint venture partners and/or unrelated builders.

In 2024, we entered into a new land joint venture from which we expect to purchase lots in the future for home construction.

Our mortgage joint venture is engaged in mortgage activities and primarily provides mortgage services to our homebuyers.

As of March 31, 2025, we had two active equity-method land joint ventures and one mortgage joint venture.

The mortgage joint venture is engaged in mortgage activities and primarily provides mortgage services to our homebuyers.

Summarized condensed combined financial information related to unconsolidated joint ventures that are accounted for using the equity method was as follows (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

$ 4,314 $ 4,434

6 unchanged sentences

Total liabilities and equity $ 83,597 $ 78,163

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

2024 2023 2024 2023

Three Months Ended March 31,

Revenue $ 10,740 $ 10,590

1 unchanged sentence

Net earnings of unconsolidated entities $ 881 $ 1,453

Meritage’s share of pre-tax earnings/(loss) (1) (2)

$ 1,298 $ 1,770 $ 3,925 $ 4,652

Meritage’s share of pre-tax earnings (1) (2)

(1) Balance represents Meritage’s interest, as reflected in the financial records of the respective joint ventures.

1 unchanged sentence

(i) timing differences for revenue and distributions recognition, (ii) step-up basis and corresponding amortization, (iii) capitalization of interest on qualified assets, (iv) income deferrals as discussed in Note (2) below and (v) the cessation of allocation of losses from joint ventures in which we have previously written down our investment balance to zero and where we have no commitment to fund additional losses.

(2) Our share of pre-tax earnings/(loss) from our mortgage joint venture is recorded in (Loss)/earnings from financial services unconsolidated entities and other, net on the accompanying unaudited consolidated income statements.

Our share of pre-tax earnings/(loss) from all other joint ventures is recorded in Other income, net on the accompanying unaudited consolidated income statements and excludes joint venture profit related to lots we purchased from the joint ventures, if any.

(2) Our share of pre-tax earnings from our mortgage joint venture is recorded in Earnings/(loss) from financial services unconsolidated entities and other, net on the accompanying unaudited consolidated income statements.

Our share of pre-tax earnings from all other joint ventures is recorded in Other income, net on the accompanying unaudited consolidated income statements and excludes joint venture profit related to lots we purchased from the joint ventures, if any.

Such profit is deferred until homes are delivered by us and title passes to a homebuyer.

1 unchanged sentence

Loans payable and other borrowings consist of the following (in thousands):

September 30, 2024 December 31, 2023

Other borrowings, real estate notes payable (1)

March 31, 2025 December 31, 2024

Other borrowings, secured real estate notes payable (1)

$ 35,183 $ 29,343

6 unchanged sentences

refresh the accordion feature permitting the facility size to be increased subject to certain conditions;

extend the maturity date from June 2, 2028 to June 12, 2029;

extend the maturity date to June 12, 2029;

and revise the applicable pricing grid.

The Credit Facility's aggregate commitment is

$ 910.0 million with an accordion feature permitting the size of the facility to increase to a maximum of $ 1.4 billion, subject to certain conditions, including the availability of additional bank commitments.

Borrowings under the Credit Facility bear interest at the Company's option, at either (1) term SOFR (based on 1, 3, or 6 month interest periods, as selected by the Company) plus a 10 basis point adjustment plus an applicable margin (ranging from 110 basis points to 175 basis points (the "applicable margin")) based on the Company's leverage ratio as determined in accordance with a pricing grid, (2) the higher of (i) the prime lending rate ("Prime"), (ii) an overnight bank rate plus 50 basis points and (iii) term SOFR (based on a 1 month interest period) plus a 10 basis point adjustment plus 1 %, in each case plus a margin ranging from 10 basis points to 75 basis points based on the Company's leverage in accordance with a pricing grid, or (3) daily simple SOFR plus a 10 basis point adjustment plus the applicable margin.

At September 30, 2024, the interest rate on outstanding borrowings under the Credit Facility would have been 6.046 % per annum, calculated in accordance with option (1) noted above and using the 1-month term SOFR.

The Credit Facility's aggregate commitment is $ 910.0 million with an

accordion feature permitting the size of the facility to increase to a maximum of $ 1.4 billion, subject to certain conditions, including the availability of additional bank commitments.

Borrowings under the Credit Facility bear interest at the Company's option, at either (1) term Secured Overnight Financing Rate ("SOFR") (based on 1, 3, or 6 month interest periods, as selected by the Company) plus a 10 basis point adjustment plus an applicable margin (ranging from 110 basis points to 175 basis points (the "applicable margin")) based on the Company's leverage ratio as determined in accordance with a pricing grid, (2) the higher of (i) the prime lending rate ("Prime"), (ii) an overnight bank rate plus 50 basis points and (iii) term SOFR (based on a 1 month interest period) plus a 10 basis point adjustment plus 1 %, in each case plus a margin ranging from 10 basis points to 75 basis points based on the Company's leverage in accordance with a pricing grid, or (3) daily simple SOFR plus a 10 basis point adjustment plus the applicable margin.

At March 31, 2025, the interest rate on outstanding borrowings under the Credit Facility would have been 5.519 % per annum, calculated in accordance with option (1) noted above and using the 1-month term SOFR.

We are obligated to pay a fee on the undrawn portion of the Credit Facility at a rate determined by a tiered fee matrix based on our leverage ratio.

The Credit Facility also contains certain financial covenants, including (a) a minimum tangible net worth requirement of $ 3.3 billion (which amount is subject to increase over time based on subsequent earnings and proceeds from equity offerings), and (b) a maximum leverage covenant that prohibits the leverage ratio (as defined therein) from exceeding 60 %.

We were in compliance with all Credit Facility covenants as of September 30, 2024.

We had no outstanding borrowings under the Credit Facility as of September 30, 2024 and December 31, 2023.

There were no borrowings or repayments under the Credit Facility during the three and nine months ended September 30, 2024 and 2023.

As of September 30, 2024, we had outstanding letters of credit issued under the Credit Facility totaling $ 113.3 million, leaving $ 796.7 million available under the Credit Facility to be drawn.

We were in compliance with all Credit Facility covenants as of March 31, 2025.

We had no outstanding borrowings under the Credit Facility as of March 31, 2025 and December 31, 2024.

There were $5.0 million of borrowings and repayments under the Credit Facility during the three months ended March 31, 2025, and no borrowings or repayments under the Credit Facility during the three months ended March 31, 2024.

As of March 31, 2025, we had outstanding letters of credit issued under the Credit Facility totaling $ 139.4 million, leaving $ 770.6 million available under the Credit Facility to be drawn.

NOTE 6 — SENIOR AND CONVERTIBLE SENIOR NOTES, NET

S enior and convertible senior notes, net consist of the following (in thousands):

September 30, 2024 December 31, 2023

6.00 % senior notes due 2025 ("2025 Notes").

At December 31, 2023 there was approximately $ 994 in net unamortized premium.

March 31, 2025 December 31, 2024

5.125 % senior notes due 2027 ("2027 Notes")

1 unchanged sentence

1.750 % convertible senior notes due 2028 ("2028 Convertible Notes")

575,000 575,000

3.875 % senior notes due 2029 ("2029 Notes")

450,000 450,000

5.650 % senior notes due 2035 ("2035 Notes").

At March 31, 2025, there was $ 2,782 in net unamortized discount.

Net debt issuance costs ( 22,133 ) ( 18,465 )

Total $ 1,800,085 $ 1,306,535

The indentures for our 2027 Notes and 2029 Notes contain non-financial covenants including, among others, limitations on the amount of secured debt we may incur, and limitations on sale and leaseback transactions and mergers.

We were in compliance with all such covenants as of September 30, 2024.

Obligations to pay principal and interest on the senior and convertible senior notes are guaranteed by substantially all of our wholly-owned subsidiaries (each a “Guarantor” and, collectively, the “Guarantor Subsidiaries”), each of which is directly or indirectly 100% owned by Meritage Homes Corporation.

The indentures for our 2027 Notes, 2029 Notes and 2035 Notes contain non-financial covenants including, among others, limitations on the amount of secured debt we may incur, on sale and leaseback transactions and mergers.

We were in compliance with all such covenants as of March 31, 2025.

Such guarantees are full and unconditional, and joint and several.

1 unchanged sentence

There are no significant restrictions on our ability or the ability of any Guarantor to obtain funds from their respective subsidiaries, as applicable, by dividend or loan.

We do not provide separate financial statements of the Guarantor Subsidiaries because Meritage (the parent company) has no independent assets or operations and the guarantees are full and unconditional and joint and several.

We do not provide separate financial statements of the Guarantor Subsidiaries because Meritage Homes (the parent company) has no independent assets or operations and the guarantees are full and unconditional and joint and several.

Subsidiaries of Meritage Homes Corporation that are non-guarantor subsidiaries are, individually and in the aggregate, minor.

In September 2023, we partially redeemed $ 150.0 million of our 2025 Notes, incurring $ 0.9 million in early debt extinguishment charges in the three and nine months ended September 30, 2023, reflected as Loss on early extinguishment of debt in the accompanying unaudited consolidated income statements.

After the partial redemption, the 2025 Notes had $ 250.0 million in remaining principal outstanding.

Convertible Senior Notes due 2028

In May 2024, we issued $ 575.0 million aggregate principal amount of 1.750 % 2028 Convertible Notes (the "2028 Convertible Notes") pursuant to an Indenture dated as of May 9, 2024 (the “Indenture”).

In March 2025, we completed an offering of $ 500.0 million aggregate principal amount of 5.650 % 2035 Notes.

The 2035 Notes were issued at a discount of 99.439 % of the principal amount and the net proceeds are intended to be used for general corporate purposes.

2028 Convertible Notes

In May 2024, we issued $ 575.0 million aggregate principal amount of 1.750 % 2028 Convertible Notes.

The 2028 Convertible Notes were issued at par and will mature on May 15, 2028, unless converted earlier in accordance with their terms prior to such date.

We used a portion of the net proceeds from the offering to pay the cost of entering into the capped calls, as defined and described below, and to redeem the remaining $ 250.0 million aggregate principal then outstanding of our 2025 Notes for which we incurred $ 0.6 million in early debt extinguishment charges in the nine months ended September 30, 2024 , reflected as Loss on early extinguishment of debt in the accompanying unaudited consolidated income statements.

There were no such charges in the three months ended September 30, 2024.

The 2028 Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 4.3048 shares of common stock per $1,000 principal amount of the 2028 Convertible Notes, which is equivalent to an initial conversion price of approximately $ 232.30 per share.

The conversion rate will be subject to adjustment upon the occurrence of certain events but will not be adjusted for accrued and unpaid interest or quarterly cash dividends.

The 2028 Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 8.6096 shares of common stock per $1,000 principal amount of the 2028 Convertible Notes, which is equivalent to an initial conversion price of approximately $ 116.15 per share and is subject to adjustment in certain circumstances.

In addition, we must provide additional shares upon conversion if there is a "Make-Whole Fundamental Change".

The Company is required to satisfy its conversion obligations by paying cash up to the principal amount of notes and settle any additional value in cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election.

Prior to February 15, 2028, the holders of the 2028 Convertible Notes may convert their notes only under the following conditions:

(1) the sale price of common stock reaches 130 % of the applicable conversion price for a specified period during any fiscal quarter commencing after the fiscal quarter ending on September 30, 2024;

(2) the trading price of the 2028 Convertible Notes falls below 98% of the product of the last reported sale price of common stock and the conversion rate for a specified period;

or (3) upon the occurrence of specified corporate events.

Prior to February 15, 2028, the holders of the 2028 Convertible Notes may convert their notes only upon satisfaction of certain circumstances.

During the three months ended March 31, 2025, the circumstances allowing holders of the 2028 Convertible Notes to convert were not met.

On or after February 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date of the Notes, holders may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances.

The 2028 Convertible Notes are accounted for in accordance with ASC 470, Debt , and ASC 815, Derivatives and Hedging ("ASC 815") .

The conversion options and the 2028 Convertible Notes are reflected as a single instrument in Senior and convertible senior notes, net on the accompanying unaudited consolidated balance sheets and the conversion options are not bifurcated as a derivative.

For additional details related to our 2028 Convertible Notes and Capped Calls, see Note 6 in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Capped Call Transactions

Concurrent with the offering of the 2028 Convertible Notes, we used $ 61.8 million of the net proceeds to enter into privately negotiated capped call transactions (the "Capped Calls”) which require the Capped Calls counterparties (the "Counterparties") to provide shares of our common stock to converting debt holders up to a cap price.

Concurrent with the offering of the 2028 Convertible Notes, we used a portion of the net proceeds to enter into privately negotiated capped call transactions (the "Capped Calls”) which require the Capped Calls counterparties (the "Counterparties") to provide shares of our common stock to converting debt holders up to a cap price.

The Capped Calls each have an initial strike price of approximately $ 116.15 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2028 Convertible Notes.

3 unchanged sentences

Holders of the 2028 Convertible Notes do not have any rights with respect to the Capped Calls.

As the Capped Calls are considered indexed to the Company's own stock, they are recorded in stockholders’ equity as a reduction of Additional paid-in capital in the accompanying unaudited consolidated balance sheets, and are not accounted for as derivatives under ASC 815-10.

NOTE 7 — FAIR VALUE DISCLOSURES

9 unchanged sentences

The fair value of our fixed-rate debt is derived from quoted market prices by independent dealers (Level 2 inputs as per the discussion above) and is as follows (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Principal Estimated Fair

1 unchanged sentence

Principal Estimated Fair

6.00 % senior notes due 2025

5.125 % 2027 Notes

$ 300,000 $ 301,140 $ 300,000 $ 300,330

5.125 % senior notes due 2027

1.750 % 2028 Convertible Notes

$ 575,000 $ 564,110 $ 575,000 $ 563,259

1.750 % convertible senior notes due 2028

3.875 % 2029 Notes

$ 450,000 $ 426,960 $ 450,000 $ 420,795

3.875 % senior notes due 2029

5.650 % 2035 Notes

$ 500,000 $ 494,020 $ — $ —

6 unchanged sentences

Basic and diluted earnings per common share were calculated as follows (in thousands, except per share amounts):

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

2024 2023 2024 2023

Three Months Ended March 31,

Basic weighted average number of shares outstanding 71,915 72,622

10 unchanged sentences

As the Company will settle the principal amount of convertible notes in cash upon conversion, the convertible notes only have a dilutive impact when the average share price of the Company’s common stock exceeds the conversion price, in any applicable period.

Share and per share amounts have been retroactively adjusted to reflect the Stock Split that was effective on January 2, 2025.

NOTE 9 — ACQUISITIONS AND GOODWILL

11 unchanged sentences

Additions — — — — — —

Balance at September 30, 2024 $ — $ — $ 32,962 $ — $ — $ 32,962

Balance at March 31, 2025 $ — $ 10,247 $ 22,715 $ — $ — $ 32,962

(1) Effective January 1, 2025, the Tennessee homebuilding operating segment has been reclassified from the East reporting segment to the Central reporting segment.

See Note 1 for additional information about the reclassification of the Tennessee homebuilding operating segment.

Prior period balances have been retroactively adjusted to reflect this reclassification.

NOTE 10 — STOCKHOLDERS’ EQUITY

A summary of changes in stockholders’ equity is presented below (in thousands):

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

(In thousands)

4 unchanged sentences

Balance at December 31, 2024 71,922 $ 360 $ 143,036 $ 4,998,177 $ 5,141,573

Stock Split on January 2, 2025 (See Note 1) — 360 ( 360 ) — —

Net earnings — — — 122,806 122,806

4 unchanged sentences

Balance at March 31, 2025 71,831 $ 718 $ 103,930 $ 5,090,096 $ 5,194,744

Net earnings — — — 231,555 231,555

Stock-based compensation expense — — 4,718 — 4,718

Issuance of stock 8 — — — —

Dividends declared — — — ( 27,245 ) ( 27,245 )

Share repurchases — — — — —

Capped call transactions, net of tax — — ( 47,067 ) — ( 47,067 )

Balance at June 30, 2024 36,327 $ 363 $ 198,503 $ 4,683,668 $ 4,882,534

Net earnings — — — 195,966 195,966

Stock-based compensation expense — — 8,473 — 8,473

Issuance of stock 4 — — — —

Dividends declared — — — ( 27,135 ) ( 27,135 )

Share repurchases ( 151 ) (1) ( 30,047 ) — ( 30,048 )

Balance at September 30, 2024 36,180 $ 362 $ 176,929 $ 4,852,499 $ 5,029,790

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

(In thousands)

Shares Common

Stock Additional

4 unchanged sentences

Stock-based compensation expense — — 6,114 — 6,114

Issuance of stock 287 3 ( 3 ) — —

Dividends declared — — — ( 27,239 ) ( 27,239 )

Share repurchases ( 93 ) ( 1 ) ( 9,999 ) — ( 10,000 )

Balance at March 31, 2023 36,765 $ 368 $ 324,101 $ 3,742,741 $ 4,067,210

Net earnings — — — 186,836 186,836

Stock-based compensation expense — — 4,176 — 4,176

Dividends declared — — — ( 9,927 ) ( 9,927 )

Share repurchases — — — — —

Balance at June 30, 2023 36,765 368 328,277 3,919,650 4,248,295

Net earnings — — — 221,760 221,760

Stock-based compensation expense — — 6,156 — 6,156

Dividends declared — — — ( 9,841 ) ( 9,841 )

Issuance of stock 512 3 ( 3 ) — —

Share repurchases ( 724 ) ( 4 ) ( 56,214 ) — ( 56,218 )

Balance at September 30, 2023 36,450 $ 364 $ 289,109 $ 4,131,569 $ 4,421,042

During the three months ended September 30, 2024 and 2023, our Board of Directors approved, and we paid, a quarterly cash dividend on common stock of $ 0.75 and $ 0.27 per share, respectively.

Quarterly dividends declared and paid during the nine months ended September 30, 2024 and 2023, totaled $ 2.25 and $ 0.81 per share, respectively.

During the three and nine months ended September 30, 2024 and 2023, we reflected the applicable excise tax on share repurchases in Additional paid-in capital as part of the cost basis of the stock repurchased and recorded a corresponding liability in Accrued liabilities on the accompanying unaudited consolidated balance sheets.

Balance at March 31, 2024 72,638 $ 363 $ 240,852 $ 4,479,358 $ 4,720,573

(1) Share amounts have been retroactively adjusted to reflect the Stock Split that was effective on January 2, 2025.

During the three months ended March 31, 2025 and 2024, our Board of Directors approved, and we paid, a quarterly cash dividend on common stock of $ 0.43 and $ 0.375 per share, respectively.

During the three months ended March 31, 2025 and 2024, we reflected the applicable excise tax on share repurchases in Additional paid-in capital as part of the cost basis of the stock repurchased and recorded a corresponding liability in Accrued liabilities on the accompanying unaudited consolidated balance sheets.

NOTE 11 — STOCK BASED AND DEFERRED COMPENSATION

4 unchanged sentences

The 2018 Plan authorizes awards to officers, key employees, non-employee directors and consultants.

The 2018 Plan authorizes 7,400,000 shares of stock to be awarded, of which 1,147,353 shares remain available for grant at September 30, 2024.

The 2018 Plan authorizes 14,800,000 shares of stock to be awarded, of which 1,883,235 shares remain available for grant at March 31, 2025.

We believe that such awards provide a means of long-term compensation to attract and retain qualified employees and better align the interests of our employees with those of our stockholders.

2 unchanged sentences

Compensation cost related to performance-based restricted stock unit awards is also measured as of the closing price on the date of grant but is expensed in accordance with ASC 718-10-25-20, Compensation – Stock Compensation ("ASC 718"), which requires an assessment of probability of attainment of the performance target(s).

As our performance targets are dependent on performance over a

specified measurement period, once we determine that a performance target outcome is probable, the cumulative expense is recorded immediately with the remaining expense recorded on a straight-line basis through the end of the award vesting period.

As our performance targets are dependent on performance over a specified measurement period, once we determine that a performance target outcome is probable, the cumulative expense is recorded immediately with the remaining expense recorded on a straight-line basis through the end of the award vesting period.

A portion of the performance-based restricted stock unit awards granted to our executive officers contain market conditions as defined by ASC 718.

2 unchanged sentences

Below is a summary of stock-based compensation expense and stock award activity (dollars in thousands):

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

2024 2023 2024 2023

Three Months Ended March 31,

Stock-based compensation expense $ 6,325 $ 6,114

6 unchanged sentences

The following table includes additional information regarding our stock compensation plan (dollars in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Unrecognized stock-based compensation cost $ 47,863 $ 30,666

5 unchanged sentences

We do not currently offer a contribution match on the Deferred Compensation Plan.

All contributions to the plan to date have been funded by the employees and, therefore, we have no associated expense related to the Deferred Compensation Plan for the three and nine months ended September 30, 2024 or 2023, other than minor administrative costs.

All contributions to the plan to date have been funded by the employees and, therefore, we have no associated expense related to the Deferred Compensation Plan for the three months ended March 31, 2025 or 2024, other than minor administrative costs.

NOTE 12 — INCOME TAXES

Components of the provision for income taxes are as follows (in thousands):

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

2024 2023 2024 2023

Three Months Ended March 31,

Federal $ 30,631 $ 38,122

1 unchanged sentence

Total $ 37,353 $ 47,999

The effective tax rate for the three and nine months ended September 30, 2024 was 21.6 % and 21.5 %, and for the three and nine months ended September 30, 2023 was 22.4 % and 21.8 %, respectively.

The rate for all periods reflects the §45L energy-efficient homes federal tax credit on qualifying homes under the Internal Revenue Code ("IRC") enacted in the Inflation Reduction Act ("IRA") in August 2022.

At September 30, 2024 and December 31, 2023, we have no unrecognized tax benefits.

We believe our current income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change.

The effective tax rate for the three months ended March 31, 2025 and 2024 was 23.3 % and 20.5 %, respectively.

The increase in the effective tax rate for the three months ended March 31, 2025 reflects fewer homes qualifying for the §45L energy-efficient homes federal tax credit under the Internal Revenue Code ("IRC") enacted in the Inflation Reduction Act ("IRA") due to higher construction thresholds required to earn these tax credits beginning in 2025.

At March 31, 2025 and December 31, 2024, we have no unrecognized tax benefits.

We believe our current income tax filing positions and deductions will be sustained on audit and we do not anticipate any adjustments that will result in a material change.

Our policy is to accrue interest and penalties on unrecognized tax benefits and include them in the provision for income taxes.

2 unchanged sentences

This evaluation considers, among other matters, the nature, frequency and severity of cumulative losses, forecasts of future profitability, the length of statutory carry forward periods, experiences with operating losses and experiences of utilizing tax credit carry forwards and tax planning alternatives.

We have no NOLs or credit carryovers, and determined that no valuation allowance on our deferred tax assets is necessary at September 30, 2024.

At September 30, 2024, we have $ 17.8 million in income taxes receivable and no income taxes payable.

The income taxes receivable primarily consists of federal and state estimated tax payments and energy tax credits in excess of income tax liability accrued as of September 30, 2024, and is recorded in Other receivables on the accompanying unaudited consolidated balance sheets at September 30, 2024.

In addition, we have accrued taxes of $ 15.2 million recorded in Accrued liabilities on the accompanying unaudited consolidated balance sheets as of September 30, 2024 that consists primarily of state franchise tax, sales and use tax and federal excise tax.

We have no NOLs or credit carryovers, and determined that no valuation allowance on our deferred tax assets is necessary at March 31, 2025.

At March 31, 2025, we had $ 47.4 million income taxes payable and no income taxes receivable.

The income taxes payable primarily consists of federal and state tax accruals, net of current energy tax credits and estimated tax payments, and is recorded in Accrued liabilities on the accompanying unaudited consolidated balance sheets at March 31, 2025.

We conduct business and are subject to tax in the U.S.

2 unchanged sentences

federal, state, or local income tax examinations by taxing authorities for years prior to 2020.

We have one state income tax examination being conducted at this time.

We do not have any Federal or state income tax examinations pending resolution at this time.

NOTE 13 — SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

The following table presents certain supplemental cash flow information (in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Cash paid during the year for:

Interest, net of interest capitalized $ ( 14,385 ) $ ( 12,754 )

Income taxes paid $ 182,390 $ 145,020

Income taxes paid, net $ 107 $ 204

Non-cash operating activities:

Real estate acquired through notes payable $ 7,990 $ —

ROU assets obtained in exchange for new operating lease obligations $ 9,139 $ 36,266

Non-cash investing and financing activities:

3 unchanged sentences

homebuilding and financial services.

As defined in ASC 280-10, Segment Reporting , we have ten homebuilding operating segments.

As defined in ASC 280-10, Segment Reporting , we have twelve homebuilding operating segments.

The homebuilding segments are engaged in the business of acquiring and developing land, constructing homes, marketing and selling those homes and providing warranty and customer services.

2 unchanged sentences

Arizona, California, Colorado and Utah

Florida, Georgia, North Carolina, South Carolina and Tennessee

Management’s evaluation of segment performance is based on homebuilding segment operating income, which we define as home and land closing revenue less cost of home and land closings, including land development and other land sales costs, commissions and other sales costs, and other general and administrative costs incurred by or allocated to each segment, including impairments.

Each reportable segment follows the same accounting policies described in Note 1, “Organization and

Basis of Presentation.” Operating results for each segment may not be indicative of the results for such segment had it been an independent, stand-alone entity for the periods presented.

The following segment information is in thousands:

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

2024 2023 2024 2023

Homebuilding revenue (1) :

West $ 594,509 606,833 $ 1,732,978 $ 1,569,947

Central 418,927 454,228 1,305,672 1,338,387

East 575,013 552,039 1,711,938 1,551,474

Consolidated total $ 1,588,449 $ 1,613,100 $ 4,750,588 $ 4,459,808

Tennessee and Texas

Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina

We define our segments based on the way in which internally reported financial information is regularly provided and reviewed by the CODM to analyze financial performance, make decisions, and allocate resources.

Our CODM is the chief executive officer.

The CODM’s evaluation of the homebuilding segment performance is based on segment home closing revenue, home closing gross profit/(loss), home closing gross margin, total gross profit/(loss), commissions and other sales costs, general and administrative costs incurred by or allocated to each segment, including impairments, and operating income/(loss).

The CODM uses these performance metrics predominantly in the annual budget and forecasting process and considers budget-to-actual variances on a quarterly basis for these measures when making decisions about the allocation of operating and capital resources to each segment.

The CODM also uses these data points to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.

The CODM also reviews financial services profit/(loss) to evaluate the performance of the financial services segment and make decisions about allocation of resources and financial services related product offerings.

Effective January 1, 2025, we realigned our internal organizational structure and resources following continued growth and recent entry into new markets.

operational and resource decisions and assessing financial performance.

Prior period balances have been retroactively adjusted to reflect this reclassification.

Each reportable segment follows the same accounting policies described in Note 1, “Organization and Basis of Presentation.” Operating results for each segment may not be indicative of the results for such segment had it been an independent, stand-alone entity for the periods presented.

The following tables provide financial information about our reportable segments and Corporate and other categories (in thousands):

Three Months Ended March 31, 2025

West Central East Total

Home closing revenue $ 479,636 $ 412,537 $ 449,931 $ 1,342,104

Land closing revenue 691 930 13,800 15,421

Total closing revenue 480,327 413,467 463,731 1,357,525

Cost of home closings 374,665 321,808 349,981 1,046,454

Cost of land closings 142 335 11,779 12,256

Total cost of closings 374,807 322,143 361,760 1,058,710

Home closing gross profit 104,971 90,729 99,950 295,650

Land closing gross profit 549 595 2,021 3,165

Total closing gross profit 105,520 91,324 101,971 298,815

Home closing gross margin 21.9 % 22.0 % 22.2 % 22.0 %

Commissions and other sales costs 27,402 32,657 34,661 94,720

General and administrative expenses 13,453 12,839 18,092 44,384

Homebuilding segment operating income 64,665 45,828 49,218 159,711

West $ 93,891 $ 94,885 $ 265,934 $ 185,977

Central 68,198 84,575 223,914 233,357

East 92,127 109,318 296,613 273,711

Total homebuilding segment operating income 254,216 288,778 786,461 693,045

Financial services segment profit/(loss) 3,101 5,700 7,248 6,066

Financial services segment profit 3,563

Corporate and unallocated costs (1) ( 12,613 )

( 18,067 ) ( 21,168 ) ( 42,972 ) ( 42,680 )

Interest expense —

Other income, net 9,498

Loss on early extinguishment of debt — ( 907 ) ( 631 ) ( 907 )

Earnings before income taxes $ 160,159

(1) Homebuilding revenue includes the following land closing revenue, by segment:

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

2024 2023 2024 2023

(1) Balance consists primarily of corporate costs and shared service functions such as finance and treasury that are not allocated to the homebuilding or financial services reporting segments.

Three Months Ended March 31, 2024

West Central East Total

Home closing revenue $ 515,632 $ 483,770 $ 466,694 $ 1,466,096

Land closing revenue — — 2,305 2,305

West $ — $ — $ — $ 26,575

Central 2,125 1,541 2,125 4,019

East 540 1,242 2,845 13,953

Total $ 2,665 $ 2,783 $ 4,970 $ 44,547

Total closing revenue 515,632 483,770 468,999 1,468,401

Cost of home closings $ 400,504 $ 350,371 $ 337,263 $ 1,088,138

Cost of land closings — — 2,298 2,298

Total cost of closings 400,504 350,371 339,561 1,090,436

Home closing gross profit 115,128 133,399 129,431 377,958

Land closing gross profit — — 7 7

Total closing gross profit 115,128 133,399 129,438 377,965

Home closing gross margin 22.3 % 27.6 % 27.7 % 25.8 %

Commissions and other sales costs 31,158 37,245 33,147 101,550

General and administrative expenses 12,706 11,383 13,682 37,771

Homebuilding segment operating income 71,264 84,771 82,609 238,644

Financial services segment loss ( 690 )

Corporate and unallocated costs (1) ( 12,961 )

Interest expense —

Other income, net 9,022

Earnings before income taxes $ 234,015

(1) Balance consists primarily of corporate costs and shared service functions such as finance and treasury that are not allocated to the homebuilding or financial services reporting segments.

At September 30, 2024

At March 31, 2025

West Central East Financial Services Corporate and

6 unchanged sentences

(1) Balance consists primarily of cash and cash equivalents, development reimbursements from local municipalities, and property and equipment, net .

(2) Balance consists primarily of cash and cash equivalents, development reimbursements from local municipalities and prepaids and other assets.

(2) Balance consists primarily of cash and cash equivalents, development reimbursements from local municipalities, goodwill (see Note 9), and prepaids and other assets.

(3) Balance consists primarily of cash and cash equivalents, goodwill (see Note 9), and prepaids and other assets.

8 unchanged sentences

Total assets $ 1,930,284 $ 1,934,954 $ 2,473,356 $ 3,049 $ 821,011 $ 7,162,654

(1) Balance consists primarily of cash and cash equivalents, receivables from title companies and property and equipment, net.

(2) Balance consists primarily of cash and cash equivalents, development reimbursements from local municipalities and prepaids and other assets .

(3) Balance consists primarily of cash and cash equivalents, goodwill (see Note 9), prepaids and other assets and property and equipment, net .

(4) Balance consists primarily of cash and cash equivalents, deferred tax assets, net and prepaids and other assets .

(1) Balance consists primarily of property and equipment, prepaid expenses and other assets, and development receivables.

(2) Balance consists primarily of development reimbursements from local municipalities, property and equipment, goodwill (see Note 9), and prepaid expenses and other assets .

(3) Balance consists primarily of cash and cash equivalents, goodwill (see Note 9), and prepaids and other assets .

(4) Balance consists primarily of cash and cash equivalents, deferred tax assets, prepaid expenses and other assets .

NOTE 15 — COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

Historically, most disputes regarding warranty claims are resolved prior to litigation.

We believe there are no pending legal or warranty matters as of September 30, 2024 that could have a material adverse impact upon our consolidated financial condition, results of operations or cash flows that have not been sufficiently reserved.

As discussed in Note 1 under the heading “Warranty Reserves”, we have case specific reserves within our $ 35.4 million of total warranty reserves related to alleged stucco defects in certain homes we constructed predominantly between 2006 and 2017 and HVAC condensation issues in limited geographies for homes constructed and delivered in 2021 and the first half of 2022.

We believe there are no pending legal or warranty matters as of March 31, 2025 that could have a material adverse impact upon our consolidated financial condition, results of operations or cash flows that have not been sufficiently reserved.

We have case specific reserves within our $ 35.4 million of total warranty reserves related to alleged stucco defects in certain homes we constructed predominantly between 2006 and 2017.

Our review and management of these matters is ongoing and our estimate of and reserves for resolving them is based on internal data, historical experience, our judgment and various assumptions and estimates.

Due to the degree of judgment and the potential for variability in our underlying assumptions and data, as we obtain additional information, we may revise our estimate and thus our related reserves.

As of September 30, 2024, after considering potential recoveries from the consultants and contractors involved and their insurers and the potential recovery under our general liability insurance policies, we did not adjust such reserves and we believe our reserves are sufficient to cover the above mentioned matters.

As of March 31, 2025, after considering potential recoveries from the consultants and contractors involved and their insurers and the potential recovery under our general liability insurance policies, we did not adjust such reserves and we believe our reserves are sufficient to cover the above mentioned matters.

See Note 1 for information related to our warranty obligations.

NOTE 16 — SUBSEQUENT EVENTS

On October 29, 2024, we closed on the asset acquisition of the homebuilding assets of Elliott Homes, a private homebuilder in the Gulf Coast area with operations in Mississippi, Alabama and the Florida panhandle.

Special Note of Caution Regarding Forward-Looking Statements

4 unchanged sentences

Forward-looking statements in this Quarterly Report include statements concerning our belief that we have ample liquidity;

our goals, strategies and strategic initiatives including our all-spec strategy and the anticipated benefits relating thereto;

our goals, strategies and strategic initiatives including our 60-day closing ready commitment strategy, our use of interest rate buy-downs and other financing incentives, our partnership with external realtors, and the anticipated benefits relating thereto;

our intentions and the expected benefits and advantages of our product and land positioning strategies, including with respect to our focus on the first-time and first move-up home buyer and housing demand for affordable homes;

17 unchanged sentences

the impact of new accounting standards and changes in accounting estimates;

trends and expectations concerning future demand for homes, home construction cycle times, sales prices, sales incentives, sales orders, cancellations, construction and materials costs and availability, general and administrative costs, gross margins, land costs, inflation, community counts and profitability and future home supply and inventories;

trends and expectations concerning future demand for homes, home construction cycle times, sales prices, sales incentives, sales orders, cancellations, construction and materials costs and availability, general and administrative costs, mortgage interest rates, gross margins, land costs, inflation, community counts and profitability and future home supply and inventories;

our future cash needs and sources, and the impact of seasonality.

1 unchanged sentence

increases in interest rates or decreases in mortgage availability, and the cost and use of rate locks and buy-downs;

inflation in the cost of materials used to develop communities and construct homes;

the cost of materials used to develop communities and construct homes;

cancellation rates;

supply chain and labor constraints;

shortages in the availability and cost of subcontract labor;

the ability of our potential buyers to sell their existing homes;

14 unchanged sentences

our limited geographic diversification;

shortages in the availability and cost of subcontract labor;

the replication of our energy-efficient technologies by our competitors;

our exposure to information technology failures and security breaches and the impact thereof;

13 unchanged sentences

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