What changed in this filing

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Item 1. Business

2026-02-13 compared with 2025-02-20 · 137 added, 159 removed, 267 unchanged (53% of the section changed)

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 twelve states:

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

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

These three regions are our principal homebuilding reporting segments.

We also operate a financial services reporting segment.

In this segment, we offer title and escrow, mortgage, and insurance services.

We also operate a financial services segment, which offers title and escrow, mortgage, and insurance services to our homebuyers.

Carefree Title Agency, Inc.

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Information about our Company and communities is provided on our Internet website at www.meritagehomes.com .

The information contained on our website is not considered part of this Annual Report on Form 10-K.

The information contained on our website is not considered part of this Annual Report on Form 10-K ("Annual Report").

Our periodic and current reports, including any amendments, filed or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) are available, free of charge, on our website as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).

Meritage Homes operates within a comprehensive plan of corporate governance for the purpose of defining responsibilities and setting high standards for ethical conduct.

Our Board of Directors has established an audit committee, executive compensation committee, environmental, social, nominating and governance committee, and land committee.

The charters for each of these committees are available on our website, along with our Lead Director Charter, Code of Ethics, Corporate Governance Principles and Practices, Conflict of Interest and Related Party Transaction Policy, Securities Trading Policy, Clawback Policy, Human Rights Policy, Vendor Code of Conduct, Environmental Responsibility Policy, and Responsible Marketing Policy (collectively, the "charters and Published Policies").

All of our employees, officers and directors, are required to comply with our Code of Ethics and to immediately report through the appropriate channels, any known instances of non-compliance.

Our Board of Directors has established an audit committee, executive compensation committee, nominating, governance and sustainability committee, and asset management committee.

The charters for each of these committees are available on our website, along with our Lead Independent Director Charter, Code of Ethics, Corporate Governance Principles and Practices, Conflict of Interest and Related Party Transaction Policy, Securities Trading Policy, Clawback Policy, Human Rights Policy, Vendor Code of Conduct, Political Activities and Contributions Policy, Sustainability Policy, Non-Employee Director Retirement Policy, and Responsible Marketing Policy (collectively, the "charters and Published Policies").

All of our employees, officers and directors, are required to comply with our policies and our Code of Ethics.

Our charters and Published Policies are also available in print, free of charge, to any stockholder who requests any of them by calling us or by writing to us at our principal executive offices at the following address:

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The main tenets of these core values are:

• Value, recognize and appreciate our employees, trade partners and customers;

• Value, recognize and appreciate our employees, trade partners, customers and other stakeholders;

• Act with honesty, character and integrity by demonstrating openness and transparency with our internal and external customers;

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• Commit to build a culture of inclusion and belonging across our organization.

These core values are evident in the operational decisions, all of which contribute to the successes we have achieved in becoming the fifth largest homebuilder in America.

Our operational strategy focuses on building affordable, move-in ready homes that are designed to meet the growing demand for entry-level and first move-up product.

Our LiVE.NOW ® communities are targeted to the entry-level price point combining nicely-appointed affordable homes with simplified and streamlined construction and sales processes aimed to create a stress-free buying experience for our customers while also allowing our trade partners and suppliers to work more efficiently and cost effectively, which allows us to pass resulting savings on to our customers.

We have a 100% speculative ("spec") home building strategy for our entry-level product, so we pre-start all of our homes with preselected plans and features.

These core values are evident in our operational decisions, all of which contribute to the successes we have achieved in becoming the fifth largest homebuilder in America.

Our operational strategy focuses on building affordable, move-in ready homes that are designed to meet the growing demand for entry-level and first move-up product in high-growth geographies across the U.S., while utilizing sales channels historically focused on the residential resale market.

Our communities are targeted to the entry-level and first-time move-up price point combining nicely-appointed affordable homes with simplified and streamlined construction and sales processes aimed to create a stress-free buying experience for our customers while also allowing our trade partners and suppliers to work more efficiently and cost effectively, allowing us to pass savings on to our customers.

We have a 100% speculative ("spec") home building strategy, pre-starting all of our homes with preselected plans and features.

Midway through 2024, we introduced a strategic shift of selling homes later in the construction process which enables us to compete more effectively with the resale home market by shortening the delivery time from sale to close, aligning more closely with typical resale home closing timelines.

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We believe that focusing on these three tenets reinforces our brand commitment and positions us competitively to capture a larger market share by opening up a category of buyers that previously might not have considered new home construction due to hesitancy over construction and closing delays and hidden move-in costs.

We believe our move-in ready, 60-day closing ready guarantee will help alleviate these concerns.

Further, by focusing on our relationship with the external realtor community, we expand our potential buyer pool as we know that a large percentage of buyers place their trust in these agents when starting their search for a new home.

We believe our move-in ready, 60-day closing ready guarantee helps alleviate these concerns.

Further, by focusing on our relationship with the external realtor community, we expand our potential buyer pool and marketing funnel as we know that a large percentage of buyers place their trust in these agents when starting their search for a new home.

We continue to focus on building energy efficient, resilient homes and believe it is one of the core differentiators between the new and resale home market.

Accordingly, at a minimum, every new home we construct meets or exceeds ENERGY STAR ® standards which are higher than existing building codes.

These standard offerings provide our customers with homes that utilize, on average, half of the energy of a typical U.S.

Accordingly, at a minimum, every new home we construct, except in certain geographies, meets or exceeds the standards of ENERGY STAR® Version 3.1, which are higher than existing building codes.

ENERGY STAR® certification program is anticipated to phase out by June 2026, based on current guidance from the U.S.

Environmental Protection Agency ("EPA"), we will continue to monitor developments and adjust our approach as needed.

These standard offerings provide our customers with homes that utilize, on average, half of the energy of a typical existing U.S.

home of the same size.

As a result of our commitment to interior air

quality, we received the U.S.

Environmental Protection Agency’s ("EPA") ENERGY STAR ® certification for the eleventh time in 2024 and the Indoor airPLUS certification for the fourth consecutive year.

As a result of our commitment to interior air quality, we have repeatedly received the EPA's ENERGY STAR ® and the Indoor airPLUS certifications.

Our commitment to incorporate these energy and healthy living standards into all of our homes has resulted in our achievement of design, purchasing and production efficiencies that have allowed us to offer these as standard features to our home buyers for nominal additional cost while providing significant additional value to our customers.

In addition, all homes we build include home automation features through our M.Connected Home™ Automation Suite which includes a central hub that allows users to monitor and control key components of their homes, such as Wi-Fi enabled thermostats, garage doors and smart door locks.

In addition, all of our homes come equipped with the M.Connected Home™ Automation Suite, bringing smart home technology together in one convenient app so homeowners can seamlessly monitor and control features like Wi-Fi enabled thermostats, garage doors and smart door locks.

Year after year, we strive to build energy-efficient homes through better construction processes and selection of materials and features inside the home.

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Our homes earn better Home Energy Rating System ("HERS") scores from the third-party energy rater, Residential Energy Services Network, as compared to a comparable existing home.

We have also received various national and regional awards in recognition of our efforts, including:

In recognition of our efforts, we have received various national and regional awards, including most recently:

• Newsweek's 2025 America's Greenest Companies;

• 2024 EPA's ENERGY STAR ® Partner of the Year for Sustained Excellence for the eleventh year (1) ;

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• 2013 - 2024 EPA's ENERGY STAR ® Residential New Construction Market Leader Award (1) ;

• USA Today’s 2024 America’s Climate Leaders;

• Newsweek's 2024 America's Greenest Companies

Environmental, Social and Governance

We believe transparent corporate governance and responsibility are important for the long-term sustainability of the business.

Our Environmental Responsibility Policy, Code of Ethics, Human Rights Policy, Vendor Code of Conduct, and Responsible Marketing Policy, collectively, are intended to define, promote and support sustainable practices throughout all phases of the homebuilding cycle.

(1) The EPA did not issue any awards during 2025.

Sustainability and Corporate Social Responsibility

We believe transparent corporate governance and sustainability are important for the long-term sustainability of the business.

Our Sustainability Policy, Code of Ethics, Human Rights Policy, Vendor Code of Conduct, Political Activities and Contributions Policy, and Responsible Marketing Policy, collectively, are intended to define, promote and support sustainable practices throughout our operations.

We take pride in being an organization driven by ethics and living by our core values and our promise to deliver a Life.Built.Better.

® We promote the long-term interests of our stakeholders and customers and focus on the transparency and accountability of Meritage’s Board of Directors, executive management, employees and trade partners.

In addition to being certified as a Great Place to Work ® for a second year in a row in 2024, we also received various national and regional awards in recognition of our corporate stewardship, including:

• Forbes' 2024 Most Successful Mid-Cap Companies;

• The President's Volunteer Service Award for 2024;

• Arizona's 2024 Most Admired Companies;

In addition to being certified as a Great Place to Work ® for a third year in a row in 2025, we also received various national and regional awards in recognition of our corporate stewardship, including:

• Forbes' 2025 list of Most Trusted Companies in America;

News & World Report’s Best Companies to Work For in 2025-2026;

• 2024 Fortune Best Workplaces in Construction, Best Workplaces for Women, and Best Workplaces for Parents;

• AVID Cup – Production, the highest national honor, for a third consecutive year;

• Various AVID Diamond, Gold and Benchmark customer service awards across multiple categories and divisions.

More information regarding these topics can be found on our website and within publicly filed reports, including our 2024 environmental, social, and governance (“ESG”) report which includes our Task Force on Climate-Related Financial Disclosures ("TCFD") and our Equal Employment Opportunity data (“EEO-1”).

These disclosures are located within the Investor Relations area of our website.

The ESG report and other information on our website are not incorporated by reference into this Annual Report on Form 10-K.

• 2025 Fortune Best Workplaces in Construction, Best Workplaces for Women, and Best Workplaces for Overall;

• One of Time Magazine's 2025 America's Best Mid-Sized Companies;

• Various 2025 AvidCX™ Benchmark customer service awards across multiple divisions.

More information regarding these topics can be found on our website and within publicly filed reports, including our fifth annual Sustainability & Corporate Responsibility report (“S&CR Report”) issued in 2025, which includes our Task Force on Climate-Related Financial Disclosures ("TCFD") and our Equal Employment Opportunity data (“EEO-1”).

This information is located within the Investor Relations area of our website.

The S&CR Report and other information on our website are not incorporated by reference into this Annual Report.

We currently build and sell homes in the following markets:

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Recent Industry and Company Developments

The market for new homes was healthy in 2024 as the largest U.S.

population cohorts of the millennial, Gen Z and baby boomer generations continue to need affordable, move-in ready homes.

While demand was stable, volatile and elevated interest rates resulted in increased need for interest rate assistance for potential homebuyers to help with monthly mortgage affordability.

The ability to offer financing incentives, including interest rate locks and buy-downs, combined with a short supply of re-sale inventory available has shifted demand to the new home market in recent years.

We believe that our ability to offer financing incentives gives us a competitive advantage, particularly over resale homes, as individual home sellers are typically not able to provide such incentives, and that our all-spec strategy with a commitment to affordability can meet this demand, providing us with ample opportunity to capture and grow our market share.

Supply chain and labor market disruptions, shortages and other economic-related disruptions that impacted construction cycle times for the homebuilding industry during 2022 and 2023 stabilized in 2024.

Throughout 2024, we further reduced our construction cycle time, reaching normalized cycle times of approximately 120 days by the end of the year.

The increased capacity in supply chain has resulted in a decrease in some material costs over the past few years, and our higher volume allowed us to capture additional volume discounts from our national vendors.

Land costs were elevated in 2024 following several years of historically high land development activity and negatively impacted our margins.

The market for new homes in 2025 was marked by much softer demand than anticipated, as affordability challenges persisted and consumer confidence deteriorated.

While demand for affordable, move-in ready homes from millennial, Gen Z and baby boomer generations continues, buyers are increasingly reliant on financing assistance to overcome market uncertainty and manage monthly payments.

Our ability to offer financing incentives, including interest rate locks and buy-downs, remains a key differentiator, primarily compared to resale homes, where individual sellers are typically not able to provide such incentives.

With our strategy to provide affordable, move-in ready homes that can close within 60 days, and a commitment to partner with third party brokers, who facilitate most residential real estate transactions in the U.S., we believe we are well positioned to capture existing demand and grow our market share when demand improves.

During 2025, we further shortened our construction cycle times to under 110 calendar days, below our historical normalized time of approximately 120 days.

Our all-spec strategy minimizes variability and creates efficiencies through repeatability, which combined with increased capacity from declining market demand, were the drivers for this cycle time improvement.

Cycle time improvement was also supported by a healthy channel of materials available in the supply chain.

While material costs have eased, land costs remain elevated following years of historically high land acquisition and development costs.

Our scale and purchasing power allow us to secure volume discounts from national vendors, helping offset some of these cost pressures.

We have been successful in executing on our strategy to address the demand for more affordable homes by acquiring and developing communities and designing homes that can be delivered at a lower cost, simplifying our product and construction processes, and having an all spec home sales program, all of which allow buyers to move in quicker and make the entire home buying experience faster, easier and less costly.

We are confident in our strategy and continue to demonstrate our commitment to first-time and first move-up buyers through our focus on delivering affordable homes.

Our portfolio of active communities is

largely concentrated on first-time buyers, as these provide us the best opportunity to offer affordable homes.

We are confident in our strategy and continue to demonstrate our commitment

to first-time and first move-up buyers through our focus on delivering affordable homes.

Our portfolio of active communities is currently concentrated on first-time buyers, as these provide us the best opportunity to offer affordable homes.

We also remain committed to our key financial goals such as higher home closing revenue, strong home closing gross margin, controlling selling, and general and administrative costs, and maintaining sufficient liquidity.

Our products and simplification strategy have enabled us to deliver on these goals and we believe will continue to provide improved profitability while also preserving liquidity.

Our near-term objectives in today's uncertain environment are expanding our market share and maintaining liquidity.

During 2024 we maintained our investment grade ratings from all three of our rating agencies in recognition of our disciplined approach to balance sheet management, while actively pursuing growth and shareholder return.

Home closing revenue of $6.3 billion for the year ended December 31, 2024, increased 4.7% year over year, the combined result of an 11.7% increase in home closing volume and a 6.3% decrease in ASP on closings.

The improvement in home closing volume was achieved due to strong orders throughout the year alongside higher backlog conversion as a result of our offering all spec, move-in ready homes.

Home order volume improved 10.7% year-over-year due to a 1.4% increase in average active communities and a 7.5% increase in orders pace to 4.3 homes per month.

Higher order volume partially offset by the lower ASP led to a 4.8% increase in home order value compared to 2023.

Home closing gross margin of 24.9% was consistent with 24.8% in 2023.

ASP on orders decreased 5.3% due to greater utilization of financing incentives as well as product and geographic mix shift.

Entry-level represented 92% of full year 2024 sales orders, compared to 87% in the prior year.

Net earnings for the year ended December 31, 2024 of $786.2 million and diluted EPS of $10.72 both increased by 6.4% and 7.6%, respectively, compared to prior year.

Our near-term objectives in today's uncertain environment are balancing disciplined growth with stockholder returns and maintaining liquidity.

During 2025, we maintained investment grade ratings from all three of our rating agencies in recognition of our disciplined approach to balance sheet management, while balancing growth and shareholder return.

In response to the broader economic conditions, during the fourth quarter of 2025 we conducted an in-depth review of our land portfolio and elected to terminate certain positions to release capital to top-grade our land portfolio as better opportunities become available.

We also took steps to reduce our go-forward overhead costs, with a strategic focus on both cost savings and technological efficiencies for certain back-office functions.

As a result of these strategic reviews, we recognized charges on terminated land contracts of $39.4 million and severance costs totaling $8.4 million during the year ended December 31, 2025.

Home closing revenue of $5.8 billion for the year ended December 31, 2025, decreased 9.1% year over year as a result of 3.7% lower home closing volume and 5.6% lower ASP on closings.

The decline in home closing volume was due to the softer demand previously discussed, while affordability concerns drove ASP on closings down as a larger number of buyers utilized financing incentives to assist with lower monthly payments.

Home order volume of 14,650 was consistent year-over-year, as an 11.6% increase in average active communities was nearly offset by a 9.3% decrease in orders pace to 3.9 homes per month.

Home order value of $5.7 billion decreased 3.8% due entirely to lower ASP resulting from increased utilization of financing incentives.

The lower ASP on both closings and orders was also due in part to geographic mix shift.

Home closing gross margin of 19.7% was 520 basis points lower than 24.9% in 2024, due to increased utilization of financing incentives, higher lot costs, charges incurred related to terminated land contracts and real estate-related impairments, severance costs, and reduced leverage of fixed costs on lower home closing revenue, all of which more than offset savings in direct costs.

Excluding $39.4 million in terminated land contracts, $16.5 million of real estate-related impairments, and $4.3 million of severance costs, adjusted home closing gross margin was 20.8% for the year ended December 31, 2025, compared to adjusted home closing gross margin of 25.0% in 2024 when excluding $6.7 million in terminated land contracts.

Net earnings and diluted EPS for the year ended December 31, 2025 of $453.0 million and $6.35 per share, decreased by 42.4% and 40.8%, respectively, compared to prior year.

We carefully manage our liquidity and balance sheet, particularly during times of limited economic visibility.

Our earnings generate cash that allows us to reinvest in our business through acquiring and developing land, increasing the number of homes under construction, and returning shareholder value by repurchasing our common stock and paying dividends.

During 2024, we repurchased 1,464,510 shares of our common stock, or 2.0% of the shares outstanding at the beginning of the year, for $125.9 million, paid dividends totaling $108.6 million, and redeemed $250.0 million of our Senior Notes due 2025.

During 2025, we repurchased 4,289,984 shares of our common stock, or 6.0% of the shares outstanding at the beginning of the year, for $295.0 million and paid dividends totaling $121.1 million.

We ended the year with cash and cash equivalents totaling $775.2 million as compared to $651.6 million at December 31, 2024, while growing our inventory 4.5% to $6.0 billion.

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On November 21, 2024, our Board declared a two-for-one stock split to stockholders of record at the close of business on December 31, 2024 that was effective on January 2, 2025.

All share and per share amounts in this Annual Report on Form 10-K have been retroactively adjusted to reflect the Stock Split for all periods presented.

See "Part II, Item 5 - Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities".

See Note 9 in the accompanying consolidated financial statements for additional information related to the stock split.

Land Acquisition and Development

Our current land pipeline goal is to maintain an approximate four-to-five year future sales order pace supply of lots, which we believe provides an appropriate planning horizon to address regulatory matters, perform land development and manage to our business plan for future closings.

With the increasing demand for new homes, and in support of our commitment to grow community count and market share, we are increasing our efforts to find new land that aligns with our underwriting criteria.

During the year ended December 31, 2024, we invested approximately $2.5 billion in land acquisition and development and secured approximately 37,000 net new lots, up from 16,000 net new lots in 2023.

Included in the 2024 new lots are those we acquired as part of our entry into new markets in Alabama and the Gulf Coast.

During the year ended December 31, 2025, we invested approximately $1.9 billion in land acquisition and development and secured approximately 5,500 net new lots, compared to 37,000 net new lots in 2024.

We ended the year with 77,625 lots under control at December 31, 2025 versus 85,613 in 2024.

Nearly all of the lots placed under control in 2025 are designated for entry-level communities.

We are currently focused on growing our market share in our newly-entered and existing markets, and we continually evaluate our markets, monitoring and adjusting our lot supply through lot and land acquisitions to ensure we have a sufficient pipeline that is in sync with local market dynamics as well as our goals for growth in those markets.

During 2024, we closed 15,611 homes, purchased approximately 27,300 lots for $1.2 billion, spent $1.3 billion on land development, and started construction on 15,824 homes.

During 2025, we closed 15,026 homes, purchased approximately 15,000 lots for $867.3 million, spent $1.1 billion on land development, and started construction on 13,450 homes.

At December 31, 2025 and 2024, respectively, approximately 72% and 62% of our controlled lots were owned.

We are currently purchasing primarily undeveloped land as the opportunity to purchase partially developed or substantially finished lots in desired locations is limited.

We are currently purchasing undeveloped or partially developed land, as the opportunity to purchase substantially finished lots in desired locations is limited.

Finished lots are those on which the development has been completed by a third party and are ready for immediate home construction.

The entitlement and development of raw and undeveloped land and partially developed lots require a longer lead time before new communities are able to open for sales.

Typically, undeveloped and partially developed lots will have a lower all-in cost than finished lots as we are responsible for improvements on the land, rather than paying a mark-up on improvements completed by a third-party developer.

The entitlement and development of raw and undeveloped land requires a longer lead time before new communities are able to start new home construction.

Typically, undeveloped and partially developed lots will have a lower all-in cost than finished lots as we are responsible for improvements on the land, rather than paying a mark-up

on the entitlement value created by a third-party developer.

When evaluating any land acquisition opportunity, our selection is based upon a variety of factors, including:

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• availability and financial impact of seller-provided purchase options or structured financing agreements that allow us to defer lot purchases until needed for production, if applicable.

When purchasing undeveloped or partially developed land, we strive to defer the land acquisition until after entitlements have been obtained to eliminate or significantly minimize lot yield risk and so that development or construction are known and may begin immediately, improving returns.

The term “entitlements” refers to appropriate zoning, unit density and total lot yield, development agreements and preliminary, tentative and final maps or plats, depending on the jurisdiction within which the land is located.

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In unique circumstances, we may consider the purchase of unentitled land when we can do so in a manner with limited risk and which is consistent with our business strategy.

We generally purchase and develop parcels that provide us with communities that range on average from 100 to 200 lots per product line.

Once we secure undeveloped land, we generally supervise and control the development of the land through contractual agreements with professional consultants and subcontractors.

We generally purchase and develop parcels that will become communities that provide at least two or three years of sales per product line.

Once we secure undeveloped land, we generally supervise and control the entitlement and development of the land through contractual agreements with professional consultants and subcontractors.

These activities may include site planning and engineering, as well as constructing road, sewer, water, utilities, drainage, landscaping improvements, recreation amenities and other improvements and refinements.

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We may also determine the overall community design for each project we develop including street and community layout, individual lot size and layout, and common areas and amenities to be included within the community.

The homes offered depend upon many factors, including the guidelines, if any, of the existing community, housing available in the area, the needs and desired housing product for a particular market based on consumer research, and pricing targets for the desired product offering in the surrounding area, though we almost exclusively use our standardized home design plans in our communities.

We also build homes in master-planned communities with home sites that are adjacent to or near major amenities, such as golf courses or recreation facilities.

The homes to be offered depend upon many factors, including the guidelines, if any, of the existing community, housing available in the area, the needs and desired housing product for a particular market based on consumer research, and pricing targets for the desired product offering in the surrounding area, though we almost exclusively use our standardized home design plans in our communities.

We also build homes in master-planned communities.

The factors used to evaluate finished lot purchases are similar to those for land we intend to develop ourselves, although the development risks associated with the undeveloped land—financial, entitlement, environmental, legal and governmental—have largely been borne by others.

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Lot option contracts are generally non-recourse and typically require the payment of non-refundable deposits of 5% to 20% of the total land purchase price.

The use of option contracts limits the market risks associated with land ownership by allowing us to re-negotiate option terms or terminate options

in the event of market downturns but also include a financial return to the counterparty.

The use of option

contracts limits the market risks associated with land ownership by allowing us to re-negotiate option terms or terminate options in the event of market downturns but also include a financial return to the counterparty.

In the event we elect to cancel an option contract, our losses are typically limited to the forfeiture of our option deposits and any associated capitalized pre-acquisition costs.

The cost of obtaining land through such option contracts is generally higher than if we were to purchase land in bulk, although the financial leverage benefits they can provide can outweigh the financing costs associated with them.

Due to our strong liquidity position, our and purchases are generally financed through our working capital, including corporate borrowings.

Our land purchases are financed through our working capital, including corporate borrowings.

At December 31, 2025, in addition to our 55,861 owned lots, we also had 21,764 lots under committed purchase or option contracts with a total purchase price of approximately $1.3 billion secured by $161.5 million in cash deposits.

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All land and lot acquisitions are reviewed by our corporate land acquisition committee, which is comprised of certain members of our executive management team and key operational leaders.

All land acquisitions exceeding a specified dollar amount must also be approved by our Executive Chairman, with a secondary threshold requiring approval by our Board of Directors' Land Committee.

All land acquisitions exceeding a specified dollar amount must also be approved by our Executive Chairman, and are also reported to our Board of Directors' Asset Management Committee.

Construction Operations

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We typically do not enter into any derivative contracts to hedge against weather or materials price fluctuations as we do not believe they are particularly advantageous to our operations, although we do periodically lock in short and mid-term pricing with our vendors for certain key construction commodities.

Throughout 2022, we experienced building materials cost pressures and production capacity issues with some of our main product suppliers, including supply chain constraints largely associated with world-wide labor, materials, and transportation shortages.

The market returned to normal conditions in latter 2023 and has maintained that position throughout 2024.

We continue our focus on controlling costs by expanding our trade base and strengthening critical relationships.

We continue to focus on controlling costs by expanding our trade base and strengthening critical relationships.

We generally build and sell homes in phases within our larger projects, which we believe creates efficiencies in land development, home construction operations and cash management.

We also believe it improves customer satisfaction by reducing the number of vacant lots and construction activity surrounding completed and occupied homes.

Our homes are typically completed within three to five months from the start of construction, depending upon the geographic location and the size and complexity of the home.

Our homes are typically completed within three to five months from the start of construction, depending upon the geographic location and the size and complexity of the home, although our current average construction cycle time is under 110 calendar days.

Construction schedules may vary depending on the size of the home, availability of labor, materials and supplies, product type, location, municipal requirements and weather.

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In mid-2024, we announced our strategic shift to focus on real estate agents as the primary customer and we created a variety of tools to help agents leverage a suite of digital offerings to provide a simple and streamlined sales and marketing experience, including:

• Immediate lockbox access for models and completed homes;

• Industry-leading dedicated Agent Portal where agents can find and save homes, view clients, see loyalty program status and more - all in one place;

• A new Meritage Homes website with easy navigation and focused on real estate agents;

• Lockbox access for models and completed homes;

• Dedicated Agent Portal where agents can find and save homes, view homes their clients are interested in, see loyalty program status and more;

• Virtual tours in all of our communities;

• Extensive online tools such as 3-D tours and dynamic floor plans to mimic the live experience of walking through a model home;

• Our chat bot, Virtual Assistant Liaison ("VAL"), provides customers and owners with around-the-clock information and support on our website;

• Pre-qualifying buyers for mortgages through digital solutions on our website;

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In addition, our local marketing efforts are focused on online listings and generating leads through digital media campaigns, in-person and virtual events for real estate agents, and grass roots marketing efforts.

Our marketing strategy is aimed at differentiating Meritage Homes by focusing on real estate agents as our primary customer, supported by our industry-leading Agents Rock Rewards program, which provides opportunities for real estate agents to grow their business in true partnership with Meritage Homes.

From a product perspective, Meritage homes delivers the best of both worlds with the stylish design, energy-efficiency and a new home warranty combined with quick move-in timelines and turnkey experience often found with used homes.

Our move-in ready homes include a suite of appliances and whole home blinds, and with our 60-day closing ready commitment, we guarantee the home will be closing ready in 60 days or less.

If the deadline is missed due to our actions, we'll reimburse up to $5,000 of expenses related to the delay.

All of this is part of our LIFE.

® brand promise to our customers.

In addition to our robust digital marketing platform, we also use furnished model homes as a marketing tool to demonstrate to prospective homebuyers the advantages of the designs and features of our homes.

At December 31, 2024, we owned 341 completed model homes, had 28 models under construction and leased back one model home previously sold to a buyer.

We generally employ or contract with interior and landscape designers who enhance the appeal of our model homes, which highlight the features and options available.

We typically build between one and three models for each actively selling community, depending upon the products to be offered and the number of homes to be built in the project.

We strive to implement marketing strategies that will educate our buyers on how our unique building techniques and the energy efficient and home automation features in our homes differentiate them from other homes.

Our marketing strategy is aimed at differentiating Meritage Homes by focusing on real estate agents as our primary customer, supported by our Agents Rock Rewards program, which provides opportunities for real estate agents to grow their business with Meritage Homes.

Our move-in ready homes include a suite of appliances and whole home blinds, and our 60-day closing ready commitment guarantees the home will be closing ready in 60 days or less, or Meritage will reimburse the buyer up to $5,000 of expenses if the deadline is missed.

In addition to our robust digital marketing platform, we may also use furnished model homes as a marketing tool to demonstrate to prospective homebuyers the advantages of the designs and features of our homes.

At December 31, 2025, we owned 349 completed model homes, had 22 models under construction and leased back two model homes previously sold to buyers.

We strive to implement marketing strategies that will educate real estate agents and buyers on how our unique building techniques and the energy efficient and home automation features in our homes differentiate them from other homes.

Our strategy of providing simplification and transparency extends to our approach to interior design and finishes, which is particularly appealing to our first-time and first move-up buyer segments.

Leveraging feedback from our homebuyers and based on our core values of innovating with the customer in mind, we took action to completely rethink how the home buying and design process should work to meet the needs of today’s buyer.

We offer pre-selected combinations of flooring, cabinetry, countertops and fixtures that are all professionally designed to meet our buyer’s preferences, and our homebuyers benefit from bulk-purchase savings that we pass through from our national vendor partnerships.

Our homes generally are sold by our commissioned local sales associate employees.

Leveraging feedback from our homebuyers and based on our core values of innovating with the customer in mind, we offer pre-selected combinations of flooring, cabinetry, countertops and fixtures that are all professionally designed to meet our buyer’s preferences, and our homebuyers benefit from bulk-purchase savings that we pass through from our national vendor partnerships.

Our homes generally are sold by our commissioned local sales associate employees and third-party real estate brokers.

At December 31, 2025, we had approximately 534 full-time sales and marketing personnel.

Our goal is to ensure that our sales force has extensive knowledge of our homes and their differentiated offerings, our sales strategies and mortgage options, in order to fully execute our marketing message.

plans, available product lines, pricing, and options offered, as well as the numerous benefits our energy efficient product provides.

To achieve this goal, we train our sales associates and conduct regular meetings to update them on our product, sales techniques, competition in the area, financing availability, construction schedules, marketing and advertising plans, available product lines, pricing, and options offered, as well as the numerous benefits our energy efficient product provides.

Our sales associates are licensed real estate agents where required by law.

Third-party real estate agents also sell our homes and are paid a sales commission, usually based on the price of the home.

We are now more heavily focused on this relationship and have our robust Agents Rock Rewards loyalty program for these agents, demonstrating our commitment to leaning into the external realtor market with our recent strategic shift.

Third-party real estate agents who sell our homes and are paid a sales commission, usually based on the price of the home.

Our strategy focuses on the external broker relationship, and more than 90% of our closings were co-broke in 2025, which we believe is materially higher than the industry average.

To attract buyers, we may offer various sales incentives, including mortgage-related incentives such as interest rate locks or buy-downs, price concessions, and assistance with closing costs.

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We may enter into joint ventures as a means of accessing larger parcels of land, expanding our market opportunities, managing our risk profile and leveraging our capital.

We currently have two active land development ventures.

We currently have three active land development ventures.

In addition to the land development joint ventures, we also participate in one mortgage business joint venture ("MTH Mortgage").

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Our spec inventory per active community as of December 31, 2025 was 17.4 or 5,838 units as compared to 24.1 or 7,029 units as of December 31, 2024.

At December 31, 2024, 100% of our 1,544 homes in backlog were under construction.

At December 31, 2025, all of our 1,168 homes in backlog were under construction.

We do not recognize any revenue from a home sale until a finished home is delivered to the homebuyer, payment is collected and other criteria for sale and profit recognition are met.

At December 31, 2024, of our total unsold homes in inventory, excluding completed model homes, 60% were under construction and 40% were completed.

A portion of the unsold inventory resulted from homes that began construction with valid sales contracts that were subsequently canceled.

At December 31, 2025, of our total unsold spec homes in inventory, excluding completed model homes, 50% were under construction and 50% were completed.

We believe that during 2026 we will deliver to customers substantially all homes in backlog at December 31, 2025 under existing contracts, or, in the case of cancellations, replacement sales contracts.

The number of units in backlog decreased 39.4% to 1,544 units at December 31, 2024 from 2,549 units at December 31, 2023 with a 42.1% decrease in the value of backlog to $629.5 million from $1.1 billion.

The decrease in backlog units is due to reduced construction cycle times and increased backlog conversion as a result of our strategy of offering move-in ready homes.

The number of units in backlog decreased 24.4% to 1,168 units at December 31, 2025 from 1,544 units at December 31, 2024 with a 30.0% decrease in the value of backlog to $440.6 million from $629.5 million.

The decrease in backlog units is due to faster construction cycle times and higher backlog conversions as a result of our move-in ready strategy, as well as lower orders in the fourth quarter of 2025 due to market conditions.

Customer Financing

Most of our homebuyers require financing to purchase their home.

Accordingly, we refer them to mortgage lenders that offer a variety of financing options.

While our homebuyers may obtain financing from any mortgage provider of their choice, we have a joint venture arrangement with an established mortgage broker that acts as a preferred mortgage broker to help facilitate the financing process as well as generate additional revenue for us through our interest in the joint venture (see Note 5 in the accompanying consolidated financial statements for additional information on joint venture financial results).

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At the time a home is completed and delivered to a buyer, the continuing relationship is transitioned to a customer relations employee who manages our warranty and customer care efforts.

We generally provide a complete workmanship and materials warranty for the first year after the close of the home, a major mechanical warranty for two years after the close of the home and a structural warranty that typically extends up to 10 years after the close of the home.

We require our subcontractors to provide evidence of insurance before beginning work and to indemnify us from defects in their work and the materials they provide and therefore any claims relating to workmanship and materials are generally the subcontractors’ responsibility.

We generally provide a workmanship and materials warranty for the first year after the close of the home, a mechanical warranty for two years after the close of the home and a structural warranty that typically extends up to 10 years after the close of the home, based on state laws.

materials are generally the subcontractors’ responsibility.

In certain markets and for certain attached product, our trades participate in a Meritage-controlled insurance program for our subcontractors underwritten on behalf of Meritage which, if accepted, is the insurance for damage resulting from construction defects in lieu of the standard insurance we require from subcontractors.

Although our subcontractors are generally required to repair and replace any product or labor defects (and for those operating in markets with our Company-controlled insurance program, pay a deductible as a condition to such coverage), we are, during applicable warranty periods, ultimately responsible to the homeowner for making such repairs.

Although our subcontractors are generally required to repair and replace any product or labor defects (and for those operating in markets with our Company-controlled insurance program, subcontractors who are enrolled in the insurance program are only required to pay a deductible), we are, during applicable warranty periods, ultimately responsible to the homeowner for making such repairs.

Accordingly, with the assistance of an actuary, we have estimated and established reserves for future structural warranty costs based on the number of home closings and historical data trends for warranty work within our communities.

Warranty reserves generally range between 0.1% to 0.5% of a home’s sale price.

Those projections are subject to variability due to uncertainties regarding structural warranty claims relating to the construction of our homes, the markets in which we build, industry trends and experience, claim settlement history, and insurance and legal interpretations and developments, among other factors and we are, therefore, constantly monitoring such reserves.

Those projections are subject to variability due to the markets in which we build, industry trends and experience, claim settlement history, and insurance and legal interpretations and developments, among other factors and we are, therefore, constantly monitoring such reserves.

Historically, these reserves, as adjusted, have been sufficient to cover net out-of-pocket warranty costs.

Competition and Market Factors

The construction and sale of homes is a highly-competitive industry.

We compete for sales in each of our markets with national, regional and local developers and homebuilders, as well as existing resale homes, condominiums, townhomes and rental housing.

Some of our competitors have greater financial resources and may have lower costs than we do.

We compete for both homebuyers and desirable land in each of our markets.

The competition for land is with other national, regional and local developers and homebuilders, while competition for the construction and sale of homes is with the developers and homebuilders, as well as existing resale homes, condominiums, town homes and rental housing.

While we are one of the largest public homebuilders in the United States, some of our homebuilder competitors have greater financial resources and may have lower costs than we do.

Competition among residential homebuilders of all sizes is based on a number of interrelated factors, including location, reputation, product type, amenities, design, innovation, quality, and price.

We believe that we compare favorably to other homebuilders in the markets in which we operate due to our:

• streamlined construction processes that allow us to save on materials, labor and time and pass those savings to our customers in the form of lower prices while still offering a well-appointed home;

• simplified and less stressful home buying experience through a full spec operating model;

• experience within our geographic markets which allows us to develop and offer products that provide superior design and quality in line with the needs and desires of the targeted demographic;

• ENERGY STAR ® standards and incremental energy-efficient features that create a variety of benefits to our customers which we believe differentiate our product from competing new and existing home inventories by providing cleaner, and healthier homes;

We believe that we compare favorably to other homebuilders in the markets in which we operate.

New home sales have traditionally represented less than 20% of overall home sales in the United States, and therefore a significant portion of our competition is with existing housing inventory and rental housing units.

We believe we compete favorably with the existing home resale market by providing features that are not typically available in a resale home, such as:

• the warranty of a new home with a quick move-in timeline and turnkey experience;

• move-in ready homes including a full suite of appliances and whole-home blinds – all included in the price of the home;

• 60-day closing ready commitment.

If the home is not ready to close in 60 days or less, Meritage will reimburse the buyer up to $5,000 of expenses related to the delay;

• energy-efficient features that meet or exceed ENERGY STAR ® Version 3.1 standards and create a variety of benefits to our customers by providing healthier homes;

• inclusion of home automation through our M.Connected Home Automation Suite ® ;

• ability to recognize and adapt to changing market conditions, from both a financial capital and human capital perspective;

• ability to capitalize on opportunities to acquire land in desirable locations and on favorable terms;

• digital offerings in all stages of the homebuying process.

• reputation for outstanding service and quality products and our exceptional customer and warranty service.

Our product offerings and strategic locations are successfully competing with both existing homes inventory and surrounding new-home communities as evidenced by our relative orders volume and market share in most of our markets.

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Government approval processes may cause delays, which primarily impact the timing of new community openings.

There is no assurance that these and other restrictions will not adversely affect future operations as, among other things, sunset clauses may exist on some of our entitlements and they could lapse.

There is no assurance that these and other restrictions will not

adversely affect future operations as, among other things, sunset clauses may exist on some of our entitlements and they could lapse.

Local and state governments have broad discretion regarding the imposition of development fees for projects under their jurisdictions.

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However, because we acquire almost all of our land after entitlement, construction moratoriums typically do not affect us in the near term unless they arise from health, safety or welfare issues, such as insufficient water, electric or sewage facilities.

In addition, there is constantly a variety of new regulations being adopted and legislation being enacted, or considered for enactment, at the federal, state and local levels relating to energy and climate change.

Some of this legislation relates to items such as carbon dioxide emissions control and building codes with increasing energy efficiency standards.

New building code requirements could significantly increase the cost to construct homes, although our focus on energy-efficiency technologies and offerings may give us a competitive advantage regarding implementation of new code standards.

As climate change concerns continue to grow, legislation and regulations of this nature may result in increased costs and longer approval and development timelines.

Similarly, energy and environment-related initiatives affect a wide variety of companies throughout the United States and the world, and because our operations are heavily dependent on significant amounts of raw materials, such as lumber, steel, and concrete, such initiatives could have an indirect adverse impact on our operations and profitability to the extent the manufacturers and suppliers of our materials are burdened with expensive carbon dioxide emissions control and other environmental and energy-related regulations.

We are also subject to a variety of local, state, and federal statutes, ordinances, rules and regulations concerning the protection of health and the environment.

In some markets, we are subject to environmentally-sensitive land ordinances that mandate open space areas with public elements in housing developments, and prevent development on hillsides, wetlands and other protected areas.

We must also comply with open space restrictions, flood plain restrictions, desert wash area restrictions, native plant regulations, endangered species acts and view restrictions.

These and similar laws and regulations may result in delays, cause substantial compliance and other costs, and prohibit or severely restrict development in certain environmentally sensitive regions or areas.

In addition, our failure to comply with such restrictions could result in penalties or fines.

To date, compliance with such laws and regulations has not materially affected our operations, although it may do so in the future.

We believe that we are in compliance in all material respects with existing environmental regulations applicable to our business.

Additionally, our compliance with such regulations has not had, nor is it expected to have, a material adverse effect on our consolidated financial position, results of operations or cash flows.

However, changes in regulations, such as the climate-related disclosure legislation recently enacted by the State of California, could increase our costs to comply with such regulations, as discussed in “Item 1A.

Risk Factors.”

We condition our obligation to acquire property on, among other things, an environmental review of the land.

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Human Capital

Human capital makes our success possible.

Human capital is central to our success.

At December 31, 2025, we had 1,860 full-time employees, including 374 in management and administration, 74 in our title and insurance companies, 534 in sales and marketing, and 878 in construction and warranty operations.

We are committed to cultivating a diverse team, fostering an inclusive culture and creating a workplace environment where our team members are treated with respect, are valued for their unique perspectives and experiences, and feel a sense of belonging.

We have a robust talent recognition and succession planning model designed to identify and develop employees and provide a roadmap for promotion so that they can reach their full potential in support of our organizational goals.

Developing our employees enhances each individual’s opportunity to progress their career at Meritage and enrich their work experience.

We work to attract, motivate, and retain talent by offering competitive and comprehensive compensation and benefits that include health insurance with health savings accounts and company match, 401(k) retirement plan with a competitive company match, paid time off, paid parental benefits, women's health and fertility support benefits, mental well-being support and resources, employee assistance program, caregiving benefits, employee discounts, tuition reimbursement, and a wellness program, among many others.

We are committed to cultivating a diverse team, fostering an inclusive culture and creating a workplace environment where every individual is treated with respect, valued for their unique perspectives and experiences, and feels a true sense of belonging.

Our robust talent recognition and succession planning model is designed to identify and develop employees and provide a roadmap for advancement so that they grow their careers while contributing to our organizational goals.

Developing our people enhances each individual’s opportunity and the overall employee experience at Meritage.

We aim to attract, motivate, and retain talent by offering competitive and comprehensive compensation and benefits that include health insurance with health savings accounts and company match, 401(k) retirement plan with a competitive company match, paid time off, paid parental benefits, women's health and fertility support benefits, mental well-being support and resources, employee assistance program, caregiving benefits, employee discounts, tuition reimbursement, and a wellness program, among many others.

Of our entire employee population at December 31, 2025, 42% were female and 58% were minorities.

We are proud of the diversity in our team and are committed to the ongoing and intentional work to achieve inclusive excellence, including the long-term goals of attracting diverse talent and forming strategic relationships.

We are proud of our diverse team and remain dedicated to the intentional work required to achieve inclusive excellence, including building strategic relationships and attracting diverse talent.

Based upon employee feedback we have three voluntary, employee led groups to empower and promote belonging for all employees while creating community and connection.

We are dedicated to learning, improving our practices and challenging our leaders and employees to recognize and leverage our differences for the greater good of the team and the organization.

We are committed to continuous learning and improvement, challenging our leaders and employees to recognize and leverage our differences for the greater benefit of our teams and the organization.

We promote an open-door policy where individuals are encouraged to voice concerns which are promptly addressed.

We remain committed to promoting inclusion and belonging efforts which we strongly believe amplifies our core values, enhances our culture, drives positive change throughout our organization, as well as strengthens our business, enhances our relationships with our customers, and promotes competitiveness in the homebuilding sector.

We remain deeply invested in our inclusion and belonging efforts which we strongly believe amplifies our core values, enhances our culture, drives positive change throughout

our organization, as well as strengthens our business, enhances our relationships with our customers, and promotes competitiveness in the homebuilding sector.

Our operations are carried out through both local and centralized management.

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Our employees are not unionized.

During 2024 we were certified as a Great Place to Work® for the second year in a row and were named as Fortune’s Best Workplaces for Construction.

During 2025 we were certified as a Great Place to Work® for the third year in a row and were named as Fortune’s Best Workplaces for Construction and Women.

We act solely as a general contractor, and all construction operations are coordinated by our area managers and field construction managers who schedule and monitor third-party independent subcontractors.

We may use independent consultants and contractors for certain architectural, engineering, advertising, technology and legal services, and we strive to maintain good relationships with our subcontractors and independent consultants and contractors.

Our Vendor Code of Conduct applies to all contractors and subcontractors and is available on our website.

In late 2025, the Company approved and committed to a plan to reduce its workforce as part of a broader cost-reduction initiative, and fully executed its efforts in early 2026.

In connection with this action, the Company recorded costs of $8.4 million in the accompanying consolidated financial statements for the year ended December 31, 2025, which primarily consists of employee severance and related benefits.

Historically, we have experienced seasonal variations in our quarterly operating results and capital requirements.

We typically take orders for more homes in the first half of the fiscal year than in the second half, which has created additional working capital requirements in the second and third quarters to build our inventories to satisfy seasonally higher closings in the second half of the year.

While we expect the seasonal orders pattern to continue over the long term, our higher backlog conversion rate and all-spec strategy may shift the timing of home closings and capital requirements to build our inventories to earlier in the year.

We typically take orders for more homes in the first half of the year than in the second half, which has created additional working capital requirements in the first and second quarters to build our inventories to satisfy seasonally higher demand associated with our 60-day closing ready commitment homes.

While we expect the seasonal orders pattern to continue over the long term, a higher backlog conversion rate and our all-spec strategy may shift the timing of home closings and capital requirements to build our inventories to earlier in the year.

Additionally, seasonality may, from time to time, be affected by short-term volatility in the homebuilding industry and in the overall economy.

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Hilla Sferruzza 50 Chief Financial Officer, Executive Vice President

Clinton Szubinski 48 Chief Operating Officer, Executive Vice President

Malissia Clinton 57 General Counsel, Executive Vice President and Secretary

Javier Feliciano 52 Chief People Officer, Executive Vice President

Austin Woffinden 50 Executive Vice President, Corporate Operations and Strategy

Hilton co-founded Monterey Homes in 1985, which merged with Homeplex Mortgage Investments in December 1996 and later became known as Meritage Homes.

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Sferruzza was our Chief Accounting Officer and Corporate Controller from 2010 to 2016, and worked in other management roles at the Company since 2006.

Clinton Szubinski was appointed Chief Operating Officer, Executive Vice President on January 1, 2021.

Prior to his appointment as Chief Operating Officer, Mr.

Szubinski served as South Region President of Meritage Homes from 2018 to December 2020.

Previously, Mr.

Szubinski served in senior management roles at K.

Hovnanian and CalAtlantic, both public U.S.

homebuilders, from 2014 to 2018, and from 2011-2014 was the Florida Region President at Meritage Homes.

Malissia Clinton joined Meritage in April 2022 as General Counsel, Executive Vice President and Secretary.

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Javier Feliciano joined Meritage in November 2015 as Chief Human Resources Officer (now "Chief People Officer"), Executive Vice President.

From January 2013 through November 2015, Mr.

Feliciano was employed by Apollo Education Group as Vice President, Human Resources and as HR Director from June 2010 through January 2013.

Austin Woffinden became Executive Vice President, Corporate Operations and Strategy, effective January 1, 2026.

Woffinden began his career at Meritage as a Vice President Regional Counsel in 2007 and held various operational leadership positions since, including Area President of Dallas Fort Worth and Nashville (2025) and Division President of Dallas Fort Worth (2018 - 2025).

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

What changed 10-K

Item 1. Business