What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-23 compared with 2025-10-21 · 157 added, 193 removed, 300 unchanged (54% of the section changed)

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The following is a summary of our operating results by line of business ($000's omitted, except per share data):

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

Income before income taxes:

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Diluted earnings per share $ 1.79 $ 2.57

In the third quarter of 2025, the consumer demand weakness we experienced in the first half of the year continued.

This softening continued to be influenced by ongoing affordability challenges, resulting from elevated mortgage interest rates and higher housing costs, as well as volatility in other macroeconomic and geopolitical conditions, including weakened consumer confidence.

We have responded to these conditions by adjusting production cadence and sales prices where necessary and focusing sales incentives on discounts on spec inventory (houses without customer orders) and closing cost incentives, especially mortgage interest rate buydowns.

Despite these efforts, net new orders in units decreased 6% and 7% for the three and nine months ended September 30, 2025, respectively, versus the comparable prior year periods.

We expect that many homebuyers will continue to face affordability challenges, so our sales paces may remain volatile on a monthly basis.

In response, we expect our sales incentives to remain elevated and for our pace of house starts to remain dynamic.

Additionally, we continue to face pressure in the cost of land acquisition and development.

Demand conditions to start 2026 remained challenging as the result of elevated mortgage interest rates, higher housing costs, and general economic uncertainty.

As volatility in geopolitical conditions increased in March, it negatively impacted inflation and interest rates, further weakening consumer confidence.

We have continued responding to these conditions by adjusting production cadence and sales prices where necessary and focusing sales incentives on discounts on spec inventory (houses without customer orders), closing cost incentives, and mortgage interest rate buydowns.

These pricing actions contributed to a 3% increase in net new orders in units, but lower average selling prices and gross margins during the first quarter of 2026 compared to 2025.

Closings decreased 7% in the first quarter of 2026 compared to 2025 primarily due to a lower order backlog entering 2026 compared to 2025.

We expect that many homebuyers will continue to face affordability challenges.

In response, we expect our sales incentives to remain elevated and for our pace of house starts to remain dynamic in response to market conditions.

We have successfully lowered our mix of spec home inventory and are increasing our backlog of build-to-order production.

However, we continue to face pressure in the cost of land acquisition and development.

Due to the length of our land development and construction cycle times, there is a lag between when such cost changes occur and when they impact our operating results.

This is evidenced in our gross margin from home sales for the third quarter of 2025, which decreased to 26.2% from 28.8% in the comparable prior year period, and from 27.0% in the second quarter of 2025.

These decreases are primarily due to higher land costs combined with the aforementioned elevated sales incentives.

While we expect to continue to generate healthy gross margins, they may decline somewhat in future periods as a result of these factors.

In response to the significant shift in market conditions in 2025, we have slowed the pace of our housing starts, have increased sales incentives, and are taking additional pricing actions in many of our communities, which have resulted in $42.2 million of land inventory impairments during the nine months ended September 30, 2025.

We continue to update the underwriting for our land option contracts prior to buying additional land and have made decisions to walk away from a number of land option agreements, which resulted in write-offs of deposits and pre-acquisition costs totaling $26.5 million in the nine months ended September 30, 2025.

We will continue working with our trade partners to update the costs for materials, labor, and services to reflect changes in market conditions and plan to adjust our overhead cost structure as necessary to align with demand.

Our gross margin from home sales decreased to 24.4% in the first quarter of 2026 versus 27.5% in the first quarter of 2025, and gross margin from home sales decreased each quarter in 2025, ending the year at 24.7% in the fourth quarter of 2025.

These decreases are primarily due to the aforementioned higher land costs, pricing actions, and elevated sales incentives in response to buyer affordability challenges and reducing our mix of spec inventory.

Although elevated mortgage interest rates and volatile macroeconomic and geopolitical conditions may persist for some time, we believe the demographics supporting housing demand remain favorable over the long term.

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Accordingly, we are focused on protecting liquidity and closely managing our cash flows while also continuing to emphasize shareholder returns, including the following actions:

– Increasing our lot optionality within our land pipeline for increased flexibility;

– Producing sufficient levels of spec inventory to service buyers seeking to close within 30 to 90 days;

– Maintaining a focus on shareholder return through share buybacks and dividends, including a 10% increase in our quarterly dividends from $0.20 to $0.22 per share effective with our January 2025 dividend payment and an additional $1.5 billion share repurchase authorization effective January 2025, bringing our total remaining share repurchase

authorization to $1.3 billion as of September 30, 2025, after $900.0 million of share repurchases in the first nine months of 2025;

– Taking an opportunistic approach to retiring debt;

– Emphasizing our lot optionality within our land pipeline for increased flexibility;

– Updating the underwriting for our land option contracts prior to buying additional land, and we have made decisions to walk away from a limited number of land option agreements;

– Working with our trade partners to update the costs for materials, labor, and services to reflect changes in market conditions;

– Adjusting our overhead cost structure as necessary to align with demand;

– Rebalancing our mix of spec versus sold home inventory to continue to service buyers seeking to close within 30 to 90 days while increasing our backlog of build-to-order homes;

– Maintaining a focus on shareholder return through share buybacks and dividends, including $308.2 million of share repurchases in the first three months of 2026 and an 18% increase in our quarterly dividends from $0.22 to $0.26 per share effective with our January 2026 dividend payment;

– Opportunistically extending and expanding our revolving credit facility while also issuing $800.0 million of senior notes at lower interest rates than the $589.1 million of senior notes repaid and redeemed in the first three months of 2026;

– Maintaining ample liquidity.

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The following presents selected financial information for our Homebuilding operations ($000’s omitted):

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2025 vs.

Three Months Ended

2026 2026 vs.

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Selling, general, and administrative

expenses ("SG&A") (b)

(400,681) (2) % (406,897) (1,184,472) 5 % (1,125,637)

Equity income (loss) from unconsolidated

entities, net (c)

2,422 (3) % 2,508 2,083 (d) 41,527

Other income, net 1,755 (d) 9,702 7,110 (d) 39,709

expenses ("SG&A") (380,334) (3) % (393,337)

Equity income from unconsolidated

entities, net

Other income, net 6,745 6 % 6,362

Income before income taxes $ 436,814 (32) % $ 645,280

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Gross margin from home sales (a)

26.2 % (260) bps 28.8 % 26.9 % (250) bps 29.4 %

SG&A as a percentage of home

sale revenues (b)

24.4 % (310) bps 27.5 %

SG&A as a percentage of home

sale revenues 11.5 % 100 bps 10.5 %

Closings (units) 6,102 (7) % 6,583

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Average active communities 1,043 9 % 961

Backlog at September 30:

Backlog at March 31:

Units 10,427 (8) % 11,335

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(a) Includes the amortization of capitalized interest.

(b) SG&A includes insurance reserve reversals of $78.7 million for the nine months ended September 30, 2024 (see Note 8 ).

(c) Equity income from unconsolidated entities includes a gain of $37.7 million for the nine months ended September 30, 2024 related to the sale of our minority interest in a joint venture.

(d) Percentage not meaningful.

(e) Net new order dollars represent a composite of new order dollars combined with other movements of the dollars in backlog related to cancellations and change orders.

(b) Percentage not meaningful.

(c) Net new order dollars represent a composite of new order dollars combined with other movements of the dollars in backlog related to cancellations and change orders.

Home sale revenues

Home sale revenues in the three and nine months ended September 30, 2025 were lower than the prior year periods by $94.9 million and $345.4 million, respectively.

In the three months ended September 30, 2025, the 2% decrease resulted primarily from a 5% decrease in closings from the prior year period, partially offset by a 3% increase in average selling price.

In the nine months ended September 30, 2025 the 3% decrease resulted primarily from a 6% decrease in closings, partially offset by a 3% increase in average selling price.

The decreases in closings were primarily attributable to lower net new orders in the first half of 2025 and a weaker order backlog entering the year, partially offset by a higher community count and improved production cycle times.

Average selling price during the three and nine months ended September 30, 2025 increased primarily due to product and geographic mix, including a slightly higher mix of closings toward our move-up buyers and in our Northeast segment, both of which carry a higher average selling price.

Home sale revenues in the three months ended March 31, 2026 were lower than the prior year period by $441.8 million.

The 12% decrease resulted primarily from a 7% decrease in closings from the prior year period combined with a 5% decrease in average selling price.

The decrease in closings was primarily attributable to a lower order backlog entering the year, partially offset by a higher community count and improved production cycle times.

Average selling price during the three months ended March 31, 2026 decreased primarily due to increased incentives in our efforts to reduce spec inventory.

Home sale gross margins

Home sale gross margins were 26.2% and 26.9% in the three and nine months ended September 30, 2025, respectively, compared with 28.8% and 29.4% in the three and nine months ended September 30, 2024, respectively.

The decreases in home sale gross margins were primarily attributable to the aforementioned pricing actions, including elevated sales incentives, and increased land acquisition and development costs.

Home sale gross margins were 24.4% in the three months ended March 31, 2026, compared with 27.5% in the three months ended March 31, 2025.

The lower home sale gross margins were primarily attributable to the aforementioned pricing actions we took in 2025 and 2026, elevated sales incentives, and higher land acquisition and development costs.

We expect these factors to continue to impact our gross margins over the near term.

Gross margins for the first nine months of 2025 were also unfavorably impacted by our efforts to reduce completed spec inventory to more appropriate levels, which we expect will continue to be an area of focus for the remainder of 2025.

While we have made significant progress in reducing the level of spec inventory during 2025, the level of completed spec inventory remains elevated for the current demand environment.

Gross margins in the first three months of 2026 were also unfavorably impacted by our efforts to reduce completed spec inventory to more appropriate levels.

Land sale and other revenues

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Land sale and other revenues and their related gains or losses vary between periods, depending on the timing of land sales and our strategic operating decisions.

Land sales and other revenues contributed income of $5.1 million and $10.8 million for the three and nine months ended September 30, 2025, respectively, compared with losses of $6.0 million and $4.9 million for the three and nine months ended September 30, 2024, respectively.

SG&A as a percentage of home sale revenues was 9.4% and 9.7% and in the three and nine months ended September 30, 2025, respectively, compared with 9.4% and 8.9% for the three and nine months ended September 30, 2024, respectively.

The gross dollar amount of our SG&A decreased $6.2 million, or 2%, for the three months ended September 30, 2025 compared with the prior year period, and increased $58.8 million, or 5%, for the nine months ended September 30, 2025 compared with the prior year period.

The increase in gross dollars for the nine months ended September 30, 2025 resulted primarily from insurance reserve reversals of $78.7 million recorded in the nine months ended September 30, 2024, respectively.

Additionally, SG&A for the first nine months of 2025 reflects modestly higher headcount and technology costs to support ongoing production volumes.

Land sales and other revenues contributed income of $2.2 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively.

SG&A as a percentage of home sale revenues was 11.5% in the three months ended March 31, 2026, compared with 10.5% for the three months ended March 31, 2025.

The gross dollar amount of our SG&A decreased $13.0 million, or 3%, for the three months ended March 31, 2026 compared with the prior year period.

The decrease in gross dollars for the three months ended March 31, 2026 is primarily attributable to lower commissions associated with the decrease in closings.

We expect to continue managing and balancing our overhead costs consistent with expected changes in the demand environment.

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Other income, net includes the following ($000’s omitted):

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

Write-offs of deposits and pre-acquisition costs $ (4,931) $ (4,335)

Amortization of intangible assets (1,412) (2,367)

Loss on debt retirement (2,637) —

Interest income 13,175 10,262

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Other income, net $ 6,745 $ 6,362

The increase in write-offs of deposits and pre-acquisition costs for 2025 relative to 2024 resulted from strategic decisions to not move forward with certain projects based on the current environment.

Interest income declined in 2025, primarily due to lower returns on invested cash balances.

Net new orders

Net new orders in units decreased 6% while net new orders in dollars decreased 7% in the three months ended September 30, 2025, as compared with the prior year period.

Net new orders in units decreased 7% while net new orders in dollars decreased 8% in the nine months ended September 30, 2025, as compared with the prior year period.

The decreased net new order volume and dollars in the three and nine months ended September 30, 2025 over the comparable prior year periods was primarily attributable to lower order volumes in our Texas and West segments.

Cancellation rates (canceled orders for the period divided by gross new orders for the period) were 16% and 15% for the three and nine months ended September 30, 2025, respectively, and 15% and 14% for the three and nine months ended September 30, 2024, respectively.

Ending backlog dollars, which represent orders for homes that have not yet closed, decreased 19% at September 30, 2025 compared with September 30, 2024.

Net new orders in units increased 3% while net new orders in dollars increased 2% in the three months ended March 31, 2026, as compared with the prior year period.

The increased net new order volume and dollars in the three months ended March 31, 2026 over the comparable prior year period was primarily attributable to higher order volumes in our Florida segment.

Cancellation rates (canceled orders for the period divided by gross new orders for the period) were 12% for the three months ended March 31, 2026, and 13% for the three months ended March 31, 2025.

Ending backlog dollars, which represent orders for homes that have not yet closed, decreased 10% at March 31, 2026 compared with March 31, 2025.

Homes in production

We operate our business to generate a cadence of house starts that aligns with the sales environment, and an appropriate inventory of quick move-in speculative (spec) homes as we focus on turning our assets and delivering high returns on investment, which has allowed us to achieve an effective balance of price and pace.

Our production cycle times have improved significantly over the past two years and have now returned to near historical norms.

The following is a summary of our homes in production:

September 30,

2025 September 30,

2026 March 31,

Sold 7,741 8,708

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Total 15,841 18,197

The number of homes in production at September 30, 2025 was 10% lower than at September 30, 2024.

This decrease was primarily due to a decreased number of sold homes due to lower backlog and improved production cycle times, which reduces the length of time a home sits in inventory.

The number of homes in production at March 31, 2026 was 13% lower than at March 31, 2025.

This decrease was primarily due to lower order volumes, a focused reduction of spec homes, and improved production cycle times, which reduces the length of time a home remains under construction.

Controlled lots

The following is a summary of our lots under control at September 30, 2025 and December 31, 2024:

September 30, 2025 December 31, 2024

The following is a summary of our lots under control at March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

Owned Optioned Controlled Owned Optioned Controlled

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We have also continued to seek to maintain a high percentage of our lots that are controlled via land option agreements as such contracts enable us to defer acquiring portions of properties owned by third parties or unconsolidated entities until we have determined whether and when to exercise our option, which reduces our financial risks associated with long-term land holdings.

The remaining purchase price under our land option agreements totaled $9.9 billion at September 30, 2025.

The remaining purchase price under our land option agreements totaled $9.7 billion at March 31, 2026.

Homebuilding Segment Operations

As of September 30, 2025, we conducted our operations in 47 markets located throughout 26 states.

As of March 31, 2026, we conducted our operations in 48 markets located throughout 26 states.

For reporting purposes, our Homebuilding operations are aggregated into six reportable segments:

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Operating Data by Segment ($000's omitted)

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2025 vs.

Three Months Ended

2026 2026 vs.

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Other homebuilding (c)

10,372 (51) % 21,043 36,868 (78) % 165,954

11,753 (d) 2,319

$ 436,814 (32) % $ 645,280

(a) Other homebuilding includes revenues from land sales and construction services.

(b) Includes land-related charges as summarized in the table below.

(b) Income before income taxes includes land-related charges as summarized in the table below.

(c) Other homebuilding includes the amortization of intangible assets and capitalized interest and other items not allocated to the other segments.

Other homebuilding also includes insurance reserve reversals of $78.7 million, respectively, for the nine months ended September 30, 2024, (see Note 8 ), and a gain of $37.7 million for the nine months ended September 30, 2024 related to the sale of our minority interest in a joint venture.

(d) Percentage not meaningful.

Operating Data by Segment ($000's omitted)

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2025 vs.

Three Months Ended

2026 2026 vs.

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Operating Data by Segment ($000's omitted)

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

2026 2026 vs.

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West 15 % 18 %

16 % 15 % 15 % 14 %

Unit backlog:

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($000’s omitted)

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

Land-related charges (a) :

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Other homebuilding consists primarily of write-offs of capitalized interest related to such land-related charges.

For the third quarter of 2025, Northeast home sale revenues increased 14% when compared with the prior year period due to a 4% increase in closings combined with a 9% increase in average selling price.

The increase in closings and average selling price occurred across the majority of markets.

Income before income taxes increased 19%, primarily due to higher revenues across the majority of markets.

Net new orders decreased across the majority of markets.

For the nine months ended September 30, 2025, Northeast home sale revenues increased 25% when compared with the prior year period due to a 14% increase in closings combined with a 10% increase in average selling price.

The increase in closings was primarily due to the timing of projects in our Northeast Corridor operations, while the increase in average selling price occurred across all markets.

Income before income taxes increased 41% primarily due to higher revenues and gross margins across the majority of markets.

Net new orders decreased across the majority of markets.

For the third quarter of 2025, Southeast home sale revenues increased 16% when compared with the prior year period due to a 8% increase in closings combined with a 7% increase in average selling price.

The increase in closings and average selling price occurred across the majority of markets.

Income before income taxes increased 8%, primarily due to higher revenues across the majority of markets.

The increase in net new orders occurred across the majority of among markets.

For the nine months ended September 30, 2025, Southeast home sale revenues increased slightly when compared with the prior year period due to a 6% increase in average selling price partially offset by a 6% decrease in closings.

The increase in average selling price and decrease in closings was mixed among markets.

Income before income taxes decreased 11% primarily due to lower gross margins across all markets.

The decrease in net new orders was mixed among markets.

For the third quarter of 2025, Florida home sale revenues decreased 6% when compared with the prior year period primarily due to a 3% decrease in closings combined with an 3% decrease in average selling price.

The decrease in closings and average selling price occurred across the majority of markets.

Income before income taxes decreased 20% primarily due to lower revenues across the majority of markets and lower gross margins across all markets.

Net new orders increased across the majority of markets.

For the nine months ended September 30, 2025, Florida home sale revenues decreased 14% when compared with the prior year period due to a 10% decrease in closings combined with a 4% decrease in the average selling price.

The decrease in closings and average selling price occurred across the majority of markets.

Income before income taxes decreased 31% primarily due to lower revenues and gross margins across the majority of markets.

The decrease in net new orders was mixed among markets.

For the third quarter of 2025, Midwest home sale revenues increased 9% when compared with the prior year period due to a 10% increase in closings partially offset by a 1% decrease in average selling price.

The increase in closings occurred across the majority of markets while the decrease in average selling price was mixed among markets.

Income before income taxes increased 13% primarily due to higher revenues and gross margins across the majority of markets.

The decrease in net new orders occurred across the majority of markets.

For the nine months ended September 30, 2025, Midwest home sale revenues increased 8% when compared with the prior year period due to an 9% increase in closings partially offset by a slight 1% decrease in average selling price.

The increase in closings and the decrease in average selling price occurred across the majority of markets.

Income before income taxes increased 14% primarily due to higher revenues and gross margins across the majority of markets.

The increase in net new orders was mixed among markets.

For the third quarter of 2025, Texas home sale revenues decreased 28% when compared with the prior year period due to a 28% decrease in closings combined with a slight decrease in average selling price.

The decrease in closings occurred across all markets while the decrease in average selling price was mixed among markets.

For the three months ended March 31, 2026, Northeast home sale revenues decreased by 29% when compared with the prior year period due to a 23% decrease in closings combined with an 8% decrease in average selling price.

The decrease in closings was due to the timing of projects in our Northeast Corridor and New England operations, while the decrease in average selling price occurred across all markets.

Income before income taxes decreased 59% primarily due to lower revenues across all markets and lower gross margins across the majority of markets.

The decrease in net new orders occurred across all markets.

For the nine months ended September 30, 2025, Texas home sale revenues decreased 23% when compared with the prior year period due to a 22% decrease in closings combined with a 1% decrease in average selling price.

The decrease in closings occurred across all markets while the decrease in average selling price was mixed among markets.

Income before income taxes decreased 50% primarily due to decreased revenues across all markets and decreased gross margins across the majority of markets.

Net new orders decreased across all markets.

For the third quarter of 2025, West home sale revenues decreased 7% when compared with the prior year period due to a 11% decrease in closings partially offset by a 5% increase in average selling price.

Net new orders increased across all markets.

For the three months ended March 31, 2026, Southeast home sale revenues decreased 2% when compared with the prior year period due to a 5% decrease in average selling price partially offset by a 3% increase in closings.

The decrease in average selling price and the increase in closings occurred across the majority of markets.

Income before income taxes decreased 28% primarily due to lower gross margins across all markets combined with lower revenues across the majority of markets.

The increase in net new orders was mixed among markets.

For the three months ended March 31, 2026, Florida home sale revenues decreased 6% when compared with the prior year period due to an 8% decrease in the average selling price partially offset by a 2% increase in closings.

The decrease in average selling price and increase in closings occurred across the majority of markets.

Income before income taxes decreased 27% primarily due to lower revenues across the majority of markets and lower gross margins across all markets.

Net new orders increased across all markets.

For the three months ended March 31, 2026, Midwest home sale revenues decreased 9% when compared with the prior year period due to a 10% decrease in closings partially offset by a 1% increase in average selling price.

The decrease in closings and increase in average selling price occurred across the majority of markets.

Income before income taxes decreased 35%, primarily due to lower revenues and gross margins across the majority of markets.

Income before income taxes decreased 15% primarily due to lower revenues across the majority of markets.

Net new orders decreased across the majority of markets.

For the nine months ended September 30, 2025, West home sale revenues increased 8% when compared with the prior year period due to an 8% increase in average selling price partially offset by a slight decrease in closings.

The increase in average selling price and decrease in closings occurred across the majority of markets.

Income before income taxes decreased 13% primarily due to lower gross margin and increased overhead costs across the majority of markets.

For the three months ended March 31, 2026, Texas home sale revenues decreased 23% when compared with the prior year period due to a 17% decrease in closings combined with an 8% decrease in average selling price.

The decrease in average selling price and the decrease in closings occurred across all markets.

Income before income taxes decreased 59% primarily due to lower revenues and gross margins across all markets.

Net new orders decreased across the majority of markets.

For the three months ended March 31, 2026, West home sale revenues decreased 17% when compared with the prior year period due to a 15% decrease in closings combined with a 2% decrease in average selling price.

The decrease in closings occurred across the majority of markets while the decrease in average selling price was mixed among markets.

Income before income taxes decreased 49% primarily due to lower revenues and gross margins across the majority of markets.

Net new orders decreased across the majority of markets.

Financial Services Operations

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Operating as a captive business model primarily targeted to support our Homebuilding operations, the business levels of our Financial Services operations are highly correlated to Homebuilding, as Homebuilding customers continue to account for substantially all of its business.

We believe that our mortgage capture rate, which represents loan originations from our Homebuilding operations as a percentage of total loan opportunities from our Homebuilding operations, excluding cash closings, is an important metric in

evaluating the effectiveness of our captive mortgage business model.

The following tables present selected financial information for our Financial Services operations ($000's omitted):

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2025 vs.

Three Months Ended

2026 2026 vs.

4 unchanged sentences

Expenses (59,165) 8 % (54,970)

Equity income from unconsolidated entities — — % — 1,250 19 % 1,050

Income before income taxes $ 12,582 (65) % $ 35,857

2 unchanged sentences

Principal $ 1,703,016 (9) % $ 1,866,018

Nine Months Ended

September 30,

Three Months Ended

Supplemental data:

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Total funded originations 100 % 100 %

Total Financial Services revenues for the three and nine months ended September 30, 2025 decreased 9% and 7%, respectively, compared with the comparable prior year periods, reflective of the lower homebuilding volume.

Insurance agency commissions reflect lower policy retention and commission rates as a result of the evolving environment for home insurance as carriers adjust their premiums, geographic markets, and product coverages.

Total Financial Services revenues for the three months ended March 31, 2026 decreased 21% compared with the same period in 2025, reflective of the lower homebuilding volume and lower net gains from the sale of mortgages.

Income before income taxes

Income before income taxes in the three and nine months ended September 30, 2025 decreased 19% and 23%, respectively, compared with the same period in 2024 due to lower insurance agency commissions combined with higher expenses.

Our effective tax rate for the three and nine months ended September 30, 2025 was 23.7% and 23.9%, respectively, compared with 23.0% and 23.1% for the comparable prior year periods.

Our effective tax rate for each of these periods differs from the federal statutory rate primarily due to state income tax expense and federal tax credits.

Income tax expense for the nine months ended September 30, 2024 also reflected a reduction in income tax liabilities totaling $13.2 million related to the favorable resolution of uncertain state tax positions.

Income before income taxes in the three months ended March 31, 2026 decreased 65% compared with the same period in 2025 as a result of the lower revenues.

Our effective tax rate for the three months ended March 31, 2026 was 22.8% compared with 23.2% for same period in 2025.

Our effective tax rate for each of these periods differs from the federal statutory rate primarily due to state income tax expense and benefits from stock-based compensation and federal tax credits.

Liquidity and Capital Resources

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We routinely monitor current and expected operational requirements and financial market conditions to evaluate accessing available financing sources, including revolving bank credit and securities offerings.

At September 30, 2025, we had unrestricted cash and equivalents of $1.5 billion, restricted cash balances of $28.0 million, and $902.0 million available under our Revolving Credit Facility.

Our ratio of debt-to-total capitalization, excluding our Financial Services debt, was 11.2% at September 30, 2025, compared with 11.8% at December 31, 2024.

At March 31, 2026, we had unrestricted cash and equivalents of $1.8 billion, restricted cash balances of $36.4 million, and $1.4 billion available under our Revolving Credit Facility.

Our ratio of debt-to-total capitalization, excluding our Financial Services debt, was 12.3% at March 31, 2026, compared with 11.2% at December 31, 2025.

We follow a diversified investment approach for our cash and equivalents by maintaining such funds with a portfolio of banks within our group of relationship banks in high quality, highly liquid, short-term deposits and investments, which helps mitigate banking concentration risk.

For the next 12 months, we expect our principal demand for funds will be for the acquisition and development of land inventory, construction of house inventory, the repayment of certain of our unsecured senior notes due in March 2026, and operating expenses, including our general and administrative expenses.

For the next 12 months, we expect our principal demand for funds will be for the acquisition and development of land inventory, construction of house inventory, and operating expenses, including our general and administrative expenses.

We plan to continue our dividend payments and repurchases of common stock.

In August 2026, we need to repay or refinance Pulte Mortgage's master repurchase agreement with third-party lenders (as amended, the "Repurchase Agreement").

We need to repay or refinance Pulte Mortgage's master repurchase agreement with third-party lenders (as amended, the "Repurchase Agreement") prior to or at the time it comes due in August 2026.

While we intend to refinance the Repurchase Agreement, there can be no assurances that the Repurchase Agreement can be renewed or replaced on commercially reasonable terms upon its expiration.

However, we believe we have adequate liquidity to meet Pulte Mortgage's anticipated financing needs.

Beyond the next 12 months, we will need to repay or refinance our Revolving Credit Facility, which matures in June 2027, and additional unsecured senior notes beginning in January 2027 and beyond (see Note 4 ).

Beyond the next 12 months, we will need to repay or refinance our Revolving Credit Facility, which matures in February 2031, and additional unsecured senior notes beginning in March 2031 and beyond (see Note 4 ).

We may from time to time repurchase our unsecured senior notes through open market purchases, privately negotiated transactions, or otherwise.

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Unsecured senior notes

We had $1.6 billion of unsecured senior notes outstanding at both September 30, 2025 and December 31, 2024, with no repayments due until March 2026, when $251.9 million of unsecured senior notes are scheduled to mature.

We had $1.8 billion and $1.6 billion of unsecured senior notes outstanding at March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026 no repayments are due until March 2031.

In February 2026, we issued $800.0 million of unsecured senior notes, consisting of $400.0 million of 4.250% senior notes scheduled to mature on March 1, 2031, and $400.0 million of 4.900% senior notes scheduled to mature on March 1, 2036.

The net proceeds from the February 2026 senior notes issuance were used to repay at maturity $251.9 million principal amount of unsecured senior notes which matured on March 1, 2026, and to redeem in full prior to maturity all $337.3 million principal amount of unsecured senior notes which were scheduled to mature in January 2027, and, in each case, to pay any premium and accrued interest in respect thereof, with the remaining net proceeds used for general corporate purposes.

Other notes payable

Other notes payable include non-recourse and limited recourse secured notes with third parties that totaled $39.7 million and $35.8 million at September 30, 2025 and December 31, 2024, respectively.

These notes have maturities ranging up to five years, are secured by the applicable land positions to which they relate, and generally have no recourse to other assets.

Other notes payable include non-recourse and limited recourse secured notes with third parties that totaled $38.4 million and $47.2 million at March 31, 2026 and December 31, 2025, respectively.

These notes have maturities ranging up to four years, are secured by the applicable land positions to which they relate, and generally have no recourse to other assets.

The stated interest rates on these notes range up to 9%.

Revolving credit facility

We maintain a revolving credit facility (the "Revolving Credit Facility") maturing in June 2027 that has a maximum borrowing capacity of $1.3 billion and contains an uncommitted accordion feature that could increase the capacity to $1.8 billion, subject to certain conditions and availability of additional bank commitments.

The Revolving Credit Facility also provides for the issuance of letters of credit that reduce the available borrowing capacity under the Revolving Credit Facility, up to the maximum borrowing capacity.

We maintain a revolving credit facility with third-party lenders entered into in June 2022 (the "Original Revolving Credit Facility", and, as amended, the "Revolving Credit Facility") scheduled to mature in February 2031.

The Original Revolving Credit Facility was amended and restated in February 2026 to (i) extend the maturity from June 2027 to February 2031, (ii) increase the total committed capacity from $1.25 billion to $1.75 billion, and (iii) expand the uncommitted accordion feature from $500.0 million to $750.0 million, providing for potential capacity of up to $2.5 billion, subject to customary conditions and additional lender commitments.

The Revolving Credit Facility provides for the issuance of letters of credit that reduce the available borrowing capacity under the Revolving Credit Facility, up to the maximum borrowing capacity.

The interest rate on borrowings under the Revolving Credit Facility may be based on either the Secured Overnight Financing Rate or a base rate, plus an applicable margin, as defined therein.

The Revolving Credit Facility contains financial covenants that require us to maintain a minimum Tangible Net Worth and a maximum Debt-to-Capitalization

Ratio (as each term is defined in the Revolving Credit Facility).

We were in compliance with all covenants and requirements as of September 30, 2025.

The Revolving Credit Facility contains financial covenants that require us to maintain a minimum Tangible Net Worth and a maximum Debt-to-Capitalization Ratio (as each term is defined in the Revolving Credit Facility).

As of March 31, 2026, we were in compliance with all covenants and requirements of the Revolving Credit Facility.

Outstanding balances under the Revolving Credit Facility are guaranteed by certain of our wholly-owned subsidiaries.

At September 30, 2025, we had no borrowings outstanding, $348.0 million of letters of credit issued, and $902.0 million of remaining capacity under the Revolving Credit Facility.

At December 31, 2024, we had no borrowings outstanding, $321.1 million of letters of credit issued, and $928.9 million of remaining capacity under the Revolving Credit Facility.

At March 31, 2026, we had no borrowings outstanding, $348.1 million of letters of credit issued, and $1.4 billion of remaining capacity under the Revolving Credit Facility.

At December 31, 2025, we had no borrowings outstanding, $357.1 million of letters of credit issued, and $892.9 million of remaining capacity under the Original Revolving Credit Facility.

Joint venture debt

At September 30, 2025, aggregate outstanding debt of unconsolidated joint ventures was $37.2 million.

At March 31, 2026, aggregate outstanding debt of unconsolidated joint ventures was $44.4 million.

Financial Services debt

Pulte Mortgage maintains a master repurchase agreement with third-party lenders (as amended, the "Repurchase Agreement") that matures on August 12, 2026.

The maximum aggregate commitment under the Repurchase Agreement was $625.0 million at September 30, 2025, which continues until maturity.

The maximum aggregate commitment under the Repurchase Agreement was $625.0 million at March 31, 2026, which continues until maturity.

The Repurchase Agreement also contains an accordion feature that could increase the commitment by $50.0 million above its active commitment level.

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The Repurchase Agreement contains various affirmative and negative covenants applicable to Pulte Mortgage, including quantitative thresholds related to net worth, net income, and liquidity.

At September 30, 2025, Pulte Mortgage had $404.2 million outstanding at a weighted-average interest rate of 5.93% and $220.8 million of remaining capacity under the Repurchase Agreement.

At March 31, 2026, Pulte Mortgage had $455.1 million outstanding at a weighted-average interest rate of 5.43% and $169.9 million of remaining capacity under the Repurchase Agreement.

At December 31, 2025, Pulte Mortgage had $532.3 million outstanding at a weighted-average interest rate of 5.51% and $92.7 million of remaining capacity under the Repurchase Agreement.

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Dividends and share repurchase program

In the nine months ended September 30, 2025, we declared cash dividends totaling $132.2 million and repurchased 8.2 million shares under our share repurchase authorization for $900.0 million.

In the nine months ended September 30, 2024, we declared cash dividends totaling $126.2 million and repurchased 7.6 million shares under our share repurchase authorization for $880.0 million.

In the three months ended March 31, 2026, we declared cash dividends totaling $50.2 million and repurchased 2.4 million shares under our share repurchase authorization for $308.2 million.

In the three months ended March 31, 2025, we declared cash dividends totaling $44.7 million and repurchased 2.8 million shares under our share repurchase authorization for $300.0 million.

On January 29, 2025, the Board of Directors increased our share repurchase authorization by $1.5 billion, which was publicly announced on January 30, 2025.

At September 30, 2025, we had remaining authorization to repurchase $1.3 billion of common shares.

At March 31, 2026, we had remaining authorization to repurchase $674.7 million of common shares.

On April 22, 2026, the Board of Directors approved an additional increase to our share repurchase authorization of $1.5 billion, which was publicly announced on April 23, 2026.

Contractual Obligations

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These obligations impact our short-term and long-term liquidity and capital resource needs.

Certain contractual obligations are reflected on the Consolidated Balance Sheet as of September 30, 2025, while others are considered future commitments.

Certain contractual obligations are reflected on the Consolidated Balance Sheet as of March 31, 2026, while others are considered future commitments.

Our contractual obligations primarily consist of long-term debt and related interest payments, purchase obligations related to expected acquisitions and development of land, house construction costs, operating leases, and obligations under our various compensation and benefit plans.

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If the obligations related to a project or program are ongoing, annual extensions of the letters of credit are typically granted on a year-to-year basis.

At September 30, 2025, we had outstanding letters of credit totaling $348.0 million.

At March 31, 2026, we had outstanding letters of credit totaling $348.1 million.

Our surety bonds generally do not have stated expiration dates;

rather, we are released from the bonds as the contractual performance is completed.

These bonds, which approximated $3.1 billion at September 30, 2025, are typically outstanding over a period of approximately three to five years.

These bonds, which approximated $3.0 billion at March 31, 2026, are typically outstanding over a period of approximately three to five years.

Because significant construction and development work has been performed related to projects that have not yet received final acceptance by the respective counterparties, the aggregate amount of surety bonds outstanding is in excess of the projected cost of the remaining work to be performed.

In the ordinary course of business, we enter into land option agreements in order to procure land for the construction of houses in the future.

At September 30, 2025, these agreements had an aggregate remaining purchase price of $9.9 billion.

Pursuant to these land option agreements, we generally provide a deposit to the seller as consideration for the right to purchase land at

different times in the future, usually at predetermined prices.

At September 30, 2025, outstanding deposits totaled $681.5 million, of which $18.0 million is refundable.

For further information regarding our primary obligations, refer to Note 4 and Note 8 to the Consolidated Financial Statements included elsewhere in this Quarterly Report on 10-Q for amounts outstanding as of September 30, 2025 related to debt and commitments and contingencies, respectively.

At March 31, 2026, these agreements had an aggregate remaining purchase price of $9.7 billion.

Pursuant to these land option agreements, we generally provide a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices.

At March 31, 2026, outstanding deposits totaled $735.2 million, of which $19.0 million is refundable.

For further information regarding our primary obligations, refer to Note 4 and Note 8 to the Consolidated Financial Statements included elsewhere in this Quarterly Report on 10-Q for amounts outstanding as of March 31, 2026 related to debt and commitments and contingencies, respectively.

Operating activities

Net cash provided by operating activities in the nine months ended September 30, 2025 was $1.1 billion.

Generally, the primary drivers of our cash flow from operations are profitability and changes in the levels of inventory and residential mortgage loans available-for-sale, each of which experiences seasonal fluctuations.

The cash inflows from our operations for the nine months ended September 30, 2025 were primarily due to net income of $1.7 billion, partially offset by a net increase in inventories of $635.9 million, which was primarily attributable to land acquisition, development, and house spend to support ongoing operations.

Net cash provided by operating activities in the nine months ended September 30, 2024 was $1.1 billion.

The cash inflows from our operations for the nine months ended September 30, 2024 were primarily due to net income of $2.2 billion, partially offset by a net increase in inventories of $805.3 million, which was primarily attributable to land acquisition, development, and house spend to support expected future growth, and a $45.2 million increase in residential mortgage loans available-for-sale due to higher loan origination volumes.

Net cash provided by operating activities in the three months ended March 31, 2026 was $159.8 million.

The cash inflows from our operations for the three months ended March 31, 2026 were primarily due to net income of $347.0 million and a net decrease in residential mortgage loans available-for-sale of $104.4 million, partially offset by a net increase in inventories of $376.4 million, which was primarily attributable to land acquisition, development, and house spend to support ongoing operations.

Net cash provided by operating activities in the three months ended March 31, 2025 was $134.2 million.

The cash inflows from our operations for the three months ended March 31, 2025 were primarily due to net income of $522.8 million, partially offset by a net increase in inventories of $270.6 million, which was primarily attributable to land acquisition, development, and house spend to support expected future growth.

Investing activities

Net cash used in investing activities in the nine months ended September 30, 2025 was $64.1 million.

These cash outflows primarily resulted from capital expenditures of $91.4 million related to our ongoing investments in new communities, facilities, and information technology applications, partially offset by distributions of capital from unconsolidated entities of $45.7 million.

Net cash used in investing activities in the nine months ended September 30, 2024 was $108.4 million.

These cash outflows primarily resulted from capital expenditures of $94.1 million related to our ongoing investments in new communities, facilities, and information technology applications along with $15.1 million of investments in unconsolidated entities.

Net cash used in investing activities in the three months ended March 31, 2026 was $24.9 million.

These cash outflows primarily resulted from capital expenditures of $25.4 million related to our ongoing investments in new communities, facilities, and information technology applications.

Net cash used in investing activities in the three months ended March 31, 2025 was $39.7 million.

These cash outflows primarily resulted from capital expenditures of $29.6 million related to our ongoing investments in new communities, facilities, and information technology applications.

Financing activities

Net cash used in financing activities in the nine months ended September 30, 2025 totaled $1.2 billion.

Net cash used in financing activities in the three months ended March 31, 2026 totaled $300.2 million.

These cash outflows resulted primarily from repayments and redemptions of notes payable of $599.7 million, repurchases of 2.4 million common shares for $308.2 million under our share repurchase authorization, payments of $52.0 million in cash dividends, and net repayments of $77.3 million under the Repurchase Agreement, partially offset by $794.8 million of proceeds from debt issuance.

Net cash used in financing activities in the three months ended March 31, 2025 totaled $472.3 million.

These cash outflows resulted primarily from the repurchase of 2.8 million common shares for $300.0 million under our share repurchase authorization, payments of $45.8 million in cash dividends, payments of $11.4 million related to consolidated inventory not owned, and net repayments of $100.1 million under the Repurchase Agreement.

Net cash used in financing activities in the nine months ended September 30, 2024 totaled $1.4 billion.

These cash outflows resulted primarily from the repurchase of 7.6 million common shares for $880.0 million under our share repurchase authorization, payments of $126.6 million in cash dividends, payments of $94.1 million related to consolidated inventory not owned, and $350.5 million of repayments of notes payable, partially offset by net borrowings of $24.5 million under the Repurchase Agreement.

Although significant changes in market conditions have impacted our seasonal patterns in the past and could do so again, we historically experience variability in our quarterly results from operations due to the seasonal nature of the homebuilding industry.

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Supplemental Guarantor Financial Information

As of September 30, 2025, PulteGroup, Inc.

had outstanding $1.6 billion principal amount of unsecured senior notes due at dates from March 2026 through February 2035 and no borrowings outstanding, $348.0 million of letters of credit issued, and $902.0 million of remaining capacity under its Revolving Credit Facility.

As of March 31, 2026, PulteGroup, Inc.

had outstanding $1.8 billion principal amount of unsecured senior notes due at dates from March 2031 through March 2036 and no borrowings outstanding, $348.1 million of letters of credit issued, and $1.4 billion of remaining capacity under its Revolving Credit Facility.

All of our unsecured senior notes and the Revolving Credit Facility are fully and unconditionally guaranteed, on a joint and several basis, by certain subsidiaries of PulteGroup, Inc.

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PulteGroup, Inc.

and Guarantor Subsidiaries

and Guarantor Subsidiaries of the Company’s 7.875% unsecured senior notes due 2032, 6.375% unsecured senior notes due 2033, and 6.000% unsecured senior notes due 2035:

Summarized Balance Sheet Data

ASSETS September 30, 2025 December 31, 2024

ASSETS March 31, 2026 December 31, 2025

Cash, cash equivalents, and restricted cash $1,612,351 $1,632,196

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Total liabilities 4,935,944 4,682,755

Nine Months Ended

September 30,

Three Months Ended Year Ended

March 31, December 31

Summarized Statement of Operations Data 2026 2025

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Income before income taxes 508,571 3,047,519

PulteGroup, Inc.

and Guarantor Subsidiaries of the Company’s 4.250% unsecured senior notes due 2031 and 4.900% unsecured senior notes due 2036:

Summarized Balance Sheet Data

ASSETS March 31, 2026 December 31, 2025

Cash, cash equivalents, and restricted cash $1,584,539 $1,623,081

House and land inventory 13,309,716 12,935,565

Total assets 17,216,645 16,819,499

Accounts payable, customer deposits,

accrued and other liabilities $2,679,671 $2,627,453

Notes payable 1,820,771 1,631,098

Amount due to Non-Guarantor Subsidiaries 308,084 142,311

Total liabilities 4,958,553 4,708,371

Three Months Ended Year Ended

March 31, December 31

Summarized Statement of Operations Data 2026 2025

Revenues $3,324,823 $16,796,525

Cost of revenues 2,519,602 12,403,216

Selling, general, and administrative expenses 361,993 1,504,824

Income before income taxes 508,263 3,040,908

Critical Accounting Estimates

There have been no significant changes to our critical accounting estimates in the nine months ended September 30, 2025 compared with those contained in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no significant changes to our critical accounting estimates in the three months ended March 31, 2026 compared with those contained in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 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-Q

Item 2. Management’s Discussion and Analysis