BEAZER HOMES USA INC
For the period ended Jun 30, 2025. Filed Jul 31, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 31, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000915840-25-000044
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0000915840-25-000056
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 129 previous paragraphs and 123 current paragraphs.
47 unchanged; 55 reworded; 21 added; 24 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Market Conditions and Strategy
Current report
During the third quarter of fiscal 2025, the sales environment remained challenging due to elevated mortgage rates, weak consumer sentiment, and continued uncertainties in the macroeconomic environment. In response, we are taking a disciplined approach to our operations and capital allocation by slowing land spend to match current market conditions, renegotiating land acquisition terms to reduce costs and enhance flexibility, and pursuing capital-efficient growth opportunities through expanded usage of lot option agreements. Additionally, with our shares currently trading below book value, we prioritized share repurchases, buying back approximately 586,000 shares of our common stock for $12.5 million during the third quarter of fiscal 2025.
Current report
While the headwinds of affordability and consumer sentiment continue to create challenges for us and our peers, we are committed to leaning into our differentiators, as follows: (1) our Mortgage Choice platform which identifies qualified lenders and encourages multiple lenders to compete for our customer's business with the most competitive interest rates, fees, and service levels; (2) our Choice Plans®which allow customers to select from a list of structural options that meets their lifestyle at no additional cost; and (3) our homes are designed to deliver Surprising Performance with nearly all new home starts built to Zero Energy Ready standards, reducing the cost to operate a home. We continue to enhance the durability and quality of our homes through innovative design and superior construction standards, reinforcing our commitment to delivering high-quality, differentiated homes in desirable locations.
Current report
•During the quarter ended June 30, 2025, our average active community count of 167 was up 14.9% from 146 in the prior year quarter. We invested $153.8 million in land acquisition and land development during the quarter ended June 30, 2025, down from$201.1 million in land spend during the quarter ended June 30, 2024. We expect the pace of community growth to moderate as we strategically reallocate a portion of our land investment toward reaching our Multi-Year Goals of deleveraging and growth in book value per share. This shift underscores our confidence in the long-term value of our business and reinforces our commitment to enhancing shareholder returns while reducing risk.
Current report
•Homebuilding gross margin for the quarter ended June 30, 2025 was 13.5%, down from 17.3% compared to the prior year quarter. Homebuilding gross margin was impacted by inventory impairment and abandonment charges of $8.9 million during the quarter ended June 30, 2025, of which $8.6 million related to impairments recorded for two projects in progress communities, one located in our Phoenix market and the other in our Orlando market, principally due to a reduction in price that is other than temporary based on current competitive and market dynamics. The remaining $0.2 million represents abandonment charges related to a land acquisition deal we terminated during the quarter. Refer to Note 4 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion. Homebu ilding gross margin, excluding impairments, abandonments, and interest for the quarter ended June 30, 2025, was 18.4%, down from 20.3% in the prior year quarter. The decrease in homebuilding gross margin, excluding impairments, abandonments, and interest, compared to the prior year quarter was primarily due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Current report
Net new orders for the nine months ended June 30, 2025 decreased to 2,891, down 9.4% from the nine months ended June 30, 2024. The decrease in net new orders compared to the prior year period was driven by an 22.0% decrease in sales pace from 2.5 orders per community per month in the prior year period to 2.0, partially offset by a 16.2% increase in average active community count from 141 in the prior year period to 164.
Current report
West Segment: Net new orders for the quarter ended June 30, 2025 decreased to 482, down 32.6% from the quarter ended June 30, 2024. The decrease in net new orders compared to the prior year quarter was driven by a 37.4% decrease in sales pace from 2.5 orders per community per month in the prior year quarter to 1.6, partially offset by a 7.7% increase in average active community count from 95 in the prior year quarter to 103. Our Houston and San Antonio markets experienced the greatest sales pace challenges.
Current report
East Segment: Net new orders for the quarter ended June 30, 2025 decreased to 224, down 10.4% from the quarter ended June 30, 2024. The decrease in net new orders compared to the prior year quarter was driven by a 25.2% decrease in sales pace from 2.6 orders per community per month in the prior year quarter to 1.9, partially offset by a 19.8% increase in average active community count from 32 in the prior year quarter to 38.
Current report
Southeast Segment: Net new orders for the quarter ended June 30, 2025 increased to 155, up 47.6% from the quarter ended June 30, 2024. Theincrease in net new orders compared to the prior year quarter was driven by a 43.6% increase inaverage active community count from 18 in the prior year quarter to 26 and a 2.8% increase in sales pace from 1.9 orders per community per month in the prior year quarter to 2.0.
Current report
West Segment: Net new orders for the nine months ended June 30, 2025 decreased to 1,736, down 17.6% from the nine months ended June 30, 2024. The decrease in net new orders was driven by a 26.7% decrease in sales pace from 2.6 orders per community per month to 1.9, partially offset by a 12.4% increase in average active community count from 91 to 102.
Current report
East Segment: Homebuilding revenue increased by 20.1% for the three months ended June 30, 2025 compared to the prior year quarter due to a 12.6% increase in ASP and a 6.7% increase in closings. The increase in closings was primarily due to higher share of homes near completion within beginning backlog as well as improved construction cycle times compared to prior year quarter.
Current report
West Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $19.2 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 18.1%, down from 20.6% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Current report
East Segment: Compared to the prior year quarter, homebuilding gross profit increased by $6.3 million due to an increase in homebuilding revenue and higher gross margin. Homebuilding gross margin, excluding impairments and abandonments, increased to 17.8%, up from 16.3% in the prior year quarter, primarily due to changes in product and community mix as we closed more homes at higher margin communities, partially offset by an increase in price concessions.
Current report
West Segment: Compared to the prior year period, homebuilding gross profit decreased by $21.8 million due to lower gross margin, partially offset by an increase in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 18.5%, down from 21.2% in the prior year period, primarily due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Current report
East Segment: Compared to the prior year period, homebuilding gross profit increased by $5.8 million due to an increase in homebuilding revenue, partially offset by lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 16.0%, down from 17.8% in the prior year period, primarily due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Current report
For the three months ended June 30, 2025, land sales and other revenue increased by $3.9 million to $10.0 million, and land sales and other gross profit decreased by $1.2 million to $0.1 million compared to the prior year quarter. For the nine months ended June 30, 2025, land sales and other revenue increased by $13.0 million to $27.8 million, and land sales and other gross profit decreased by $0.1 million to $4.1 million compared to the prior year period.
Current report
During thethree months ended June 30, 2025, we performed a strategic review of a community in our Phoenix market and determined to sell a portion of the lots that were no longer aligned with our operating plans. As a result of this change in strategy, we reclassified 38 lots from project in progress to land held for sale and recognized a land held for sale impairment charge of$1.5 million during the three and nine months ended June 30, 2025. No land held for sale impairments were recognized during the three and nine ended June 30, 2024. Refer to Note 4 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion.
Current report
Operating (Loss) Income
Current report
West Segment: The $18.2 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed, including the impact of $3.1 million inventory impairments and abandonments recognized during the current quarter, partially offset by lower commissions expense on lower homebuilding revenue.
Current report
Southeast Segment: The $15.3 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed, including the impact of $5.6 million inventory impairments and abandonments recognized during the current quarter, and higher other G&A expenses, partially offset by lower commissions expense on lower homebuilding revenue.
Current report
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA repeals many of the energy efficiency credits enacted under the Inflation Reduction Act, including our ability to claim energy efficient new home tax credits for homes that close after June 30, 2026. While this change does not impact our fiscal 2025 effective tax rate and deferred tax balances, we are evaluating the full impact of OBBBA on our future tax provision and financial results.
Removed paragraphs (24)
Previous report
Market Conditions
Previous report
During the second quarter of fiscal 2025, the housing market was slower than expected as the macroeconomic environment became increasingly uncertain, which negatively impacted consumer sentiment, intensified persistent affordability challenges, and weakened demand. Despite this challenging operating environment, we believe longer-term housing market conditions remain favorable as shortfalls in production over the past decade have contributed to an undersupply of housing.
Previous report
During fiscal 2023, we established three Multi-Year Goals centered on growth, deleveraging, and product differentiation, which have since guided our capital allocation strategy. We remain dedicated to these objectives in support of our business:
Previous report
•Growth: reaching more than 200 active communities by the end of fiscal 2026. Our March 31, 2025 active community count was 162 communities, up 11.7% from March 31, 2024 and 33.9% from March 31, 2023.
Previous report
•Deleveraging: reducing our net debt to net capitalization ratio to below 30% by the end of fiscal 2026. As of March 31, 2025, our net debt to net capitalization ratio was up moderately from March 31, 2024 and March 31, 2023 due to higher land investment. However, the cumulative profitability and cash flow we anticipate over the remainder of the year will allow us to make strides in reducing this ratio.
Previous report
•Product differentiation: fulfilling our commitment that by the end of the calendar year 2025 every home we start will be Zero Energy Ready. Nearly 99% of the Company's fiscal second quarter new home starts are being built to Zero Energy Ready standards, up from 43% at March 31, 2024 and 4% at March 31, 2023.
Previous report
In February 2025, we announced an acceleration of the pace of our share repurchases given the opportunity to purchase our stock at a significant discount to book value. In tandem, we modified our multi-year deleveraging goal to reduce our net debt to net capitalization ratio to the“low 30% range” by the end of fiscal 2026. By the end of the second quarter, we had repurchased $20.6 million, or approximately 905,000 shares, of our common stock, bringing our total repurchases to $41.7 million over the past three years.
Previous report
With challenging housing market conditions and our shares trading at a significant discount to book value, we have decided to slow our community count growth and deleveraging efforts to accommodate more share repurchases. To that end, in April 2025, our Board of Directors approved a new share repurchase program to repurchase up to $100.0 million of our outstanding common stock, which we expect to execute over multiple years.
Previous report
Reflecting our revised capital allocation priorities, we are updating our Multi-Year Goals as follows:
Previous report
•During the quarter ended March 31, 2025, our average active community count of 163 was up 15.9% from 140 in the prior year quarter. As of March 31, 2025, our ending active community count was 162, up 11.7% from 145 in the prior year quarter. We invested $197.0 million in land acquisition and land development during the quarter ended March 31, 2025, which was relatively flat compared to$197.8 million in land spend during the quarter ended March 31, 2024.
Previous report
•Homebuilding gross margin for the quarter ended March 31, 2025 was 15.1%, down from 18.7% compared to the prior year quarter. Homebu ilding gross margin, excluding impairments, abandonments, and interest for the quarter ended March 31, 2025, was 18.3%, down from 21.7% in the prior year quarter. The decrease in homebuilding gross margin compared to the prior year quarter was largely due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Previous report
Net new orders for the six months ended March 31, 2025 decreased to 2,030, down 4.3% from the six months ended March 31, 2024. The decrease in net new orders compared to the prior year period was driven by an 18.1% decrease in sales pace from 2.6 orders per community per month in the prior year period to 2.1, partially offset by a 16.8% increase in average active community count from 139 in the prior year period to 162.
Previous report
West Segment: Net new orders for the quarter ended March 31, 2025 decreased to 665, down 22.7% from the quarter ended March 31, 2024. The decrease in net new orders compared to the prior year quarter was driven by a 31.3% decrease in sales pace from 3.2 orders per community per month in the prior year quarter to 2.2, partially offset by a 12.6% increase in average active community count from 90 in the prior year quarter to 101.
Previous report
East Segment: Net new orders for the quarter ended March 31, 2025 decreased to 257, down 2.3% from the quarter ended March 31, 2024. The decrease in net new orders compared to the prior year quarter was driven by a 21.5% decrease in sales pace from 3.1 orders per community per month in the prior year quarter to 2.4, partially offset by a 24.4% increase in average active community count from 29 in the prior year quarter to 36.
Previous report
Southeast Segment: Net new orders for the quarter ended March 31, 2025 remained flat year-over-year at 176 compared to the quarter ended March 31, 2024, driven by a 15.4% decrease in sales pace from 2.7 orders per community per month in the prior year quarter to 2.3, offset by an 18.2% increase inaverage active community count from 22 in the prior year quarter to 26.
Previous report
West Segment: Net new orders for the six months ended March 31, 2025 decreased to 1,254, down 10.0% from the six months ended March 31, 2024. The decrease in net new orders was driven by a 21.6% decrease in sales pace from 2.6 orders per community per month to 2.1, partially offset by a 14.9% increase in average active community count from 89 to 102.
Previous report
Southeast Segment: Homebuilding revenue decreased by 14.2% for the three months ended March 31, 2025 compared to the prior year quarter due to a 12.3% decrease in closings and a 2.1% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to prior year quarter.
Previous report
West Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $5.1 million due to lower gross margin, partially offset by an increase in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 19.1%, down from 21.5% in the prior year quarter, primarily due to an increase in closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Previous report
East Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $4.1 million due to lower gross margin, partially offset by an increase in homebuilding revenue. Homebu ilding gross margin, excluding impairments and abandonments, decreased to 14.7%, down from 19.5% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Previous report
West Segment: Compared to the prior year period, homebuilding gross profit decreased by $2.6 million due to lower gross margin, partially offset by an increase in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 18.7%, down from 21.6% in the prior year period, primarily due to an increase in closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Previous report
East Segment: Compared to the prior year period, homebuilding gross profit decreased by $0.4 million due to lower gross margin, partially offset by an increase in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.9%, down from 18.8% in the prior year period, primarily due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Previous report
Operating Income
Previous report
West Segment: The $6.6 million decrease in operating income compared to the prior year quarter was primarily due to lower gross profit previously discussed, and higher sales and marketing costs and other G&A expenses driven by community count growth.
Previous report
East Segment: The $4.7 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed, and higher sales and marketing costs driven by community count growth.
Reworded paragraphs (55)
Previous wording
•Growth: reaching more than 200 active communities by the end of fiscal 2027,
Current wording
For the remainder of fiscal 2025, we will continue to focus on deleveraging, growing book value per share, and positioning our business for durable long-term growth. Our Multi-Year Goals, updated during the second quarter of fiscal 2025, include reducing our net debt to net capitalization ratio to the low 30% range by the end of fiscal 2027, achieving a double-digit compound annual growth in book value per share from the end of fiscal 2024 through fiscal 2027, and reaching more than 200 active communities by the end of fiscal 2027. With a path to 200 active communities in sight, supported by our current land position, we are prioritizing deleveraging and book value growth. Backed by a strong balance sheet, ample liquidity, and a focused sales strategy, we believe we are well-equipped to navigate the macroeconomic uncertainty as we continue to progress toward our Multi-Year Goals.
Previous wording
Overview of Results for Our Fiscal Second Quarter
Current wording
Overview of Results for Our Fiscal Third Quarter
Previous wording
•As of March 31, 2025, our land position included 28,290 controlled lots, up 5.2% from 26,887 as of March 31, 2024. Excluding land held for future development and land held for sale lots, we controlled 27,514 active lots, up 4.9% from a year ago. This growth was achieved through expanded usage of lot option agreements, which allow us to position for future growth while providing the flexibility to respond to market conditions. As of March 31, 2025, we had 16,322 lots, or 59.3% of our total active lots, under option agreements as compared to 13,527 lots, or 51.6% of our total active lots, under option agreements as of March 31, 2024.
Current wording
•As of June 30, 2025, our land position included 27,794 controlled lots, down 2.0% from 28,365 as of June 30, 2024. Excluding land held for future development and land held for sale lots, we controlled 26,944 active lots, down 3.2% from a year ago. We remain focused on the expanded usage of lot option agreements, which allow us to position for future growth while providing the flexibility to respond to market conditions. As of June 30, 2025, we had 16,195 lots, or 60.1% of our total active lots, under option agreements as compared to 15,434 lots, or 55.5% of our total active lots, under option agreements as of June 30, 2024.
Previous wording
•During the quarter ended March 31, 2025, orders per community per month were 2.3 compared to 3.1 in the prior year quarter, and our net new orders were 1,098, down 15.5% from 1,299 in the prior year quarter. The decrease in sales pace compared to the prior year quarter reflected weaker consumer sentiment driven by affordability challenges and uncertainties in the macroeconomic environment.
Current wording
•During the quarter ended June 30, 2025, orders per community per month were 1.7 compared to 2.4 in the prior year quarter, and our net new orders were 861, down 19.5% from 1,070 in the prior year quarter. Sales pace fell short of expectations, softening in May and remained subdued in June. The decrease in sales pace compared to the prior year quarter reflected weaker consumer sentiment driven by affordability challenges and uncertainties in the macroeconomic environment. While all of our markets experienced challenging market conditions, we saw the most pronounced pressure in our Houston, San Antonio and Orlando markets. We continue to adjust prices and features to align with the current market, including offering rate buy-downs and other closing incentives.
Previous wording
•Our backlog Average Selling Price (ASP) for homes sold during the quarter ended March 31, 2025 was$544.9 thousand, up 3.7% from$525.5 thousandin the prior year quarter. The increase in backlog ASP compared to prior year quarterwas due to changes in product and community mix as well as price appreciation in certain communities.
Current wording
•Our Average Selling Price (ASP) for homes closed during the quarter ended June 30, 2025 was $517.3 thousand, up 2.4% from $505.3 thousand in the prior year quarter. The increase in ASP compared to prior year quarter was primarily due to changes in product and community mix in the East segment.
Previous wording
•SG&A for the quarter ended March 31, 2025 was 12.0% of total revenue, up from 11.5% in the prior year quarter. The increase in SG&A as a percentage of total revenue compared to the prior year quarter was largely due to higher sales and marketing costs and other G&A expenses as we continue to grow and activate new communities. We remain focused on prudently managing overhead costs.
Current wording
•SG&A for the quarter ended June 30, 2025 was 13.2% of total revenue, up from 11.9% in the prior year quarter. The increase in SG&A as a percentage of total revenue compared to the prior year quarter was primarily due to lower homebuilding revenue. We remain focused on prudently managing overhead costs.
Previous wording
Our homebuilding operating cycle historically has reflected escalating new order activity in the second and third fiscal quarters and increased closings in the third and fourth fiscal quarters. However, these seasonal patterns may be impacted by a variety of factors, including periods of market volatility and changes in mortgage interest rates, which may result in increased or decreased new orders and/or revenues and closings that are outside of the normal ranges typically realized on account of seasonality. Accordingly, our financial results for the three and six months ended March 31, 2025 may not be indicative of our full year results.
Current wording
Our homebuilding operating cycle historically has reflected escalating new order activity in the second and third fiscal quarters and increased closings in the third and fourth fiscal quarters. However, these seasonal patterns may be impacted by a variety of factors, including periods of market volatility and changes in mortgage interest rates, which may result in increased or decreased new orders and/or revenues and closings that are outside of the normal ranges typically realized on account of seasonality. Accordingly, our financial results for the three and nine months ended June 30, 2025 may not be indicative of our full year results.
Previous wording
(a)Excluding impairments, abandonments, and interest amortized to cost of sales, homebuilding gross margin was 18.3% and 21.7% for the three months ended March 31, 2025 and 2024, respectively, and 18.3% and 22.2% for the six months ended March 31, 2025 and 2024, respectively. Please see the "Homebuilding Gross Profit and Gross Margin" section below for a reconciliation of homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized tocost of sales (non-GAAP measures) to homebuilding gross profit and gross margin, the most directly comparable GAAP measure.
Current wording
(a)Excluding impairments, abandonments, and interest amortized to cost of sales, homebuilding gross margin was 18.4% and 20.3% for the three months ended June 30, 2025 and 2024, respectively, and 18.3% and 21.4% for the nine months ended June 30, 2025 and 2024, respectively. Please see the "Homebuilding Gross Profit and Gross Margin" section below for a reconciliation of homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized tocost of sales (non-GAAP measures) to homebuilding gross profit and gross margin, the most directly comparable GAAP measure.
Previous wording
(c) Calculated as tax expense for the period divided by income from continuing operations. Our income tax expenses are not always directly correlated to the amount of pre-tax income for the associated period due to a variety of factors, including, but not limited to, the impact of tax credits and permanent differences. Our tax credits are predominantly due to the energy efficiency of our homes and, historically, were valued at $2,000 per single family home. The Inflation Reduction Act increased these credits to $2,500 or $5,000 per single family home meeting Energy Star or Zero Energy Ready qualifications, respectively. As we work towards our goal of building 100% Zero Energy Ready homes, we expect our energy efficiency tax credits to continue to shift towards $5,000 per single family home.
Current wording
(c) Calculated as tax (benefit) expense for the period divided by (loss) income from continuing operations before income taxes. Our income tax (benefit) expense is not always directly correlated to the amount of pre-tax (loss) income for the associated period due to a variety of factors, including, but not limited to, the impact of tax credits and permanent differences. Our tax credits are predominantly due to the energy efficiency of our homes, with credits valued between $2,000 and $5,000 per single family home. For the three months ended June 30, 2025, the tax benefit arising from our pre-tax loss, in part driven by the $10.3 million inventory impairment and abandonment charges, combined with energy efficiency tax credits, resulted in a total tax benefit that was similar in size to our pre-tax loss from continuing operations, yielding an effective tax rate of 87.1%. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA repeals many of the energy efficiency credits enacted under the Inflation Reduction Act, including our ability to claim energy efficient new home tax credits for homes that close after June 30, 2026. While this change does not impact our fiscal 2025 effective tax rate and deferred tax balances, we are evaluating the full impact of OBBBA on our future tax provision and financial results.
Previous wording
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)
Current wording
Reconciliation of Net (Loss) Income (GAAP) to Adjusted EBITDA (Non-GAAP)
Previous wording
Reconciliation of net income (GAAP measure) to Adjusted EBITDA (Non-GAAP measure) is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing core operating results and underlying business trends by eliminating many of the differences in companies' respective capitalization, tax position, level of impairments, and other non-recurring items. This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
Current wording
Reconciliation of net (loss) income (GAAP measure) to Adjusted EBITDA (Non-GAAP measure) is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing core operating results and underlying business trends by eliminating many of the differences in companies' respective capitalization, tax position, level of impairments, and other non-recurring items. This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
Previous wording
The following table reconciles our net income (GAAP) to Adjusted EBITDA (non-GAAP) for the periods presented:
Current wording
The following table reconciles our net (loss) income (GAAP) to Adjusted EBITDA (non-GAAP) for the periods presented:
Previous wording
Net new orders for the quarter ended March 31, 2025 decreased to 1,098, down 15.5% from the quarter ended March 31, 2024. The decrease in net new orders compared to the prior year quarter was driven by a 27.1% decrease in sales pace from 3.1 orders per community per month in the prior year quarter to 2.3, partially offset by a 15.9% increase in average active community count from 140 in the prior year quarter to 163. The decrease in sales pace compared to the prior year quarter reflected weaker consumer sentiment driven by affordability challenges and uncertainties in the macroeconomic environment.
Current wording
Net new orders for the quarter ended June 30, 2025 decreased to 861, down 19.5% from the quarter ended June 30, 2024. The decrease in net new orders compared to the prior year quarter was driven by a 30.0% decrease in sales pace from 2.4 orders per community per month in the prior year quarter to 1.7, partially offset by a 14.9% increase in average active community count from 146 in the prior year quarter to 167. The decrease in sales pace compared to the prior year quarter reflected weaker consumer sentiment driven by affordability challenges and uncertainties in the macroeconomic environment.
Previous wording
East Segment: Net new orders for the six months ended March 31, 2025 increased to 484, up 11.3% from the six months ended March 31, 2024. The increase in net new orders was driven by a 29.9% increase in average active community count from 27 to 36, partially offset by a 14.3% decrease in sales pace from 2.7 orders per community per month to 2.3.
Current wording
East Segment: Net new orders for the nine months ended June 30, 2025 increased to 708, up 3.4% from the nine months ended June 30, 2024. The increase in net new orders was driven by a 26.2% increase in average active community count from 29 to 36, partially offset by an 18.1% decrease in sales pace from 2.6 orders per community per month to 2.2.
Previous wording
Southeast Segment: Net new orders for the six months ended March 31, 2025 decreased to 292, down 0.7% from the six months ended March 31, 2024. The decrease in net new orders was driven by an 8.7% decrease in sales pace from 2.1 orders per community per month to 2.0, partially offset by an 8.8% increase in average active community count from 23 to 25.
Current wording
Southeast Segment: Net new orders for the nine months ended June 30, 2025 increased to 447, up 12.0% from the nine months ended June 30, 2024. The increase in net new orders was driven by an 18.8% increase in average active community count from 21 to 25, partially offset by a 5.6% decrease in sales pace from 2.1 orders per community per month to 2.0.
Previous wording
Backlog reflects the number of homes for which the Company has entered into a sales contract with a customer but has not yet delivered the home. The decrease in backlog units was primarily due to beginning the fiscal quarter with fewer backlog units and year-over-year growth in closings outpacing growth in net new orders for the quarter ended March 31, 2025. The aggregate dollar value of homes in backlog as of March 31, 2025 decreased 22.7% compared to March 31, 2024 due to a 25.4% decrease in backlog units, partially offset by a 3.7% increase in the ASP of homes in backlog. The increase in backlog ASP compared to prior year quarter was due to changes in product and community mix as well as price appreciation in certain communities.
Current wording
Backlog reflects the number of homes for which the Company has entered into a sales contract with a customer but has not yet delivered the home. The decrease in backlog units was primarily due to beginning the fiscal quarter with fewer backlog units and year-over-year lower net new orders for the quarter ended June 30, 2025. The aggregate dollar value of homes in backlog as of June 30, 2025 decreased 29.0% compared to June 30, 2024 due to a 30.6% decrease in backlog units, partially offset by a 2.3% increase in the ASP of homes in backlog. The increase in backlog ASP compared to prior year quarter was primarily due to changes in product and community mix.
Previous wording
West Segment: Homebuilding revenue increased by 5.9% for the three months ended March 31, 2025 compared to the prior year quarter due to a 6.0% increase in closings, partially offset by a 0.1% decrease in ASP. The increase in closings was primarily due to the higher volume of spec homes that sold and closed within the current fiscal quarter and improved construction cycle times compared to prior year quarter.
Current wording
West Segment: Homebuilding revenue decreased by 11.7% for the three months ended June 30, 2025 compared to the prior year quarter due to a 11.1% decrease in closings and a 0.7% decrease in ASP. The decrease in closings was primarily due to the lower beginning backlog, partially offset by higher volume of spec homes that sold and closed within the current fiscal quarter and improved construction cycle times compared to prior year quarter.
Previous wording
East Segment: Homebuilding revenue increased by 7.9% for the three months ended March 31, 2025 compared to the prior year quarter due to a 7.0% increase in closings and a 0.8% increase in ASP. The increase in closings was primarily due to higher volume of spec homes that sold and closed within the current fiscal quarter and improved construction cycle times compared to prior year quarter.
Current wording
Southeast Segment: Homebuilding revenue decreased by 34.8% for the three months ended June 30, 2025 compared to the prior year quarter due to a 33.7% decrease in closings and a 1.7% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by higher volume of spec homes that sold and closed within the current fiscal quarter and improved construction cycle times compared to prior year quarter.
Previous wording
West Segment: Homebuilding revenue increased by 13.4% for the six months ended March 31, 2025 compared to the six months ended March 31, 2024 due to a 14.9% increase in closings, partially offset by a 1.3% decrease in ASP. The increase in closings was primarily due to higher volume of spec homes that sold and closed within the current year period and improved construction cycle times compared to prior year period.
Current wording
West Segment: Homebuilding revenue increased by 3.7% for the nine months ended June 30, 2025 compared to the nine months ended June 30, 2024 due to a 4.7% increase in closings, partially offset by a 0.9% decrease in ASP. The increase in closings was primarily due to higher volume of spec homes that sold and closed within the current year period and improved construction cycle times compared to prior year period.
Previous wording
East Segment: Homebuilding revenue increased by 24.9% for the six months ended March 31, 2025 compared to the six months ended March 31, 2024 due to a 22.8% increase in closings as well as a 1.7% increase in ASP. The increase in closings was primarily due to higher volume of spec homes that sold and closed within the current year period and improved construction cycle times compared to prior year period.
Current wording
East Segment: Homebuilding revenue increased by 23.0% for the nine months ended June 30, 2025 compared to the nine months ended June 30, 2024 due to a 16.2% increase in closings and a 5.8% increase in ASP. The increase in closings was primarily due to higher volume of spec homes that sold and closed within the current year period and improved construction cycle times compared to prior year period.
Previous wording
Southeast Segment: Homebuilding revenue decreased by 16.8% six months ended March 31, 2025 compared to the six months ended March 31, 2024 due to a 15.2% decrease in closings and a 1.9% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to prior year period.
Current wording
Southeast Segment: Homebuilding revenue decreased by 23.9% nine months ended June 30, 2025 compared to the nine months ended June 30, 2024 due to a 22.4% decrease in closings and a 2.0% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to prior year period.
Previous wording
The following tables present our homebuilding (HB) gross profit and gross margin by reportable segment and in total. In addition, such amounts are presented excluding inventory impairments and abandonments and interest amortized to cost of sales (COS). Homebuilding gross profit is defined as homebuilding revenue less home cost of sales (which includes land and land development costs, home construction costs, capitalized interest, indirect costs of construction, estimated warranty costs, closing costs, and inventory impairments and abandonment charges).
Current wording
The following tables present our homebuilding (HB) gross profit and gross margin by reportable segment and Corporate and unallocated. In addition, such amounts are presented excluding inventory impairments and abandonments and interest amortized to cost of sales (COS). Homebuilding gross profit is defined as homebuilding revenue less home cost of sales (which includes land and land development costs, home construction costs, capitalized interest, indirect costs of construction, estimated warranty costs, closing costs, and inventory impairment and abandonment charges).
Previous wording
Our homebuilding gross profit decreased by $16.6 million to $84.1 million for the three months ended March 31, 2025, compared to $100.8 million in the prior year quarter. The decrease in homebuilding gross profit compared to the prior year quarter was primarily due to a decrease in gross margin of 360 basis points to 15.1%, partially offset by an increase in homebuilding revenue of $17.4 million. As shown in the tables above, the comparability of our gross profit and gross margin was slightly impacted by impairment and abandonment charges, which increased by $0.5 million, and interest amortized to homebuilding cost of sales, which increased by $1.2 million compared to the prior year quarter (refer to Note 5 of the notes to the condensed consolidated financial statements in this Form 10-Q for additional details). When excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $15.0 million compared to the prior year quarter, while homebuilding gross margin decreased by 340 basis points to 18.3%. The decrease in gross margin for the three months ended March 31, 2025 compared to the prior year quarter was due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Current wording
Our homebuilding gross profit decreased by $29.5 million to $72.5 million for the three months ended June 30, 2025, compared to $102.0 million in the prior year quarter. The decrease in homebuilding gross profit compared to the prior year quarter was primarily due to a decrease in homebuilding revenue of $54.3 million and a decrease in gross margin of 380 basis points to 13.5%. As shown in the tables above, the comparability of our gross profit and gross margin was impacted by impairment and abandonment charges, which increased by $8.7 million, and interest amortized to homebuilding cost of sales, which increased by $0.1 million compared to the prior year quarter (refer to Note 4 and Note 5 of the notes to the condensed consolidated financial statements in this Form 10-Q for additional details). When excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $20.7 million compared to the prior year quarter, while homebuilding gross margin decreased by 190 basis points to 18.4%. The decrease in gross margin for the three months ended June 30, 2025 compared to the prior year quarter was due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Previous wording
Southeast Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $7.1 million due to lower gross margin and a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 16.3%, down from 22.6% in the prior year quarter, primarily due to an increase in price concessions, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Current wording
Southeast Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $15.7 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 17.7%, down from 21.4% in the prior year quarter, primarily due to an increase in price concessions, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Previous wording
Our homebuilding gross profit decreased by $22.6 million to $154.1 million for the six months ended March 31, 2025, from $176.7 million in the prior year period. The decrease in homebuilding gross profit was primarily due to a decrease in gross margin of 400 basis points to 15.2%, partially offset by an increase in homebuilding revenue of $96.9 million. Similar to the three-month period discussed above, the comparability of our gross profit and gross margin for the six-month period was slightly impacted by impairment and abandonment charges, which increased by $0.5 million, and interest amortized to homebuilding cost of sales, which increased by $3.9 million year-over-year (refer to Note 4 and Note 5 of the notes to the condensed consolidated financial statements in this Form 10-Q for additional details). When excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $18.2 million compared to the prior year period, while homebuilding gross margin decreased by 390 basis points to 18.3%. The decrease in gross margin for the six months ended March 31, 2025 compared to the prior year period was primarily due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Current wording
Our homebuilding gross profit decreased by $52.1 million to $226.6 million for the nine months ended June 30, 2025, from $278.7 million in the prior year period. The decrease in homebuilding gross profit was primarily due to a decrease in gross margin of 390 basis points to 14.6%, partially offset by an increase in homebuilding revenue of $42.6 million. Similar to the three-month period discussed above, the comparability of our gross profit and gross margin for the nine-month period was impacted by impairment and abandonment charges, which increased by $9.2 million, and interest amortized to homebuilding cost of sales, which increased by $4.0 million year-over-year (refer to Note 4 and Note 5 of the notes to the condensed consolidated financial statements in this Form 10-Q for additional details). When excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $38.9 million compared to the prior year period, while homebuilding gross margin decreased by 310 basis points to 18.3%. The decrease in gross margin for the nine months ended June 30, 2025 compared to the prior year period was primarily due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Previous wording
Southeast Segment: Compared to the prior year period, homebuilding gross profit decreased by $14.2 million due to a decrease in homeb uilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 16.2%, down from 22.5% in the prior year period, primarily due to an increase in price concessions, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix.
Current wording
Southeast Segment: Compared to the prior year period, homebuilding gross profit decreased by $29.9 million due to a decrease in homeb uilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 16.7%, down from 22.1% in the prior year period, primarily due to an increase in price concessions and changes in product and community mix.
Previous wording
Land sales relate to land and lots sold that do not fit within our homebuilding programs or strategic plans. We also have other revenue related to title examinations provided for our homebuyers in certain markets. The following tables summarize our land sales and other revenue and related gross profit by reportable segment for the periods presented:
Current wording
Land sales relate to land and lots sold that do not fit within our homebuilding programs or strategic plans. We also have other revenue related to title examinations provided for our homebuyers in certain markets. The following tables summarize our land sales and other revenue and related gross profit by reportable segment and Corporate and unallocated for the periods presented:
Previous wording
(a) Corporate and unallocated includes capitalized interest and capitalized indirect costs expensed to land cost of sale related to land and lots sold, as well as capitalized interest and capitalized indirect costs impaired in order to reflect land held for sale assets at net realizable value.
Current wording
(a) Corporate and unallocated includes capitalized interest and capitalized indirect costs expensed to land cost of sales related to land and lots sold, as well as capitalized interest and capitalized indirect costs impaired in order to reflect land held for sale assets at fair value less cost to sell.
Previous wording
For the three months ended March 31, 2025, land sales and other revenue increased by $6.4 million to $9.3 million, and land sales and other gross profit increased by $0.8 million to $1.9 million compared to the prior year quarter. For the six months ended March 31, 2025, land sales and other revenue increased by $9.0 million to $17.8 million, and land sales and other gross profit increased by $1.1 million to $4.0 million compared to the prior year period. Period-over-period fluctuations on land sales and other revenue are primarily driven by the timing and volume of land and lot sales closings. Land sales and other gross profit are primarily impacted by the profitability of individual land and lot sale transactions as well as the volume of our title examinations operations. Future land and lot sales will depend on a variety of factors, including local market conditions, individual community performance, and changing strategic plans.
Current wording
Period-over-period fluctuations on land sales and other revenue are primarily driven by the timing and volume of land and lot sales closings. As we continue toproactively manage our land position and divest land assets that no longer align with our strategic priorities, the dollar value of land sales and other revenue may grow. Land sales and other gross profit are primarily impacted by the profitability of individual land and lot sale transactions as well as the volume of our title examinations operations. Future land and lot sales will depend on a variety of factors, including local market conditions, individual community performance, and changing strategic plans.
Previous wording
The table below summarizes operating income by reportable segment for the periods presented:
Current wording
The table below summarizes operating (loss) income by reportable segment and Corporate and unallocated for the periods presented:
Previous wording
Our operating income decreased by $22.6 million to $13.4 million for the three months ended March 31, 2025, compared to operating income of $36.0 million for the three months ended March 31, 2024. This decrease compared to the prior year quarter was primarily due to the previously discussed decrease in gross profit and gross margin. SG&A expense increased by 9.1% compared to prior year quarter in proportion to active community count growth. SG&A as a percentage of total revenue increased by 50 basis points compared to the prior year quarter, from 11.5% to 12.0%, primarily due to higher sales and marketing costs and other G&A expenses as we continue to grow and activate new communities.
Current wording
Our operating income decreased by $32.2 million to a loss of $3.7 million for the three months ended June 30, 2025, compared to income of $28.5 million for the three months ended June 30, 2024. This decrease compared to the prior year quarter was primarily due to the previously discussed decrease in gross profit and gross margin, including the impact of $10.3 million inventory impairments and abandonments recognized during the three months ended June 30, 2025. SG&A expense increased by 1.2% compared to prior year primarily due to higher sales and marketing costs and other G&A expenses, partially offset by lower commissions expense on lower homebuilding revenue to support community count growth. SG&A as a percentage of total revenue increased by 130 basis points compared to the prior year quarter, from 11.9% to 13.2%, primarily due to lower homebuilding revenue.
Previous wording
Our operating income decreased by $40.7 million to $15.5 million for the six months ended March 31, 2025, compared to operating income of $56.3 million for the six months ended March 31, 2024. This decrease compared to the prior year period was primarily due to the previously discussed decrease in gross profit and gross margin. SG&A expense increased by 13.9% compared to prior year in proportion to active community count growth. SG&A as a percentage of total revenue increased by 20 basis points compared to the prior year period, from 12.7% to 12.9%, primarily due to higher other G&A expenses and higher sales and marketing costs as we continue to grow and activate new communities.
Current wording
Our operating income decreased by $73.0 million to $11.8 million for the nine months ended June 30, 2025, compared to operating income of $84.8 million for the nine months ended June 30, 2024. This decrease compared to the prior year periodwas primarily due to the previously discussed decrease in gross profit and gross margin, including the impact of $10.9 million inventory impairments and abandonments recognized during thenine months ended June 30, 2025. SG&A expense increased by 9.1% compared to prior year in proportion to active community count growth. SG&A as a percentage of total revenue increased by 60 basis points compared to the prior year period, from 12.4% to 13.0%, primarily due to higher other G&A expenses and higher sales and marketing costs as we continue to grow and activate new communities.
Previous wording
Southeast Segment: The $7.2 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed, partially offset by lower commissions expense on lower homebuilding revenue.
Current wording
East Segment: The $5.3 million increase in operating income compared to the prior year quarter was primarily due to the higher gross profit previously discussed, partially offset by higher other G&A expenses and higher commissions expense on higher homebuilding revenue.
Previous wording
Corporate and Unallocated: Our corporate and unallocated results include amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, expenses for various shared services functions that benefit all segments but are not allocated, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments. For the three months ended March 31, 2025, corporate and unallocated net expenses increased by $4.1 million from the prior year quarter primarily due to higher G&A expensesas well as higher amortization of capitalized interest to cost of sales on higher closings and homebuilding revenue.
Current wording
Corporate and Unallocated: Our corporate and unallocated results include amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, expenses for various shared services functions that benefit all segments but are not allocated, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments. For the three months ended June 30, 2025, corporate and unallocated net expenses increased by $4.1 million from the prior year quarter primarily due to an impairment of capitalized interest and capitalized indirects costs of $1.6 million recognized during the current quarter, higher G&A expenses, higher depreciation and amortization expenses, and higher capitalized interest and capitalized indirect costs expensed to land cost of sales related to land and lots sold.
Previous wording
West Segment: The $7.5 million decrease in operating income compared to the prior year period was primarily due to thedecrease in gross profit previously discussed as well as higher commissions expense on higher homebuilding revenue and higher sales and marketing expenses.
Current wording
West Segment: The $25.7 million decrease in operating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed, including the impact of $3.6 million inventory impairments and abandonments recognized during the current period, as well as higher sales and marketing expenses and higher commissions expense on higher homebuilding revenue.
Previous wording
East Segment: The $4.4 million decrease in operating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed as well as higher commission expenses on higher homebuilding revenue and higher sales and marketing expenses.
Current wording
East Segment: The $0.9 million increase in operating income compared to the prior year period was primarily due to the increase in gross profit previously discussed, partially offset by higher commission expenses on higher homebuilding revenue, higher other G&A expenses, and higher sales and marketing expenses.
Previous wording
Southeast Segment: The $13.7 million decrease in operating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed, partially offset by lower commissions expense on lower homebuilding revenue.
Current wording
Southeast Segment: The $29.1 million decrease inoperating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed, including the impact of $5.7 million inventory impairments and abandonments recognized during the current period, and higher other G&A expenses, partially offset by lower commissions expense on lower homebuilding revenue.
Previous wording
Corporate and Unallocated: For the six months ended March 31, 2025, corporate and unallocated net expenses increased by$15.1 million over the prior year period. This increase was primarilydue to higher G&A expenses as well as higher amortization of capitalized interest to cost of sales on higher closings and homebuilding revenue.
Current wording
Corporate and Unallocated: For the nine months ended June 30, 2025, corporate and unallocated net expenses increased by$19.2 million over the prior year period. This increase was primarily due to higher G&A expenses, higher amortization of capitalized interest to cost of sales on higher closings and homebuilding revenue, higher depreciation and amortization expenses, higher capitalized interest and capitalized indirect costs expensed to land cost of sales related to land and lots sold, and an impairment ofcapitalized interest and capitalized indirects costs of $1.6 million recognized during the current year period compared to no such charge in the prior year period.
Previous wording
Below operating income, we had three noteworthy fluctuations for the three and six months ended March 31, 2025 compared to the prior year periods. Specifically, (1) within other income, net, we recognized a gain on sale of investment of $8.6 million during the three and six months ended March 31, 2024 compared to no such transaction in the current period (See the "EBITDA: Reconciliation of Net Income to Adjusted EBITDA" section above for further discussion on this transaction), (2) within other income, net, we experienced lower interest income driven by lower interest rates on lower operating cash balances, and (3) we recorded a loss on extinguishment of debt of $0.4 million during the three and six months ended March 31, 2024 compared to no such loss in the current period. See Note 6 of the notes to our condensed consolidated financial statements in this Form 10-Q for a further discussion of debt.
Current wording
Below operating income, we had three noteworthy fluctuations for the nine months ended June 30, 2025 compared to the prior year periods. Specifically, (1) within other income, net, we recognized a gain on sale of investment of $8.6 million during the nine months ended June 30, 2024 compared to no such transaction in the current period (See the "EBITDA: Reconciliation of Net Income to Adjusted EBITDA" section above for further discussion on this transaction), (2) within other income, net, we experienced lower interest income driven by lower interest rates on lower operating cash balances, and (3) we recorded a loss on extinguishment of debt of $0.4 million during the nine months ended June 30, 2024 compared to no such loss in the current period. See Note 6 of the notes to our condensed consolidated financial statements in this Form 10-Q for a further discussion of debt.
Previous wording
We recognized income tax expense from continuing operations of $1.4 million and $1.4 million for the three and six months ended March 31, 2025, respectively, compared to $6.7 million and $7.9 million for the three and six months ended March 31, 2024, respectively. Income tax expense for the six months ended March 31, 2025 was primarily driven byincome tax expense on earnings from continuing operations and permanent differences, partially offset by energy efficiency tax credits generated from expected closings during the current fiscal year, and stock-based compensation activity in the period. Income tax expense for the six months ended March 31, 2024 was primarily driven byincome tax expense on earnings from continuing operations and permanent differences, partially offset by both energy efficiency tax credits generated from expected closings during fiscal 2024 and the discrete tax benefits related to the generation of additional energy efficiency tax credits from homes closed in prior periods, as well as stock-based compensation activity in the period. Refer to Note 10 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion of our income taxes.
Current wording
We recognized income tax benefit from continuing operations of $2.2 million and $0.8 million for the three and nine months ended June 30, 2025, respectively, compared to income tax expense of $2.5 million and $10.4 million for the three and nine months ended June 30, 2024, respectively. Income tax benefit for the nine months ended June 30, 2025 was primarily driven byenergy efficiency tax credits generated from expected closings during the current fiscal year and stock-based compensation activity in the period, partially offset by income tax expense on earnings from continuing operations and permanent differences. Income tax expense for the nine months ended June 30, 2024 was primarily driven byincome tax expense on earnings from continuing operations and permanent differences, partially offset by energy efficiency tax credits generated from expected closings during the current year, the discrete tax benefits related to the generation of additional energy efficiency tax credits from homes closed in prior periods, and stock-based compensation activity in the period. Refer to Note 10 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion of our income taxes.
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Previous report — wording carried elsewhere
•Deleveraging: reducing our net debt to net capitalization ratio to the low 30% range by the end of fiscal 2027, and
Previous report — wording carried elsewhere
•Book value per share: achieving a double-digit compound annual growth in book value per share from the end of fiscal 2024 through fiscal 2027.
Previous report — wording carried elsewhere
In April 2025, the Company's Board of Directors approved a new share repurchase program that authorizes the Company to repurchase up to $100.0 million of its outstanding common stock. This newly authorized program replaced the prior share repurchase program. Refer to Note 15 of the notes to the condensed consolidated financial statements in this Form 10-Q for additional details.