BEAZER HOMES USA INC
For the period ended Dec 31, 2025. Filed Jan 29, 2026.
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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.
Dec 31, 2025 · Filed Jan 29, 2026
BZH$33.48+0.1%Stored close · as of Oct 19, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious 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 OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-01-29.
0000915840-26-000009
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 123 previous paragraphs and 106 current paragraphs.
51 unchanged; 39 reworded; 16 added; 33 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 10 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 (16)
Current report
During the first quarter of fiscal 2026, the sales environment reflected continued weak consumer sentiment and economic uncertainty. Aggressive discounts and incentives remained necessary across the industry to generate volume and turn inventory despite mortgage rates decreasing to the low 6% range. In 2025, the industry began slowing new home starts to better align with demand, which we believe could create more favorable supply dynamics as fiscal 2026 progresses. Despite a soft current homebuilding environment, we remain positive on long-term housing market fundamentals, as production shortfalls over the past decade have left the market structurally undersupplied.
Current report
In response to challenging conditions, we have maintained a disciplined approach to operations and capital allocation. We continue to focus on our differentiated product strategy, lowering construction costs, selling non-strategic assets, and moderating our land spend. Further, when making growth investments, we are utilizing capital-efficient option agreements when possible. With our common stock trading below book value, we prioritized share repurchases, buying back 697 thousand shares of our common stock, approximately 2.3% of our fiscal first quarter's outstanding shares, for an aggregate $15.1 million during the first quarter. We expect to accelerate buyback activity in the coming quarters, using a portion of land sale proceeds to fund the repurchases.
Current report
We believe the Company is uniquely positioned to address affordability concerns of today’s buyers and deliver a superior product and buying experience. Our differentiated strategy focuses on (1) Advanced Home Performance – energy savings, cleaner air, and a quieter home, (2) Curated Choices – competitive mortgage, floorplan, and style options, (3) Elevated Experiences – easy shopping, a trusted team, and continuing care, and (4) Community Impact – Beazer Charity Foundation and employee commitments. Together, these lower the cost of homeownership and deliver meaningful financial and lifestyle benefits that make buying a Beazer home more attainable and rewarding.
Current report
•Homebuilding gross margin for the quarter ended December 31, 2025 was 10.4%, down from 15.2% compared to the prior year quarter. Homebuilding gross margin, excluding impairments, abandonments and interest amortization, for the quarter ended December 31, 2025 was 14.0%, down from 18.2% in the prior year quarter. The decrease in homebuilding gross margin compared to the prior year quarter was primarily due to an increase in price concessions and closing cost incentives, changes in product and community mix, and a litigation-related charge recognized during the quarter ended December 31, 2025. The litigation-related charge reduced homebuilding gross margin by 1.8%.
Current report
RESULTS OF OPERATIONS:
Current report
Net new orders for the quarter ended December 31, 2025 decreased to 763, down 18.1% from the quarter ended December 31, 2024. The decrease in net new orders compared to the prior year quarter was driven by a 21.1% decrease in sales pace from 1.9 orders per community per month in the prior year quarter to 1.5, partially offset by a 3.7% increase in average active community count from 161 in the prior year quarter to 167.
Current report
West Segment: Net new orders for the quarter ended December 31, 2025 decreased to 458, down 22.2% from the quarter ended December 31, 2024. The decrease in net new orders compared to the prior year quarter was driven by a 25.6% decrease in sales pace from 1.9 orders per community per month in the prior year quarter to 1.4, partially offset by a 4.6% increase in average active community count from 102 in the prior year quarter to 107.
Current report
East Segment: Net new orders for the quarter ended December 31, 2025 decreased to 176, down 22.5% from the quarter ended December 31, 2024. The decrease in net new orders compared to the prior year quarter was driven by a 12.6% decrease in sales pace from 2.1 orders per community per month in the prior year quarter to 1.9 and an 11.3% decrease in average active community count from 35 in the prior year quarter to 31.
Current report
East Segment: Homebuilding revenue decreased by 14.2% for the three months ended December 31, 2025 compared to the prior year quarter due to an 11.9% decrease in closings and a 2.6% decrease in ASP. The decrease in closings was primarily due to the lower beginning backlog compared to prior year quarter.
Current report
West Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $24.0 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 13.9%, down from 18.3% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives.
Current report
East Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $2.7 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.7%, down from 15.1% in the prior year quarter, primarily due to an increase in price concessions, closing cost incentives, and changes in product and community mix.
Current report
For the three months ended December 31, 2025, land sales and other revenue decreased by $4.8 million to $3.7 million, and land sales and other gross profit (loss) decreased by $2.3 million to a loss of $0.2 million compared to the prior year quarter. During the three months ended December 31, 2025, we recognized $1.0 million land held for sale impairment charges related to two held for sale communities in our West and East segments.
Current report
Operating Income
Current report
West Segment: The $23.2 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, partially offset by lower commissions expense on lower homebuilding revenue.
Current report
East Segment: The $3.1 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, partially offset by lower commissions expense on lower homebuilding revenue.
Current report
Southeast Segment: The $2.6 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, partially offset by lower commissions expense on lower homebuilding revenue.
Removed paragraphs (33)
Previous 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.
Previous 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.
Previous 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.
Previous report
RESULTS OF CONTINUING OPERATIONS:
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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 report
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 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.
Previous report
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 report
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 report
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 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.
Previous 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.
Previous report
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 report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Operating (Loss) Income
Previous report
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 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.
Previous report
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 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.
Previous report
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 report
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 report
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 report
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 report
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.
Reworded paragraphs (39)
Previous 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.
Current wording
We remain on track to achieve our Multi-Year Goals, which include reaching more than 200 active communities by the end of fiscal 2027, reducing our net debt to net capitalization ratio to the low-30% range by the end of fiscal 2027, and achieving a double-digit compound annual growth rate in book value per share from the end of fiscal 2024 through fiscal 2027. We are confident in our differentiated product strategy, the value of our assets, and our ability to generate improving returns for our shareholders.
Previous wording
Overview of Results for Our Fiscal Third Quarter
Current wording
Overview of Results for Our Fiscal First Quarter
Previous wording
•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 wording
•During the quarter ended December 31, 2025, our average active community count of 167 was up 3.7% from 161 in the prior year quarter. We ended the quarter with 168 active communities, up 3.1% from 163 a year ago. We invested $180.7 million in land acquisition and land development during the quarter ended December 31, 2025, down from$211.3 million in land spend during the quarter ended December 31, 2024. In response to the evolving market conditions, we reallocated a portion of our land investment toward reaching our Multi-Year Goals of deleveraging and growing book value per share. This shift underscores our confidence in our strong land position and the visibility we have into our community count growth.
Previous 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.
Current wording
•As of December 31, 2025, our land position included 24,832 controlled lots, down 14.0% from 28,874 as of December 31, 2024. 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 December 31, 2025, we had 14,340 lots, or 61.0% of our total active lots, under option agreements as compared to 16,609 lots, or 58.9% of our total active lots, under option agreements as of December 31, 2024.
Previous 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.
Current wording
•During the quarter ended December 31, 2025, orders per community per month were 1.5 compared to 1.9 in the prior year quarter, and our net new orders were 763, down 18.1% from 932 in the prior year quarter. The decrease in sales pace compared to the prior year reflected weaker consumer sentiment driven by affordability challenges and uncertainties in the macroeconomic environment. We continue to adjust prices, features and incentives to align with the current competitive market conditions.
Previous 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.
Current wording
•Our Average Selling Price (ASP) for homes closed during the quarter ended December 31, 2025 was $513.9 thousand, up 1.2% from $507.6 thousand in the prior year quarter. Our backlog ASP for homes sold during the quarter ended December 31, 2025 was $568.7 thousand, up 5.0% from $541.5 thousand in the prior year quarter. The increase in closing ASP and backlog ASP compared to prior year quarter was primarily due to changes in product and community mix.
Previous 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.
Current wording
•SG&A for the quarter ended December 31, 2025 was 17.9% of total revenue, up from 14.0% 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 nine months ended June 30, 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 months ended December 31, 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 18.4% 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.
Current wording
(a)Excluding impairments, abandonments, and interest amortized to cost of sales, homebuilding gross margin was 14.0% and 18.2% for the three months ended December 31, 2025 and 2024, respectively. A litigation-related charge was recognized during the quarter ended December 31, 2025, which reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 1.8%. 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 (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.
Current wording
(c) Calculated as tax expense for the period divided by (loss) income before income taxes. Our income tax 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. 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.
Previous wording
The following table summarizes new orders and cancellation rates by reportable segment for the periods presented:
Current wording
The following table summarizes net new orders and cancellation rates by reportable segment for the periods presented:
Previous wording
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 wording
Southeast Segment: Net new orders for the quarter ended December 31, 2025 increased to 129, up 11.2% from the quarter ended December 31, 2024. Theincrease in net new orders compared to the prior year quarter was driven by a 22.5% increase inaverage active community count from 24 in the prior year quarter to 29, partially offset by a 9.2% decrease in sales pace from 1.6 orders per community per month in the prior year quarter to 1.5.
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 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.
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. Thedecrease 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 December 31, 2025. The aggregate dollar value of homes in backlog as of December 31, 2025 decreased 29.7% compared to December 31, 2024 due to a 33.1% decrease in backlog units, partially offset by a 5.0% 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 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.
Current wording
West Segment: Homebuilding revenue decreased by 24.6% for the three months ended December 31, 2025 compared to the prior year quarter due to a 25.0% decrease in closings, partially offset by a 0.6% increase in ASP. The decrease in closings was primarily due to the lower beginning backlog compared to prior year quarter.
Previous 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.
Current wording
Southeast Segment: Homebuilding revenue decreased by 22.6% for the three months ended December 31, 2025 compared to the prior year quarter due to a 30.4% decrease in closings, partially offset by an 11.1% increase in ASP. The decrease in closings was primarily due to lower beginning backlog compared to prior year quarter.
Previous wording
(a) Corporate and unallocated includes amortization of capitalized interest, capitalization and amortization of indirect costs related to homebuilding activities, as well as capitalized interest and capitalized indirect costs impaired in order to reflect projects in progress assets at fair value, when applicable.
Current wording
(a) Corporate and unallocated includes amortization of capitalized interest, capitalization and amortization of indirect costs related to homebuilding activities, as well as capitalized interest and capitalized indirect costs impaired in order to reflect projects in progress assets at fair value, when applicable. For thethree months ended December 31, 2025, Corporate and unallocated also included alitigation-related charge that reduced total homebuilding gross margin, excluding impairments, abandonments, and interest, by 1.8%.
Previous 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.
Current wording
Our homebuilding gross profit decreased by $32.6 million to $37.4 million for the three months ended December 31, 2025, compared to $70.0 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 $100.7 million and a decrease in gross margin of 480 basis points to 10.4%. 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 $1.3 million, and interest amortized to homebuilding cost of sales, which decreased by $2.2 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 $33.4 million compared to the prior year quarter, while homebuilding gross margin decreased by 420 basis points to 14.0%. The decrease in gross margin for the three months ended December 31, 2025 compared to the prior year quarter was due to an increase in price concessions and closing cost incentives, changes in product and community mix, and a litigation-related charge recognized in Corporate and unallocated during the quarter ended December 31, 2025 (refer to Note 8 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion). The litigation-related charge charge reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 1.8%.
Previous 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.
Current wording
Southeast Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $2.9 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.5%, down from 16.1% in the prior year quarter, primarily due to an increase in price concessions and changes in product and community mix.
Previous wording
The table below summarizes operating (loss) income by reportable segment and Corporate and unallocated for the periods presented:
Current wording
The table below summarizes operating income by reportable segment and Corporate and unallocated for the periods presented:
Previous 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.
Current wording
Our operating income decreased by $34.0 million to a loss of $31.8 million for the three months ended December 31, 2025, compared to operating income of $2.1 million for the three months ended December 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 as a percentage of total revenue increased by 390 basis points compared to the prior year quarter, from 14.0% to 17.9%, primarily due to lower 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 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.
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 December 31, 2025, corporate and unallocated net expenses increased by $5.0 million from the prior year quarter primarily due to a litigation-related charge (refer to Note 8 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion) and higher G&A expenses, partially offset by lower amortization of capitalized interest costs expensed to homebuilding cost of sales on lower closings and homebuilding revenue.
Previous 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.
Current wording
We recognized income tax expense of $1.5 million for the three months ended December 31, 2025, compared to income tax expense of $36.0 thousand for the three months ended December 31, 2024. Income tax expense for the three months ended December 31, 2025 was primarily driven by energy efficiency tax credits generated from expected closings during the current fiscal year, a discrete tax benefit from tax credits related to prior year activities, and stock-based compensation activity in the period, partially offset by the operating loss, and permanent differences. Income tax expense for the three months ended December 31, 2024 was primarily driven byincome tax expense on earnings from 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. 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.
Previous wording
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.
Current wording
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.
Previous wording
Net cash used in operating activities was $218.2 million for the nine months ended June 30, 2025. The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development spending. Net cash used in operating activities during the period was primarily driven by an increase in inventory of $258.9 million resulting from land acquisition, land development and house construction spending and a net increase in non-inventory working capital balances of $3.5 million. This was partially offset by cash inflows from income before income taxes of $14.8 million, which included $29.4 million of non-cash charges.
Current wording
Net cash used in operating activities was $165.3 million for the three months ended December 31, 2025. The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development spending. Net cash used in operating activities during the period was primarily driven by an increase in inventory of $112.6 million resulting from land acquisition, land development and house construction spending, loss before income taxes of $31.1 million, which included $8.0 million of non-cash charges, and a net increase in non-inventory working capital balances of $29.6 million.
Previous wording
Net cash used in operating activities was $323.0 million for the nine months ended June 30, 2024. Net cash used in operating activities during the period was primarily driven by an increase in inventory of $412.7 million resulting from land acquisition, land development and house construction spending, and a net increase in non-inventory working capital balances of $15.7 million. This was partially offset by cash inflows from income before income taxes of $98.5 million, which included $6.9 million of non-cash charges.
Current wording
Net cash used in operating activities was $159.4 million for the three months ended December 31, 2024. Net cash used in operating activities during the period was primarily driven by an increase in inventory of $122.3 million resulting from land acquisition, land development and house construction spending to support continued growth, and a net increase in non-inventory working capital balances of $46.1 million. This was partially offset by cash inflows from income before income taxes of $3.2 million, which included $5.9 million of non-cash charges.
Previous wording
Net cash used in investing activities was $23.9 million for the nine months ended June 30, 2024, primarily driven by capital expenditures for model homes and information systems infrastructure, and purchases of investment securities.
Current wording
Net cash used in investing activities was $6.3 million for the three months ended December 31, 2025, primarily driven by capital expenditures for model homes and information systems infrastructure and purchases of investment securities.
Previous wording
Net cash used in investing activities was $12.7 million for the nine months ended June 30, 2025, primarily driven by capital expenditures for model homes and information systems infrastructure and purchase of investment securities, partially offset by proceeds from maturities in investment securities.
Current wording
Net cash used in investing activities was $5.7 million for the three months ended December 31, 2024, primarily driven by capital expenditures for model homes and information systems infrastructure and purchases of investment securities.
Previous wording
Net cash provided by financing activities was $78.7 million for the nine months ended June 30, 2025, primarily driven by net borrowings from our Unsecured Facility (refer to Note 6 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion), partially offset by common stock repurchases under our share repurchase program and tax payments for stock-based compensation awards vesting.
Current wording
Net cash provided by financing activities was $77.4 million for the three months ended December 31, 2025, primarily driven by borrowings from our Unsecured Facility (refer to Note 6 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion), partially offset by common stock repurchases under our share repurchase program and tax payments for stock-based compensation awards vesting.
Previous wording
Net cash provided by financing activities was $69.0 million for the nine months ended June 30, 2024, primarily driven by inflows from the issuance of the 2031 Notes and borrowings from our Unsecured Facility, partially offset by outflows from redemption of our 2025 Notes, debt issuance costs related to the 2031 Notes and extension of the term of our Unsecured Facility (refer to Note 6 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion), repurchases of common stock, and tax payments for stock-based compensation awards vesting.
Current wording
Net cash provided by financing activities was $41.9 million for the three months ended December 31, 2024, primarily driven by net borrowings from our Unsecured Facility (see Note 6 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion), partially offset by tax payments for stock-based compensation awards vesting.
Previous wording
As of June 30, 2025, our liquidity position consisted of $82.9 million in cash and cash equi valents and $209.4 million of remaining capacity under the Unsecured Facility, compared to $73.2 million in cash and cash equivalents and $255.0 million of remaining capacity under the Unsecured Facility as of June 30, 2024.
Current wording
As of December 31, 2025, our liquidity position consisted of $120.8 million in cash and cash equivalents and $221.9 million of remaining capacity under the Unsecured Facility, compared to $80.4 million in cash and cash equivalents and $255.0 million of remaining capacity under the Unsecured Facility as of December 31, 2024.
Previous wording
We generally fulfill our short-term cash requirements with cash generated from our operations and available borrowings. Additionally, our Unsecured Facility provides working capital and letter of credit capacity of $365.0 million, which includes a letter of credit capacity of $100.0 million. As of June 30, 2025, we had $115.0 million in borrowings and $40.6 million in letters of credit were outstanding under the Unsecured Facility, resulting in a remaining borrowing capacity of $209.4 million.
Current wording
We generally fulfill our short-term cash requirements with cash generated from our operations and available borrowings. Additionally, our Unsecured Facility provides working capital and letter of credit capacity of $365.0 million, which includes a letter of credit capacity of $100.0 million. As of December 31, 2025, we had $95.0 million in borrowings and $48.1 million in letters of credit were outstanding under the Unsecured Facility, resulting in a remaining borrowing capacity of $221.9 million.
Previous wording
We have also entered into a number of stand-alone letter of credit agreements with banks, secured with cash or certificates of deposit. These combined facilities provide for letter of credit needs collateralized by either cash or assets of the Company. We currently have $0.4 million of outstanding letters of credit under these facilities.
Current wording
We have also entered into a number of stand-alone letter of credit agreements with banks, secured with cash or certificates of deposit. These combined facilities provide for letter of credit needs collateralized by either cash or assets of the Company. We currently have $4.6 million of outstanding letters of credit under these facilities.
Previous wording
Our credit ratings are periodically reviewed by rating agencies. In February 2025, S&P reaffirmed the Company’s corporate credit rating of B+ and revised the Company's outlook from stable to negative. In October 2024, Moody's reaffirmed the Company's issuer corporate family rating of B1 and reaffirmed the Company's outlook of stable. In addition, our Senior Notes have a rating of B+ and B1 per S&P and Moody's, respectively. These ratings and our current credit condition affect, among other things, our ability to access new capital. These ratings are not recommendations to buy, sell or hold debt securities. Negative changes to these ratings may result in more stringent covenants and higher interest rates under the terms of any new debt. Our credit ratings could be lowered, or rating agencies could issue adverse commentaries in the future, which could have a material adverse effect on our business, financial condition, results of operations, and liquidity. In particular, a weakening of our financial condition, including any further increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, could result in a credit rating downgrade or change in outlook, or could otherwise increase our cost of borrowing.
Current wording
Our credit ratings are periodically reviewed by rating agencies. In November 2025, S&P revised the Company’s corporate credit rating from B+ to B and revised the Company's outlook from negative to stable. In September 2025, Moody's reaffirmed the Company's issuer corporate family rating of B1 and reaffirmed the Company's outlook of stable. In addition, our Senior Notes have a rating of B and B1 per S&P and Moody's, respectively. These ratings and our current credit condition affect, among other things, our ability to access new capital. These ratings are not recommendations to buy, sell or hold debt securities. Negative changes to these ratings may result in more stringent covenants and higher interest rates under the terms of any new debt. Our credit ratings could be lowered, or rating agencies could issue adverse commentaries in the future, which could have a material adverse effect on our business, financial condition, results of operations, and liquidity. In particular, a weakening of our financial condition, including any further increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, could result in a credit rating downgrade or change in outlook, or could otherwise increase our cost of borrowing.
Previous wording
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. The newly authorized program replaced the prior share repurchase program authorized in May 2022 of up to $50.0 million of common stock repurchases, pursuant to which $8.3 million of the capacity remained prior to the replacement of the program. Under the new share repurchase program, the Company repurchased 586 thousand shares of its common stock for$12.5 million at an average price per share of$21.38 during the three months ended June 30, 2025 through open market transactions. This brings the total repurchases for the nine months ended June 30, 2025 to 1.5 million shares of common stock for $33.1 million at an average price per share of $22.20. During the three and nine months ended June 30, 2024, 455 thousand shares were repurchased for $12.9 million at an average price per share of $28.41 through open market transactions. All shares have been retired upon repurchase.
Current wording
In April 2025, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $100.0 million of its outstanding common stock. The repurchase program has no expiration date. The Company repurchased 697 thousand shares of its common stock, approximately 2.3% of our fiscal first quarter's outstanding shares, for an aggregate$15.1 million at an average price per share of$21.72 during the three months ended December 31, 2025 through open market transactions. All shares have been retired upon repurchase. No share repurchases were made during the three months ended December 31, 2024. The aggregate reduction to stockholders' equity related to share repurchases during the three months ended December 31, 2025 was$15.1 million. As of December 31, 2025, the remaining availability of the share repurchase program was $72.3 million.
Previous wording
The indentures under which our Senior Notes were issued contain certain restrictive covenants, including limitations on the payment of dividends. There were no dividends paid during the three and nine months ended June 30, 2025 or 2024.
Current wording
The indentures under which our Senior Notes were issued contain certain restrictive covenants, including limitations on the payment of dividends. There were no dividends paid during the three months ended December 31, 2025 or 2024.
Previous wording
In addition to purchasing land directly, we control a portion of our land supply through lot option agreements with land developers and land bankers, which generally require the payment of cash or issuance of an irrevocable letter of credit or surety bond for the right to acquire lots during a specified period of time at a specified price. In recent years, we have focused on increasing our lot option agreement usage to minimize risk as we grow our land position. As of June 30, 2025, we controlled 27,794 lots, which includes 251 lots of land held for future development and 599 lots of land held for sale. Of the 26,944 active lots, we controlled 16,195 of these lots, or 60.1%, through option agreements, as compared to 15,434 active lots controlled, or 55.5% of our total active lots, through option agreements as of June 30, 2024. Lot option agreements allow us to position for future growth while providing the flexibility to respond to market conditions by renegotiating the terms of the options prior to exercise or terminating the agreement.
Current wording
In addition to purchasing land directly, we control a portion of our land supply through lot option agreements with land developers and land bankers, which generally require the payment of cash or issuance of an irrevocable letter of credit or surety bond for the right to acquire lots during a specified period of time at a specified price. In recent years, we have focused on increasing our lot option agreement usage to minimize risk as we grow our land position. As of December 31, 2025, we controlled 24,832 lots, which includes 251 lots of land held for future development and 1,083 lots of land held for sale. Of the 23,498 active lots, we controlled 14,340 of these lots, or 61.0%, through option agreements, as compared to 16,609 active lots controlled, or 58.9% of our total active lots, through option agreements as of December 31, 2024. Lot option agreements allow us to position for future growth while providing the flexibility to respond to market conditions by renegotiating the terms of the options prior to exercise or terminating the agreement.
Previous wording
Under option agreements, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers, and our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred, which totaled$322.6 million as of June 30, 2025. The total remaining purchase price, net of cash deposits, committed under all options was$1.65 billion as of June 30, 2025. Subject to market conditions and our liquidity, we may further expand our use of option agreements to supp lement our owned inventory supply.
Current wording
Under option agreements, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers, and our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred, which totaled $353.9 million as of December 31, 2025. The total remaining purchase price, net of cash deposits, committed under all options was $1.60 billion as of December 31, 2025. Subject to market conditions and our liquidity, we may further expand our use of option agreements to supp lement our inventory supply.
Previous wording
In connection with the development of our communities, we are frequently required to provide performance, maintenance, and other bonds and letters of credit in support of our related obligations with respect to such developments. The amount of such obligations outstanding at any time varies in accordance with our pending development activities. In the event any such bonds or letters of credit are drawn upon, we would be obligated to reimburse the issuer of such bonds or letters of credit. We had outstanding letters of credit and surety bonds of $41.0 million and $330.2 million, respectively, as of June 30, 2025, primarily related to our obligations to local governments to construct roads and other improvements in various developments.
Current wording
In connection with the development of our communities, we are frequently required to provide performance, maintenance, and other bonds and letters of credit in support of our related obligations with respect to such developments. The amount of such obligations outstanding at any time varies in accordance with our pending development activities. In the event any such bonds or letters of credit are drawn upon, we would be obligated to reimburse the issuer of such bonds or letters of credit. We had outstanding letters of credit, surety bonds, and surety-backed letters of credit of $52.7 million, $319.6 million, and $4.6 million respectively, as of December 31, 2025, primarily related to our obligations to local governments to construct roads and other improvements in various developments.
Previous wording
Our critical accounting policies require the use of judgment in their application and in certain cases require estimates of inherently uncertain matters. Although our accounting policies are in compliance with accounting principles generally accepted in the United States of America (GAAP), a change in the facts and circumstances of the underlying transactions could significantly change the application of the accounting policies and the resulting financial statement impact. It is also possible that other professionals applying reasonable judgment to the same set of facts and circumstances could reach a different conclusion. As disclosed in our 2024 Annual Report, our most critical accounting policies relate to inventory valuation of projects in progress, warranty reserves, and income tax valuation allowances. There have been no significant changes to our critical accounting policies and estimates during the nine months ended June 30, 2025 as compared to those described in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2024 Annual Report on Form 10-K.
Current wording
Our critical accounting policies require the use of judgment in their application and in certain cases require estimates of inherently uncertain matters. Although our accounting policies are in compliance with accounting principles generally accepted in the United States of America (GAAP), a change in the facts and circumstances of the underlying transactions could significantly change the application of the accounting policies and the resulting financial statement impact. It is also possible that other professionals applying reasonable judgment to the same set of facts and circumstances could reach a different conclusion. As disclosed in our 2025 Annual Report, our most critical accounting policies relate to inventory valuation of projects in progress, warranty reserves, and income tax valuation allowances. There have been no significant changes to our critical accounting policies and estimates during the three months ended December 31, 2025 as compared to those described in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Annual Report on Form 10-K.