BEAZER HOMES USA INC
For the period ended Jun 30, 2026. Filed Aug 7, 2026.
View on SEC.govAbout this filing
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, 2026 · Filed Aug 7, 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 2026-03-31; filed 2026-04-30.
0000915840-26-000041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0000915840-26-000052
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 126 previous paragraphs and 128 current paragraphs.
59 unchanged; 53 reworded; 15 added; 14 removed; 0 previous and 1 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 (15)
Current report
During the third quarter of fiscal 2026, consumer sentiment remained near all-time lows, reflecting ongoing uncertainties around geopolitical events and economic conditions. While financial market volatility caused by the start of the military conflict in the Middle East has since subsided, energy prices have continued to fluctuate and mortgage rates remain elevated near 52-week highs. We believe these macro factors contributed to sales pace remaining relatively soft versus historical levels. Despite the impact of these trends on homebuyers, the Company continued to execute on several margin-enhancing cost and mix initiatives that were realized in the quarter.
Current report
•Homebuilding gross margin for the quarter ended June 30, 2026 was 13.6%, up from 13.5% compared to the prior year quarter. Homebuilding gross margin, excluding impairments, abandonments, and interest amortization, for the quarter ended June 30, 2026 was 16.9%, down from 18.4% 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 and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin was up by 160 basis points sequentially from 12.0% in the prior fiscal quarter, and up 130 basis points from 15.6% sequentially when excluding impairments, abandonments, and interest amortization, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities.
Current report
Net new orders for the quarter ended June 30, 2026 increased to 900, up 4.5% from the quarter ended June 30, 2025. The increase in net new orders compared to the prior year quarter was driven by a 3.7% increase in sales pace from 1.7 orders per community per month in the prior year quarter to 1.8 and a 0.8% increase in average active community count from 167 in the prior year quarter to 169.
Current report
West Segment: Net new orders for the quarter ended June 30, 2026 increased to 520, up 7.9% from the quarter ended June 30, 2025. The increase in netnew orders compared to the prior year quarter was driven by a 4.5% increase in average active community count from 103 in the prior year quarter to 107 and a 3.2% increase in sales pace from 1.57 orders per community per month in the prior year quarter to 1.62.
Current report
East Segment: Net new orders for the quarter ended June 30, 2026 decreased to 220, down 1.8% from the quarter ended June 30, 2025. The decrease in net new orders compared to the prior year quarter was driven by a 24.3% decrease in average active community count from 38 in the prior year quarter to 29, partially offset by a 29.8% increase in sales pace from 1.9 orders per community per month in the prior year quarter to 2.5.
Current report
West Segment: Homebuilding revenue decreased by 14.1% for the three months ended June 30, 2026 compared to the prior year quarter due to an 18.5% decrease in closings, partially offset by a 5.5% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year quarter.
Current report
West Segment: Homebuilding revenue decreased by 25.6% for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025 due to a 26.5% decrease in closings, partially offset by a 1.2% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year period.
Current report
East Segment: Homebuilding revenue decreased by 22.6% for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025 due to a 23.6% decrease in closings, partially offset by a 1.4% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year period.
Current report
East Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $9.7 million due to a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 15.3%, down from 17.8% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales was up by 70 basis points sequentially from 14.6% in the prior fiscal quarter, primarily driven by a decrease in price concessions.
Current report
Southeast Segment: Compared to the prior year quarter, homebuilding gross profit increased by $14.8 million due to an increase in homebuilding revenue and higher gross margin. Homebuilding gross margin, excluding impairments and abandonments, increased to 19.6%, up from 17.7% in the prior year quarter, primarily due to a reduction in direct construction costs, partially offset by an increase in land costs and price concessions. Although down year-over-year, homebuilding gross margin excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales was up by 250 basis points sequentially from 17.1% in the prior fiscal quarter, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities.
Current report
West Segment: The $69.2 million decrease in operating income compared to the prior year period was primarily due to the decrease in 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 $15.3 million decrease in operating income compared to the prior year period was primarily due to the decrease in 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 $10.7 million increase in operating income compared to the prior year period was primarily due to the increase in gross profit previously discussed and a decrease in other G&A costs, partially offset by higher sales and marketing costs and higher commissions expense on higher homebuilding revenue.
Current report
Below operating income, for thethree and nine months ended June 30, 2026 compared to the prior period, we experienced a year-over-year decrease within other income, net primarily due to a loss on extinguishment of debt of $0.7 million during the current year as compared to no such loss in the prior year period.
Current report
During the three months ended June 30, 2025,586 thousand shares were repurchased for$12.5 millionat an average price per share of$21.38. During the nine months ended June 30, 2025,1.5 million shares were repurchased for$33.1 millionat an average price per share of$22.20.
Removed paragraphs (14)
Previous report
During the second quarter of fiscal 2026, sales paces reflected positive early momentum before plateauing in March with the disruption from geopolitical events. The military conflict in the Middle East heightened existing economic uncertainty and contributed to a rapid increase in mortgage rates, sharply higher energy prices, and other adverse macroeconomic pressures. Despite these uncertainties, the Company continued to execute on several margin-enhancing cost and mix initiatives that are expected to be realized over the remainder of fiscal 2026.
Previous report
We continue to work towards 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 report
•Homebuilding gross margin for the quarter ended March 31, 2026 was 12.0%, down from 15.1% compared to the prior year quarter. Homebuilding gross margin was impacted by inventory impairment and abandonment charges of $1.3 million during the quarter ended March 31, 2026 related to a project in progress community in our Houston market, principally due to a reduction in price driven by the competitive market dynamics. Refer to Note 4 to the condensed consolidated financial statements included in this Form 10-Q for further discussion. Homebuilding gross margin, excluding impairments, abandonments and interest amortization, for the quarter ended March 31, 2026 was 15.6%, down from 18.3% 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, and changes in product and community mix.
Previous report
Net new orders for the quarter ended March 31, 2026 decreased to 1,048, down 4.6% from the quarter ended March 31, 2025. The decrease in net new orders compared to the prior year quarter was driven by a 7.2% decrease in sales pace from 2.3 orders per community per month in the prior year quarter to 2.1, partially offset by a 2.9% increase in average active community count from 163 in the prior year quarter to 167.
Previous report
West Segment: Net new orders for the quarter ended March 31, 2026 decreased to 599, down 9.9% from the quarter ended March 31, 2025. The decrease in net new orders compared to the prior year quarter was driven by a 12.5% decrease in sales pace from 2.2 orders per community per month in the prior year quarter to 1.9, partially offset by a 3.0% increase in average active community count from 101 in the prior year quarter to 104.
Previous report
East Segment: Net new orders for the quarter ended March 31, 2026 decreased to 249, down 3.1% from the quarter ended March 31, 2025. The decrease in net new orders compared to the prior year quarter was driven by a 9.3% decrease in average active community count from 36 in the prior year quarter to 32, partially offset by a 6.9% increase in sales pace from 2.4 orders per community per month in the prior year quarter to 2.6.
Previous report
East Segment: Homebuilding revenue decreased by 24.6% for the three months ended March 31, 2026 compared to the prior year quarter due to a 30.0% decrease in closings, partially offset by a 7.7% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year quarter.
Previous report
East Segment: Homebuilding revenue decreased by 19.7% for the six months ended March 31, 2026 compared to the six months ended March 31, 2025 due to a 21.6% decrease in closings, partially offset by a 2.4% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year period.
Previous report
Southeast Segment: Homebuilding revenue decreased by 6.4% for the six months ended March 31, 2026 compared to the six months ended March 31, 2025 due to a 16.1% decrease in closings, partially offset by an 11.5% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year period.
Previous report
East Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $4.4 million due to a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, remained relatively flat at 14.6% compared to 14.7% in the prior year quarter, as reductions in direct construction costs largely offset increases in price concessions and land costs.
Previous report
Southeast Segment: Compared to the prior year period, homebuilding gross profit decreased by $1.5 million due to a decrease in homeb uilding revenue. Homebuilding gross margin, excluding impairments and abandonments, remained relatively flat at 16.1% compared to 16.2% in the prior year period, as reductions in direct construction costs largely offset increases in price concessions and land costs.
Previous report
West Segment: The $56.6 million decrease in operating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed and higher sales and marketing costs, partially offset by lower commissions expense on lower homebuilding revenue.
Previous report
East Segment: The $6.4 million decrease in operating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed and higher sales and marketing costs, partially offset by lower commission expenses on lower homebuilding revenue.
Previous report
Southeast Segment: The $1.8 million decrease in operating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed and higher sales and marketing costs, partially offset by lower commissions expense on lower homebuilding revenue.
Reworded paragraphs (53)
Previous wording
In response to the persistent affordability concerns and overall economic uncertainty, we have maintained a disciplined approach to operations and capital allocation. We continue to focus on our differentiated product strategy, increasing margins, selling non-strategic assets, and improving the efficiency of our land spend to support community count growth and facilitate share repurchases. Further, we are utilizing capital-efficient option agreements, when possible, to finance land spending, while keeping a prudent balance between optioned lots and on-balance sheet inventory.
Current wording
In response to persistent affordability concerns and overall economic uncertainty, we have maintained a disciplined approach to operations and capital allocation. We continue to focus on our differentiated product strategy, increasing margins, selling non-strategic assets, and improving the efficiency of our land spend to support community count growth and facilitate share repurchases. Further, we are utilizing capital-efficient option agreements, when possible, to finance land spending, while keeping a prudent balance between optioned lots and on-balance sheet inventory.
Previous wording
With our common stock trading below book value, we accelerated our share buyback in the second quarter and repurchased 1.2 million shares of our common stock, approximately 4.0% of our outstanding shares at the end of our fiscal first quarter, for an aggregate $30.0 million. This brings our year-to-date share repurchases to $45.1 million, equating to approximately 6.3% of our outstanding shares at fiscal year end 2025. We expect to continue buyback activity in the coming quarters, using a portion of land sale proceeds to fund the repurchases.
Current wording
With our common stock trading below book value, we continued our share buyback program in the third quarter, repurchasing another 1.0 million shares of our common stock, or approximately 3.5% of our outstanding shares at the end of our fiscal second quarter, for an aggregate $21.0 million. This brings our year-to-date share repurchases to $66.2 million, or 2.9 million shares, representing approximately 9.7%of our outstanding shares at fiscal year end 2025.
Previous wording
•Curated Choices, which include competitive mortgage pricing to drive customer savings, and a range of floorplan and style options,
Current wording
•Curated Choices, which include competitive mortgage pricing to drive customer savings, and a range of floorplan and interior design styles,
Previous wording
Overview of Results for Our Fiscal Second Quarter
Current wording
Overview of Results for Our Fiscal Third Quarter
Previous wording
•During the quarter ended March 31, 2026, orders per community per month were 2.1 compared to 2.3 in the prior year quarter, and our net new orders were 1,048, down 4.6% from 1,098 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.
Current wording
•During the quarter ended June 30, 2026, orders per community per month were 1.8 compared to 1.7 in the prior year quarter, and our net new orders were 900, up 4.5% from 861 in the prior year quarter. The year-over-year increase was primarily attributed to softer sales performance in the prior year quarter. However, the sales environment remains challenging due to affordability constraints, weaker consumer sentiment, and broader macroeconomic uncertainty. We continue to adjust prices, features and incentives to align with the current competitive market conditions.
Previous wording
•During the quarter ended March 31, 2026, our average active community count of 167 was up 2.9% from 163 in the prior year quarter. We ended the quarter with 169 active communities, up 4.3% from 162 a year ago, as we continue to make strides towards reaching 200 active communities by the end of fiscal 2027.
Current wording
•During the quarter ended June 30, 2026, our average active community count of 169 was up 0.8% from 167 in the prior year quarter. We ended the quarter with 170 active communities, up 1.8% from 167 a year ago, as we continue to work toward reaching 200 active communities by the end of fiscal 2027.
Previous wording
•As of March 31, 2026, our land position included 24,824 controlled lots, down 12.3% from 28,290 as of March 31, 2025. We invested $187.0 million in land acquisition and land development during the quarter ended March 31, 2026, down from$197.0 million during the quarter ended March 31, 2025. We continued to manage our land spend and lot position to improve our capital efficiency and support future community count growth. As part of these efforts, we have realigned the portfolio, divested non-strategic assets, and improved the efficiency of our land spend by using lot option agreements. As of March 31, 2026, we had 14,145 lots, or 59.9% of our total active lots, under option agreements as compared to 16,322 lots, or 59.3% of our total active lots, under option agreements as of March 31, 2025.
Current wording
•As of June 30, 2026, our land position included 24,489 controlled lots, down 11.9% from 27,794 as of June 30, 2025. We invested $199.6 million in land acquisition and land development during the quarter ended June 30, 2026, up from$153.8 million during the quarter ended June 30, 2025. We continued to manage our land spend and lot position to improve our capital efficiency and support future community count growth. As part of these efforts, we have realigned the portfolio, divested non-strategic assets, and sustained the efficiency of our land spend by using lot option agreements. As of June 30, 2026, we had 13,841 lots, or 60.0% of our total active lots, under option agreements as compared to 16,195 lots, or 60.1% of our total active lots, under option agreements as of June 30, 2025.
Previous wording
•Our Average Selling Price (ASP) for homes closed during the quarter ended March 31, 2026 was $525.4 thousand, up 2.0% from $515.3 thousand in the prior year quarter. Our backlog ASP as of March 31, 2026 was $582.1 thousand, up 6.8% from $544.9 thousand in the prior year quarter. The increase in closing and backlog ASP compared to the prior year quarter was primarily due to changes in product and community mix.
Current wording
•Our Average Selling Price (ASP) for homes closed during the quarter ended June 30, 2026 was $547.8 thousand, up 5.9% from $517.3 thousand in the prior year quarter. Our backlog ASP as of June 30, 2026 was $582.1 thousand, up 6.0% from $549.2 thousand in the prior year quarter. The increase in closing and backlog ASP compared to the prior year quarter was primarily due to changes in product and community mix.
Previous wording
•SG&A for the quarter ended March 31, 2026 was 15.5% of total revenue, up from 12.0% 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. SG&A expense was$63.6 million for the quarter ended March 31, 2026, down 6.5%compared to the prior year quarter primarily due to lower commissions. We remain focused on prudently managing overhead costs.
Current wording
•SG&A for the quarter ended June 30, 2026 was 14.1% of total revenue, up from 13.2% 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. SG&A expense was relatively flat compared to the prior year quarter, as 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, 2026 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, 2026 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 15.6% and 18.3% for the three months ended March 31, 2026 and 2025, respectively, and 14.9% and 18.3% for the six months ended March 31, 2026 and 2025, respectively. A litigation-related charge was recognized during the six months ended March 31, 2026, which reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.8%. 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.
Current wording
(a)Excluding impairments, abandonments, and interest amortized to cost of sales, homebuilding gross margin was 16.9% and 18.4% for the three months ended June 30, 2026 and 2025, respectively, and 15.6% and 18.3% for the nine months ended June 30, 2026 and 2025, respectively. During thenine months ended June 30, 2026, homebuilding gross margin was impacted by a litigation-related charge associated with a confidential settlement agreement with a homeowners' association. This charge reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.5%. 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 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. 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. For the three and six months ended March 31, 2026, the Company's effective tax rates were also affected by a change in the approach used to calculate the interim income tax provision, reducing comparability with the prior year periods. Refer to Note 10 to the condensed consolidated financial statements included in this Form 10-Q for additional details.
Current wording
(c) Calculated as tax (benefit) expense for the period divided by (loss) income 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. 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. For the three and nine months ended June 30, 2026, the Company's effective tax rates were also affected by a change in the approach used to calculate the interim income tax provision, reducing comparability with the prior year periods. Refer to Note 10 to the condensed consolidated financial statements included in this Form 10-Q for additional details.
Previous wording
Net new orders for the six months ended March 31, 2026 decreased to 1,811, down 10.8% from the six months ended March 31, 2025. The decrease in net new orders compared to the prior year period was driven by a 13.6% decrease in sales pace from 2.1 orders per community per month in the prior year period to 1.8, partially offset by a 3.3% increase in average active community count from 162 in the prior year period to 167.
Current wording
Net new orders for the nine months ended June 30, 2026 decreased to 2,711, down 6.2% from the nine months ended June 30, 2025. The decrease in net new orders compared to the prior year period was driven by an 8.5% decrease in sales pace from 2.0 orders per community per month in the prior year period to 1.8, partially offset by a 2.4% increase in average active community count from 164 in the prior year period to 168.
Previous wording
Southeast Segment: Net new orders for the quarter ended March 31, 2026 increased to 200, up 13.6% from the quarter ended March 31, 2025. Theincrease in net new orders compared to the prior year quarter was driven by a 19.2% increase inaverage active community count from 26 in the prior year quarter to 31, partially offset by a 4.7% decrease in sales pace from 2.3 orders per community per month in the prior year quarter to 2.2. The growth in average active communities is mainly attributed to our Atlanta submarket.
Current wording
Southeast Segment: Net new orders for the quarter ended June 30, 2026 increased to 160, up 3.2% from the quarter ended June 30, 2025. Theincrease in net new orders compared to the prior year quarter was driven by a 22.8% increase inaverage active community count from 26 in the prior year quarter to 32, partially offset by a 16.0% decrease in sales pace from 2.0 orders per community per month in the prior year quarter to 1.6.
Previous wording
West Segment: Net new orders for the six months ended March 31, 2026 decreased to 1,057, down 15.7% from the six months ended March 31, 2025. The decrease in net new orders was driven by an 18.8% decrease in sales pace from 2.1 orders per community per month to 1.7, partially offset by a 3.8% increase in average active community count from 102 to 106.
Current wording
West Segment: Net new orders for the nine months ended June 30, 2026 decreased to 1,577, down 9.2% from the nine months ended June 30, 2025. The decrease in net new orders was driven by a 12.7% decrease in sales pace from 1.9 orders per community per month to 1.7, partially offset by a 4.0% increase in average active community count from 102 to 106.
Previous wording
East Segment: Net new orders for the six months ended March 31, 2026 decreased to 425, down 12.2% from the six months ended March 31, 2025. The decrease in net new orders was driven by a 10.3% decrease in average active community count from 36 to 32 and a 2.1% decrease in sales pace from 2.3 orders per community per month to 2.2.
Current wording
East Segment: Net new orders for the nine months ended June 30, 2026 decreased to 645, down 8.9% from the nine months ended June 30, 2025. The decrease in net new orders was driven by a 15.2% decrease in average active community count from 36 to 31, partially offset by a 7.5% increase in sales pace from 2.2 orders per community per month to 2.3.
Previous wording
Southeast Segment: Net new orders for the six months ended March 31, 2026 increased to 329, up 12.7% from the six months ended March 31, 2025. The increase in net new orders was driven by a 20.8% increase in average active community count from 25 to 30, partially offset by a 6.7% decrease in sales pace from 2.0 orders per community per month to 1.8. The growth in average active communities is mainly attributed to our Atlanta submarket.
Current wording
Southeast Segment: Net new orders for the nine months ended June 30, 2026 increased to 489, up 9.4% from the nine months ended June 30, 2025. The increase in net new orders was driven by a 21.5% increase in average active community count from 25 to 31, partially offset by a 10.0% decrease in sales pace from 2.0 orders per community per month to 1.8.
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. 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 March 31, 2026. The aggregate dollar value of homes in backlog as of March 31, 2026 decreased 9.1% compared to March 31, 2025 due to a 14.9% decrease in backlog units, partially offset by a 6.8% increase in the ASP of homes in backlog. The increase in backlog ASP compared to the 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. The decrease in backlog units was primarily due to beginning the fiscal quarter with fewer backlog units for the quarter ended June 30, 2026. The aggregate dollar value of homes in backlog as of June 30, 2026 increased 2.2% compared to June 30, 2025 due to a 6.0% increase in the ASP of homes in backlog, partially offset by a 3.6% decrease in backlog units. The increase in backlog ASP compared to the prior year quarter was primarily due to changes in product and community mix.
Previous wording
West Segment: Homebuilding revenue decreased by 36.7% for the three months ended March 31, 2026 compared to the prior year quarter due to a 35.1% decrease in closings and a 2.4% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year quarter.
Current wording
East Segment: Homebuilding revenue decreased by 27.1% for the three months ended June 30, 2026 compared to the prior year quarter due to a 27.0% decrease in closings and a 0.1% decrease in ASP. The decrease in closings was primarilydue to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year quarter.
Previous wording
West Segment: Homebuilding revenue decreased by 31.3% for the six months ended March 31, 2026 compared to the six months ended March 31, 2025 due to a 30.5% decrease in closings and a 1.1% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year period.
Current wording
Southeast Segment: Homebuilding revenue increased by 60.2% for the three months ended June 30, 2026 compared to the prior year quarter due to a 37.9% increase in closings and a 16.2% increase in ASP. The increase in closings was primarily due to higher beginning backlog and improved construction cycle times compared to the prior year quarter.
Previous wording
Southeast Segment: Homebuilding revenue increased by 7.4% for the three months ended March 31, 2026 compared to the prior year quarter due to an 11.3% increase in ASP, partially offset by a 3.5% decrease in closings. The decrease in closings was primarily due to lower volume of spec homes that sold and closed within the current fiscal quarter, partially offset by higher beginning backlog andimproved construction cycle times compared to the prior year quarter.
Current wording
Southeast Segment: Homebuilding revenue increased by 16.2% for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025 due to a 14.2% increase in ASP and a 1.8% increase in closings. The increase in closings was primarily due to higher beginning backlog and improved construction cycle times compared to the prior year period.
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. For the six months ended March 31, 2026, Corporate and unallocated also included alitigation-related charge that reduced total homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.8%.
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 the nine months ended June 30, 2026, Corporate and unallocated also included alitigation-related charge that reduced total homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.5%.
Previous wording
Our homebuilding gross profit decreased by $36.5 million to $47.6 million for the three months ended March 31, 2026, compared to $84.1 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 $158.3 million and a decrease in gross margin of 310 basis points to 12.0%. 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 $0.8 million, and interest amortized to homebuilding cost of sales, which decreased by $4.1 million compared to the prior year quarter (refer to Note 4 and Note 5 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 $39.9 million compared to the prior year quarter, while homebuilding gross margin decreased by 270 basis points to 15.6%. The decrease in gross margin for the three months ended March 31, 2026 compared to the prior year quarter was due to an increase in price concessions and closing cost incentives, and changes in product and community mix.
Current wording
Our homebuilding gross profit decreased by $5.9 million to $66.6 million for the three months ended June 30, 2026, compared to $72.5 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 $44.5 million, partially offset by an increase in gross margin of 10 basis points to 13.6%. As shown in the tables above, the comparability of our gross profit and gross margin was impacted by impairment and abandonment charges, which decreased by $8.9 million, and interest amortized to homebuilding cost of sales, which decreased by $1.3 million compared to the prior year quarter (refer to Note 4 and Note 5 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 $16.0 million compared to the prior year quarter, while homebuilding gross margin decreased by 150 basis points to 16.9%. The decrease in gross margin for the three months ended June 30, 2026 compared to the prior year quarter was primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin was up by 160 basis points sequentially from 12.0% in the prior fiscal quarter, and up 130 basis points from 15.6% sequentially when excluding impairments, abandonments, and interest amortization, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities.
Previous wording
West Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $36.7 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.6%, down from 19.1% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives, and changes in product and community mix.
Current wording
West Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $12.0 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 15.9%, down from 18.1% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales was up by 130 basis points sequentially from 14.6% in the prior fiscal quarter, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities.
Previous wording
Our homebuilding gross profit decreased by $69.1 million to $85.1 million for the six months ended March 31, 2026, from $154.1 million in the prior year period. The decrease in homebuilding gross profit was primarily due to a decrease in homebuilding revenue of $259.0 million and a decrease in gross margin of 400 basis points to 11.2%. Similar to the three-month period discussed above, the comparability of our gross profit and gross margin for the six-month period was impacted by impairment and abandonment charges, which increased by $2.1 million, and interest amortized to homebuilding cost of sales, which decreased by $6.3 million year-over-year (refer to Note 4 and Note 5 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 $73.3 million compared to the prior year period, while homebuilding gross margin decreased by 340 basis points to 14.9%. The decrease in gross margin for the six months ended March 31, 2026 compared to the prior year period 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 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 reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.8%.
Current wording
Our homebuilding gross profit decreased by $74.9 million to $151.7 million for the nine months ended June 30, 2026, from $226.6 million in the prior year period. The decrease in homebuilding gross profit was primarily due to a decrease in homebuilding revenue of $303.5 million and a decrease in gross margin of 240 basis points to 12.2%. 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 decreased by $6.8 million, and interest amortized to homebuilding cost of sales, which decreased by $7.6 million year-over-year (refer to Note 4 and Note 5 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 $89.3 million compared to the prior year period, while homebuilding gross margin decreased by 270 basis points to 15.6%. The decrease in gross margin for the nine months ended June 30, 2026 compared to the prior year period was primarily due to an increase in price concessions and closing cost incentives, changes in existing product and community mix, and a litigation-related charge recognized in Corporate and unallocated during the quarter ended December 31, 2025. The litigation-related charge reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.5%.
Previous wording
West Segment: Compared to the prior year period, homebuilding gross profit decreased by $60.6 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.3%, down from 18.7% in the prior year period, primarily due to an increase in price concessions and closing cost incentives and changes in product and community mix.
Current wording
West Segment: Compared to the prior year period, homebuilding gross profit decreased by $72.7 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.9%, down from 18.5% in the prior year period, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix.
Previous wording
East Segment: Compared to the prior year period, homebuilding gross profit decreased by $7.1 million due to a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, remained relatively flat at 14.7% compared to 14.9% in the prior year period, as reductions in direct construction costs largely offset increases in price concessions and land costs.
Current wording
East Segment: Compared to the prior year period, homebuilding gross profit decreased by $16.8 million due to a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.9%, down from 16.0% in the prior year period, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix.
Previous wording
Southeast Segment: Compared to the prior year quarter, homebuilding gross profit increased by $1.4 million due to an increase in homebuilding revenue and higher gross margin. Homebuilding gross margin, excluding impairments and abandonments, increased to 17.1%, up from 16.3% in the prior year quarter, primarily due to a decrease in price concessions and reductions in direct construction costs.
Current wording
Southeast Segment: Compared to the prior year period, homebuilding gross profit increased by $13.3 million due to an increase in homeb uilding revenue. Homebuilding gross margin, excluding impairments and abandonments, increased to 17.7%, up from 16.7% in the prior year period, primarily due to a reduction in direct construction costs, partially offset by an increase in land costs and price concessions.
Previous wording
For the three months ended March 31, 2026, land sales and other revenue increased by $2.8 million to $12.1 million, and land sales and other gross profit decreased by $0.8 million to $1.1 million compared to the prior year quarter. For the six months ended March 31, 2026, land sales and other revenue decreased by $2.0 million to $15.8 million, and land sales and other gross profit decreased by $3.1 million to $0.8 million compared to the prior year period. Also, during the six months ended March 31, 2026, we recognized $1.0 million in land held for sale impairment charges related to two held for sale communities in our West and East segments.
Current wording
For the three months ended June 30, 2026, land sales and other revenue increased by $15.5 million to $25.4 million, and land sales and other gross profit decreased by $0.6 million to a loss of $0.5 million compared to the prior year quarter. For the nine months ended June 30, 2026, land sales and other revenue increased by $13.5 million to $41.3 million, and land sales and other gross profit decreased by $3.7 million to $0.3 million compared to the prior year period. Also, during the nine months ended June 30, 2026, we recognized $3.4 million in land held for sale impairment charges related to six held for sale communities in our West and East segments.
Previous wording
Our operating income decreased by $32.3 million to a loss of $19.0 million for the three months ended March 31, 2026, compared to operating income of $13.4 million for the three months ended March 31, 2025. 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 decreased 6.5% compared to the prior year primarily due to lower commissions expense on lower homebuilding revenue. SG&A as a percentage of total revenue increased by 350 basis points compared to the prior year quarter, from 12.0% to 15.5%, primarily due to lower homebuilding revenue.
Current wording
Our operating income decreased by $7.7 million to a loss of $11.4 million for the three months ended June 30, 2026, compared to operating loss of $3.7 million for the three months ended June 30, 2025. 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 90 basis points compared to the prior year quarter, from 13.2% to 14.1%, primarily due to lower homebuilding revenue.
Previous wording
Our operating income decreased by $66.3 million to a loss of $50.8 million for the six months ended March 31, 2026, compared to operating income of $15.5 million for the six months ended March 31, 2025. 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 decreased 3.9% compared to the prior year primarily due to lower commissions expense on lower homebuilding revenue, partially offset by higher sales and marketing costs. SG&A as a percentage of total revenue increased by 370 basis points compared to the prior year period, from 12.9% to 16.6%, primarily due to lower homebuilding revenue.
Current wording
Our operating income decreased by $74.0 million to a loss of $62.2 million for the nine months ended June 30, 2026, compared to operating income of $11.8 million for the nine months ended June 30, 2025. This decrease compared to the prior year period was primarily due to the previously discussed decrease in gross profit and gross margin. SG&A as a percentage of total revenue increased by 260 basis points compared to the prior year period, from 13.0% to 15.6%, primarily due to lower homebuilding revenue.
Previous wording
West Segment: The $33.4 million decrease in oper ating 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 wording
West Segment: The $12.5 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.
Previous wording
East Segment: The $3.2 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 wording
East Segment: The $9.0 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.
Previous wording
Southeast Segment: The $0.8 million increase in operating income compared to the prior year quarter was primarily due to the higher gross profit previously discussed and lower other G&A costs, partially offset by higher sales and marketing costs.
Current wording
Southeast Segment: The $12.5 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 commissions expense on higher homebuilding revenue and higher sales and marketing costs.
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, 2026, corporate and unallocated net expenses decreased by $3.5 million from the prior year quarter primarily due to lower amortization of capitalized interest costs expensed to homebuilding cost of sales on lower closings and homebuilding revenue, and lower G&A costs.
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, 2026, corporate and unallocated net expenses decreased by $1.3 million from the prior year quarter primarily due to lower impairment of capitalized interest and capitalized indirect costs recognized in the current quarter compared to the prior year quarter.
Previous wording
Corporate and Unallocated: For the six months ended March 31, 2026, corporate and unallocated net expenses increased by $1.5 million from the prior year period primarily due to a litigation-related charge (refer to Note 8 to the condensed consolidated financial statements included in this Form 10-Q for further discussion), partially offset by lower amortization of capitalized interest costs expensed to homebuilding cost of sales on lower closings and homebuilding revenue.
Current wording
Corporate and Unallocated: For the nine months ended June 30, 2026, corporate and unallocated net expenses increased by $0.2 million from the prior year period primarily due to a litigation-related charge, partially offset by lower amortization of capitalized interest costs expensed to homebuilding cost of sales on lower closings and homebuilding revenue.
Previous wording
Our income tax expense or benefit and related effective tax rate are affected by a variety of factors, including, but not limited to, tax credits, permanent differences and other discrete items. A comparison of our effective tax rates should also consider the changes in valuation allowance in periods when a change occurs. As such, our income tax expense or benefit is not always directly correlated to the amount of pre-tax income or loss for the associated periods. For the three and six months ended March 31, 2026, the Company's effective tax rates were also affected by a change in the approach used to calculate the interim income tax provision, reducing comparability with the prior year periods. Refer to Note 10 to the condensed consolidated financial statements included in this Form 10-Q for additional details.
Current wording
Our income tax expense or benefit and related effective tax rate are affected by a variety of factors, including, but not limited to, tax credits, permanent differences and other discrete items. A comparison of our effective tax rates should also consider the changes in valuation allowance in periods when a change occurs. As such, our income tax expense or benefit is not always directly correlated to the amount of pre-tax income or loss for the associated periods. For the three and nine months ended June 30, 2026, the Company's effective tax rates were also affected by a change in the approach used to calculate the interim income tax provision, reducing comparability with the prior year periods. Refer to Note 10 to the condensed consolidated financial statements included in this Form 10-Q for additional details.
Previous wording
We recognized income tax benefit of $17.6 million and $16.1 million for the three and six months ended March 31, 2026, compared to income tax expense of $1.4 million and $1.4 million for the three and six months ended March 31, 2025. Income tax benefit for the six months ended March 31, 2026 was primarily driven by income tax benefit on loss from operations, energy efficiency tax credits generated from closings during the current fiscal year, and a discrete tax benefit from tax credits related to prior year activities, partially offset by permanent differences, and stock-based compensation activity in the period. Income tax expense for the six months ended March 31, 2025 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.
Current wording
We recognized income tax benefit of $6.3 million and $22.4 million for the three and nine months ended June 30, 2026, compared to income tax benefit of $2.2 million and $0.8 million for the three and nine months ended June 30, 2025. Income tax benefit for the nine months ended June 30, 2026 was primarily driven by income tax benefit on loss from operations and energy efficiency tax credits generated from closings during the current fiscal year, partially offset by permanent differences and stock-based compensation activity in the period. 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.
Previous wording
Net cash used in operating activities was $228.8 million for the six months ended March 31, 2026. 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 $224.8 million resulting from land acquisition, land development and house construction spending and loss before income taxes of $49.6 million, which included $15.2 million of non-cash charges. This was partially offset by cash inflows from a net decrease in non-inventory working capital balances of $30.5 million.
Current wording
Net cash used in operating activities was $375.7 million for the nine months ended June 30, 2026. 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 $342.6 million resulting from land acquisition, land development and house construction spending and loss before income taxes of $60.1 million, which included $24.7 million of non-cash charges. This was partially offset by cash inflows from a net decrease in non-inventory working capital balances of $2.3 million.
Previous wording
Net cash used in operating activities was $155.9 million for the six months ended March 31, 2025. Net cash used in operating activities during the period was primarily driven by an increase in inventory of $191.0 million resulting from land acquisition, land development and house construction spending to support growth. This was partially offset by cash inflows from income before income taxes of $17.3 million, which included $12.7 million of non-cash charges, and a net decrease in non-inventory working capital balances of $5.1 million.
Current wording
Net cash used in operating activities was $218.2 million for the nine months ended June 30, 2025. 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.
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Current report — wording carried from elsewhere
Since the authorization of the share repurchase program in April 2025, we have repurchase an aggregated 3.5 million shares of common stock for $78.7 million at an average price per share of $22.75. All shares have been retired upon repurchase. As of June 30, 2026, the remaining availability of the share repurchase program was $21.3 million.