LGI Homes, Inc.

11. REVENUES

Homebuilding Revenues

We generate revenues primarily by delivering move-in ready entry-level and move-up spec homes sold under our LGI Homes brand and our move-up and luxury series spec homes sold under our Terrata Homes brand.

Land and Other Revenues

We also generate land and other revenue through lot sales and leasing. For the three and nine months ended September 30, 2025, we reclassified the income of lot sales and leasing revenues from other income to land and other revenue and land and other costs to conform to the current presentation. This reclassification had no impact on our previously reported net income, earnings per share, or cash flows for any period presented, as it represents a change in gross presentation between revenue and cost of sales versus other income, net.

The following table presents the revenue and cost of sales for lots and leases reclassified from other income for the three and nine months ended September 30, 2025 (in thousands).

The following table presents our homebuilding revenues and land and other revenues disaggregated by revenue stream (in thousands):

Our homebuilding revenues and land and other revenues are disaggregated by geography, based on our determined reportable segments.

Leasing Revenue

The Company leases certain residential properties to third parties under operating leases. Lease terms generally are for one year or less. The Company recognizes operating lease income on a straight-line basis over the lease term.

The following table presents the components of lease income (in thousands):

Variable lease payments primarily consist of amounts attributable to reimbursements of certain property-related costs, including late fees and lease termination fees, that are not included in the measurement of the lease receivable.

The Company evaluates its residential properties for impairment when events or changes in circumstances indicate that the carrying amount of a property may not be recoverable. To the extent an event or change in circumstance is identified, a residential property is considered to be impaired only if its carrying value cannot be recovered through estimated future undiscounted cash flows from the use and eventual disposition of the property. The process to assess our residential properties for impairment requires significant judgment and assessment of factors that are, at times, subject to significant uncertainty. We evaluate multiple information sources and perform a number of internal analyses, each of which is an important component of our process with no single information source or analysis being necessarily determinative.

12. SEGMENT INFORMATION

We operateone principal homebuilding business that is organized and reports by division. We have seven operating segments (our Central, Midwest, Southeast, Mid-Atlantic, Northwest, West and Florida divisions) that we aggregate into five qualifying reportable segments at September 30, 2026: our Central, Southeast, Northwest, West, and Florida divisions. These segments reflect the way we evaluate our business performance and manage our operations.

For reporting purposes, our homebuilding operations are aggregated into five reportable segments as follows:

Central: Texas, Oklahoma, Minnesota

Southeast: Georgia, Alabama, Tennessee, North Carolina, South Carolina,

West Virginia, Maryland, Pennsylvania, Virginia

Northwest: Colorado, Washington, Oregon

West: Arizona, New Mexico, Nevada, California, Utah

Florida: Florida

In determining the most appropriate reportable segments, we consider operating segments’ economic and other characteristics, including home floor plans, average selling prices, homebuilding gross margin percentage, geographical proximity, production construction processes, suppliers, subcontractors, regulatory environments, customer type and underlying demand and supply. Each operating segment follows the same accounting policies and is managed by our management team. We haveno inter-segment sales, as all sales are to external customers. Operating results for each segment may not be indicative of the results for such segment had it been an independent, stand-alone entity for the periods presented.

Our Chief Executive Officer and Chairman of the Board and our President and Chief Operating Officer have been determined to be our chief operating decision-makers (“CODMs”). The CODMs primarily evaluate the segments’ operating performance and allocate resources for all of our reportable segments based on net income before income taxes. For all of the segments, the CODMs use segment net income before income tax expense in the annual budget and forecasting process. These operating results are reviewed against actual and forecasted figures, with net income before income taxes being the key operating metric used to measure profit or loss.

Financial information relating to our reportable segments was as follows (in thousands):

(1)During the nine months ended September 30, 2026, the Company recognized $4.7 million of impairment charges related to inventory, of which $2.4 million was related to our Florida reportable segment and $2.3 million was related to our Central reportable segment.

(2)Other segment items reflects other sources of income and expense, including selling expenses, general and administrative expenses and other income, net.

(1)The Corporate balance consists primarily of cash and cash equivalents and investments in unconsolidated entities.