Dream Finders Homes, Inc.
For the period ended Sep 30, 2026. Filed Nov 3, 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.
Sep 30, 2026 · Filed Nov 3, 2026
DFH$12.40-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-30.
0001628280-26-050969
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-03.
0001628280-26-069387
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 165 previous paragraphs and 170 current paragraphs.
101 unchanged; 47 reworded; 22 added; 17 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 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 (22)
Current report
During the third quarter of 2026, housing demand remained weak as mortgage interest rates rose meaningfully, particularly late in the period, consumer confidence weakened to near-record levels and affordability remained constrained amid persistent inflation and higher energy prices. Prospective homebuyers remained highly focused on monthly payments, resulting in continued sensitivity to pricing and incentives. Demand varied by market, community and price point, with affordability pressures remaining acute for entry-level and first-time homebuyers.
Current report
Elevated competitive conditions have also persisted as homebuilders continued to use pricing adjustments, mortgage rate buydowns and other incentives to support absorption and manage inventory. In certain markets, increased resale housing inventory also provided buyers with additional alternatives. While incentives and mortgage buydowns have supported sales activity, they place pressure on average selling prices, gross margins and profitability. We have continued to calibrate our product offerings, pricing, sales pace and incentive levels by community based on local demand, inventory levels and competitive conditions.
Current report
Looking ahead, we do not currently expect near-term relief from these pressures. Absent a sustained improvement in mortgage rates or overall affordability, we expect homebuyers to remain highly price- and payment-sensitive and competitive incentive activity to remain elevated. We also expect higher energy, materials and labor costs, and tighter skilled labor availability, including from changes in immigration enforcement, which may extend construction cycle times and which may not be able to be offset through pricing. Our results are expected to remain sensitive to changes in mortgage rates, consumer confidence, labor market conditions, energy prices, new and resale housing supply and the broader economic environment. We remain focused on balancing sales pace, pricing discipline, margin preservation and inventory management while advancing our land-light strategy and operational efficiency initiatives. Following the Beazer acquisition, our near-term priorities also include integrating Beazer’s operations, pursuing anticipated operational efficiencies, maintaining disciplined land and inventory investment across the combined platform and managing the combined Company’s capital structure. Our future results will include Beazer’s operations beginning on October 20, 2026, the acquisition date, and will be affected by transaction and integration costs, purchase accounting adjustments and incremental financing costs.
Current report
On October 20, 2026, the Company completed its acquisition of Beazer Homes USA, Inc. (“Beazer”), in an all-cash transaction with an enterprise value of approximately $2.2 billion. The acquisition expands our footprint into California, Nevada, Indiana and Delaware, while broadening our presence in the Washington D.C. metropolitan area, including Maryland, and adding scale in shared markets across Texas, Florida, South Carolina, North Carolina, Georgia and Arizona. Refer to Note 14, Subsequent Events to the condensed consolidated financial statements for more information.
Current report
Issuance of Series B Preferred Stock and Redemption of Series A Preferred Stock
Current report
On September 14, 2026, the Company redeemed all of the outstanding shares of Series A Convertible Preferred Stock (“Series A preferred stock”) for an aggregate redemption price of $154 million, which included 101% of the liquidation preference of $1,000 per share and accumulated dividends of $3 million.
Current report
During September and October 2026, the Company issued a total of 675,000 shares of newly-created Series B Convertible Preferred Stock (“Series B preferred stock” and, together with the Series A preferred stock, the “redeemable preferred stock”), par value $0.01 per share, at a price of $1,000 per share. The Company received net proceeds of $652 million, which were used to redeem the then outstanding Series A preferred stock, to fund a portion of the Beazer acquisition and for general corporate and operational purposes.
Current report
Net Income. Current quarter net income was negatively affected due to a higher effective tax rate, primarily from the Beazer transaction costs incurred during the three and nine months ended September 30, 2026 which are nondeductible for tax purposes.
Current report
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Current report
Following the recent Beazer acquisition, we are reviewing the combined Company’s controlled lot pipeline to inform management’s capital allocation decisions. Our use of lot option contracts provides flexibility to pursue the opportunities that best fit our strategy while generally limiting our exposure on options we elect not to exercise. This review may result in the abandonment of certain lot options and material charges for related deposits and pre-acquisition costs. The amount and timing of any charges will depend on the results of the review.
Current report
(3)The increase in starts in the Midwest was mostly due to an increase in active communities. As of September 30, 2026, active communities in the Midwest were 149, compared to 122 as of September 30, 2025, an increase of 27, or 22%.
Current report
(2)Excluding built-for-rent activity, net sales and closings in the Mid-Atlantic segment increased 14% and less than 1%, respectively, during the nine months ended September 30, 2026 when compared to the nine months ended September 30, 2025.
Current report
Southeast. Backlog for the Southeast segment as of September 30, 2026 was 895 homes, a decrease of 248 from 1,143 homes as of September 30, 2025. The decrease from prior year was primarily attributable to the cumulative effect of constrained sales activity in prior periods, which outpaced the increase in net sales during the current period, as well as increased closings from pre-order sales and spec homes in the current period.
Current report
We believe our focus on delivering quality homes at affordable prices, targeted mortgage buydown programs and sales incentive strategies, along with our focus on spec homes which shorten the time between contract signing and closing, all contribute to our relatively low cancellation rates.
Current report
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Current report
The Beazer acquisition will affect liquidity and borrowing availability under the Credit Agreement through the inclusion of eligible acquired assets in the borrowing base, subject to applicable advance rates and limitations, and a reduction in the borrowing base for the principal amount of the newly assumed senior unsecured notes as part of the transaction. Refer to Note 14, Subsequent Events for more information regarding these assumed notes.
Current report
Series A Preferred Stock
Current report
On September 14, 2026, the Company redeemed all 150,000 shares of its previously outstanding Series A preferred stock with an initial liquidation preference of $1,000 per share and a par value of $0.01 per share, pursuant to the redemption notice provided to the holders of the Series A preferred stock on August 14, 2026. The Company made an aggregate cash payment to the holders of the Series A preferred stock of $154 million, which included 101% of the liquidation preference of $1,000 per share and accumulated dividends of $3 million. Following the redemption, no Series A preferred stock remained outstanding.
Current report
Series B Preferred Stock
Current report
On September 14, 2026, the Company entered into Subscription Agreements (the “Subscription Agreements”) with certain institutional investors (the “Purchasers”). Pursuant to the Subscription Agreements, the Company sold to the Purchasers 225,000 shares of newly-created Series B preferred stock at a first closing, which occurred on September 14, 2026 (the “First Closing”) with an initial liquidation preference of $1,000 per share and a par value of $0.01 per share for an aggregate purchase price of $225 million. The Purchasers of the Series B preferred stock from the First Closing received an original issue discount equal to 2.5% of the purchase price. The Company used the proceeds from the First Closing of $217 million, net of the original issue discount and other fees incurred by the Company, to redeem the then outstanding Series A preferred stock and for general corporate and operational purposes, and in anticipation of funding a portion of the Beazer acquisition.
Current report
On October 20, 2026, in connection with the closing of the Beazer acquisition, the Company sold an additional 450,000 shares of Series B preferred stock (the “Additional Shares”) at a second closing for an aggregate purchase price of $450 million (the “Second Closing”). The proceeds received from the Second Closing were $435 million, net of the original issue discount of 2.5% and other fees incurred by the Company. The Company used the proceeds from the sale of the Additional Shares to fund a portion of the Beazer acquisition.
Current report
We test goodwill for impairment annually as of October 1, or more frequently upon the occurrence of a triggering event. Our impairment assessment requires significant estimates and judgments, including projected revenues and margins, and discount rates, which are largely influenced by the current housing market environment. The current housing market environment is characterized by elevated mortgage interest rates, constrained affordability, weakened consumer confidence and heightened competitive conditions. We also consider the stock price of our Class A common stock and resulting market capitalization, including the magnitude, duration and underlying causes of declines, as well as share-price performance relative to peers, together with other relevant facts and circumstances, in evaluating potential goodwill impairment. When performing a quantitative goodwill impairment test, we also consider our market capitalization in evaluating the reasonableness of estimated reporting unit fair values. Given the current housing market conditions and the decline in our market capitalization, the estimated fair values of our reporting units could be more sensitive to changes in these assumptions than in prior periods and may indicate reductions in the estimated fair values of our reporting units. If housing market conditions were to deteriorate further or if our market capitalization decline persists or becomes more significant, we could be required to record a goodwill impairment charge in a future period, which could be material. Goodwill, if any, resulting from the Beazer acquisition will be recorded during the three months ended December 31, 2026, and, therefore, was not included in our goodwill balance as of September 30, 2026. There have been no changes to our goodwill impairment testing policies during the nine months ended September 30, 2026 as compared to those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Removed paragraphs (17)
Previous report
The most significant challenge facing homebuyers across our markets continues to be affordability, especially at entry-level price points, as persistently elevated mortgage interest rates and broader macroeconomic uncertainty pressure consumer confidence. To address this, we have continued to align our product offerings and pricing to current market conditions and drive sales activity through targeted incentives, including mortgage rate buydowns.
Previous report
These measures have weighed on margins and profitability, and may continue to do so in the near term as we navigate the balance between pricing, incentives and sales pace in a competitive and evolving environment. Demand across our communities remains particularly sensitive to fluctuations in mortgage interest rates and broader economic conditions.
Previous report
Our focus remains on advancing our land-light strategy, enhancing operational efficiencies and delivering homes that address customer needs and set us apart in our markets. Although longer-term housing fundamentals remain favorable, including constrained supply, near-term results may continue to be shaped by macroeconomic conditions and interest rate movements.
Previous report
Reincorporation to the State of Texas
Previous report
The Company completed its reincorporation to the state of Texas by conversion from the state of Delaware on June 9, 2026 (the “Effective Date”). As a result of the reincorporation by conversion, the rights of holders of the Company’s Class A common stock are governed by the Texas Business Organizations Code and the Company’s certificate of formation and bylaws as of the Effective Date. The Company’s Class A common stock continues to be traded on the New York Stock Exchange under the symbol “DFH.”
Previous report
Appointment of Chief Operating Officer
Previous report
On June 1, 2026, Clint Szubinski was appointed as our Chief Operating Officer. Mr. Szubinski has assumed responsibility for directing the strategic vision and operational performance of the Company. Doug Moran, National President, will continue to provide guidance and support for the ongoing success and growth of Dream Finders Homes.
Previous report
Appointment of Directors
Previous report
Effective on July 13, 2026, the Board of Directors (the “Board”) of the Company appointed Richard Beckwitt and Steven Fischer to serve as directors on the Board. The Board appointed Mr. Beckwitt as Co-Chairman of the Board, sharing Board responsibilities with Patrick Zalupski, President and Chief Executive Officer, who serves as the other Co-Chairman. The Board appointed Mr. Fischer as a member of the Audit Committee.
Previous report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Previous report
Southeast. Backlog for the Southeast segment as of June 30, 2026 was 1,016 homes, an increase of 18 from 998 homes as of June 30, 2025. The increase from prior year was primarily attributable to an increase in net sales in the current period and, to a lesser extent, the decrease in home closings, mostly due to built-for-rent activity.
Previous report
Our cancellation rate for the three months ended June 30, 2026 was 11.1%, an improvement of 290 bps when compared to the 14.0% cancellation rate for the three months ended June 30, 2025. Our cancellation rate for the six months ended June 30, 2026 was 9.3%, an improvement of 350 bps when compared to the 12.8% cancellation rate for the six months ended June 30, 2025. The improvement is partly attributable to the higher number of spec sales contracts, which have shorter closing cycles, typically resulting in lower cancellations when compared to pre-sold home sales contracts.
Previous report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Previous report
Redeemable Preferred Stock
Previous report
On September 29, 2021, we sold 150,000 shares of redeemable preferred stock with an initial liquidation preference of $1,000 per share and a par value of $0.01 per share, for an aggregate purchase price of $150 million. We used the proceeds from the sale of the redeemable preferred stock to partially fund the MHI acquisition and for general corporate purposes. The redeemable preferred stock ranks senior to the Class A and B common stock with respect to dividends and distributions on liquidation, winding-up and dissolution.
Previous report
Accordingly, upon liquidation, dissolution or winding up of the Company, each share of redeemable preferred stock is entitled to receive the initial liquidation preference of $1,000 per share, subject to adjustment, plus all accrued and unpaid dividends thereon.
Previous report
Pursuant to the terms of the redeemable preferred stock, any time after September 29, 2026, a holder of shares of redeemable preferred stock can elect to convert their shares into shares of our Class A common stock at a conversion price based on the average of the immediately-preceding trailing 90 trading days’ closing price of Class A common stock prior to conversion, less 20% of the average and subject to a floor conversion price of $4.00 (the “Conversion Right”). We currently expect and plan to redeem and refinance all of the outstanding shares of redeemable preferred stock prior to September 29, 2026, after which the Conversion Right becomes effective.
Reworded paragraphs (47)
Previous wording
(2)Refer to Note 13, Earnings Per Share to the condensed consolidated financial statements for disclosures related to the calculation of earnings per share (“EPS”). Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the redeemable preferred stock and the associated preferred dividends.
Current wording
(2)Refer to Note 13, (Loss) Earnings Per Share to the condensed consolidated financial statements for disclosures related to the calculation of earnings per share (“EPS”). Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the redeemable preferred stock and the associated preferred dividends. Since the conversion price of the Company’s redeemable preferred stock is based on an average price of our Class A common stock, changes in this price may significantly affect the number of additional assumed common shares outstanding under the if-converted method for diluted EPS.
Previous wording
(6)Return on participating equity is calculated as net income attributable to DFH, less redeemable preferred stock dividends, divided by average beginning and ending total Dream Finders Homes, Inc. stockholders’ equity (“participating equity”) for the trailing twelve months.
Current wording
(6)Return on participating equity is calculated as net income attributable to DFH, less preferred stock dividends, divided by average beginning and ending total Dream Finders Homes, Inc. stockholders’ equity (“participating equity”) for the trailing twelve months.
Previous wording
Net Income. In addition to the operational results by segment discussed below, for the three and six months ended June 30, 2026, consolidated net income included $9 million and $8 million, respectively, of gains on equity securities, primarily attributable to unrealized gains from changes in fair value.
Current wording
Income Before Taxes. In addition to the operational results by segment discussed below, for the three and nine months ended September 30, 2026, the Company had gains on equity securities recorded within other income, net of $5 million and $13 million, respectively, primarily attributable to unrealized gains from changes in fair value on our equity investment related to our pre-acquisition investment in Beazer. Additionally, the Company incurred transaction costs related to the Beazer acquisition of $23 million and $24 million for the three and nine months ended September 30, 2026, respectively. For the three and nine months ended September 30, 2026, the transaction costs represent 250 basis points (“bps”) and 90 bps, respectively, of selling, general and administrative expense %. All amounts are reflected in our Corporate component. There were none of these items recorded for the three and nine months ended September 30, 2025.
Previous wording
Homebuilding Revenues. The decrease in homebuilding revenues was primarily attributable to a lower consolidated ASP of homes closed, which decreased 9%, partially offset by lower sales incentives as a percentage of homebuilding revenues, which decreased by 77 basis points (“bps”), or 8%, when comparing the three months ended June 30, 2026 to the three months ended June 30, 2025, as well as changes in geographic and product mix during the period. This reduction in homebuilding revenues was partially offset by an increase in home closings of 58 homes, or 3%, for the three months ended June 30, 2026 to 2,290 from 2,232 home closings for the three months ended June 30, 2025. The Mid-Atlantic segment had an increase of 115 closings with an ASP of homes closed of $372,812, which was the lowest homebuilding segment ASP of homes closed, and the Midwest segment had a decrease of 104 closings with an ASP of homes closed of $514,341, which was the highest homebuilding segment ASP of homes closed.
Current wording
Homebuilding Revenues. The increase in homebuilding revenues was primarily attributable to an increase in home closings of 52 homes, or 3%, to 1,967 for the three months ended September 30, 2026 from 1,915 home closings for the three months ended September 30, 2025, an increase in lot sales revenue in the Midwest segment of $27 million and, to a lesser extent, a $10 million increase from percentage of completion contracts where we build homes on buyer-owned land, when comparing the three months ended September 30, 2026 to the three months ended September 30, 2025. This improvement in homebuilding revenues was partially offset by lower consolidated ASP of homes closed, which decreased 4%, mostly due to changes in geographic and product mix during the period. The Mid-Atlantic segment had an increase of 22 closings with an ASP of homes closed of $398,410, which was the lowest homebuilding segment ASP of homes closed, and the ASP of homes closed in the Midwest segment declined $36,430, or 7%, when comparing the three months ended September 30, 2026 to the three months ended September 30, 2025.
Previous wording
Homebuilding Gross Margin. The lower homebuilding gross margin was primarily due to the decrease in consolidated ASP of homes closed for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The decrease in homebuilding gross margin as a percentage of homebuilding revenues when comparing the three months ended June 30, 2026 and 2025 was primarily attributable to higher land and financing costs, partially offset by direct cost reductions and cycle-time improvements.
Current wording
Homebuilding Gross Margin. The lower homebuilding gross margin was primarily due to the decrease in consolidated ASP of homes closed for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, as well as higher land and financing costs. The decrease in homebuilding gross margin as a percentage of homebuilding revenues when comparing the three months ended September 30, 2026 and 2025 was primarily attributable to higher land and financing costs, partially offset by direct cost reductions and cycle-time improvements. In addition, inventory impairment negatively impacted homebuilding gross margin and homebuilding gross margin percentage by approximately $7 million, or 70 bps, when compared to the three months ended September 30, 2025.
Previous wording
Southeast. Our Southeast segment homebuilding revenues for the three months ended June 30, 2026 were $388 million, an increase of $20 million, or 6%, from $368 million for the three months ended June 30, 2025. This growth was primarily driven by an increase in home closings of 47, or 6%, and higher revenue from percentage of completion contracts where we build homes on buyer-owned land, partially offset by a 2% decrease in the ASP of homes closed. Homebuilding gross margin percentage was 14.2% for the three months ended June 30, 2026, representing a decrease of 370 bps, or 21%, when compared to the three months ended June 30, 2025. The decrease in homebuilding gross margin percentage was mostly the result of higher land and financing costs, partially offset by direct cost reductions.
Current wording
Southeast. Our Southeast segment homebuilding revenues for the three months ended September 30, 2026 were $343 million, an increase of $26 million, or 8%, from $317 million for the three months ended September 30, 2025. This growth was primarily driven by an increase in home closings of 28, or 4%, higher revenue from percentage of completion contracts where we build homes on buyer-owned land and, to a lesser extent, a 1% increase in the ASP of homes closed. Homebuilding gross margin percentage was 14.9% for the three months ended September 30, 2026, representing a decrease of 390 bps, or 21%, when compared to the three months ended September 30, 2025. The decrease in homebuilding gross margin percentage was mostly the result of higher land and financing costs, partially offset by direct cost reductions.
Previous wording
Mid-Atlantic. Our Mid-Atlantic segment homebuilding revenues for the three months ended June 30, 2026 were $264 million, a decrease of $11 million, or 4%, from $275 million for the three months ended June 30, 2025. This decline in revenue was primarily driven by a decrease in ASP of homes closed of $71,759, or 16%, as well as lower revenue from percentage of completion contracts where we build homes on buyer-owned land, and was largely offset by an increase in home closings of 115, or 19%. The reduction in ASP was driven by higher use of sales incentives as a percentage of homebuilding revenues, which increased by 133 bps, or 30%, when compared to the three months ended June 30, 2025, as well as a higher relative and absolute number of built-for-rent closings with lower ASPs. Homebuilding gross margin percentage was 14.6% for the three months ended June 30, 2026, representing a decrease of 330 bps, or 18%, when compared to the three months ended June 30, 2025. The reduction in homebuilding gross margin percentage was mainly due to increased sales incentives, as well as land and financing costs, partially offset by direct cost reductions and cycle time improvements.
Current wording
Mid-Atlantic. Our Mid-Atlantic segment homebuilding revenues for the three months ended September 30, 2026 were $237 million, a decrease of $5 million, or 2%, from $242 million for the three months ended September 30, 2025. This decline in revenue was primarily driven by a decrease in ASP of homes closed of $21,501, or 5%, as well as lower revenue from percentage of completion contracts where we build homes on buyer-owned land, and was partially offset by an increase in home closings of 22, or 4%. The reduction in ASP was driven by higher relative and absolute number of built-for-rent closings with lower ASPs. Homebuilding gross margin percentage was 15.1% for the three months ended September 30, 2026, representing a decrease of 200 bps, or 12%, when compared to the three months ended September 30, 2025. The reduction in homebuilding gross margin percentage was mainly due to higher land and financing costs, partially offset by direct cost reductions and lower commissions from a higher proportion of built-for-rent closings positively impacting the gross margin percentage. In addition, inventory impairment negatively impacted homebuilding gross margin and homebuilding gross margin percentage by approximately $6 million and 240 bps, respectively, when compared to the three months ended September 30, 2025.
Previous wording
Midwest. Our Midwest segment homebuilding revenues for the three months ended June 30, 2026 were $355 million, a decrease of $102 million, or 22%, from $457 million for the three months ended June 30, 2025. This decrease was primarily due to lower home closings of 104, or 13%, as well as a decrease in ASP of homes closed of $39,648, or 7%. The decline in ASP was mostly driven by changes in product mix, including the strategic introduction of lower-priced offerings in 2025, particularly in our Texas markets, which were not yet fully reflected in the results for the three months ended June 30, 2025. Additionally, strategic lot sales within the segment were lower by $17 million when compared to the three months ended June 30, 2025. Homebuilding gross margin percentage was 14.0% for the three months ended June 30, 2026, representing a decrease of 60 bps, or 4%, when compared to the three months ended June 30, 2025. The reduction in homebuilding gross margin percentage was primarily due to increased land and financing costs, largely offset by direct cost reductions.
Current wording
Midwest. Our Midwest segment homebuilding revenues for the three months ended September 30, 2026 were $362 million, an increase of $5 million, or 1%, from $357 million for the three months ended September 30, 2025. This increase was primarily due to an increase in strategic lot sales of $27 million, mostly offset by a decrease in ASP of homes closed of $36,430, or 7%. The decline in ASP was mostly driven by changes in product mix, including the strategic introduction of lower-priced offerings in 2025, particularly in our Texas markets, which were not yet fully reflected in the results for the three months ended September 30, 2025. Homebuilding gross margin percentage was 14.7% for the three months ended September 30, 2026, representing a decrease of 200 bps, or 12%, when compared to the three months ended September 30, 2025. The reduction in homebuilding gross margin percentage was primarily due to increased land and financing costs, partially offset by direct cost reductions.
Previous wording
Selling, General and Administrative Expense. The dollar decrease in Homebuilding SG&A was primarily driven by lower compensation cost of $9 million, mostly from reductions commensurate with financial results. $5 million of the decrease in compensation costs were attributable to our Midwest segment. Homebuilding SG&A as a percentage of homebuilding revenues was 12.4% for the three months ended June 30, 2026, an increase of 20 bps, or 2%, when compared to the three months ended June 30, 2025. The percentage increase in Homebuilding SG&A was primarily attributable to reduced absorption per active community, as well as increased investments in technology and growth initiatives.
Current wording
Selling, General and Administrative Expense. The dollar increase in Homebuilding SG&A was primarily driven by increased costs of $4 million related to our forward mortgage commitment programs that allow homebuyers to lock in lower mortgage interest rates at the time of sale, increased investments of $3 million in technology and growth initiatives, and higher costs of $2 million related to an increase in active communities. Homebuilding SG&A as a percentage of homebuilding revenues was 12.5% for the three months ended September 30, 2026, an increase of 80 bps, or 7%, when compared to the three months ended September 30, 2025. The percentage increase in Homebuilding SG&A was also due to lower overhead absorption per active community.
Previous wording
Contingent Consideration Revaluation. Contingent consideration income of $13 million during the three months ended June 30, 2025 related to an acquisition earnout arrangement that concluded in 2025 and, therefore, did not impact income before taxes of homebuilding operations for the three months ended June 30, 2026.
Current wording
Contingent Consideration Revaluation. Contingent consideration expense of $2 million during the three months ended September 30, 2025 related to an acquisition earnout arrangement that concluded in 2025 and, therefore, had no impact for the three months ended September 30, 2026.
Previous wording
Income Before Taxes Of Homebuilding Operations. The decrease in income before taxes of homebuilding operations during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was primarily attributable to the reduction in homebuilding revenues, the decrease in gross margin, the change in contingent consideration income and the increase in Homebuilding SG&A as a percentage of homebuilding revenues, all explained above.
Current wording
Income Before Taxes of Homebuilding Operations. The decrease in income before taxes of homebuilding operations during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 was due to the decrease in gross margin, the increase in Homebuilding SG&A as a percentage of homebuilding revenues, partially offset by the increase in homebuilding revenues and decrease in contingent consideration expense, all explained above.
Previous wording
Homebuilding Revenues. The decrease in homebuilding revenues was primarily attributable to a decrease of 10% in the consolidated ASP of homes closed when comparing the six months ended June 30, 2026 to the six months ended June 30, 2025, primarily a result of changes in geographic and product mix during the period and, to a much lesser extent, an increase in sales incentives. The Mid-Atlantic segment had an increase of 220 closings with an ASP of homes closed of $376,236, which was the lowest homebuilding segment ASP of homes closed, and the Midwest segment had a decrease of 191 closings with an ASP of homes closed of $519,292, which was the highest homebuilding segment ASP of homes closed.
Current wording
Homebuilding Revenues. The decrease in homebuilding revenues was primarily attributable to a decrease of 8% in the consolidated ASP of homes closed when comparing the nine months ended September 30, 2026 to the nine months ended September 30, 2025, primarily a result of changes in geographic and product mix during the period, partially offset by an increase in closings. The Mid-Atlantic segment had an increase of 242 closings with an ASP of homes closed of $383,027, which was the lowest homebuilding segment ASP of homes closed, and the Midwest segment had a decrease of 189 closings with an ASP of homes closed of $520,684, which was the highest homebuilding segment ASP of homes closed.
Previous wording
Homebuilding Gross Margin. The lower homebuilding gross margin was primarily due to the lower consolidated ASP of homes closed. The decrease in homebuilding gross margin as a percentage of homebuilding revenues, when comparing the six months ended June 30, 2026 and 2025, was primarily attributable to higher land and financing costs, partially offset by direct cost reductions.
Current wording
Homebuilding Gross Margin. The lower homebuilding gross margin was primarily due to the lower consolidated ASP of homes closed. The decrease in homebuilding gross margin as a percentage of homebuilding revenues, when comparing the nine months ended September 30, 2026 and 2025, was primarily attributable to higher land and financing costs, partially offset by direct cost reductions. In addition, inventory impairment negatively impacted homebuilding gross margin and homebuilding gross margin percentage by approximately $7 million, or 20 bps, when compared to the nine months ended September 30, 2025.
Previous wording
Southeast. Our Southeast segment homebuilding revenues for the six months ended June 30, 2026 were $662 million, a decrease of $13 million, or 2%, from $675 million for the six months ended June 30, 2025. This decline in revenue was driven by a decrease in home closings of 26, or 2% and a 2% decrease in the ASP of homes closed, partially offset by increased revenue from percentage of completion contracts where we build homes on buyer-owned land. Homebuilding gross margin percentage was 14.9% for the six months ended June 30, 2026, representing a decrease of 370 bps, or 20%, when compared to the six months ended June 30, 2025. The decrease in homebuilding gross margin percentage was mostly the result of higher land and financing costs, partially offset by direct cost reductions.
Current wording
Southeast. Our Southeast segment homebuilding revenues for the nine months ended September 30, 2026 were $1,005 million, an increase of $13 million, or 1%, from $992 million for the nine months ended September 30, 2025. This revenue growth was driven by increased revenue from percentage of completion contracts where we build homes on buyer-owned land, partially offset by a decrease in the ASP of homes closed of $3,514, or 1%. Homebuilding gross margin percentage was 14.9% for the nine months ended September 30, 2026, representing a decrease of 380 bps, or 20%, when compared to the nine months ended September 30, 2025. The decrease in homebuilding gross margin percentage was mostly the result of higher land and financing costs, partially offset by direct cost reductions.
Previous wording
Mid-Atlantic. Our Mid-Atlantic segment homebuilding revenues for the six months ended June 30, 2026 were $495 million, a decrease of $18 million, or 3%, from $513 million for the six months ended June 30, 2025. This decline in revenue was primarily driven by a decrease in ASP of homes closed of $73,393, or 16%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, as well as lower revenue from percentage of completion contracts where we build homes on buyer-owned land and fewer strategic lot sales, which was mostly offset by an increase in home closings of 220, or 20%. The reduction in ASP was driven by higher use of sales incentives as a percentage of homebuilding revenues, which increased by 183 bps, or 43%, when compared to the six months ended June 30, 2025, as well as a higher relative and absolute number of built-for-rent closings with lower ASPs. Homebuilding gross margin percentage of 15.0% for the six months ended June 30, 2026, representing a decrease of 460 bps, or 23%, when compared to the six months ended June 30, 2025. The decrease in homebuilding gross margin percentage was mainly the result of higher land and financing costs.
Current wording
Mid-Atlantic. Our Mid-Atlantic segment homebuilding revenues for the nine months ended September 30, 2026 were $732 million, a decrease of $23 million, or 3%, from $755 million for the nine months ended September 30, 2025. This decline in revenue was primarily driven by a decrease in ASP of homes closed of $56,585, or 13%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, as well as lower revenue from percentage of completion contracts where we build homes on buyer-owned land and fewer strategic lot sales, largely offset by an increase in home closings of 242, or 14%. The reduction in ASP was driven by higher relative and absolute number of built-for-rent closings with lower ASPs. Homebuilding gross margin percentage was 15.0% for the nine months ended September 30, 2026, representing a decrease of 380 bps, or 20%, when compared to the nine months ended September 30, 2025. The decrease in homebuilding gross margin percentage was mainly the result of higher land costs, partially offset by direct cost reductions. In addition, inventory impairment negatively impacted homebuilding gross margin and homebuilding gross margin percentage by approximately $6 million, or 80 bps, when compared to the nine months ended September 30, 2025.
Previous wording
Midwest. Our Midwest segment homebuilding revenues for the six months ended June 30, 2026 were $687 million, a decrease of $195 million, or 22%, from $882 million for the six months ended June 30, 2025. This decrease was primarily due to lower home closings of 191, or 13%, as well as a decrease of 8% in the ASP of homes closed. The decline in ASP was mostly driven by changes in product mix, including the strategic introduction of lower-priced offerings in 2025, particularly in our Texas markets, which were not yet fully reflected in the results for the six months ended June 30, 2025. Additionally, strategic lot sales within the segment were lower by $25 million when compared to the six months ended June 30, 2025. Homebuilding gross margin percentage was 13.3% for the six months ended June 30, 2026, representing a decrease of 280 bps, or 17%, when compared to the six months ended June 30, 2025. The reduction in homebuilding gross margin percentage was mostly due to increased land and financing costs, partially offset by direct cost reductions.
Current wording
Midwest. Our Midwest segment homebuilding revenues for the nine months ended September 30, 2026 were $1.0 billion, a decrease of $0.2 billion, or 15%, from $1.2 billion for the nine months ended September 30, 2025. This decrease was primarily due to lower home closings of 189, or 9%, as well as a decrease of 8% in the ASP of homes closed. The decline in ASP was mostly driven by changes in product mix, including the strategic introduction of lower-priced offerings in 2025, particularly in our Texas markets, which were not yet fully reflected in the results for the nine months ended September 30, 2025. Homebuilding gross margin percentage was 13.8% for the nine months ended September 30, 2026, representing a decrease of 250 bps, or 15%, when compared to the nine months ended September 30, 2025. The reduction in homebuilding gross margin percentage was mostly due to increased land and financing costs, partially offset by direct cost reductions.
Previous wording
Selling, General and Administrative Expense. The dollar decrease in Homebuilding SG&A was primarily driven by lower compensation cost of $23 million, mostly due to reductions commensurate with financial results. $15 million of the decrease in compensation costs were attributable to our Midwest segment. Homebuilding SG&A as a percentage of homebuilding revenues was 12.5% for the six months ended June 30, 2026, an increase of 40 bps, or 3%, when compared to the six months ended June 30, 2025. The percentage increase in Homebuilding SG&A was primarily attributable to reduced absorption per active community, as well as increased investments in technology and growth initiatives.
Current wording
Selling, General and Administrative Expense. The dollar decrease in Homebuilding SG&A was primarily driven by lower compensation cost of $21 million, mostly due to headcount and other reductions commensurate with financial results, partially offset by higher costs of $6 million related to an increase in active communities. $14 million of the decrease in compensation costs was attributable to our Midwest segment. Homebuilding SG&A as a percentage of homebuilding revenues was 12.5% for the nine months ended September 30, 2026, an increase of 50 bps, or 4%, when compared to the nine months ended September 30, 2025. The percentage increase in Homebuilding SG&A was primarily attributable to reduced absorption per active community.
Previous wording
Other Expense, Net. The decrease in other expense, net for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 was primarily due to $7 million of purchase price adjustments related to the Crescent acquisition, which were recognized outside of the measurement period during the first quarter of 2025.
Current wording
Other Expense, Net. The decrease in other expense, net for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 was primarily due to $7 million of purchase price adjustments related to the Crescent acquisition recorded during the nine months ended September 30, 2025, partially offset by increased interest expense, as well as a reduction in legal settlement and management fee income.
Previous wording
Contingent Consideration Revaluation. Contingent consideration income of $12 million during the six months ended June 30, 2025 related to an acquisition earnout arrangement that concluded in 2025 and, therefore, did not impact income before taxes of homebuilding operations for the six months ended June 30, 2026.
Current wording
Contingent Consideration Revaluation. Contingent consideration income of $10 million during the nine months ended September 30, 2025 related to an acquisition earnout arrangement that concluded in 2025 and, therefore, had no impact for the nine months ended September 30, 2026.
Previous wording
Income Before Taxes of Homebuilding Operations. The decrease in income before taxes of homebuilding operations during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 was primarily attributable to the reduction in homebuilding revenues, the decrease in gross margin, the change in contingent consideration income and the increase in Homebuilding SG&A as a percentage of homebuilding revenue, all explained above.
Current wording
Income Before Taxes of Homebuilding Operations. The decrease in income before taxes of homebuilding operations during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 was primarily attributable to the reduction in homebuilding revenues, the decrease in gross margin, the increase in Homebuilding SG&A as a percentage of homebuilding revenue, and the change in contingent consideration, partially offset by the decrease in other expense, all explained above.
Previous wording
As of June 30, 2026 and December 31, 2025, our lot deposits for finished lot option and land bank option contracts were $502 million and $545 million, respectively. As of June 30, 2026 and December 31, 2025, we controlled 54,091 and 63,121 lots under finished lot option and land bank option contracts, respectively. The risk of loss related to finished lot and land bank option deposits and related fees was $812 million and $773 million as of June 30, 2026 and December 31, 2025, respectively. Risk of loss includes the lot deposits noted above, which are reported as such on the Condensed Consolidated Balance Sheets, pre-acquisition land costs, which include due diligence costs, lot option fees and property taxes, which are included in inventories on the condensed consolidated balance sheet, and any applicable termination fees.
Current wording
As of September 30, 2026 and December 31, 2025, our lot deposits for finished lot option and land bank option contracts were $490 million and $545 million, respectively. As of September 30, 2026 and December 31, 2025, we controlled 52,574 and 63,121 lots under finished lot option and land bank option contracts, respectively. The risk of loss related to finished lot and land bank option deposits and related fees was $808 million and $773 million as of September 30, 2026 and December 31, 2025, respectively. Risk of loss includes the lot deposits noted above, which are reported as such on the Condensed Consolidated Balance Sheets, pre-acquisition land costs, which include due diligence costs, lot option fees and property taxes, which are included in inventories on the Condensed Consolidated Balance Sheet, and any applicable termination fees.
Previous wording
(2)As of June 30, 2026 and December 31, 2025, we had 320 and 731 controlled lots under built-for-rent contracts, respectively.
Current wording
(2)As of September 30, 2026 and December 31, 2025, we had 296 and 731 controlled lots under built-for-rent contracts, respectively.
Previous wording
A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five units remaining to sell. Ending active community count is an important metric to forecast future net sales for our business. As of June 30, 2026, we had 353 active communities, an increase of 82 communities, or 30%, as compared to 271 active communities as of June 30, 2025. As of June 30, 2026, the Company had 1,004 completed quick move-in ready homes, which represents approximately 3 spec homes per ending active community.
Current wording
A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five units remaining to sell. Ending active community count is an important metric to forecast future net sales for our business. As of September 30, 2026, we had 365 active communities, an increase of 82 communities, or 29%, as compared to 283 active communities as of September 30, 2025. As of September 30, 2026, the Company had 1,227 completed quick move-in ready homes, which represent approximately 3 spec homes per ending active community, compared to 1,053 as of September 30, 2025, which represent approximately 4 spec homes per ending active community.
Previous wording
Our active community count excludes communities under built-for-rent contracts, as all sales to third-party investors occur at one point in time and these communities would have no homesites remaining to sell. As of June 30, 2026, we had 10 communities delivering closings under built-for-rent contracts, as compared to 7 communities as of June 30, 2025.
Current wording
Our active community count excludes communities under built-for-rent contracts, as all sales to third-party investors occur at one point in time and these communities would have no homesites remaining to sell. As of September 30, 2026, we had 9 communities delivering closings under built-for-rent contracts, as compared to 12 communities as of September 30, 2025. We selectively enter into built-for-rent contracts with institutional rental partners based on management’s assessment of each opportunity, which may cause the number of communities delivering closings under these contracts to vary significantly from period to period.
Previous wording
(1)Excluding built-for-rent activity, net sales in the Southeast segment increased 36% when comparing the three months ended June 30, 2026 to the three months ended June 30, 2025.
Current wording
(1)Excluding built-for-rent activity, net sales in the Southeast segment decreased 4% when comparing the three months ended September 30, 2026 to the three months ended September 30, 2025.
Previous wording
(2)Excluding built-for-rent activity, net sales in the Mid-Atlantic segment increased 17% when comparing the three months ended June 30, 2026 to the three months ended June 30, 2025.
Current wording
(2)Excluding built-for-rent activity, net sales in the Mid-Atlantic segment increased 10% when comparing the three months ended September 30, 2026 to the three months ended September 30, 2025.
Previous wording
(1)Excluding built-for-rent activity, net sales and closings in the Southeast segment increased 27% and 7%, respectively during the six months ended June 30, 2026 when compared to the six months ended June 30, 2025.
Current wording
(1)Excluding built-for-rent activity, net sales and closings in the Southeast segment increased 17% and 8%, respectively, during the nine months ended September 30, 2026 when compared to the nine months ended September 30, 2025.
Previous wording
Backlog of sold homes as of June 30, 2026 was 2,319 homes valued at approximately $1.2 billion based on ASP, a decrease of 194 homes and $47 million in value, or 8% and 4%, respectively, from 2,513 homes valued at approximately $1.2 billion as of June 30, 2025. Approximately 213 of the homes in our backlog are expected to be delivered in 2027 and beyond. The overall decrease in backlog was reflective of the cumulative impact of constrained sales activity in prior periods, and, to a lesser extent, fewer built-for-rent contracts in backlog, which outpaced the increase in net sales during the current period. Our backlog is primarily comprised of spec homes. Spec homes typically result in quicker closings and turnover of the backlog within the same reporting period.
Current wording
Backlog of sold homes as of September 30, 2026 was 2,064 homes valued at approximately $1.1 billion based on ASP, a decrease of 555 homes and $102 million in value, or 21% and 9%, respectively, from 2,619 homes valued at approximately $1.2 billion as of September 30, 2025. Approximately 535 of the homes in our backlog are expected to be delivered in 2027 and beyond. The overall decrease in backlog was reflective of the cumulative impact of constrained sales activity in prior periods, mostly due to decreased built-for-rent activity, which outpaced the overall increase in net sales during the current period. Our backlog is primarily comprised of spec homes. Spec homes typically result in quicker closings and turnover of the backlog within the same reporting period.
Previous wording
Mid-Atlantic. Backlog for the Mid-Atlantic segment as of June 30, 2026 was 694 homes, a decrease of 118 from 812 homes as of June 30, 2025. The decrease in backlog from prior year was primarily attributable to the cumulative effect of constrained sales activity in prior periods, as well as increased built-for-rent closings.
Current wording
Mid-Atlantic. Backlog for the Mid-Atlantic segment as of September 30, 2026 was 609 homes, a decrease of 289 from 898 homes as of September 30, 2025. The decrease in backlog from prior year was primarily attributable to an increase in closings and decrease in net sales related to built-for-rent contracts in the current period and, to a lesser extent, the cumulative effect of constrained sales activity in prior periods for spec homes, which outpaced the increase in net sales of spec homes during the current period.
Previous wording
Midwest. Backlog for the Midwest segment as of June 30, 2026 was 609 homes, a decrease of 94 from 703 homes as of June 30, 2025. The decrease from prior year was mostly a result of the continued constrained sales environment, slightly offset by higher net sales relative to closings.
Current wording
Midwest. Backlog for the Midwest segment as of September 30, 2026 was 560 homes, a decrease of 18 from 578 homes as of September 30, 2025. The decrease from prior year was primarily attributable to the cumulative effect of constrained sales activity in prior periods, which outpaced the increase in net sales in the current period.
Previous wording
Our Financial Services segment provides mortgage banking solutions and title insurance services—inclusive of agency and underwriting services—through our wholly-owned subsidiaries Jet HomeLoans, LP (“Jet HomeLoans”), DF Title, LLC doing business as Golden Dog Title & Trust and Golden Dog Title (“DF Title”) and Alliant National Title Insurance Company, Inc. (“Alliant Title”). Additionally, the Financial Services segment offers homeowners insurance and ancillary products to homebuyers through our wholly-owned insurance broker.
Current wording
Our Financial Services segment provides mortgage banking solutions and title insurance services—inclusive of agency and underwriting services—through our wholly-owned subsidiaries Jet HomeLoans, LP (“Jet HomeLoans”), DF Title, LLC doing business as Golden Dog Title & Trust and Golden Dog Title (“DF Title”) and Alliant National Title Insurance Company, Inc. (“Alliant National Title”). Additionally, the Financial Services segment offers homeowners insurance and ancillary products to homebuyers through our wholly-owned insurance broker.
Previous wording
Mortgage Banking. Mortgage revenues for the six months ended June 30, 2026 increased to $39 million from $33 million for the six months ended June 30, 2025. Financial services income before taxes related to mortgage banking for the six months ended June 30, 2026 was $19 million, an increase of $7 million, or 58%, from $12 million for the six months ended June 30, 2025. These increases were primarily due to continued execution efficiency and benefits from implemented hedging strategies.
Current wording
Mortgage Banking. Mortgage revenues for the three months ended September 30, 2026 decreased to $14 million from $16 million for the three months ended September 30, 2025. Financial services income before taxes related to mortgage banking for the three months ended September 30, 2026 was $5 million, a decrease of $1 million, or 17%, from $6 million for the three months ended September 30, 2025. These decreases were primarily due to lower margins, partially offset by increased volume and benefits from implemented hedging strategies.
Previous wording
Title and Other Services. Title and other services revenues for the three months ended June 30, 2026 increased to $36 million from $33 million for the three months ended June 30, 2025. Financial services income before taxes related to title and other services for the three months ended June 30, 2026 was $2 million, a decrease of $3 million, or 60%, from $5 million for the three months ended June 30, 2025. The increase in revenues and decrease in income were mostly due to the April 2025 acquisition of Alliant Title, with the decline in income primarily a result of increased costs associated with growth initiatives.
Current wording
Title and Other Services. Title and other services revenues for the three months ended September 30, 2026 increased to $40 million from $37 million for the three months ended September 30, 2025. Financial services income before taxes related to title and other services for the three months ended September 30, 2026 was $3 million, an increase of $1 million, or 50%, from $2 million for the three months ended September 30, 2025. These increases were mostly due to increased volume. Financial services income before taxes was slightly offset by the increase in costs associated with growth initiatives, primarily in relation to the April 2025 acquisition of Alliant National Title.
Previous wording
Mortgage Banking. Mortgage revenues for the three months ended June 30, 2026 increased to $20 million from $18 million for the three months ended June 30, 2025. Financial services income before taxes related to mortgage banking for the three months ended June 30, 2026 was $10 million, an increase of $3 million, or 43%, from $7 million for the three months ended June 30, 2025. These increases were primarily due to continued execution efficiency and benefits from implemented hedging strategies.
Current wording
Mortgage Banking. Mortgage revenues for the nine months ended September 30, 2026 increased to $53 million from $49 million for the nine months ended September 30, 2025. Financial services income before taxes related to mortgage banking for the nine months ended September 30, 2026 was $24 million, an increase of $6 million, or 33%, from $18 million for the nine months ended September 30, 2025. These increases were primarily due to continued execution efficiency and benefits from implemented hedging strategies and, to a lesser extent, increased volume.
Previous wording
Title and Other Services. Title and other services revenues for the six months ended June 30, 2026 increased to $69 million from $38 million for the six months ended June 30, 2025. Financial services income before taxes related to title and other services for the six months ended June 30, 2026 was $2 million, a decrease of $5 million, or 71%, from $7 million for the six months ended June 30, 2025. The increase in revenues and decrease in income were mostly due to the April 2025 acquisition of Alliant Title, with the decline in income reflecting higher integration and restructuring related costs incurred to improve operational efficiency and support long-term growth.
Current wording
Title and Other Services. Title and other services revenues for the nine months ended September 30, 2026 increased to $108 million from $75 million for the nine months ended September 30, 2025. Financial services income before taxes related to title and other services for the nine months ended September 30, 2026 was $5 million, a decrease of $4 million, or 44%, from $9 million for the nine months ended September 30, 2025. The increase in revenues was mostly due to the April 2025 acquisition of Alliant National Title. The decrease in financial services income before taxes was mostly attributable to higher integration and restructuring related costs incurred to improve operational efficiency and support long-term growth, primarily in relation to the acquisition of Alliant National Title.
Previous wording
We generate cash from the sale of our homes and from providing ancillary financial services. We intend to re-deploy our generated net cash to acquire and control land and further grow our operations year over year. We believe that our sources of liquidity are sufficient to satisfy our current commitments. We finance our operations through a variety of sources, including cash, borrowings under a revolving credit facility (the “Credit Agreement”), net proceeds from the senior unsecured notes (“Senior Notes”) and mortgage warehouse facilities used in our mortgage banking operations.
Current wording
We generate cash from the sale of our homes and from providing ancillary financial services. We intend to re-deploy our generated net cash to acquire and control land and further grow our operations year over year. We believe that our sources of liquidity are sufficient to satisfy our current commitments. We finance our operations through a variety of sources, including cash, borrowings under a revolving credit facility (the “Credit Agreement”), net proceeds from the senior unsecured notes (“Senior Notes”), redeemable preferred stock and mortgage warehouse facilities used in our mortgage banking operations. During the three months ended September 30, 2026, there were cash payments of $154 million for the redemption of the Series A preferred stock, inclusive of the redemption premium and accrued dividends, and cash proceeds of $217 million for the issuance of the Series B preferred stock at the first closing on September 14, 2026.
Previous wording
Our principal uses of capital are for lot deposits, lot purchases just-in-time for construction, vertical home construction, operating expenses, the payment of routine liabilities, business acquisitions and the origination of mortgage loans. There were no cash payments for business acquisitions during the six months ended June 30, 2026, and there were cash payments of $183 million for business acquisitions during the six months ended June 30, 2025. Refer to Note 1, Nature of Business and Significant Accounting Policies to the consolidated financial statements within our Annual Report on Form 10-K for the year ended December 31, 2025, for more information.
Current wording
Our principal uses of capital are for lot deposits, lot purchases just-in-time for construction, vertical home construction, operating expenses, the payment of routine liabilities, business acquisitions and the origination of mortgage loans. There were no cash payments for business acquisitions during the nine months ended September 30, 2026, and there were cash payments of $184 million for business acquisitions during the nine months ended September 30, 2025. Refer to Note 1, Nature of Business and Significant Accounting Policies to the consolidated financial statements within our Annual Report on Form 10-K for the year ended December 31, 2025, for more information.
Previous wording
The above cash and land-light strategies allow us to maintain an adequate lot supply in our existing markets and support ongoing growth and profitability while significantly de-risking our balance sheet. We continue to operate in geographic regions with consistent increases in demand for new homes and constrained lot and inventory supply compared to population and job growth trends. We intend to continue to reinvest our earnings into our business and focus on expanding our operations. In addition, as the opportunity to purchase finished lots in desired locations becomes increasingly more limited and competitive, we are committed to allocating additional liquidity to land bank deposits on land development projects, as this strategy mitigates the risks associated with holding undeveloped land on our balance sheet, while allowing us to control adequate lot supply in our key markets to support forecasted growth. As of June 30, 2026 and December 31, 2025, our lot deposits related to finished lot option contracts and land bank option contracts were $502 million and $545 million, respectively.
Current wording
The above cash and land-light strategies allow us to maintain an adequate lot supply in our existing markets and support ongoing growth and profitability while significantly de-risking our balance sheet. We continue to operate in geographic regions with consistent increases in demand for new homes and constrained lot and inventory supply compared to population and job growth trends. We intend to continue to reinvest our earnings into our business and focus on expanding our operations. In addition, as the opportunity to purchase finished lots in desired locations becomes increasingly more limited and competitive, we are committed to allocating additional liquidity to land bank deposits on land development projects, as this strategy mitigates the risks associated with holding undeveloped land on our balance sheet, while allowing us to control adequate lot supply in our key markets to support forecasted growth. As of September 30, 2026 and December 31, 2025, our lot deposits related to finished lot option contracts and land bank option contracts were $490 million and $545 million, respectively.
Previous wording
Net cash used in operating activities was $151 million for the six months ended June 30, 2026, compared to $113 million of net cash used in operating activities for the six months ended June 30, 2025. The change in net cash used in operating activities was mostly due to increased spend on inventories of $130 million, partly due to higher pre-acquisition land costs, as well as higher land and financing costs, a reduction of $7 million in mortgage loans held for the current period, compared to a reduction of $151 million in the prior year, and the decrease in net income of $70 million. These increases in net cash used in operating activities were partially offset by $110 million from reduced expenditures on lot deposits, an increase in accounts payable and accrued expenses of $16 million in the current period, compared to a reduction of $67 million in the prior year, increased customer deposits of $66 million from increased sales activity, and the impact of $32 million of contingent consideration revaluation and payments in the prior period related to an acquisition earnout arrangement that concluded in 2025 that did not repeat in the current period. The change in net cash used in operating activities are net of the effects of our acquisitions in 2025. Refer to Note 2, Acquisitions to our condensed consolidated financial statements for more information.
Current wording
Net cash used in operating activities was $304 million for the nine months ended September 30, 2026, compared to $244 million of net cash used in operating activities for the nine months ended September 30, 2025. The change in net cash used in operating activities was mostly due to increased spend on inventories of $170 million, partly due to higher pre-acquisition land costs, as well as higher land and financing costs, and a reduction of $35 million in mortgage loans held for sale in the current period, compared to a reduction of $189 million in the prior year. These increases in net cash used in operating activities were partially offset by $144 million from reduced expenditures on lot deposits and an increase in accounts payable and accrued expenses of $15 million in the current period, compared to a reduction of $114 million in the prior year. The change in net cash used in operating activities is net of the effects of our acquisitions in 2025. Refer to Note 2, Acquisitions to our condensed consolidated financial statements for more information.
Previous wording
Net cash used in investing activities was $17 million for the six months ended June 30, 2026, compared to $197 million of net cash used in investing activities for the six months ended June 30, 2025, mostly attributable to business acquisition related payments during the six months ended June 30, 2025, which did not recur during the current period.
Current wording
Net cash used in investing activities was $32 million for the nine months ended September 30, 2026, compared to $202 million of net cash used in investing activities for the nine months ended September 30, 2025, mostly attributable to business acquisition related payments during the nine months ended September 30, 2025, which did not recur during the current period.
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