Green Brick Partners, Inc.
Other securities:
GRBK
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PART I
ITEM 1. BUSINESS
Green Brick Partners, Inc. and its subsidiaries (“Green Brick”, “the Company”, “we” or “us”) is a diversified homebuilding and land development company. We acquire and develop land and build homes through our seven brands of builders in three major markets. Our core markets are in the high growth U.S. metropolitan areas of Dallas-Fort Worth (“DFW”), Austin, and Houston, Texas, and Atlanta, Georgia, as well as the Treasure Coast, Florida area. We handle every stage of homebuilding, from acquiring and developing land, securing entitlements, designing homes, constructing properties, to providing title, mortgage, and insurance agency services. We also manage marketing and sales, and the creation of master planned communities.
We believe we offer higher quality homes with more distinctive designs and floor plans than those built by our competitors at comparable prices. Many of our communities are located in premium locations and have high-end common areas and amenities. We seek to enhance our homebuyers’ experience by utilizing high-quality materials, and building well-crafted homes. We seek to not only maximize value over the long term but to mitigate risks in the event of a downturn by minimizing leverage, controlling costs, and quickly reacting to regional and local market trends
We are a leading lot developer in our markets and believe that our strict operating discipline provides us with a competitive advantage in seeking to maximize returns while minimizing risk. As of December 31, 2025, we owned or had under contract approximately 48,900 home sites in high-growth submarkets throughout the DFW, Austin, Houston, and Atlanta metropolitan areas and the Treasure Coast, Florida market. We previously referred to “lots controlled”, which included only lots past feasibility studies for which we did not hold title, but had the contractual right to acquire. However, as of December 31, 2025, we revised our definition of lots controlled to “lots under contract” to provide investors consistent disclosure with those of other home builders. Lots under contract include all land or lot parcels that we have a contractual right to acquire pursuant to a fully executed option contact or purchase and sale agreement. These contracts are subject to the fulfillment of certain conditions that may be out of our control such as zoning approval or environmental reports. We provide finished lots to our subsidiary builders or option lots from third-party developers for our builders’ homebuilding operations and provide them with construction funding and strategic planning.
We are a Delaware corporation, incorporated in 2006. We commenced operations as a publicly held homebuilding company in 2014. Our principal executive offices are located at 5501 Headquarters Drive, Ste 300W, Plano, TX 75024.
Business Strategy
We have been committed to building high quality neighborhoods in some of the best markets in the country, interwoven with modern technologies, innovative design and architecture. Our strategic advantages in sourcing and self-developing land in infill and infill-adjacent submarkets, as well as expert local teams, have been instrumental to our growth and expansion over the last decade. We believe our unique approach enables us to provide superior value to our customers and the communities in which they live, as well as long-term returns for our investors and stakeholders. We believe we are well-positioned for growth through the disciplined execution of the following elements of our strategy:
•Consistent Land Acquisition Program with Disciplined Underwriting. We believe our ability to identify, acquire and develop land in desirable locations and on favorable terms is critical to our success. We evaluate land opportunities based on how we expect such opportunities will contribute to overall profitability and returns. Through our rigorous national underwriting program, we seek to identify attractive properties that are typically located in prime neighborhood locations or in preferred growth corridors. We target entitled parcels to develop that can begin delivering finished lots to our builder subsidiaries within 12 to 24 months from acquisition. We will also purchase finished lots from 3rd-party developers, but to a much lesser extent. Our neighborhoods vary in size, depending on lot count and density. As such, project durations, from the beginning of development to the last delivery, can range from a couple of years to eight or more years depending on the amount of lots, the number of development phases, the variety of product lines and the sales pace of each product line. Our investment and capital allocation strategies vary by market, but we typically target minimum underwriting thresholds for returns and margins.
•Focus on Markets with a Favorable Growth Outlook and Strong Demand Fundamentals. We have chosen to focus our operations on sunbelt states because we believe these markets offer attractive residential real estate investment characteristics, such as growing economies, improving levels of employment, population growth relative to national averages, favorable migration patterns, general housing affordability, and desirable lifestyle and weather characteristics. We currently generate income from home sales in Texas, Georgia, and Florida. As of October 2025, Texas, Florida and Georgia were ranked first, second and fifth, respectively, in terms of single-family building permits issued according to the National Association of Home Builders.
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•Strategically Increase Market Positions in our Existing Markets. We believe there are significant opportunities to profitably expand in our core markets. As of December 31, 2025, we believe our extensive land and lot inventory will allow us to maximize our profitability and return on capital. In DFW, Austin, Houston, and Atlanta, we seek to acquire land with convenient access to metropolitan areas which have diverse economic and employment bases and demographics that we believe will support long-term growth. In the Treasure Coast market, we seek land in highly desirable, but limited, coastal regions that attract relocating homebuyers. We continuously review the allocation of our investments in these markets, taking into account demographic trends and the likely impact on our operating results and will reallocate our investments when necessary.
•Deliver Superior Designs, Broad Product Ranges and Enhanced Homebuying Experience. We partner with our builders to design attractive neighborhoods and homes that appeal to a wide variety of potential homebuyers. Our homebuilding projects include single family homes, townhomes, master-planned communities, condos, luxury homes, and patio homes. Additionally, we offer a spec home business model with a focus on quick move-in homes through our Trophy brand.
•We believe we can adapt quickly to changing market conditions and optimize performance and returns while strategically reducing portfolio risk because of our diversified product strategy. One of our core operating philosophies is to create a culture that provides a positive, memorable experience for our homebuyers. In consultation with nationally and locally recognized architecture firms and interior and exterior consultants, we research and design a diversified range of products at various levels and price points.
•Disciplined Investment Strategy Combined with the Prudent Use of Leverage. We seek to maximize value over the long-term and operate our business to mitigate risks in the event of a downturn by controlling costs and focusing on regional and local market trends. We believe our strict operating discipline combined with our prudent use of financial leverage to continue to invest in our land acquisition, development and homebuilding businesses provides us with a competitive advantage in seeking to maximize returns while minimizing risk. Based on current interest rate levels, our target debt-to-capital capitalization ratio is approximately 20%. We believe this will allow us to maintain sufficient capital to fund our continued growth. As of December 31, 2025, our debt to total capitalization ratio was 14.7%.
•Targeted Expansion into Adjacent Markets. We currently intend to pursue targeted expansion of our first-time homebuyer or entry-level builder, Trophy Signature Homes (“Trophy”), into new markets. We believe Trophy’s more affordable product and quicker inventory turns make its platform uniquely scalable to expand outside of the DFW metroplex. We plan to expand Trophy into markets compatible with our existing markets that demonstrate strong trends in demographics, employment, and in-migration by leveraging existing relationships with land developers and homebuilders. In 2025 we expanded into the Austin and Houston, Texas markets. In addition, we have historically, and may in the future, grow through the acquisition of homebuilders in our current markets or other markets that meet our demographic and economic growth criteria.
Our Builders and Homes
The following table presents general information about each of our builders, including the types of homes they build and their price ranges as of December 31, 2025.
| Builder* | Ownership | Market | Products Offered | Price Range | ||||||||||||||||||
| Trophy Signature Homes LLC (“Trophy”) | 100% | DFW, Austin, and Houston | Single family | Mid $200s to mid $700s | ||||||||||||||||||
| CB JENI Homes DFW LLC (“CB JENI”) | 100% | DFW | Townhomes | Mid $200s to mid $600s | ||||||||||||||||||
| Normandy Homes LLC (“Normandy Homes”) | 100% | DFW | Single family | Mid $400s to over $1 million | ||||||||||||||||||
| SGHDAL LLC (“Southgate”) | 100% | DFW | Luxury homes | Mid $700s to over $1.5 million | ||||||||||||||||||
| CLH20 LLC (“Centre Living”) | 90% | DFW | Single Family and Townhomes | Mid $300s to upper $800s | ||||||||||||||||||
| The Providence Group of Georgia LLC (“TPG”) | 50% | Atlanta | Townhomes, Condominiums and Single Family | Mid $400s to over $1.8 million | ||||||||||||||||||
| GRBK GHO Homes LLC (“GRBK GHO”) | 80% | Treasure Coast | Patio homes and Single Family | High $300s to over $2.8 million | ||||||||||||||||||
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K/A for the year ended December 31, 2025 filed with the Securities and Exchange Commission (“SEC”) on May 11, 2026 and our condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.
Overview and Outlook
Our key financial and operating metrics are home deliveries, home closings revenue, average sales price of homes delivered, and net new home orders, which refers to sales contracts executed reduced by the number of sales contracts canceled during the relevant period, homebuilding gross margin, and incentives on homes closed as a percentage of residential units revenue. Our results for each key financial and operating metric, as compared to the same period in 2025, are provided below:
| Three Months Ended September 30, 2026 | Nine Months Ended September 30, 2026 | |||||||||||
| Home deliveries | Increased by 2.6% | Increased by 1.0% | ||||||||||
| Home closings revenue | Decreased by 9.8% | Decreased by 9.5% | ||||||||||
| Average sales price of homes delivered | Decreased by 12.1% | Decreased by 10.4% | ||||||||||
| Net new home orders | Increased by 3.1% | Increased by 4.5% | ||||||||||
| Homebuilding gross margin percentage | Decreased by 4.1% | Decreased by 2.9% | ||||||||||
| Incentives on homes closed as a percentage of residential units revenue | Increased by 2.2% | Increased by 2.5% | ||||||||||
Our home deliveries increased 2.6% in the third quarter of 2026 year over year, while average sales prices decreased primarily as a result of elevated discounts and incentives. Homebuilding gross margins decreased from 32.1% to 28.0% for the three months ended September 30, 2026, primarily due to higher incentives and product mix.
Three Months Ended September 30, 2026 Compared to the Three Months Ended September 30, 2025
Residential Units Revenue and New Homes Delivered
The table below represents residential units revenue and new homes delivered for the three months ended September 30, 2026 and 2025 (dollars in thousands):
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Change | % | ||||||||||||||||||||
| Home closings revenue | $ | 436,919 | $ | 484,184 | $ | (47,265) | (9.8) | % | |||||||||||||||
| Mechanic’s lien contracts revenue | 124 | 32 | 92 | 287.5 | % | ||||||||||||||||||
| Residential units revenue | $ | 437,043 | $ | 484,216 | $ | (47,173) | (9.7) | % | |||||||||||||||
| New homes delivered | 978 | 953 | 25 | 2.6 | % | ||||||||||||||||||
| Average sales price of homes delivered | $ | 446.7 | $ | 508.1 | $ | (61.4) | (12.1) | % | |||||||||||||||
Residential units revenue decreased 9.7% and new homes delivered increased 2.6%. The 12.1% decrease in the average sales price of homes delivered during the three months ended September 30, 2026, is due to increased incentives and product mix.
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New Home Orders and Backlog
The table below represents new home orders and backlog related to our builder operations segments, excluding mechanic’s lien contracts (dollars in thousands):
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Change | % | ||||||||||||||||||||
| Net new home orders | 926 | 898 | 28 | 3.1 | % | ||||||||||||||||||
| Revenue from net new home orders | $ | 428,877 | $ | 433,862 | $ | (4,985) | (1.1) | % | |||||||||||||||
| Average selling price of net new home orders | $ | 463.2 | $ | 483.1 | $ | (19.9) | (4.1) | % | |||||||||||||||
| Cancellation rate | 8.2 | % | 6.7 | % | 1.5 | % | 22.4 | % | |||||||||||||||
| Absorption rate per average active selling community per quarter | 8.5 | 8.7 | (0.2) | (2.3) | % | ||||||||||||||||||
| Average active selling communities | 109 | 103 | 6 | 5.8 | % | ||||||||||||||||||
| Active selling communities at end of period | 104 | 100 | 4 | 4.0 | % | ||||||||||||||||||
| Backlog revenue | $ | 379,345 | $ | 456,783 | $ | (77,438) | (17.0) | % | |||||||||||||||
| Backlog units | 629 | 675 | (46) | (6.8) | % | ||||||||||||||||||
| Average sales price of backlog | $ | 603.1 | $ | 676.7 | $ | (73.6) | (10.9) | % | |||||||||||||||
Net new home orders increased 3.1% to 926 for the three months ended September 30, 2026, compared to 898 for the three months ended September 30, 2025, while average active selling communities increased by 5.8% to 109 communities. Revenue from net new home orders decreased $5.0 million, or 1.1%, to $428.9 million, due to a 4.1% decrease in the average selling price of net new home orders to $463.2 thousand, driven primarily by a higher mix of orders from Trophy Signature Homes, which targets first-time homebuyers and operates at a lower price point relative to our other builders.
Our cancellation rate, which refers to sales contracts canceled divided by sales contracts executed during the relevant period, was 8.2% for the three months ended September 30, 2026, compared to 6.7% for the three months ended September 30, 2025. The increase in cancellation rate was primarily driven by continued affordability pressures from elevated mortgage interest rates, as well as an increase in financing-related cancellations. However, our cancellation rate has remained in a historically low range, under 10.0% since December 31, 2022.
Backlog units refer to homes under sales contracts that have not yet closed at the end of the respective period, and absorption rate refers to the rate at which net new home orders are contracted per average active selling community during the respective period. Sales contracts may be canceled prior to closing for a number of reasons, including the inability of the homebuyer to obtain suitable mortgage financing. Accordingly, backlog may not be indicative of our future revenue.
Backlog revenue decreased by 17.0% to $379.3 million as of September 30, 2026, compared to $456.8 million as of September 30, 2025, driven by a 6.8% decrease in backlog units to 629 homes and a 10.9% decrease in the average sales price of backlog to $603.1 thousand, reflecting higher sales from Trophy Signature Homes in addition to higher incentives and discounts offered to sustain orders.
Residential Units Gross Margin
The table below represents the components of residential units gross margin (dollars in thousands):
| Three Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||
| Residential units revenue | $ | 437,043 | 100.0 | % | $ | 484,216 | 100.0 | % | |||||||||||||||||
| Cost of residential units | 314,475 | 72.0 | % | 328,754 | 67.9 | % | |||||||||||||||||||
| Residential units gross margin | $ | 122,568 | 28.0 | % | $ | 155,462 | 32.1 | % | |||||||||||||||||
For the three months ended September 30, 2026, residential units revenue decreased by $47.2 million or 9.7% while cost of residential units decreased by $14.3 million, or 4.3%, compared to the same period in the previous year. Residential units gross margin declined by 410 bps to 28.0% for the three months ended September 30, 2026, from 32.1% for the three months ended September 30, 2025. The decrease in residential units gross margin is attributable to higher incentives and discounts.
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Selling, General and Administrative Expenses
The table below represents the components of selling, general and administrative expenses (dollars in thousands):
| Three Months Ended September 30, | As Percentage of Segment Revenue | |||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||
| Builder operations | $ | 49,599 | $ | 54,613 | 11.3 | % | 11.3 | % | ||||||||||||||||
| Corporate, other and unallocated expense, net | 1,947 | 189 | 0.4 | % | — | % | ||||||||||||||||||
| Net builder operations | 51,546 | 54,802 | 11.8 | % | 11.3 | % | ||||||||||||||||||
| Land development, net | 215 | 421 | ||||||||||||||||||||||
| Total selling, general and administrative expenses | $ | 51,761 | $ | 55,223 | 11.8 | % | 11.4 | % | ||||||||||||||||
Selling, general and administrative expenses as a percentage of revenue increased by 0.4% for the three months ended September 30, 2026, mainly due to lower revenue, partially offset by a decrease in commissions.
Builder Operations
Selling, general and administrative expenses as a percentage of revenue for builder operations remained flat mainly due to the decline in residential units revenue offset by a decrease in commissions. Builder operation expenditures include salary expenses, commissions, corporate allocations, and community costs such as advertising and marketing expenses, rent, professional fees, and non-capitalized property taxes.
Corporate, Other and Unallocated
Selling, general and administrative expenses for the corporate, other and unallocated non-operating segment for the three months ended September 30, 2026 were $1.9 million, compared to $0.2 million for the three months ended September 30, 2025. The increase was due to higher share-based compensation during the three months ended September 30, 2026. Corporate, other and unallocated expenses generally include capitalized overhead adjustments that are not allocated to builder operations segments.
Financial Services
Commencing on January 1, 2026, we began reporting on our Financial Services Operations, which were previously reported within the Corporate segment, as a separate financial services segment. Our Financial Services operations include mortgage banking, title, and insurance agency operations through our wholly owned subsidiaries. The majority of the loans originated by our wholly owned subsidiary, GRBK Mortgage, are sold in the secondary mortgage market within a short period of time after origination, generally within 30 days. We also sell the servicing rights for the loans we originate through fixed price servicing sales contracts to reduce the risks and costs inherent in servicing loans. This strategy results in owning loans and related servicing rights for only a short period of time.
Operating as a captive business model primarily targeted to support our Builder operations, the business levels of our Financial Services operations are highly correlated to homebuilding, as the customers to our homes continue to account for substantially all of its business. We believe that our mortgage capture rate, which represents loan originations from our Builder operations as a percentage of total loan opportunities from our Builder operations, excluding cash closings, is an important metric in evaluating the effectiveness of our captive financial services business model. The following tables present selected financial information for our Financial Services operations (in thousands):
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Change | % | ||||||||||||||||||||
| Financial services revenues | $ | 11,161 | $ | 7,350 | 3,811 | 51.9 | % | ||||||||||||||||
Financial services expenses(1) | (5,557) | (4,033) | (1,524) | 37.8 | % | ||||||||||||||||||
| Income before income taxes | $ | 5,604 | $ | 3,317 | 2,287 | 68.9% | |||||||||||||||||
| Total loans funded: | |||||||||||||||||||||||
| Loans | 499 | 351 | 148 | 42.2% | |||||||||||||||||||
| Principal | $ | 185,042 | $ | 136,469 | 48,573 | 35.6% | |||||||||||||||||
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(1) Includes selling, general and administrative expenses and other income and expenses related to Financial services.
| Three Months Ended September 30, | |||||||||||||
| Supplemental data: | 2026 | 2025 | |||||||||||
| Capture rate | 65.7 | % | 72.6 | % | |||||||||
| Average FICO score | 734 | 740 | |||||||||||
| Funded origination breakdown: | |||||||||||||
| Government (FHA, VA, USDA) | 49 | % | 39 | % | |||||||||
| Other agency | — | % | — | % | |||||||||
| Total agency | 49 | % | 39 | % | |||||||||
| Non-agency | 51 | % | 61 | % | |||||||||
| Total funded originations | 100 | % | 100 | % | |||||||||
Financial services revenues increased $3.8 million, or 51.9%, to $11.2 million for the three months ended September 30, 2026, compared to $7.4 million for the three months ended September 30, 2025. The increase was primarily driven by mortgage revenues, which grew from $3.5 million to $6.7 million, as total loans funded increased 42.2% to 499 loans with total origination principal of $185.0 million, compared to 351 loans and $136.5 million in the prior year period. Our mortgage capture rate decreased from 72.6% to 65.7%, reflecting the continued expansion of the captive mortgage business into new communities, many of which have pre-existing outside lender relationships. Financial services expenses increased $1.5 million, or 37.8%, primarily due to higher costs associated with increased mortgage origination volume. As a result, income before income taxes increased $2.3 million, or 68.9%, to $5.6 million.
Equity in Income of Unconsolidated Entities
Equity in income of unconsolidated entities decreased to $0.4 million, or 13.0%, for the three months ended September 30, 2026, compared to $0.4 million for the three months ended September 30, 2025. See Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a summary of Green Brick’s share in net earnings by unconsolidated entity.
Other Income, Net
Other income, net, was $1.2 million for the three months ended September 30, 2026, compared to $2.7 million for the three months ended September 30, 2025. The change was driven by an increase in due diligence costs on terminated land and lot contracts during the three months ended September 30, 2026.
Income Tax Expense
Income tax expense was $16.6 million for the three months ended September 30, 2026 compared to $23.2 million for the three months ended September 30, 2025. The decrease in income tax expense is mainly due to lower taxable income for the three months ended September 30, 2026. See Note 12 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion on the Company’s income tax expense for the three months ended September 30, 2026.
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Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
Residential Units Revenue and New Homes Delivered
The table below represents residential units revenue and new homes delivered for the nine months ended September 30, 2026 and 2025 (dollars in thousands):
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Change | % | ||||||||||||||||||||
| Home closings revenue | $ | 1,356,380 | $ | 1,498,858 | $ | (142,478) | (9.5) | % | |||||||||||||||
| Mechanic’s lien contracts revenue | 1,146 | 32 | 1,114 | 3,481.3 | % | ||||||||||||||||||
| Residential units revenue | $ | 1,357,526 | $ | 1,498,890 | $ | (141,364) | (9.4) | % | |||||||||||||||
| New homes delivered | 2,933 | 2,905 | 28 | 1.0 | % | ||||||||||||||||||
| Average sales price of homes delivered | $ | 462.5 | $ | 516.0 | $ | (53.5) | (10.4) | % | |||||||||||||||
The $141.4 million, or 9.4%, decrease in residential units revenue was driven by the 10.4% decrease in the average sales price of homes delivered for the nine months ended September 30, 2026. The 10.4% decrease in the average sales price of homes delivered for the nine months ended September 30, 2026, was attributable to product mix, higher incentives and discounts.
New Home Orders
The table below represents new home orders related to our builder operations segments, excluding mechanic’s lien contracts (dollars in thousands):
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Change | % | ||||||||||||||||||||
| Net new home orders | 3,042 | 2,912 | 130 | 4.5 | % | ||||||||||||||||||
| Revenue from net new home orders | $ | 1,391,120 | $ | 1,513,535 | $ | (122,415) | (8.1) | % | |||||||||||||||
| Average selling price of net new home orders | $ | 457.3 | $ | 519.8 | $ | (62.5) | (12.0) | % | |||||||||||||||
| Cancellation rate | 7.9 | % | 7.5 | % | 0.4 | % | 5.3 | % | |||||||||||||||
| Absorption rate per average active selling community per quarter | 9.5 | 9.3 | 0.2 | 2.2 | % | ||||||||||||||||||
| Average active selling communities | 107 | 104 | 3 | 2.9 | % | ||||||||||||||||||
| Active selling communities at end of period | 104 | 100 | 4 | 4.0 | % | ||||||||||||||||||
Net new home orders increased 4.5% over the prior year period due to a 2.9% increase in average selling communities. In addition, the absorption rate per average active selling community per quarter increased 2.2% to 9.5 net new home orders per average active selling community, compared to 9.3 for the nine months ended September 30, 2025, primarily driven by increased absorption rate by Trophy Signature Homes.
Revenue from net new home orders decreased 8.1% to $1,391.1 million for the nine months ended September 30, 2026, compared to $1,513.5 million for the nine months ended September 30, 2025, primarily due to an 12.0% decrease in the average selling price of net new home orders to $457.3 thousand, reflecting higher sales from Trophy Signature Homes, our first-time homebuyer or entry-level builder, in addition to increased incentives and discounts offered to sustain sales pace.
Our cancellation rate, which refers to sales contracts canceled divided by sales contracts executed during the relevant period, was 7.9% for the nine months ended September 30, 2026, compared to 7.5% for the nine months ended September 30, 2025. The increase in cancellation rate was primarily driven by continued affordability pressures from elevated mortgage interest rates, as well as increased financing-related cancellations. However, our cancellation rate has remained in a historically low range under 10.0% since December 31, 2022.
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Residential Units Gross Margin
The table below represents the components of residential units gross margin (dollars in thousands):
| Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||
| Residential units revenue | $ | 1,357,526 | 100.0 | % | $ | 1,498,890 | 100.0 | % | |||||||||||||||||
| Cost of residential units | 964,509 | 71.0 | % | 1,022,279 | 68.2 | % | |||||||||||||||||||
| Residential units gross margin | $ | 393,017 | 29.0 | % | $ | 476,611 | 31.8 | % | |||||||||||||||||
Residential units revenue decreased $141.4 million or 9.4% during the nine months ended September 30, 2026, due to a decrease in the average sales price of homes delivered arising from a higher proportion of deliveries from Trophy Signature Homes and incentives. Cost of residential units for the nine months ended September 30, 2026, decreased by $57.8 million, or 5.7%, compared to the nine months ended September 30, 2025. This resulted in a decrease in residential units gross margin for the nine months ended September 30, 2026, of 280 bps to 29.0%, from 31.8% for the nine months ended September 30, 2025 mainly due to higher incentives and discounts.
Land and Lots Revenue
The table below represents lots closed and land and lots revenue (dollars in thousands):
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Change | % | ||||||||||||||||||||
| Lots revenue | $ | 7,500 | $ | 4,342 | $ | 3,158 | 72.7 | % | |||||||||||||||
| Land revenue | 9,600 | — | 9,600 | 100.0% | |||||||||||||||||||
| Land and lots revenue | $ | 17,100 | $ | 4,342 | $ | 12,758 | 293.8 | % | |||||||||||||||
| Lots closed | 75 | 42 | 33 | 78.6 | % | ||||||||||||||||||
| Average sales price of lots closed | $ | 100.0 | $ | 103.4 | $ | (3.4) | (3.3) | % | |||||||||||||||
From time to time we may opportunistically sell finished lots to other homebuilders. Lots revenue increased by $3.2 million during the nine months ended September 30, 2026. Land revenue represents the sale of one tract of land intended for multifamily development during the nine months ended September 30, 2026.
Selling, General and Administrative Expenses
The table below represents the components of selling, general and administrative expenses (dollars in thousands):
| Nine Months Ended September 30, | As Percentage of Segment Revenue | |||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||
| Builder operations | $ | 153,523 | $ | 164,754 | 11.3 | % | 11.0 | % | ||||||||||||||||
| Corporate, other and unallocated expense, net | 5,304 | (333) | 0.4 | % | — | % | ||||||||||||||||||
| Net builder operations | 158,827 | 164,421 | ||||||||||||||||||||||
Next expected filings
- ~2027-02-24 10-K expected by 2027-03-05 (in 118 days)
- ~2027-05-10 10-Q expected by 2027-05-20 (in 193 days)
- ~2027-07-28 10-Q expected by 2027-08-07 (in 272 days)
- ~2027-10-27 10-Q expected by 2027-11-06 (in 363 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-10-28 8-K Earnings Release; Other Events; Financial Statements and Exhibits
- 2026-10-28 10-Q Quarterly Report
- 2026-10-26 8-K Officer/Director Change
- 2026-08-27 8-K Officer/Director Change
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