KB Home (KBH) — Agentic Tribune

PART I

Item 1.BUSINESS

General

KB Home is one of the largest and most trusted homebuilders in the U.S. We have been building homes for nearly 70

years, with over 700,000 homes built since our founding in 1957. We build a variety of new homes, including attached and

detached single-family residential homes, townhomes and condominiums, designed primarily for first-time and first move-up,

as well as second move-up and active adult, homebuyers. We offer homes in development communities, at urban in-fill

locations and as part of mixed-use projects. Our homebuilding operations represent the majority of our business, accounting for

99.6% of our total revenues in 2025. Our financial services operations, which accounted for the remaining .4% of our total

revenues in 2025, offer various insurance products to our homebuyers in the markets where we build homes and provide title

services in certain of those markets. Our financial services operations also provide mortgage banking services, including

residential consumer mortgage loan (“mortgage loan”) originations, to our homebuyers indirectly through KBHS Home Loans,

LLC (“KBHS”), an unconsolidated joint venture between us and a third party.

Unless the context indicates otherwise, the terms “we,” “our” and “us” used in this report refer to KB Home, a Delaware

corporation, and its predecessors and subsidiaries. We also use the following terms in our business with the corresponding

meanings: “home” is a single-family residence, whether it is a single-family home or other type of residential property; “homes

delivered” are homes for which the sale has closed and title has passed to a customer; “community” is a single development in

which new homes are constructed as part of an integrated plan; “community count” is the number of communities we have open

for sales with at least five homes/lots left to sell; and “product” encompasses a home’s floor plan design and interior/exterior

style, amenities, functions and features.

The following charts present homebuilding revenues, net income and diluted earnings per share for the years ended

November 30, 2021, 2023 and 2025, and book value per share as of November 30, 2021, 2023 and 2025:

Markets

Reflecting the geographic scale of our homebuilding business, we have operations in the nine states and 49 major markets

presented below. We also operate in various submarkets within these major markets. We may refer to these markets and

submarkets collectively as our “served markets.” For reporting purposes, we organize our homebuilding operations into four

segments — West Coast, Southwest, Central and Southeast.

Segment	States	Major Market(s)
West Coast	California	Contra Costa County, Fresno, Hollister, Los Angeles, Madera, Modesto, Oakland, Orange

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-04-09 (period ending 2026-02-28).

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

OVERVIEW

Revenues are generated from our homebuilding and financial services operations. The following table presents a summary of our consolidated results of operations (dollars in thousands, except per share amounts):

	Three Months Ended February 28,
	2026		2025		Variance
Revenues:
Homebuilding	$	1,072,059	$	1,387,041	(23)	%
Financial services	4,952		4,736		5
Total revenues	$	1,077,011	$	1,391,777	(23)	%
Pretax income:
Homebuilding	$	34,789	$	131,831	(74)	%
Financial services	5,535		7,526		(26)
Total pretax income	40,324		139,357		(71)
Income tax expense	(6,900)		(29,800)		77
Net income	$	33,424	$	109,557	(69)	%
Diluted earnings per share	$	.52	$	1.49	(65)	%

Market conditions in the 2026 first quarter remained challenging, as persistent affordability pressures, cautious buyer sentiment, heightened macroeconomic uncertainties and geopolitical tensions tempered demand. While these factors softened overall housing market activity in the current period, with the conflict in the Middle East that began on the last day of our fiscal quarter introducing additional uncertainty for already wary consumers, the longer-term outlook continues to be favorable, supported by positive demographic trends and an ongoing undersupply of homes.

Within this operating environment, we experienced healthy traffic at our communities in the quarter, as we continued the simplified sales approach we implemented a year ago. With this strategy, we provide a straightforward, transparent base price with limited, if any, concessions or incentives, designed to offer customers a compelling value competitive with area resale home prices.

We believe our approach has resonated with consumers. In the 2026 first quarter, with a steady conversion of traffic to sales, the lowest cancellation rate we have experienced in the past four years and our higher average community count, we generated 2,846 net orders, a 3% increase year over year, with a monthly net order pace per community of 3.5, nearly even with the year‑earlier quarter. Our average community count rose 7% year over year to 274, and our ending community count increased 8% to 276, reflecting our continued investments in land and land development to support future growth. The value of net orders for the 2026 first quarter was $1.36 billion, about the same as the year-earlier quarter, with the higher net order volume partly offset by a slight decrease in the average selling price of those net orders to $479,400.

During the quarter, while selling through our existing inventory, we emphasized sales of our Built to Order homes, which are a key industry differentiator for us and typically generate higher gross margins than inventory homes. Our goal is to bring the mix of Built to Order homes delivered to within our historical range of 60% to 70%, compared to approximately 55% in 2025. Supported by demand for personalized homes and a 22% year-over-year improvement in our build times, our mix of net orders in the quarter was predominantly Built to Order, which we believe will enable us to achieve 70% Built to Order deliveries in the 2026 second half. Although our overall backlog declined year over year, the number of homes in backlog increased 15% sequentially from November 30, 2025, reflecting the higher net orders in the 2026 first quarter.

Homebuilding revenues for the three months ended February 28, 2026 consisted of housing revenues and nominal land sale revenues. For the corresponding period of 2025, homebuilding revenues were generated solely from housing operations. Housing revenues for the 2026 first quarter decreased 23% year over year to $1.07 billion, due to a 14% decrease in the number of homes delivered to 2,370 and a 10% decline in their average selling price to $452,100. Approximately 50% of our homes delivered in the 2026 first quarter were to first-time homebuyers. Our homes delivered as a percentage of backlog at the

beginning of the quarter grew to 76% for the 2026 first quarter, from 62% for the year-earlier quarter, mainly due to our improved build times and a greater percentage of homes sold and delivered in the same quarter.

Homebuilding operating income for the three months ended February 28, 2026 was $33.0 million, compared to $127.3 million for the year-earlier period. As a percentage of revenues, homebuilding operating income was 3.1% for the 2026 first quarter, compared to 9.2% for the corresponding 2025 period, reflecting a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of revenues. Inventory-related charges totaled $2.2 million for the current quarter and $1.5 million for the year-earlier quarter. Our housing gross profit margin was 15.3%, compared to 20.2% for the year-earlier quarter, primarily due to price reductions we implemented in conjunction with our simplified sales strategy to stimulate demand, higher relative land costs, product and geographic mix, and reduced operating leverage. Our selling, general and administrative expenses as a percentage of housing revenues increased 120 basis points year over year to 12.2%, mainly due to a decrease in operating leverage from lower housing revenues, partly offset by $8.0 million of insurance recoveries. Net income and diluted earnings per share for the three months ended February 28, 2026 were $33.4 million and $.52, respectively, compared to $109.6 million and $1.49, respectively, for the three months ended February 28, 2025. Our diluted earnings per share for the 2026 first quarter reflected lower net income, partly offset by the favorable impact of our common stock repurchases over the past several quarters.

We continue to take a balanced approach to capital allocation, guided by market conditions and our priorities of investing in land and land development to support future growth and returning capital to our stockholders. Our investments in land and land development for the 2026 first quarter totaled $567.2 million, a 38% decrease compared to the year-earlier quarter; the prior period included the purchase of two sizable land parcels in our Southwest homebuilding reporting segment. During the 2026 first quarter, we repurchased 843,339 shares of our common stock at a total cost of $50.0 million, compared to 753,939 shares at a total cost of $50.0 million in the year-earlier quarter. We ended the 2026 first quarter with total liquidity of approximately $1.20 billion, including cash and cash equivalents and $998.4 million of available capacity under the Credit Facility. We had $200.0 million of cash borrowings outstanding under the Credit Facility at February 28, 2026.

Although our ending backlog value at February 28, 2026 decreased 23% year over year to approximately $1.70 billion, we believe we are well positioned to achieve our projections for the 2026 second quarter and full year, as described below under “Outlook.”

HOMEBUILDING

Financial Results. The following table presents a summary of certain financial and operational data for our homebuilding operations (dollars in thousands, except average selling price):

	Three Months Ended February 28,
	2026		2025
Revenues:
Housing	$	1,071,474	$	1,387,041
Land	585		—
Total	1,072,059		1,387,041
Costs and expenses:
Construction and land costs
Housing	(907,513)		(1,107,414)
Land	(516)		—
Total	(908,029)		(1,107,414)
Selling, general and administrative expenses	(131,044)		(152,288)
Total	(1,039,073)		(1,259,702)
Operating income	32,986		127,339
Interest income	1,281		2,079
Equity in income of unconsolidated joint ventures	522		2,413
Homebuilding pretax income	$	34,789	$	131,831

	Three Months Ended February 28,
	2026			2025
Homes delivered	2,370			2,770
Average selling price	$	452,100		$	500,700
Housing gross profit margin as a percentage of housing revenues	15.3		%	20.2		%
Adjusted housing gross profit margin as a percentage of housing revenues	15.5		%	20.3		%
Selling, general and administrative expenses as a percentage of housing revenues	12.2		%	11.0		%
Operating income as a percentage of revenues	3.1		%	9.2		%

Revenues. Homebuilding revenues for the three months ended February 28, 2026 consisted of housing revenues and nominal land sale revenues. In the three months ended February 28, 2025, homebuilding revenues were generated solely from housing operations. Housing revenues for the 2026 first quarter declined 23% from the year-earlier quarter, driven by a 14% decrease in the number of homes delivered and a 10% decline in their overall average selling price. Our 2026 first-quarter housing revenues included year-over-year decreases of 25% in our West Coast homebuilding reporting segment, 42% in our Southwest segment and 19% in our Central segment, partially offset by an 11% increase in our Southeast segment. The decline in the number of homes delivered largely resulted from our having 29% fewer homes in backlog at the beginning of the 2026 first quarter, as compared to the year-earlier quarter. The lower average selling price primarily reflected a combination of product and geographic mix factors and the price reductions we implemented in 2025 in conjunction with our simplified sales strategy to stimulate demand.

Land sale revenues for the three months ended February 28, 2026 totaled $.6 million. There were no land sales during the three months ended February 28, 2025. Generally, land sale revenues fluctuate with our decisions to maintain or decrease our land ownership position in certain markets based upon the volume of our holdings, our business strategy, the strength and number of developers and other land buyers in particular markets at given points in time, the availability of opportunities to sell land at acceptable prices and prevailing market conditions.

Operating Income. Our homebuilding operating income for the three months ended February 28, 2026 decreased 74% from the prior-year period, reflecting lower housing gross profits, partly offset by lower selling, general and administrative expenses. Operating income for the 2026 first quarter included inventory-related charges of $2.2 million, compared to $1.5 million in the year-earlier quarter. As a percentage of revenues, our operating income for the three months ended February 28, 2026 was 3.1%, compared to 9.2% for the corresponding 2025 period, mainly due to a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of housing revenues.

•Housing Gross Profits – Housing gross profits of $164.0 million for the three months ended February 28, 2026 were down 41% year over year, reflecting lower housing revenues and a 490 basis-point decrease in our housing gross profit margin to 15.3%. The decline in the housing gross profit margin primarily reflected the price reductions we implemented a year ago, higher relative land costs, product and geographic mix, and reduced operating leverage. As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations, which is included in construction and land costs, was 1.8% and 1.7% for the three months ended February 28, 2026 and 2025, respectively. Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 15.5% for the 2026 first quarter decreased 480 basis points year over year. The calculation of adjusted housing gross profit margin, which we believe provides a clearer measure of the performance of our business, is described below under “Non-GAAP Financial Measures.”

•Land Sale Profits – Land sales generated essentially break-even results for the three months ended February 28, 2026. There were no land sales during the three months ended February 28, 2025.

•Selling, General and Administrative Expenses – The following table presents the components of our selling, general and administrative expenses (dollars in thousands):

	Three Months Ended February 28,
	2026		% of Housing Revenues		2025		% of Housing Revenues
Marketing expenses	$	38,715	3.6	%	$	39,663	2.9	%
Commission expenses (a)	39,580		3.7		47,166		3.4
General and administrative expenses	52,749		4.9		65,459		4.7
Total	$	131,044	12.2	%	$	152,288	11.0	%

(a)Commission expenses include sales commissions on homes delivered paid to internal sales counselors and external real estate brokers.

Our selling, general and administrative expenses for the three months ended February 28, 2026 decreased 14% compared to the year-earlier period, largely reflecting the favorable impact of $8.0 million in insurance recoveries and a decrease in commission expenses as a result of fewer homes delivered in the 2026 period. As a percentage of housing revenues, our selling, general and administrative expenses for the three months ended February 28, 2026 increased 120 basis points year over year, mainly due to a decrease in operating leverage from lower housing revenues, partly offset by insurance recoveries.

Interest Income/Expense. Interest income, which is generated from short-term investments, was $1.3 million for the three months ended February 28, 2026, compared to $2.1 million for the year-earlier quarter. The year-over-year decrease for the three months ended February 28, 2026 reflected our lower average balance of cash equivalents and a lower interest rate in the 2026 period. Generally, increases and decreases in interest income are attributable to changes in the interest-bearing average balances of short-term investments and fluctuations in interest rates.

We incur interest principally from our borrowings to finance land acquisitions, land development, home construction and other operating and capital needs. All interest incurred during the three-month periods ended February 28, 2026 and 2025 was capitalized as the average amount of our inventory qualifying for interest capitalization was higher than our average debt level for each period. Accordingly, we had no interest expense for these periods. Further information regarding our interest incurred and capitalized is provided in Note 6 – Inventories in the Notes to Consolidated Financial Statements in this report.

Equity in Income of Unconsolidated Joint Ventures. Our equity in income of unconsolidated joint ventures was $.5 million for the three months ended February 28, 2026, compared to $2.4 million for the year-earlier period, mainly reflecting a decrease in the number of homes delivered by an unconsolidated joint venture in California. Further information regarding our investments in homebuilding unconsolidated joint ventures is provided in Note 9 – Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report.

Net Orders, Cancellation Rates, Backlog and Community Count. The following table presents information about our net orders, cancellation rate, ending backlog and community count (dollars in thousands):

	Three Months Ended February 28,
	2026			2025
Net orders	2,846			2,772
Net order value (a)	$	1,364,312		$	1,346,067
Cancellation rate (b)	12		%	16		%
Ending backlog — homes	3,604			4,436
Ending backlog — value	$	1,696,190		$	2,201,933
Ending community count	276			255
Average community count	274			257

(a) Net order value represents potential future housing revenues associated with net orders generated during the period, as well as homebuyer selections of lot and product premiums and design choices and options for homes in backlog during the same period.

(b) Cancellation rate represents the total number of contracts for new homes cancelled during a period divided by the total (gross) orders for new homes generated during the same period.

Net Orders. Net orders for the 2026 first quarter increased 3% compared to the year-earlier quarter, reflecting growth of 12% in our West Coast homebuilding reporting segment and 10% in our Southwest segment, partially offset by declines of 6% and 8% in our Southwest and Central segments, respectively. The pace of monthly net orders per community was 3.5 in the 2026 first quarter, nearly even with 3.6 for the corresponding 2025 quarter, as the increase in net orders was more than offset by the impact of a higher average community count. The value of net orders for the 2026 first quarter was $1.36 billion, relatively even with the year-earlier quarter, as the higher net order volume was partly offset by a slight decrease in the average selling price of those net orders to $479,400. Our cancellation rate as a percentage of gross orders for the three months ended February 28, 2026 was 12%, compared to 16% for the year-earlier period.

In the 2026 first quarter, we continued the simplified sales approach we implemented a year ago. With this strategy, we provide a straightforward, transparent base price with limited, if any, concessions or incentives, designed to offer customers a compelling value competitive with area resale home prices. In addition, while selling through our existing inventory, we emphasized sales of our Built to Order homes, which are a key industry differentiator for us and typically generate higher gross margins than inventory homes. Our goal is to bring the mix of Built to Order homes delivered to within our historical range of 60% to 70%, compared to approximately 55% in 2025. Supported by demand for personalized homes and a 22% year-over-year improvement in our build times, our mix of net orders in the quarter was predominantly Built to Order.

Backlog. The number of homes in our backlog at February 28, 2026 decreased 19% compared to February 28, 2025. Our overall backlog value at February 28, 2026 declined 23% year over year due to the lower number of homes in backlog and a 5% decrease in their average selling price, reflecting the price reductions implemented during 2025 as well as product and geographic mix. Backlog value was down year over year in each of our homebuilding reporting segments, with decreases ranging from 11% in our West Coast segment to 46% in our Southwest segment. Based on our historical experience, a portion of the homes in backlog will not result in homes delivered due to cancellations. Although our overall backlog declined year over year, the number of homes in backlog increased 15% sequentially from November 30, 2025, reflecting the higher net orders in the 2026 first quarter.

Community Count. We use the term “community count” to refer to the number of communities open for sale with at least five homes left to sell at the end of a reporting period. Our ending community count for the 2026 first quarter grew 8% and our average community count increased 7%, each as compared to the year-earlier quarter.

HOMEBUILDING REPORTING SEGMENTS

Operational Data. The following tables present information about our homes delivered, net orders, cancellation rates as a percentage of gross orders, net order value, average community count and ending backlog (number of homes and value) by homebuilding reporting segment (dollars in thousands):

	Three Months Ended February 28,
	Homes Delivered		Net Orders		Cancellation Rates
Segment	2026	2025	2026	2025	2026		2025
West Coast	710	849	1,002	898	10	%	15	%
Southwest	378	678	514	545	9		14
Central	675	751	660	720	15		16
Southeast	607	492	670	609	12		20
Total	2,370	2,770	2,846	2,772	12	%	16	%

	Three Months Ended February 28,
	Net Order Value						Average Community Count
Segment	2026		2025		Variance		2026		2025		Variance
West Coast	$	662,134	$	607,179	9	%	101		88		15	%
Southwest	221,527		269,222		(18)		38		40		(5)
Central	235,600		239,725		(2)		66		68		(3)
Southeast	245,051		229,941		7		69		61		13
Total	$	1,364,312	$	1,346,067	1	%	274		257		7	%
	February 28,
	Backlog – Homes						Backlog – Value
Segment	2026		2025		Variance		2026		2025		Variance
West Coast	1,233		1,260		(2)	%	$	786,497	$	879,894	(11)	%
Southwest	603		1,001		(40)		261,772		488,714		(46)
Central	857		1,102		(22)		306,886		400,205		(23)
Southeast	911		1,073		(15)		341,035		433,120		(21)
Total	3,604		4,436		(19)	%	$	1,696,190	$	2,201,933	(23)	%

The composition of our homes delivered, net orders and backlog shifts with the product and geographic mix of our active communities and the corresponding average selling prices of the homes ordered and/or delivered at these communities in any particular period, changing as new communities open and existing communities wind down or sell out in the ordinary course. In addition, with our Built to Order business model, the selling prices of individual homes within a community may vary due to differing lot sizes and locations, home square footage, product premiums and the design choices and options buyers select. These intrinsic variations in our business limit the comparability of our homes delivered, net orders and backlog, as well as their corresponding values, between sequential and year-over-year periods, in addition to the effect of prevailing economic or housing market conditions in or across any particular periods.

Financial Results. Below is a discussion of the financial results for each of our homebuilding reporting segments. Further information regarding these segments, including their pretax income (loss), is included in Note 2 – Segment Information in the Notes to Consolidated Financial Statements in this report. The difference between each homebuilding reporting segment’s operating income (loss) and pretax income (loss) is generally due to the equity in income (loss) of unconsolidated joint ventures and/or interest income and expense.

In addition to the results of our homebuilding reporting segments presented below, our consolidated homebuilding operating income includes the results of Corporate and other, a non-operating segment. Corporate and other had operating losses of $33.8 million and $36.5 million in the three months ended February 28, 2026 and 2025, respectively.

The financial results of our homebuilding reporting segments for the three months ended February 28, 2026 and 2025 were impacted to varying degrees by price reductions and other homebuyer concessions we extended to buyers in conjunction with our sales strategies, as well as product and geographic mix shifts of homes delivered.

West Coast. The following table presents financial information related to our West Coast segment (dollars in thousands, except average selling price):

	Three Months Ended February 28,
	2026		2025		Variance
Revenues	$	449,209	$	601,649	(25)	%
Construction and land costs	(384,332)		(491,168)		22
Selling, general and administrative expenses	(39,658)		(43,989)		10
Operating income	$	25,219	$	66,492	(62)	%

	Three Months Ended February 28,
	2026	2025	Variance
Homes delivered	710	849	(16)	%

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Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Next expected filings

~2026-10-08 10-Q expected by 2026-10-10 (in 91 days)
~2027-01-22 10-K expected by 2027-01-28 (in 197 days)
~2027-04-08 10-Q expected by 2027-04-10 (in 273 days)
~2027-07-09 10-Q expected by 2027-07-11 (in 365 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-06-23 8-K Earnings Release; Financial Statements and Exhibits
2026-05-01 8-K Officer/Director Change
2026-04-09 10-Q Quarterly Report
2026-03-24 8-K Earnings Release; Financial Statements and Exhibits
2026-02-26 8-K/A Officer/Director Change; Other Events; Financial Statements and Exhibits
2026-01-28 8-K Officer/Director Change; Financial Statements and Exhibits
2026-01-23 10-K Annual Report
2026-01-23 8-K Officer/Director Change
2026-01-07 8-K Officer/Director Change
2025-12-18 8-K Earnings Release; Financial Statements and Exhibits
2025-11-13 8-K Material Agreement Entered; Material Agreement Terminated; Material Financial Obligation
2025-10-27 8-K Other Events; Financial Statements and Exhibits
2025-10-15 8-K Officer/Director Change
2025-10-09 10-Q Quarterly Report
2025-09-24 8-K Earnings Release; Financial Statements and Exhibits

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