Sales and Financial Performance - The company has successfully increased home sales prices to absorb rising costs associated with labor, commodities, and lumber, mitigating inflationary pressures experienced in recent years[46]. - The company expects to face cost pressures from inflation similar to those experienced in the last few years, which could impact future quarters[46]. - The company continues to monitor supply markets to achieve the best prices for raw materials and labor, which are critical to its operations[46]. Employment and Training - As of December 31, 2025, the company employed 1,056 people, with 622 in on-site sales and support roles and 342 involved in acquisition, development, purchasing, and construction[53]. - The company has implemented a structured 100-day training program for sales professionals, emphasizing ongoing training and development[55]. Community Engagement - The company has contributed over $4.0 million in corporate sponsorships and over 50,000 employee service hours to local communities since 2016[58]. Industry Competition - The homebuilding industry is highly competitive, with the company competing against numerous national, regional, and local homebuilders, as well as existing home sales and rental markets[51]. Environmental Regulations - The company is subject to various environmental regulations that may result in delays and increased costs, particularly in environmentally sensitive areas[48]. - The company has not incurred any material unanticipated liabilities related to environmental conditions or toxic waste removal[50]. Debt and Interest Rates - The company utilizes both fixed-rate and variable-rate debt for financing, with no obligation to prepay senior notes or fixed-rate inventory obligations prior to maturity[288]. - As of December 31, 2025, the company had $527.6 million of variable rate indebtedness outstanding under the Credit Agreement[290]. - The interest rate for the variable rate indebtedness was SOFR plus 1.85%, with SOFR at 3.72% as of December 31, 2025[290]. - A hypothetical 100 basis point increase in the average interest rate above the SOFR floor would increase annual interest costs by approximately $5.3 million[290]. - The company believes that future interest rate risks related to existing indebtedness will not have a material adverse impact on its financial position, results of operations, or liquidity[291].

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Operational focus has shifted toward capital discipline, evidenced by a 14.2% year-over-year reduction in controlled lots to align with current absorption rates.The company's self-development land strategy remains a core structural advantage, with finished lot costs averaging approximately $70,000, or 21% of the average selling price.LGI is maintaining a high-volume 'gross sale' strategy, intentionally writing more contracts to capture a larger pool of qualified buyers despite the higher resulting cancellat ...

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Financial Data and Key Metrics Changes - Revenue in Q4 2025 was $474 million, a 19.5% sequential increase driven by elevated sales activity [12] - Gross margin before inventory-related charges was over 19%, with an adjusted gross margin of over 22% [6][13] - Net income for Q4 was $17.3 million, or $0.75 per share, while excluding impairment-related charges, net income was $22.4 million, or $0.97 per share [15] Business Line Data and Key Metrics Changes - The company delivered 1,362 homes in Q4, with 1,301 contributing directly to revenue [5] - The average selling price of homes in Q4 was $364,000, slightly down compared to the previous year [12] - The wholesale business accounted for 12.1% of Q4 closings, generating significant revenue [12] Market Data and Key Metrics Changes - The cancellation rate increased to 43.3%, influenced by affordability pressures and economic uncertainty [9] - The backlog grew 133% to 1,394 homes, with a value exceeding $501 million, up 112% year-over-year [10] - The company ended the year with 144 active communities, averaging 3.1 closings per community per month in Q4 [8] Company Strategy and Development Direction - The company remains focused on managing costs, offering competitive financing options, and delivering affordable homes to first-time buyers [11] - Long-term outlook for the housing market remains positive, driven by supply-demand imbalance and favorable demographic trends [11] - The company plans to continue investing in people, land, and operating platforms to support long-term strategy [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic market environment, with affordability being a primary pressure point [5] - The expectation for 2026 includes closing between 4,600 and 5,400 homes, with stable selling prices [23] - Management indicated that incentives will continue to be utilized to support affordability while maintaining margin discipline [23] Other Important Information - The company ended the year with $1.7 billion of debt outstanding and a net debt to capital ratio of 43.2% [20] - Total liquidity at year-end was $335 million, including over $61 million in cash [20] - The average finished lot cost is approximately $70,000, representing about 21% of the average selling price [18] Q&A Session Summary Question: Drivers of sequential decline in gross margin in Q4 - Management indicated that the decline was due to increased incentives and discounts on aged inventory [26][27] Question: Closings outlook for 2026 - Management expects a similar closings pace in 2026, with wholesale closings projected to be 10%-15% of total closings [29][31] Question: Profitability on wholesale orders - Management stated that gross margins on wholesale sales are lower, but operating margins are similar to retail [36] Question: Community count growth expectations for 2026 - New community openings are expected to be weighted towards the back half of the year [38] Question: Cancellations and reasons for cancellation - The cancellation rate is elevated primarily due to financing challenges faced by buyers [44][45] Question: Mix of first-time versus move-up buyers - The proportion of move-up buyers is increasing due to elevated entry-level price points [50] Question: Current market conditions and discounting - Management noted that affordability pressures remain, with competitors also leaning into incentives [53][54] Question: Year-over-year decline in G&A - Management indicated that G&A run rate for 2026 is expected to be similar to 2025 [56]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $474 million, representing a 19.5% sequential increase driven by elevated sales activity [11] - Gross margin before inventory-related charges was over 19%, with an adjusted gross margin of over 22%, although these were below guidance ranges due to the impact of buydowns and price discounts on older inventory [5][6] - Net income for Q4 was $17.3 million, or $0.75 per share, while excluding impairment-related charges, net income was $22.4 million, or $0.97 per share [14] Business Line Data and Key Metrics Changes - In Q4, 1,362 homes were delivered, with 1,301 contributing directly to reported revenue [4] - The average selling price for Q4 closings was $364,000, slightly down compared to the previous year [11] - The wholesale business accounted for 12.1% of Q4 closings, generating significant revenue [11] Market Data and Key Metrics Changes - The cancellation rate increased to 43.3%, attributed to affordability pressures and economic uncertainty [8] - The backlog grew 133% to 1,394 homes, with a value exceeding $501 million, up 112% year-over-year [9] Company Strategy and Development Direction - The company remains focused on managing costs, offering competitive financing options, and delivering affordable homes to first-time buyers [10] - Long-term outlook for the housing market remains positive, driven by supply-demand imbalance and favorable demographic trends [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by affordability and rate volatility but expressed confidence in the company's ability to navigate these issues [4] - For 2026, the company expects to close between 4,600 and 5,400 homes, with stable selling prices and continued use of incentives to support affordability [22][23] Other Important Information - The company ended the year with $1.7 billion of debt and a net debt to capital ratio of 43.2% [19] - Total liquidity at year-end was $335 million, including cash on hand and revolver availability [19] Q&A Session Summary Question: Drivers of sequential decline in gross margin in Q4 - Management indicated that the decline was due to increased incentives and discounts on aged inventory, with expectations for similar conditions in 2026 [26][27] Question: Closings outlook for 2026 - Management confirmed expectations for a similar closings pace in 2026, with wholesale business contributing 10%-15% of total closings [28][30] Question: Profitability on wholesale orders - Management stated that operating margins for wholesale business are similar to retail, but gross margins are lower [35] Question: Community count growth expectations for 2026 - New community openings are expected to be weighted towards the back half of the year, with confidence in achieving the community count guidance [37] Question: Cancellations and buyer financing issues - Management noted that cancellations are primarily due to buyers' ability to secure financing, with customers taking longer to close [43][44] Question: Current market conditions and discounting - Management acknowledged ongoing aggressive discounting in the market, with affordability pressures remaining a significant concern [52] Question: Year-over-year decline in G&A - Management indicated that G&A run rate for 2026 is expected to be similar to 2025, with some fluctuations quarter to quarter [55]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $474 million, representing a 19.5% sequential increase driven by elevated sales activity [10] - Gross margin before inventory-related charges was over 19%, with an adjusted gross margin of over 22%, both below guidance ranges due to the impact of buydowns and price discounts on older inventory [5][11] - Pre-tax net income was $24 million, or 5.1% of revenue, with net income of $17.3 million, or $0.75 per share [13] Business Line Data and Key Metrics Changes - The company delivered 1,362 homes in Q4, with 1,301 contributing to reported revenue [4] - The average selling price for Q4 closings was $364,000, slightly down from the previous year [10] - The wholesale business accounted for 12.1% of Q4 closings, generating significant revenue [10] Market Data and Key Metrics Changes - The cancellation rate increased to 43.3%, attributed to affordability pressures and economic uncertainty [7] - The backlog grew 133% to 1,394 homes, with a value exceeding $501 million, up 112% year-over-year [8] Company Strategy and Development Direction - The company remains focused on managing costs, offering competitive financing options, and delivering affordable homes to first-time buyers [9] - Long-term outlook for the housing market remains positive, driven by supply-demand imbalance and favorable demographic trends [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges of affordability and rate volatility but expressed confidence in the company's ability to navigate these issues [4] - For 2026, the company expects to close between 4,600 and 5,400 homes, with stable selling prices and a focus on maintaining margins [21] Other Important Information - The company ended the year with $1.7 billion in debt and a net debt to capital ratio of 43.2% [19] - Total liquidity at year-end was $335 million, including cash on hand and revolver availability [19] Q&A Session Summary Question: What drove the sequential decline in gross margin in Q4? - Management indicated that the decline was due to increased incentives and discounts on aged inventory, along with competitive pricing pressures [26] Question: What is the outlook for closings in 2026? - Management confirmed expectations for a similar closings pace in 2026, with wholesale closings projected to be 10%-15% of total closings [28] Question: How will profitability be affected by the 480 orders in the wholesale business? - Management stated that while gross margins are lower for wholesale sales, operating margins remain similar to retail [34] Question: What is the current mix of first-time versus move-up buyers? - Management noted an increase in move-up buyers due to elevated entry-level price points, although first-time buyers still dominate [49] Question: What are the current conditions regarding affordability and discounting? - Management acknowledged ongoing affordability challenges and the need for continued incentives to assist buyers [52]

Home Sales Performance - Home sales revenues for Q4 2025 were $474.0 million, with total home closings of 1,362, including 61 leased homes[7] - Home sales revenues for Q4 2025 were $473,967, a decrease of 15% from $557,396 in Q4 2024[20] - Total home closings for the year ended December 31, 2025, were 4,685, a decrease from 6,028 in 2024[23] - The cancellation rate for net orders increased to 32.8% in 2025 from 22.8% in 2024[26] - The ending backlog of homes as of December 31, 2025, was 1,394 homes valued at $501,296, compared to 599 homes valued at $236,511 in 2024[26] Financial Performance - The company reported a net income of $17.3 million for Q4 2025, translating to $0.75 basic and diluted EPS[7] - Net income for the year ended December 31, 2025, was $72,552, down 63% from $196,071 in 2024[20] - Adjusted net income for Q4 2025 was $22,397, compared to $50,870 in Q4 2024[32] - Adjusted diluted earnings per share for the year ended December 31, 2025, was $3.34, down from $8.30 in 2024[32] Margins and Profitability - The average sales price per home closed in Q4 2025 was $364,310, contributing to a gross margin of 17.7%[7] - Gross margin for Q4 2025 was $84,113 thousand, down 34% from $127,511 thousand in Q4 2024, resulting in a gross margin percentage of 17.7% compared to 22.9% in the previous year[34] - Adjusted gross margin for Q4 2025 was $105,875 thousand, a decrease of 24% from $140,295 thousand in Q4 2024, with an adjusted gross margin percentage of 22.3% compared to 25.2% in Q4 2024[34] - Gross margin for 2026 is expected to range between 18.0% and 20.0%, with adjusted gross margin between 21.0% and 23.0%[13] Backlog and Future Projections - The company experienced a 133% increase in backlog due to a wholesale agreement for 480 homes, with year-end backlog up 53% compared to 2024[3] - For 2026, the company projects home closings between 4,600 and 5,400, with an average sales price between $355,000 and $365,000[4] Liquidity and Capital Structure - Total liquidity at year-end 2025 was $334.8 million, including cash and cash equivalents of $61.2 million[12] - The net debt to capital ratio was 43.2% at December 31, 2025, indicating the company's leverage position[12] - Total debt as of December 31, 2025, was $1,656,803 thousand, an increase from $1,480,718 thousand in 2024, resulting in a debt to capital ratio of 44.1% compared to 42.1% in 2024[37] - The net debt to capital ratio for December 31, 2025, was 43.2%, up from 41.2% in 2024, indicating increased leverage in the company's operations[37] Inventory and Land Management - Active selling communities at the end of 2025 numbered 144, with total owned and controlled lots at 60,842[12] - The company had 51,890 owned lots as of December 31, 2025, with 35,416 being raw/under development lots[25] - Inventory impairment for the year ended December 31, 2025, was $6,717 thousand, with no impairment recorded in 2024[34] - Capitalized interest charged to cost of sales for Q4 2025 was $14,436 thousand, compared to $11,884 thousand in Q4 2024[34] Capital Management - The company continues to monitor its capital efficiency and evaluate the effectiveness of its capital management strategies over time[36]

THE WOODLANDS, Texas, Feb. 17, 2026 (GLOBE NEWSWIRE) -- LGI Homes, Inc. (NASDAQ: LGIH) today announced financial results for the fourth quarter and year ended December 31, 2025. “Our team delivered a solid finish to the year and further strengthened the foundation that supports our long-term growth plans,” said Eric Lipar, Chairman and Chief Executive Officer of LGI Homes. “During the quarter, we closed 1,362 homes, including 61 currently and previously leased homes. Of this total, 1,301 homes contributed d ...

Core Insights - LGI Homes, Inc. has announced the grand opening of Murieta Hills, its first Terrata Homes community in California, marking a significant expansion on the West Coast [1][4] Company Overview - LGI Homes, Inc. is headquartered in The Woodlands, Texas, and operates in 36 markets across 21 states, having closed over 80,000 homes since its founding in 2003 [5] - The company is recognized for its quality construction and exceptional customer service, earning a spot on Newsweek's list of the World's Most Trustworthy Companies [5] - LGI Homes has delivered profitable financial results every year and has received numerous workplace awards, including the Top Workplaces USA 2025 Award [5] Community Features - Murieta Hills is located in a private, guard-gated enclave of Rancho Murieta, offering a lifestyle that combines tranquility, recreation, and connection with access to outdoor amenities [2] - The homes range from 2,004 to 3,024 square feet, featuring three to five bedrooms, open-concept floor plans, and high-quality finishes included at no additional cost [3] - Standard features include premium hard surface countertops, 42" upper wood cabinetry, stainless steel KitchenAid appliances, and professionally designed landscaping [3] Event Details - The grand opening event for Murieta Hills is scheduled for February 14, with homes priced from the $800s and exclusive savings for attendees [4]