Financial Data and Key Metrics Changes - The company delivered 3,435 residential units in Q4 2025, bringing the full-year total to 10,792 units, which reflects a strong performance despite market challenges [4] - Pre-tax income for Q4 was $47 million, with net income of $36 million or $1.21 per diluted share, while adjusted net income was $47 million or $1.59 per diluted share [19] - Home sales revenues for Q4 reached $1.1 billion, up 16% sequentially, while average sales price decreased by 5% to $367,000 due to increased incentives [19][20] - The company repurchased over 7% of its shares outstanding at the beginning of the year, returning a record $178 million to shareholders through dividends and share repurchases [5][24] Business Line Data and Key Metrics Changes - The Century Living segment contributed to revenues with the sale of a 300-unit multifamily community for $97 million in Q4 [20] - The company achieved a record net new contracts of 2,702 homes in Q4, representing a 10% increase year-over-year and a 13% increase sequentially [10] - The average community count increased by 13% to 318 communities for the full year, with expectations for low- to mid-single-digit percentage growth in 2026 [13][14] Market Data and Key Metrics Changes - The company noted improved absorption rates, averaging 2.9 homes per community in Q4, which is a 12% year-over-year increase [10] - Adjustable rate mortgages accounted for approximately 25% of originated mortgages in Q4, up from nearly 20% in Q3 [12] - The company expects home deliveries for 2026 to range from 10,000 to 11,000 homes, reflecting a stable market outlook [24][25] Company Strategy and Development Direction - The company plans to maintain a disciplined approach to growth, focusing on existing lot counts and not expanding for the sake of growth alone [7] - The land acquisition and development expense is expected to remain flat in 2026, with the ability to adjust based on market conditions [14][15] - The company aims to deepen its market share in existing areas to drive improved margins and returns [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about potential interest rate relief and improved consumer confidence unlocking buyer demand [8] - The company is hopeful for a stronger spring selling season compared to the previous year, despite a slower sales pace in early 2026 [28] - Management acknowledged the need to monitor market conditions closely and adjust strategies accordingly [53] Other Important Information - The company maintained a quarterly cash dividend of $0.29 per share and ended the quarter with $2.6 billion in stockholders' equity and $1.1 billion of liquidity [23] - The tax rate for Q4 was 23.5%, with expectations for a full-year tax rate of 25%-26% in 2026 [22] Q&A Session Summary Question: Insights on the spring selling season and consumer behavior - Management noted that while January sales pace has been slower compared to the previous year, order activity has improved sequentially, and there is hope for better performance in the spring selling season [28][30] Question: Community count growth expectations - Management indicated that the average community count is expected to grow steadily throughout the year, particularly in the middle and back half of 2026 [32] Question: Gross margin outlook - Management anticipates a slight pullback in gross margins due to increased incentives but expects to revert to a more balanced approach as the year progresses [40] Question: Geographic performance trends - Management did not identify specific regions outperforming others but noted increased traffic driven by mortgage rate trends [42] Question: Stock repurchase authorization status - Management confirmed that approximately 1.5 million shares remain under the stock repurchase program [44] Question: SG&A as a percentage of sales in Q1 2026 - Management confirmed an expected SG&A percentage of 14.5% in Q1 2026, which is higher due to typically lower closing volumes in that quarter [49][50] Question: Confidence in dialing back incentives - Management expressed cautious optimism about reducing incentives as market conditions improve, but emphasized the need to monitor the situation closely [53]