Financial Data and Key Metrics Changes - In Q4 2025, the company delivered 780 homes, generating $260 million in revenue, a 9% decrease from the previous year [11] - The home closing gross margin was 19.9%, down from 25.5% in Q4 2024 [11] - Net income for Q4 was $17 million, or $0.39 per diluted share, compared to $30 million in the prior year [12] - For the full year 2025, the company delivered 2,908 homes, a 1% increase over 2024, with revenue of $971 million, essentially flat year-over-year [13][14] - Adjusted net income for Q4 was $12.8 million, down from $22.7 million in the same period last year [13] Business Line Data and Key Metrics Changes - The average sales price for homes was $334,000 in Q4 2025, down from $340,000 in 2024 [14] - Net new orders for the year were 2,726 homes, a 3% increase compared to 2024, with an average order price of $333,000 [15] - The company ended the year with 512 homes in backlog, valued at approximately $173 million [15] Market Data and Key Metrics Changes - The company experienced a 28% increase in active community count, reaching 100 communities compared to 78 at the end of 2024 [15] - Total controlled lots increased by 14% to approximately 22,300 lots, primarily through option contracts [16] Company Strategy and Development Direction - The company aims to grow volume and gain market share through targeted investments and a disciplined approach to home building [8][10] - The focus remains on building affordable homes in markets with strong population growth and job creation [9] - The company maintains a conservative balance sheet and prioritizes land ownership discipline [10] Management's Comments on Operating Environment and Future Outlook - Management noted that the housing market has been in a recessionary environment for about 18 months, driven by affordability pressures and higher mortgage rates [19] - The macroeconomic environment remains uncertain, with mixed signals from recent economic data and geopolitical developments [20] - The company expects closings in Q1 2026 to be between 575 and 625 homes, with average sales prices between $330,000 and $335,000 [21] Other Important Information - The company has seen an uptick in traffic and order activity relative to Q4 levels, although demand remains inconsistent [7] - The company is focused on maintaining pace and aligning sales absorption with production capacity [18] Q&A Session Summary Question: Sales pace and pricing trends in Q1 - Management indicated that sales pace followed traditional seasonal patterns, with an uptick in February and early March [24][26] Question: Trends across major markets - Management noted similarities in market pacing, with new markets expected to perform similarly once models are open [28] Question: Incentives and margin guidance for Q1 - Management explained that they leaned heavily into incentives in Q4, with a focus on maintaining sales pace while monitoring margins [34][35] Question: SG&A expenses and unusual items - Management clarified that SG&A expenses were impacted by new divisions not yet fully operational, leading to higher costs [45][46] Question: Land pricing trends - Management noted that while land costs are expected to increase in 2026, there are signs of a reset in pricing for new deals [56][57] Question: Spec count and inventory strategy - Management stated that specs are running about half of current inventory, with a focus on pre-sold homes to maximize value [65][66] Question: Land acquisition strategy - Management prefers finished lot purchases and is seeing softening opportunities in better locations [70][71]