Investor Presentation Third Quarter 2025 1 Forward-Looking Statements 2 Items in this presentation, and statements by KB Home management in relation to this presentation or otherwise, may be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current (at the time made) expectations and projections about future events and are subject to risks, uncertainties, and assumptions about our operations, economic and market f ...

Group 1 - The article does not provide any specific content or data related to a company or industry [1]

Market Performance - U.S. equity markets experienced a subdued performance on September 24, 2025, following a pullback after a three-day record high streak, driven by profit-taking and concerns over inflation and interest rates [1][2][10] - The Dow Jones Industrial Average (DJIA) fell 0.2% to close at 46,292.78, the Nasdaq Composite (IXIC) dropped 1% to finish at 22,573.47, and the S&P 500 (SPX) declined 0.6% to settle at 6,656.92 [2] - On September 24, major indexes continued to decline, with the Nasdaq down approximately 0.4% and both the S&P 500 and DJIA declining around 0.3% [3] Sector Performance - Sector performance was mixed, with the Energy Select Sector SPDR (XLE) advancing 1.7%, while Consumer Discretionary Select Sector SPDR (XLY) and Technology Select Sector SPDR (XLK) both fell 0.9% on September 23 [4] - On September 24, the S&P 500 Materials sector was the worst performer, down 1.5%, and technology shares underperformed the broader market by falling 0.6% [4] Key Market Drivers - Federal Reserve Chair Jerome Powell's cautionary remarks regarding asset prices being "fairly highly valued" influenced market sentiment, leading to profit-taking [5] - Powell indicated a cautious approach to future rate cuts, balancing inflation risks and employment risks, with investors anticipating potentially two more rate cuts this year [5] Upcoming Market Events - Investors are awaiting the release of the Personal Consumption Expenditures (PCE) index on September 26, 2025, with expectations of a 0.25% monthly rise for August and an annual increase of 3% [6] - The U.S. Department of Labor's monthly report for September, including non-agricultural jobs and unemployment rate data, is due on October 3, 2025 [7] Major Stock News - Nvidia (NVDA) shares dropped about 2.8% due to concerns over its $100 billion deal with OpenAI, contributing to the tech sector's underperformance [13] - Micron Technology (MU) reported strong fiscal fourth-quarter results but saw a 4% decline in shares on September 24 after a significant year-to-date gain [13] - Intel (INTC) shares surged approximately 5.5% following a $5 billion investment from Nvidia and a favorable forecast for expense reductions [13] - Lithium Americas (LAC) shares nearly doubled, rising between 87.6% and 91.5%, after reports of potential U.S. government investment in its lithium project [13] - Alibaba (BABA) stock rallied after announcing plans to increase AI spending beyond $50 billion [13] - Freeport-McMoRan (FCX) experienced a significant decline of 10.6% after revising third-quarter sales forecasts downward for copper and gold [13] - Homebuilders like Lennar (LEN), PulteGroup (PHM), and D.R. Horton (DHI) saw stock increases following stronger-than-expected U.S. new home sales in August [13]

Core Viewpoint - Century Communities, Inc. will release its third quarter 2025 financial results on October 22, 2025, followed by a conference call to discuss the results and recent events [1]. Company Overview - Century Communities, Inc. is a leading national homebuilder and recognized industry leader in online home sales, operating in 16 states and over 45 markets across the U.S. [2] - The company has been named one of America's Most Trustworthy Companies for three consecutive years and one of the World's Most Trustworthy Companies in 2025 [2]. - Century Communities is also recognized as one of U.S. News & World Report's Best Companies to Work For for 2025-2026 [2]. - The company engages in all aspects of homebuilding, including land acquisition, development, construction, marketing, and sales [2]. - It offers additional services such as mortgage, title, insurance brokerage, and escrow through its subsidiaries [2].

Core Insights - Toll Brothers, Inc. is launching a new luxury home community named Toll Brothers at Windborne in Schertz, Texas, expected to open for sale in fall 2025 [1][2] - The community will feature modern single-family homes on 100-foot-wide lots, with prices starting from the low $500,000s [2][4] Company Overview - Toll Brothers, Inc. is recognized as the nation's leading builder of luxury homes and is a Fortune 500 Company, founded in 1967 and publicly traded since 1986 [8] - The company operates in over 60 markets across 24 states and the District of Columbia, offering a variety of housing options for different buyer demographics [8] Community Features - Toll Brothers at Windborne will offer one- and two-story floor plans with 3 to 5 bedrooms, including first-floor primary suites and outdoor living spaces [2][4] - The community will include amenities such as a park, walking trails, and a playground, and is conveniently located near military bases and local shops [5]

Market Overview - Stocks are experiencing a decline for the second consecutive session, pulling back from record highs achieved on Monday, primarily due to profit-taking and market pushback [1] - The AI trade had previously driven the market to record levels, but some of the best-performing stocks are now giving back a portion of their gains, with Oracle and Micron leading the tech sector down [1] Meta Platforms - Meta Platforms' CEO Mark Zuckerberg announced that Instagram has reached 3 billion monthly active users, surpassing both Facebook and WhatsApp, which also crossed the 3 billion mark earlier this year [1] - Instagram's growth in engagement is attributed to the focus on Reels, a short-form video feature, and the use of artificial intelligence to enhance recommendation systems, leading to increased time spent on the app [1] - Meta is making changes to the Instagram app to prioritize private messaging and Reels, and is testing features that allow users to open directly into Reels, indicating a strategy to optimize user engagement and maximize advertiser returns [1] Upcoming Reports and Economic Data - KB Home is set to report earnings after the market closes on Wednesday, while Accenture and Jabil will report before the market opens on Thursday [1] - A range of economic data will be released on Thursday, including the third read on second-quarter GDP, durable goods orders, and existing home sales, alongside initial jobless claims which provide insights into the labor market [1] - Recent trends show that bond yields have risen following a significant drop in initial jobless claims, which has impacted stocks like Home Depot that are reliant on lower interest rates to stimulate housing demand [1]

Core Insights - New home sales in August reached their highest level in over 3.5 years, indicating a strong recovery in the housing market [1] - The seasonally adjusted annual rate of new home sales was reported at 800,000 units last month, reflecting a significant increase [1] Industry Summary - The surge in new home sales suggests a positive trend in the real estate sector, potentially driven by favorable economic conditions and consumer confidence [1] - This increase may impact related industries, including construction, home improvement, and mortgage financing, as demand for new homes rises [1]

Market Overview - U.S. equities experienced a pullback on September 24, 2025, after a multi-day rally, with major indexes drifting lower as investors took profits and digested comments from Federal Reserve Chair Jerome Powell regarding elevated asset valuations [1][3] - The S&P 500 was down 0.3% to close at 6,656.92, following a 0.6% decline on Tuesday, while the Nasdaq Composite fell 0.4% to 22,573.47, and the Dow Jones Industrial Average decreased by 0.2% to 46,292.78 [2] Sector Performance - The Energy sector rose by 2% on September 24, supported by a 2% increase in West Texas Intermediate crude oil futures, which reached $64.75 per barrel [4] - The Information Technology and Materials sectors were among the worst performers, both down approximately 1% in afternoon trading, reflecting a broader pullback in growth-oriented assets [5] Company News - Micron Technology (MU) saw a decline of roughly 4% despite reporting record quarterly sales, attributed to profit-taking after a substantial year-to-date gain of 97.7% [13] - Alibaba (BABA) shares surged nearly 9% after announcing plans to increase its AI infrastructure budget beyond $53 billion, indicating strong investor interest in AI investments [13] - Freeport-McMoRan (FCX) plummeted over 10% after lowering its third-quarter sales outlook for copper and gold, alongside a tragic incident in Indonesia [13] - Boeing Co. (BA) gained 2% following an $8 billion agreement to deliver 22, 787 Dreamliners to Uzbekistan Airways [13] - uniQure (QURE) experienced a remarkable surge of 241% after releasing positive results from its Huntington's gene therapy [13] - Nike (NKE) shares are trading just under $71, with analysts anticipating significant price increases ahead of its upcoming quarterly update [13] - Adobe (ADBE) shares fell after a downgrade from Morgan Stanley to 'Equal-Weight' [13] Upcoming Market Catalysts - Investors are monitoring the upcoming release of the U.S. core Personal Consumption Expenditures (PCE) price index on September 26, which is a key inflation gauge [7] - Flash Purchasing Managers' Index (PMI) surveys and revised U.S. GDP numbers are also on the economic calendar, providing insights into economic growth and inflation trends [7][9]

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Core Viewpoint - The home building sector, particularly KB Home, is facing challenges with declining sales and margins, leading to a negative outlook for earnings in the near term, with expectations for a turnaround not anticipated until 2026 at the earliest [3][6][7]. Company Summary - KB Home is expected to report adjusted EPS of $1.50 for Q3, with revenue projected at $1.6 billion [1]. - The company has struggled with sales pace and has overbuilt spec supply, resulting in a year-to-date price decline of approximately 10% [3]. - The earnings and orders for KB Home are expected to be down year-over-year due to these challenges [3][6]. Industry Summary - The home building industry has been negatively impacted by high mortgage rates, with most builders, including KB Home, experiencing margin compression [3][11]. - Builders have been competing by cutting prices and offering incentives, such as below-market mortgage rates, to attract buyers [7][8]. - The recent Fed rate cut of 25 basis points has not significantly affected the market, as many builders have already been offering lower rates throughout the year [8][9]. - Builders focused on build-to-order rather than spec homes are better positioned to manage margin pressures, with those serving entry-level markets facing the greatest challenges [11][12][13].