Financial Data and Key Metrics Changes - Revenues for the first quarter increased by 9% to $273 million compared to $250.4 million in the prior year quarter [4][5] - Net income was $15.4 million or $0.30 per diluted share, down from $16.5 million or $0.32 per diluted share in the prior year quarter [5] - Book value per share increased by 10% from a year ago to $35.10 [4][13] - Pre-tax income decreased to $20.8 million from $21.9 million in the prior year quarter, with a pre-tax profit margin of 7.6% compared to 8.7% [5][6] - Gross profit margin for the quarter was 20.1%, down from 22% in the same quarter last year [6] Business Line Data and Key Metrics Changes - The company sold 1,944 lots in the quarter with an average sales price of $121,000, influenced by a mix of lot deliveries from higher price point communities [4][5] - SG&A expense was $36.5 million, representing 13.4% of revenues, compared to $36 million or 14.4% in the prior year quarter [7] Market Data and Key Metrics Changes - Demand for new homes is impacted by affordability constraints and cautious consumer sentiment, although mortgage rate buy-down incentives are helping to spur demand [8] - The company’s total lot position was 101,000 lots, with 65% owned and 35% controlled through purchase contracts [10] Company Strategy and Development Direction - The company aims to consolidate market share in the fragmented lot development industry while maintaining financial strength and operational expertise [5][12] - The focus remains on developing lots for entry-level and first-time buyers, which is the largest segment of the new home market [8][25] - The company plans to invest approximately $1.4 billion in land acquisition and development in fiscal 2026, subject to market conditions [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that home affordability constraints and cautious consumer sentiment will continue to be near-term headwinds for new home demand [15][16] - The company maintains its fiscal 2026 revenue guidance of $1.6 billion to $1.7 billion and lot delivery guidance of 14,000 to 15,000 lots [15] - The company is confident in the long-term demand for finished lots and its ability to gain market share [16] Other Important Information - The company ended the quarter with approximately $820 million of liquidity, including an unrestricted cash balance of $212 million [13] - The capital structure provides operational flexibility and positions the company to take advantage of attractive opportunities [14] Q&A Session Summary Question: Can you discuss the gross margins and expectations for the next few quarters? - Management indicated that the biggest impact on margin was due to the mix of projects delivering lots, and they expect gross margins to remain in the historical range of 21%-23% [18] Question: What are you seeing from your customers regarding pricing and takedown schedules? - Management noted a shift from large bulk takedowns to more structured quarterly takedowns, with no significant changes in pricing observed [21] Question: Is SG&A spend expected to remain stable? - Management confirmed that headcount is down slightly and expects SG&A to remain stable for the remainder of the year [22] Question: How does your inventory break out between entry-level and move-up homes? - Management stated that the strategy remains focused on entry-level homes, which is the largest market segment [25] Question: Are you looking to rebalance exposure in Texas and Florida? - Management is being selective in development activities in Texas and Florida due to higher resale inventory but believes in the long-term fundamentals of these markets [27] Question: How does pulling back on phased developments impact your cost structure? - Management indicated that there is no significant impact on cost structure, and pulling back helps reduce cycle times and development costs [28]

Financial Data and Key Metrics Changes - Revenues for the first quarter reached $273 million, a 9% increase from $250.4 million in the prior year quarter [4][5] - Net income was $15.4 million or $0.30 per diluted share, compared to $16.5 million or $0.32 per diluted share in the prior year quarter [5] - Pre-tax income was $20.8 million, down from $21.9 million in the same quarter last year, with a pre-tax profit margin of 7.6% compared to 8.7% [5][6] - Book value per share increased 10% from a year ago to $35.10 [4][13] - The company ended the quarter with $820 million of liquidity, including $212 million in unrestricted cash [13] Business Line Data and Key Metrics Changes - The company sold 1,944 lots in the quarter with an average sales price of $121,000, influenced by a mix of lot deliveries from higher price point communities [4][5][6] - Gross profit margin for the quarter was 20.1%, down from 22% in the prior year quarter, but would have been approximately 21.5% excluding a low-margin tract sale [6][12] Market Data and Key Metrics Changes - Demand for new homes is being impacted by affordability constraints and cautious consumer sentiment, although mortgage rate buydown incentives are helping to spur demand [8] - The company’s total lot position was 101,000 lots, with 65% owned and 35% controlled through purchase contracts [10] Company Strategy and Development Direction - The company remains focused on turning inventory, maximizing returns, and consolidating market share in the lot development industry [5] - The strategic goal is to maintain a three- to four-year supply of land and lots while managing development phases to match market demand [10][12] - The company plans to invest approximately $1.4 billion in land acquisition and development in fiscal 2026, subject to market conditions [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that home affordability constraints and cautious consumer sentiment will continue to be near-term headwinds for new home demand [15][16] - The company is confident in the long-term demand for finished lots and its ability to gain market share in the fragmented lot development industry [16] Other Important Information - The company’s capital structure is viewed as a competitive advantage, providing operational flexibility and strong liquidity to capitalize on opportunities [13][14] - The company’s underwriting criteria for new development projects remains unchanged, targeting a minimum 15% pre-tax return on average inventory [12] Q&A Session Summary Question: Discussion on gross margins and future expectations - Management indicated that the gross margin was impacted by the mix of projects delivering lots, and they expect margins to remain in the historical range of 21%-23% [18] Question: Customer pricing pushback and market conditions - Management noted a shift from large bulk takedowns to structured quarterly takedowns, with no significant changes in pricing observed [21] Question: SG&A spending expectations - Management expects SG&A to remain stable, with headcount and labor costs being the primary components [22] Question: Inventory and market strategy in Texas and Florida - Management is being selective in development activities in Texas and Florida due to higher resale inventory but remains optimistic about long-term fundamentals in these markets [27] Question: Impact of phased developments on cost structure - Management stated that pulling back on phased developments does not significantly impact the cost structure and helps reduce cycle times [28]

Financial Data and Key Metrics Changes - Revenues for Q1 2026 were $273 million, a 9% increase from $250.4 million in the prior year quarter [4][5] - Net income was $15.4 million or $0.30 per diluted share, compared to $16.5 million or $0.32 per diluted share in the prior year quarter [5] - Book value per share increased 10% from a year ago to $35.10 [4][15] - Pre-tax income was $20.8 million, down from $21.9 million in the prior year quarter, with a pre-tax profit margin of 7.6% compared to 8.7% [5][6] - Gross profit margin for the quarter was 20.1%, down from 22% in the same quarter last year [6] Business Line Data and Key Metrics Changes - The company sold 1,944 lots in the quarter with an average sales price of $121,000, influenced by a mix of higher price point lots [5][6] - SG&A expense was $36.5 million, or 13.4% of revenues, compared to $36 million or 14.4% in the prior year quarter [8] Market Data and Key Metrics Changes - Demand for new homes is impacted by affordability constraints and cautious consumer sentiment, although mortgage rate buy-down incentives are helping to spur demand [9][10] - The company’s total lot position was 101,000 lots, with 65% owned and 35% controlled through purchase contracts [11] Company Strategy and Development Direction - The company remains focused on turning inventory, maximizing returns, and consolidating market share in the lot development industry [5] - The strategic goal is to maintain a three- to four-year supply of land and lots while managing development phases to match market demand [11][14] - The company plans to invest approximately $1.4 billion in land acquisition and development in fiscal 2026, subject to market conditions [14] Management's Comments on Operating Environment and Future Outlook - Management expects home affordability constraints and cautious consumer sentiment to continue as near-term headwinds for new home demand [17] - The company maintains its fiscal 2026 revenue guidance of $1.6 billion to $1.7 billion and lot delivery guidance of 14,000 to 15,000 lots [17][18] - The company is confident in long-term demand for finished lots and its ability to gain market share in the lot development industry [18] Other Important Information - The company ended the quarter with $820 million of liquidity, including $212 million in unrestricted cash [15] - Total debt was $793 million, with a net debt to capital ratio of 24.6% [15] Q&A Session Summary Question: Can you discuss the gross margins and what they might look like over the next few quarters? - Management indicated that the biggest impact on margin was due to the mix of projects delivering lots, and they expect gross margins to remain in the historical range of 21%-23% [20][21] Question: What are you seeing from your customers regarding price pushback? - Management noted a shift from large bulk takedowns to more structured quarterly takedowns, with little change in pricing overall [22][23] Question: Is SG&A spend expected to remain stable? - Management confirmed that headcount is down slightly and expects SG&A to remain stable for the remainder of the year [24] Question: How is the inventory of developed lots breaking out between entry-level and move-up homes? - Management stated that the higher average sales prices were planned and that they remain focused on entry-level and first-time homebuyer markets [27][28] Question: Are you looking to rebalance exposure in Texas and Florida? - Management is being selective in development activities in Texas and Florida due to higher resale inventory but believes in the long-term fundamentals of these markets [29] Question: How does pulling back on phased developments impact your cost structure? - Management indicated that there is no significant impact on cost structure and that they continue to work with trade partners to reduce costs and cycle times [30]

Financial Data and Key Metrics Changes - In the fourth quarter, net income increased by 7% to $87 million or $1.7 per diluted share [7] - For the full year, net income totaled $167.9 million or $3.29 per diluted share [8] - Revenues for the fourth quarter increased by 22% to $670.5 million, while annual revenues grew by 10% to $1.7 billion [8][4] - Book value per share increased by 11% to $34.78, reflecting a 92% increase over the last five years [5][17] Business Line Data and Key Metrics Changes - In the fourth quarter, the company sold 4,891 lots with an average sales price of $115,700, while for the year, 14,240 lots were sold at an average price of $108,400 [8] - The gross profit margin for the fourth quarter was 22.3%, down 160 basis points from the previous year [9] - The pretax income for the fourth quarter increased by 4% to $113.1 million, with a pretax profit margin of 16.9% [10] Market Data and Key Metrics Changes - The company noted slower new home sales due to affordability constraints and cautious consumer sentiment, but builder incentives are helping to bridge the affordability gap [12] - The availability of contractors and materials remains solid, with stable land development costs [12] Company Strategy and Development Direction - The company plans to continue executing its strategic plan by investing for future growth, maximizing returns, and consolidating market share in the lot development industry [6] - Forestar aims to maintain a minimum 15% pretax return on average inventory and a return of initial cash investment within 36 months [15] - The company expects to invest approximately $1.4 billion in land acquisition and development in fiscal 2026 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term demand for finished lots despite near-term headwinds from home affordability constraints [21] - The company anticipates delivering between 14,000 to 15,000 lots and generating $1.6 billion to $1.7 billion in revenue for fiscal 2026 [20] Other Important Information - The company ended the quarter with $968 million in liquidity, including $379 million in unrestricted cash [17] - Total debt was $803 million with no senior note maturities until fiscal 2028, resulting in a net debt to capital ratio of 19.3% [17] Q&A Session Summary Question: Why is growth expected to be in line with Horton? - Management indicated that growth is tied to the size of Horton and their market entry, with the potential for mid-single-digit growth depending on market conditions [25] Question: What is the outlook for headcount and SG&A leverage? - The company expects headcount to remain flat or slightly decrease in fiscal 2026, following a significant increase in fiscal 2025 [26] Question: Are there any pushbacks on lot prices or extended takedown schedules? - Management confirmed successful renegotiation of terms but noted minimal pushback on lot pricing, managing it project by project [29] Question: What trends are observed in Texas and Florida? - Management noted some pressure in Texas and Florida markets but still sees good absorption at affordable price points [32] Question: What is the expected cadence of deliveries in 2026? - The company projects a similar delivery cadence to 2025, with larger deliveries expected in the second half of the year [33]

Financial Data and Key Metrics Changes - In Q2 2025, the company generated net income of $31.6 million or $0.62 per diluted share on revenues of $351 million, compared to $45 million or $0.89 per diluted share in the prior year quarter [7][12] - Revenues increased by 5% from $333.8 million in the prior year quarter [12] - Gross profit margin for the quarter was 16.6% compared to 22.9% for the same quarter last year, primarily due to nonrecurring high-margin items in the prior year [12][13] - Pre-tax income was $40.7 million compared to $58.9 million in the second quarter of last year [13] Business Line Data and Key Metrics Changes - Lots sold increased by 4% to 3,411 lots with an average sales price of $101,700 [14] - Lots under contract to sell increased by 41% from a year ago to 25,400 lots, representing 37% of the company's own lot position [7][24] - The current backlog represents $2.3 billion of future revenue [8][24] Market Data and Key Metrics Changes - The company entered 10 new markets in the last year and increased community count by 21% [8][16] - The home building industry is facing headwinds from home affordability constraints and declining consumer confidence, leading to a slower than expected start to the spring selling season [9][32] - Demand in Florida is weaker compared to Texas, with some strength noted in markets like Las Vegas and the Carolinas [57] Company Strategy and Development Direction - The company aims to consolidate market share in the highly fragmented lot development industry while moderating the pace of land acquisition [10][34] - The focus remains on developing lots for new homes at affordable price points, with 79% of investments this quarter directed towards land development [10][26] - The company expects to invest approximately $1.9 billion in land acquisition and development in fiscal 2025, subject to market conditions [27] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued headwinds from homeowner affordability constraints and cautious homebuyers affecting lot deliveries [32] - The company is confident in the long-term demand for finished lots and its ability to gain market share [34] - Management has updated guidance for fiscal 2025, expecting to deliver between 15,000 and 15,500 lots, generating between $1.5 billion and $1.55 billion of revenue [33] Other Important Information - The company ended the quarter with $792 million of liquidity, including an unrestricted cash balance of $174 million [28] - Total debt at March 31 was $873 million, with no senior note maturities until May 2026 [29] - The capital structure provides operational flexibility and positions the company to take advantage of attractive opportunities [30] Q&A Session Summary Question: Guidance change context - The guidance change is mostly prospective, reflecting community-level inventory buildup, with no anticipated margin changes [38][40] Question: Flexibility of raw land sellers - There is more flexibility on terms from raw land sellers, but prices remain firm [44] Question: Lot banker deal specifics - The company allows home builders to assign contracts to lot bankers, maintaining the same pricing as contracted with builders [45][47] Question: Balancing increased costs with weak market - SG&A increase is tied to headcount growth to support active projects, with expectations for SG&A as a percentage of revenues to decrease in the second half of the year [50][53] Question: Impact of tariffs on land development costs - Currently, there are no significant cost increases from trade partners, and it is too early to assess tariff impacts [55] Question: Demand characterization in Texas and Florida - Demand in Florida is weaker compared to Texas, with strong activity in sales centers despite affordability challenges [57] Question: Sensitivity of land development spend to demand - The company can moderate spend based on demand changes, with a robust pipeline of projects available [64] Question: Competitors' pullback and market share - The company sees opportunities to consolidate market share as competitors pull back [66] Question: Federal deregulation impact on lot supply - It is too early to determine the impact of federal deregulation on lot supply [75] Question: Long-term margin outlook - Margins have remained stable over the past few years, with expectations for continued stability subject to market conditions [77]

Financial Data and Key Metrics Changes - In Q1, net income was $16.5 million or $0.32 per diluted share, down from $38.2 million or $0.76 per diluted share in the prior year quarter [6] - Revenues totaled $250.4 million compared to $305.9 million in the prior year quarter, reflecting a decrease [6][7] - Pre-tax income was $21.9 million, down from $51.2 million in the same quarter last year, with a pre-tax profit margin of 8.7% compared to 16.7% previously [6][8] - SG&A expenses increased by 29% to $36 million, primarily due to a 30% increase in employee count [8] Business Line Data and Key Metrics Changes - The company sold 2,333 lots in the quarter with an average sales price of $105,500 [7] - The owned lot position increased by 23% year-over-year, and community count rose by 25% [5] - The gross profit margin for the quarter was 22%, slightly down from 23.8% in the prior year quarter [8] Market Data and Key Metrics Changes - Demand for finished lots remains solid, with owned lots under contract doubling from a year ago [4] - The company’s total lot position increased by 29% to 106,000 lots, with 64% owned and 36% controlled through purchase contracts [13] - The backlog of contracted lots is expected to generate approximately $2.2 billion in future revenue [14] Company Strategy and Development Direction - The company is focused on investing in land acquisition and development, with a planned investment of approximately $2 billion in fiscal 2025 [12] - The strategic goal is to double market share to 5% over the intermediate term [19] - The company aims to maintain a disciplined approach to capital investment while enhancing long-term value [19] Management's Comments on Operating Environment and Future Outlook - Management noted that while home inventories have increased, affordable housing supply remains limited, with favorable demographics supporting housing demand [8] - The company expects Q1 to be the lowest delivery quarter of the fiscal year, with higher revenues anticipated in the second half [18] - Management expressed confidence in the company’s position to gain market share in the fragmented lot development industry [19] Other Important Information - The company ended the quarter with $645 million in liquidity, including $132 million in cash [14] - The corporate credit rating was upgraded from B+ to BB- [14] - The company’s capital structure provides operational flexibility and positions it to take advantage of attractive opportunities [15] Q&A Session Summary Question: Can you provide more detail on the stabilization of costs in land development? - Management indicated that development costs have stabilized over the past 12 months, with no significant price increases observed [23] Question: How do you expect employee count growth to impact cost leverage in the next year or two? - Management expects SG&A expenses to moderate for the remainder of the year, anticipating high single-digit growth [26] Question: What drove the higher revenue per lot this quarter? - The increase was attributed to a specific infill project with significant lot prices that skewed the average sales price upward [28] Question: How has builder demand been trending year to date? - Builder demand remains strong, particularly for new communities, with existing communities also seeing solid demand [32] Question: Can you elaborate on the cadence of deliveries for the rest of the year? - Management noted that Q1 is typically the lowest delivery quarter, with a majority of deliveries expected in the second half of the year [34]

Financial Data and Key Metrics Changes - In Q1, net income was $16.5 million or $0.32 per diluted share, down from $38.2 million or $0.76 per diluted share in the prior year quarter [6] - Pre-tax income was $21.9 million compared to $51.2 million in Q1 of last year, with a pre-tax profit margin of 8.7% versus 16.7% in the prior year quarter due to reduced operating leverage [6] - Revenues totaled $250.4 million, down from $305.9 million in the prior year quarter [6][7] - Gross profit margin for the quarter was 22% compared to 23.8% for the same quarter last year [8] Business Line Data and Key Metrics Changes - The company sold 2,333 lots in the quarter with an average sales price of $105,500 [7] - Owned lot position increased by 23% compared to a year ago, and community count increased by 25% over the same period [5] - SG&A expenses increased by 29% from the prior year quarter to $36 million, primarily due to a 30% increase in employee count [8] Market Data and Key Metrics Changes - The total lot position increased by 29% from a year ago to 106,000 lots, with 64% owned and 36% controlled through purchase contracts [14] - Owned lots under contract increased by 51% from a year ago to 25,200 lots, representing 37% of the owned lot position [15] Company Strategy and Development Direction - The company is focused on investing in compelling land parcels, maximizing returns, and consolidating market share in the lot development industry [5] - The goal is to double market share to 5% over the intermediate term while maintaining a disciplined approach to capital investment [20] - The company expects to invest approximately $2 billion in land acquisition and development in fiscal 2025, subject to market conditions [12] Management's Comments on Operating Environment and Future Outlook - Management noted that builder demand remains strong, particularly for new communities, and there has been no softening in land prices [9][33] - The company expects Q1 to be the lowest delivery quarter of the year, with higher revenues anticipated in the second half of fiscal 2025 [19] - Management expressed confidence in the company's ability to gain market share in the fragmented lot development industry [20] Other Important Information - The company ended the quarter with $645 million of liquidity, including $132 million in unrestricted cash [15] - Total debt was $807 million with no senior note maturities until May 2026, and the net debt to capital ratio was 29.5% [15] Q&A Session Summary Question: Can you provide more detail on the stabilization of costs in land development? - Management indicated that development costs have stabilized over the past 12 months, with no significant price increases observed [23] Question: How do you foresee the growth in employee count and new markets affecting cost leverage? - Management expects SG&A expenses to moderate for the remainder of the year, anticipating high single-digit growth [26] Question: What is driving the higher revenue per lot this quarter? - The increase in revenue per lot was attributed to a specific infill project with significant lot prices that skewed the average sales price up for the quarter [28] Question: How has builder demand been trending year to date? - Builder demand remains strong, particularly for new communities, with no significant delays reported from major customers [32]