LGI Homes, Inc. Reports Third Quarter 2026 Results
Quarterly selling and administrative expenses declined in dollar terms, with their share of revenue improving 180 basis points year over year.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
LGI Homes (LGIH) reported third-quarter 2026 net income of $24.6 million, up from the prior year as home closings increased. Diluted earnings per share rose to $1.05 from $0.85. Total revenue increased 10.2% to $444.5 million. Total closings rose 10.4% to 1,222, including 33 currently and previously leased homes; new-home closings increased 11.6% to 1,189. Average new-home selling prices fell 1.2% to $367,962.
Homebuilding gross margin was 20.2%, up 40 basis points sequentially. Active communities increased 7.1% year over year to 151, and net debt to capital fell 420 basis points to 40.6%. LGI narrowed its expected 2026 closings to 4,600–4,800 homes, citing slower sales activity and affordability pressures, while maintaining other guidance. Nine-month net income declined to $53.7 million from $55.2 million despite homebuilding revenue growth of 2.2%.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointThird-quarter total revenue increased 10.2% to $444.5 million year over year.
- Moderate pointThird-quarter net income rose to $24.556 million from $19.704 million a year earlier.
- Moderate pointThird-quarter diluted earnings per share increased to $1.05 from $0.85 a year earlier.
- Moderate pointThird-quarter total closings increased 10.4% to 1,222, including 33 currently and previously leased homes.
- Moderate pointThird-quarter new-home closings increased 11.6% to 1,189 year over year.
- Moderate pointThird-quarter selling and administrative expenses declined; their revenue share improved 180 basis points year over year.
- Moderate pointNet debt to capital improved 420 basis points year over year to 40.6% at September 30, 2026.
- Moderate pointNotes payable, net, declined to $1,544.466 million from $1,656.803 million at December 31, 2025.
- Moderate pointNine-month total closings increased 4.4% to 3,578, including 143 currently and previously leased homes.
10 minor points
- Minor pointThird-quarter homebuilding gross margin increased 40 basis points sequentially to 20.2%.
- Minor pointThird-quarter adjusted homebuilding gross margin, a non-GAAP measure, increased 40 basis points sequentially to 23.7%.
- Minor pointActive communities increased 7.1% year over year to 151 at September 30, 2026.
- Minor pointCash increased to $69.437 million at September 30, 2026, from $61.247 million at December 31, 2025.
- Minor pointNine-month homebuilding revenue increased 2.2% to $1,258.8 million year over year.
- Minor pointNine-month new-home closings increased 1.5% to 3,435 year over year.
- Minor pointNine-month average new-home selling price increased 0.7% to $366,449 year over year.
- Minor pointNine-month selling expenses declined to $112.556 million from $119.602 million a year earlier.
- Minor pointNine-month general and administrative expenses declined to $82.730 million from $88.570 million a year earlier.
- Minor point. Forward-looking: it has not happened yet and may not happen.LGI maintains its expected year-end 2026 active selling community range of 150–160.
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.LGI narrowed expected 2026 closings to 4,600–4,800, citing slower sales and affordability pressures.
- Moderate pointNine-month Southeast homebuilding revenue fell to $289.706 million from $353.211 million a year earlier.
- Moderate pointNine-month Southeast new-home closings declined to 877 from 1,067 a year earlier.
- Minor pointThird-quarter average new-home selling price declined 1.2% to $367,962 year over year.
- Minor pointNine-month net income declined to $53.700 million from $55.231 million a year earlier.
5 minor points
- Minor pointNine-month diluted earnings per share declined to $2.31 from $2.37 a year earlier.
- Minor pointNine-month pretax income declined to $74.219 million from $74.465 million a year earlier.
- Minor pointNine-month land and other revenue declined to $34.634 million from $43.594 million a year earlier.
- Minor pointNine-month homebuilding gross margin was 19.7%, versus 20.1% excluding inventory impairment.
- Minor point. Forward-looking: it has not happened yet and may not happen.2026 guidance assumes similar economic and construction conditions and excludes additional U.S. trade-policy changes.
Key Figures
- Homebuilding revenue
- $437.5 million, up 10.3%
- Q3 2026 year over year
- Home deliveries
- 1,222, up 10.4%
- Q3 2026 year over year; includes currently and previously leased homes
- New home closings
- 1,189, up 11.6%
- Q3 2026 year over year
- Homebuilding gross margin
- 20.2%
- Q3 2026; above midpoint of previous guidance range
- Adjusted homebuilding gross margin
- 23.7%
- Q3 2026; above midpoint of previous guidance range
- Net income
- $24.6 million
- Q3 2026
- Diluted EPS
- $1.05
- Q3 2026
- Full-year home closings outlook
- 4,600–4,800 homes
- 2026; company narrowed its outlook
Previous Earnings Reports
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Reported Q2 margins above prior guidance midpoint and raised full-year margin and average-price ranges.
-
Reported Q3 homebuilding revenue, closings, net income and EPS as comparable prior-year baseline.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Key Terms
gaap financial
non-gaap financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
THE WOODLANDS, Texas, Nov. 03, 2026 (GLOBE NEWSWIRE) -- LGI Homes, Inc. (NASDAQ: LGIH) today announced financial results for the third quarter and the nine months ended September 30, 2026.
“We delivered strong third quarter financial results, generating year-over-year growth in closings, revenue, and earnings while maintaining strong profitability, expanding our community count, and further strengthening our balance sheet,” said Eric Lipar, Chairman and Chief Executive Officer of LGI Homes.
“During the quarter, we delivered 1,222 homes, a
“Homebuilding gross margin of
“Community growth remains an important element of our long-term strategy. We ended the quarter with 151 active communities, a
“Based on our year-to-date results and current market conditions, we are narrowing our full-year closings guidance and now expect to close between 4,600 and 4,800 homes in 2026. The revised outlook reflects slower sales activity in the quarter as affordability pressures continued to weigh on demand. We continue to see interest in homeownership and are leaning into our proven sales and marketing strategies to improve sales pace while maintaining our disciplined approach to balancing affordability and profitability. We are maintaining the remainder of our full-year 2026 guidance.”
Mr. Lipar concluded, “As we head into the final quarter of the year, our focus is on finishing 2026 strong. Affordability remains the key consideration for today’s buyers, and we have intentionally broadened our sales process to work with more prospective customers who may need additional time to qualify. With a growing community count, a strengthened balance sheet, and teams that continue to execute at a high level, we believe LGI Homes is well positioned to achieve our full-year objectives and carry that momentum into 2027.”
Third Quarter 2026 Results and Comparisons to Third Quarter 2025
- Homebuilding revenues of
$437.5 million , an increase of10.3% - Total home closings of 1,222, including 33 currently and previously leased homes, an increase of
10.4% - Home closings of 1,189, an increase of
11.6% - Average sales price per home closed of
$367,962 , a decrease of1.2% - Homebuilding gross margin as a percentage of homebuilding revenues of
20.2% - Adjusted homebuilding gross margin* as a percentage of homebuilding revenues of
23.7% - Net income before income taxes of
$33.3 million - Net income of
$24.6 million or$1.05 b asic EPS and$1.05 diluted EPS
Nine Months Ended September 30, 2026 Results and Comparisons to Nine Months Ended September 30, 2025
- Homebuilding revenues of
$1,258.8 million , an increase of2.2% - Total home closings of 3,578, including 143 currently and previously leased homes, an increase of
4.4% - Home closings of 3,435, an increase of
1.5% - Average sales price per home closed of
$366,449 , an increase of0.7% - Homebuilding gross margin as a percentage of homebuilding revenues of
19.7% - Homebuilding gross margin excluding inventory impairment* as a percentage of homebuilding revenues of
20.1% - Adjusted homebuilding gross margin* as a percentage of homebuilding revenues of
23.4% - Net income before income taxes of
$74.2 million - Net income of
$53.7 million or$2.31 b asic EPS and$2.31 diluted EPS - Adjusted net income* of
$57.2 million , or$2.46 adjusted basic EPS and$2.46 adjusted diluted EPS
| * | Please see “Non-GAAP Measures” for a reconciliation of Homebuilding Gross Margin Excluding Inventory Impairment (a non-GAAP measure) and Adjusted Homebuilding Gross Margin (a non-GAAP measure) to Homebuilding Gross Margin, and Adjusted Net Income (a non-GAAP measure) to Net Income, the most directly comparable GAAP measures, and for calculations of adjusted basic EPS and adjusted diluted EPS. | |
Balance Sheet Highlights
- Total liquidity of
$447.7 million at September 30, 2026, including cash and cash equivalents of$69.4 million and$378.3 million of availability under the Company’s revolving credit facility - Net debt to capital ratio* of
40.6% at September 30, 2026
| * | Please see “Non-GAAP Measures” for a reconciliation of net debt to capital ratio (a non-GAAP measure) to debt to capital ratio, the most directly comparable GAAP measure. | |
Full Year 2026 Outlook
Subject to the caveats in the Forward-Looking Statements section of this press release and the assumptions noted below, the Company is narrowing its home closings outlook for the full year 2026 and reiterating its other outlook items for the full year 2026. Currently, the Company expects for full year 2026:
- Home closings between 4,600 and 4,800
- Active selling communities at the end of 2026 between 150 and 160
- Average sales price per home closed between
$360,000 and$370,000 - Homebuilding gross margin as a percentage of homebuilding revenues between
19.0% and21.0% , adjusted for estimated capitalized interest and estimated purchase accounting of approximately3.5% , which results in adjusted homebuilding gross margin (non-GAAP) as a percentage of homebuilding revenues between22.5% and24.5% - SG&A as a percentage of total revenues between
15.0% and16.0% - Effective tax rate of approximately
26.5%
This outlook assumes that general economic conditions, including input costs, materials, product and labor availability, interest rates and mortgage availability, in the remainder of 2026 are similar to those experienced to date in 2026 and that construction costs, availability of land and land development costs for the remainder of 2026 are consistent with the Company’s recent experience. In addition, this outlook assumes that governmental regulations relating to land development and home construction are similar to those currently in place and does not take into account any additional changes to U.S. trade policies, including the imposition of tariffs and duties on homebuilding products.
Earnings Conference Call
The Company will host a conference call via live webcast for investors and other interested parties beginning at 12:30 p.m. Eastern Time on Tuesday, November 3, 2026 (the “Earnings Call”).
Participants may access the live webcast by visiting the Investor Relations section of the Company’s website at https://investor.lgihomes.com.
An archive of the Earnings Call webcast will be available for replay on the Company’s website for one year from the date of the Earnings Call.
About LGI Homes, Inc.
Headquartered in The Woodlands, Texas, LGI Homes, Inc. is a pioneer in the homebuilding industry, successfully applying an innovative and systematic approach to the design, construction and sale of homes across 36 markets in 21 states. LGI Homes has closed over 80,000 homes since its founding in 2003 and has delivered profitable financial results every year. Nationally recognized for its quality construction and exceptional customer service, LGI Homes was named to Newsweek’s list of the World’s Most Trustworthy Companies. LGI Homes’ commitment to excellence extends to its employees, earning the Company numerous workplace awards at the local, state, and national level, including the Top Workplaces USA 2026 Award. For more information about LGI Homes and its unique operating model focused on making the dream of homeownership a reality for families across the nation, please visit the Company’s website at www.lgihomes.com.
Forward-Looking Statements
Any statements made in this press release or on the Earnings Call that are not statements of historical fact, including statements about the Company’s beliefs, outlook and expectations, are forward-looking statements within the meaning of the federal securities laws, and should be evaluated as such. Forward-looking statements include information concerning expected 2026 home closings, active selling communities, average sales price per home closed, homebuilding gross margin as a percentage of homebuilding revenues, adjusted homebuilding gross margin as a percentage of homebuilding revenues, SG&A as a percentage of total revenues and effective tax rate, as well as market conditions and possible or assumed future results of operations, including descriptions of the Company’s business plan and strategies. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “will” or, in each case, their negative, or other variations or comparable terminology. For more information concerning factors that could cause actual results to differ materially from those contained in the forward-looking statements please refer to the “Risk Factors” section in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, including the “Cautionary Statement about Forward-Looking Statements” subsection within the “Risk Factors” section, and subsequent filings by the Company with the U.S. Securities and Exchange Commission (the “SEC”), including the “Risk Factors” and “Cautionary Statement about Forward-Looking Statements” sections in the Company’s Quarterly Report on Form 10-Q for the quarters ended March 31, 2026, June 30, 2026, and September 30, 2026 (when it is filed with the SEC). The Company bases these forward-looking statements or outlook on its current expectations, plans and assumptions that it has made in light of its experience in the industry, as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances and at such time. As you read and consider this press release or listen to the Earnings Call, you should understand that these statements are not guarantees of future performance or results. The forward-looking statements, including the Company’s 2026 outlook, are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements or outlook. Although the Company believes that these forward-looking statements and outlook are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect the Company’s actual results to differ materially from those expressed in the forward-looking statements and outlook. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. If the Company does update one or more forward-looking statements, there should be no inference that it will make additional updates with respect to those or other forward-looking statements.
| LGI HOMES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share data) | ||||||||
| September 30, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 69,437 | $ | 61,247 | ||||
| Accounts receivable | 29,013 | 32,467 | ||||||
| Real estate inventory | 3,487,271 | 3,555,602 | ||||||
| Pre-acquisition costs and deposits | 22,420 | 28,950 | ||||||
| Property and equipment, net | 189,811 | 107,145 | ||||||
| Other assets | 115,996 | 119,909 | ||||||
| Deferred tax assets, net | 10,483 | 9,904 | ||||||
| Goodwill | 12,018 | 12,018 | ||||||
| Total assets | $ | 3,936,449 | $ | 3,927,242 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Accounts payable | $ | 67,381 | $ | 16,179 | ||||
| Accrued expenses and other liabilities | 164,176 | 157,971 | ||||||
| Notes payable, net | 1,544,466 | 1,656,803 | ||||||
| Total liabilities | 1,776,023 | 1,830,953 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| EQUITY | ||||||||
| Common stock, par value | 279 | 277 | ||||||
| Additional paid-in capital | 357,690 | 347,308 | ||||||
| Retained earnings | 2,212,039 | 2,158,339 | ||||||
| Treasury stock, at cost, 4,656,592 shares as of September 30, 2026 and December 31, 2025 | (409,582 | ) | (409,635 | ) | ||||
| Total equity | 2,160,426 | 2,096,289 | ||||||
| Total liabilities and equity | $ | 3,936,449 | $ | 3,927,242 | ||||
| LGI HOMES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share data) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | ||||||||||||||||
| Homebuilding revenues | $ | 437,507 | $ | 396,632 | $ | 1,258,754 | $ | 1,231,537 | ||||||||
| Land and other revenues | 6,957 | 6,869 | 34,634 | 43,594 | ||||||||||||
| Total revenues | 444,464 | 403,501 | 1,293,388 | 1,275,131 | ||||||||||||
| Cost of sales | ||||||||||||||||
| Homebuilding costs | 349,018 | 311,520 | 1,010,942 | 962,104 | ||||||||||||
| Land and other costs | 6,262 | 4,712 | 30,437 | 37,441 | ||||||||||||
| Total cost of sales | 355,280 | 316,232 | 1,041,379 | 999,545 | ||||||||||||
| Selling expenses | 35,757 | 35,661 | 112,556 | 119,602 | ||||||||||||
| General and administrative | 26,298 | 27,967 | 82,730 | 88,570 | ||||||||||||
| Other income, net | (6,180 | ) | (3,060 | ) | (17,496 | ) | (7,051 | ) | ||||||||
| Net income before income taxes | 33,309 | 26,701 | 74,219 | 74,465 | ||||||||||||
| Income tax provision | 8,753 | 6,997 | 20,519 | 19,234 | ||||||||||||
| Net income | $ | 24,556 | $ | 19,704 | $ | 53,700 | $ | 55,231 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 1.05 | $ | 0.85 | $ | 2.31 | $ | 2.38 | ||||||||
| Diluted | $ | 1.05 | $ | 0.85 | $ | 2.31 | $ | 2.37 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 23,331,728 | 23,056,904 | 23,210,620 | 23,223,736 | ||||||||||||
| Diluted | 23,466,066 | 23,149,005 | 23,281,055 | 23,289,280 | ||||||||||||
Homebuilding Revenues, Home Closings, Average Sales Price Per Home Closed (ASP), Average Community Count, Average Monthly Absorption Rate, and Ending Community Count by Reportable Segment
(Revenues in thousands, unaudited)
| Three Months Ended September 30, 2026 | As of September 30, 2026 | ||||||||||||||
| Reportable Segment | Homebuilding Revenues | Home Closings | ASP | Average Community Count | Average Monthly Absorption Rate | Community Count at End of Period | |||||||||
| Central | $ | 103,495 | 342 | $ | 302,617 | 50.3 | 2.3 | 49 | |||||||
| Southeast | 109,238 | 335 | 326,084 | 30.0 | 3.7 | 30 | |||||||||
| Northwest | 60,125 | 115 | 522,826 | 18.0 | 2.1 | 18 | |||||||||
| West | 108,581 | 239 | 454,314 | 29.3 | 2.7 | 29 | |||||||||
| Florida | 56,068 | 158 | 354,861 | 24.4 | 2.2 | 25 | |||||||||
| Total | $ | 437,507 | 1,189 | $ | 367,962 | 152.0 | 2.6 | 151 | |||||||
| Three Months Ended September 30, 2025 | As of September 30, 2025 | ||||||||||||||
| Reportable Segment | Homebuilding Revenues | Home Closings | ASP | Average Community Count | Average Monthly Absorption Rate | Community Count at End of Period | |||||||||
| Central | $ | 99,355 | 307 | $ | 323,632 | 45.0 | 2.3 | 45 | |||||||
| Southeast | 101,419 | 299 | 339,194 | 32.3 | 3.1 | 32 | |||||||||
| Northwest | 49,408 | 109 | 453,284 | 14.7 | 2.5 | 14 | |||||||||
| West | 91,699 | 203 | 451,719 | 25.7 | 2.6 | 25 | |||||||||
| Florida | 54,751 | 147 | 372,456 | 24.3 | 2.0 | 25 | |||||||||
| Total | $ | 396,632 | 1,065 | $ | 372,424 | 142.0 | 2.5 | 141 | |||||||
Homebuilding Revenues, Home Closings, Average Sales Price Per Home Closed (ASP), Average Community Count, Average Monthly Absorption Rate, and Ending Community Count by Reportable Segment
(Revenues in thousands, unaudited)
| Nine Months Ended September 30, 2026 | As of September 30, 2026 | ||||||||||||||
| Reportable Segment | Homebuilding Revenues | Home Closings | ASP | Average Community Count | Average Monthly Absorption Rate | Community Count at End of Period | |||||||||
| Central | $ | 320,432 | 1,057 | $ | 303,152 | 49.1 | 2.4 | 49 | |||||||
| Southeast | 289,706 | 877 | 330,338 | 29.8 | 3.3 | 30 | |||||||||
| Northwest | 156,736 | 302 | 518,993 | 16.4 | 2.0 | 18 | |||||||||
| West | 319,040 | 710 | 449,352 | 28.2 | 2.8 | 29 | |||||||||
| Florida | 172,840 | 489 | 353,456 | 23.9 | 2.3 | 25 | |||||||||
| Total | $ | 1,258,754 | 3,435 | $ | 366,449 | 147.4 | 2.6 | 151 | |||||||
| Nine Months Ended September 30, 2025 | As of September 30, 2025 | ||||||||||||||
| Reportable Segment | Homebuilding Revenues | Home Closings | ASP | Average Community Count | Average Monthly Absorption Rate | Community Count at End of Period | |||||||||
| Central | $ | 313,487 | 997 | $ | 314,430 | 47.8 | 2.3 | 45 | |||||||
| Southeast | 353,211 | 1,067 | 331,032 | 31.8 | 3.7 | 32 | |||||||||
| Northwest | 137,132 | 274 | 500,482 | 15.8 | 1.9 | 14 | |||||||||
| West | 258,994 | 592 | 437,490 | 25.3 | 2.6 | 25 | |||||||||
| Florida | 168,713 | 454 | 371,615 | 24.6 | 2.1 | 25 | |||||||||
| Total | $ | 1,231,537 | 3,384 | $ | 363,929 | 145.3 | 2.6 | 141 | |||||||
Owned and Controlled Lots
The table below shows (i) home closings by reportable segment for the nine months ended September 30, 2026 and (ii) the Company’s owned or controlled lots by reportable segment as of September 30, 2026.
| Nine Months Ended September 30, 2026 | As of September 30, 2026 | |||||||||
| Reportable Segment | Home Closings | Owned (1) | Controlled | Total | ||||||
| Central | 1,057 | 17,813 | 671 | 18,484 | ||||||
| Southeast | 877 | 12,602 | 2,119 | 14,721 | ||||||
| Northwest | 302 | 5,879 | 1,012 | 6,891 | ||||||
| West | 710 | 8,947 | 3,111 | 12,058 | ||||||
| Florida | 489 | 5,029 | 1,217 | 6,246 | ||||||
| Total | 3,435 | 50,270 | 8,130 | 58,400 | ||||||
| (1) | Of the 50,270 owned lots as of September 30, 2026, 34,119 were raw/under development lots and 16,151 were finished lots. Finished lots included 2,147 completed homes, including information centers, and 1,626 homes in progress. | |||||||||
Backlog Data
As of the dates set forth below, the Company’s net orders, cancellation rate and ending backlog homes and value were as follows (dollars in thousands, unaudited):
| Nine Months Ended September 30, | |||||||||
| Backlog Data | 2026 (4) | 2025 (5) | |||||||
| Net orders (1) | 2,869 | 4,098 | |||||||
| Cancellation rate (2) | 48.9 | % | 28.1 | % | |||||
| Ending backlog – homes (3) | 685 | 1,305 | |||||||
| Ending backlog – value (3) | $ | 273,711 | $ | 498,713 | |||||
| (1) | Net orders are new (gross) orders for the purchase of homes during the period, less cancellations of existing purchase contracts during the period. | ||||||||
| (2) | Cancellation rate for a period is the total number of purchase contracts cancelled during the period divided by the total new (gross) orders for the purchase of homes during the period. | ||||||||
| (3) | Ending backlog consists of retail homes at the end of the period that are under a purchase contract that has been signed by homebuyers who have met preliminary financing criteria but have not yet closed and wholesale contracts with varying terms. Ending backlog is valued at the contract amount. | ||||||||
| (4) | As of September 30, 2026, the Company had 85 units related to bulk sales agreements associated with its wholesale business. | ||||||||
| (5) | As of September 30, 2025, the Company had 60 units related to bulk sales agreements associated with its wholesale business. | ||||||||
Non-GAAP Measures
In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company has provided information in this press release relating to adjusted net income, adjusted basic earnings per share, adjusted diluted earnings per share, homebuilding gross margin excluding inventory impairment, adjusted homebuilding gross margin, and net debt to capital ratio.
Adjusted Net Income, Adjusted Basic Earnings per Share, and Adjusted Diluted Earnings per Share
Adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance. The Company defines adjusted net income as net income less inventory impairment charges. The Company defines adjusted basic earnings per share as adjusted net income divided by weighted average basic shares outstanding. The Company defines adjusted diluted earnings per share as adjusted net income divided by weighted average diluted shares outstanding. Management believes that the presentation of adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share provides useful information to investors because such measures isolate the impact that inventory impairment charges have on net income and earnings per share. However, because adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share exclude the inventory impairment charge, which has real economic effects and could impact the Company’s results, the utility of adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share as measures of the Company’s operating performance may be limited. In addition, other companies may not calculate adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share in the same manner that the Company does. Accordingly, adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share should be considered only as supplements to net income, basic earnings per share, and diluted earnings per share, respectively, as measures of the Company’s performance.
The following table reconciles adjusted net income to net income, which is the GAAP financial measure that management believes to be most directly comparable, and adjusted basic earnings per share and adjusted diluted earnings per share are calculated by dividing adjusted net income by basic or diluted weighted average shares outstanding, respectively (dollars in thousands, except earnings per share, unaudited):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||
| Net income | $ | 24,556 | $ | 19,704 | $ | 53,700 | $ | 55,231 | ||||
| Basic weighted average number of shares outstanding | 23,331,728 | 23,056,904 | 23,210,620 | 23,223,736 | ||||||||
| Basic earnings per share | $ | 1.05 | $ | 0.85 | $ | 2.31 | $ | 2.38 | ||||
| Diluted weighted average number of shares outstanding | 23,466,066 | 23,149,005 | 23,281,055 | 23,289,280 | ||||||||
| Diluted earnings per share | $ | 1.05 | $ | 0.85 | $ | 2.31 | $ | 2.37 | ||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||
| Net income | $ | 24,556 | $ | 19,704 | $ | 53,700 | $ | 55,231 | |||||
| Inventory impairment | — | — | 4,681 | — | |||||||||
| Tax impact due to above reconciling item | — | — | (1,225 | ) | — | ||||||||
| Adjusted net income | $ | 24,556 | $ | 19,704 | $ | 57,156 | $ | 55,231 | |||||
| Basic weighted average number of shares outstanding | 23,331,728 | 23,056,904 | 23,210,620 | 23,223,736 | |||||||||
| Adjusted basic earnings per share | $ | 1.05 | $ | 0.85 | $ | 2.46 | $ | 2.38 | |||||
| Diluted weighted average number of shares outstanding | 23,466,066 | 23,149,005 | 23,281,055 | 23,289,280 | |||||||||
| Adjusted diluted earnings per share | $ | 1.05 | $ | 0.85 | $ | 2.46 | $ | 2.37 | |||||
Homebuilding Gross Margin Excluding Inventory Impairment and Adjusted Homebuilding Gross Margin
Homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance. The Company defines homebuilding gross margin excluding inventory impairment as homebuilding gross margin less inventory impairment charges. The Company defines adjusted homebuilding gross margin as homebuilding gross margin excluding inventory impairment, less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales. Management believes homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin are useful because they isolate the impact that capitalized interest, purchase accounting adjustments, and inventory impairment (as applicable) have on homebuilding gross margin. However, because homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin exclude capitalized interest, purchase accounting adjustments, and inventory impairment (as applicable), which have real economic effects and could impact the Company’s results, the utility of homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin as measures of the Company’s operating performance may be limited. In addition, other companies may not calculate homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin in the same manner that the Company does. Accordingly, homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin should be considered only as supplements to homebuilding gross margin as a measure of the Company’s performance.
The following table reconciles homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin to homebuilding gross margin (homebuilding revenues less homebuilding costs), which is the GAAP financial measure that management believes to be most directly comparable (dollars in thousands, unaudited):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Homebuilding revenues | $ | 437,507 | $ | 396,632 | $ | 1,258,754 | $ | 1,231,537 | |||||||||
| Homebuilding costs | 349,018 | 311,520 | 1,010,942 | 962,104 | |||||||||||||
| Homebuilding gross margin | $ | 88,489 | $ | 85,112 | $ | 247,812 | $ | 269,433 | |||||||||
| Inventory impairment | — | — | 4,681 | — | |||||||||||||
| Homebuilding gross margin excluding inventory impairment | $ | 88,489 | $ | 85,112 | $ | 252,493 | $ | 269,433 | |||||||||
| Capitalized interest amortized to cost of sales | 14,723 | 11,004 | 41,171 | 31,107 | |||||||||||||
| Purchase accounting adjustments (1) | 449 | 999 | 1,382 | 2,850 | |||||||||||||
| Adjusted homebuilding gross margin | $ | 103,661 | $ | 97,115 | $ | 295,046 | $ | 303,390 | |||||||||
| Homebuilding gross margin % (2) | 20.2 | % | 21.5 | % | 19.7 | % | 21.9 | % | |||||||||
| Homebuilding gross margin % excluding inventory impairment (2) | 20.2 | % | 21.5 | % | 20.1 | % | 21.9 | % | |||||||||
| Adjusted homebuilding gross margin % (2) | 23.7 | % | 24.5 | % | 23.4 | % | 24.6 | % | |||||||||
| (1) | Adjustments result from the application of purchase accounting for acquisitions and represent the amount of the fair value step-up adjustments included in cost of sales for real estate inventory sold after the acquisition dates. | ||||||||||||||||
| (2) | Calculated as a percentage of homebuilding revenues. | ||||||||||||||||
Net Debt to Capital Ratio
Net debt to capital ratio is a non-GAAP financial measure used by management as a supplemental measure in understanding the leverage employed in the Company’s operations and as an indicator of its ability to obtain financing. The Company defines net debt to capital ratio as net debt (which is total debt minus cash and cash equivalents) divided by net debt plus total equity. Management believes that the presentation of net debt to capital ratio provides useful information to investors regarding the Company’s financial leverage and its ability to meet long-term obligations. By excluding cash and cash equivalents from total debt, the ratio offers a clearer view of the Company’s capital structure and financial flexibility. Management uses this metric to monitor the Company’s capital efficiency and to evaluate the effectiveness of its capital management strategies over time. Other companies may define this measure differently and, as a result, the Company’s measure of net debt to capital ratio may not be directly comparable to the measures of other companies.
The following table reconciles net debt to capital ratio to debt to capital ratio, which is the GAAP financial measure that management believes to be most directly comparable (dollars in thousands, unaudited):
| September 30, 2026 | December 31, 2025 | ||||||||
| Total debt (Notes payable) | $ | 1,544,466 | $ | 1,656,803 | |||||
| Total equity | 2,160,426 | 2,096,289 | |||||||
| Total capital | $ | 3,704,892 | $ | 3,753,092 | |||||
| Debt to capital ratio | 41.7 | % | 44.1 | % | |||||
| Total debt (Notes payable) | $ | 1,544,466 | $ | 1,656,803 | |||||
| Less: Cash and cash equivalents | 69,437 | 61,247 | |||||||
| Net debt | $ | 1,475,029 | $ | 1,595,556 | |||||
| Total equity | 2,160,426 | 2,096,289 | |||||||
| Total net capital | $ | 3,635,455 | $ | 3,691,845 | |||||
| Net debt to capital ratio (1) | 40.6 | % | 43.2 | % | |||||
| (1) | Net debt to capital ratio is calculated as net debt (which is total debt minus cash and cash equivalents) divided by net debt plus total equity. | ||||||||
| CONTACT: | Joshua D. Fattor |
| Executive Vice President of Finance and Capital Markets | |
| Head of Investor Relations | |
| (281) 210-2586 | |
| investorrelations@lgihomes.com |
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were LGI Homes' third-quarter 2026 earnings and revenue?
LGI Homes earned $24.556 million, or $1.05 per diluted share, on total revenue of $444.464 million. A year earlier, net income was $19.704 million, diluted earnings per share were $0.85, and total revenue was $403.501 million.
What is LGI Homes' updated 2026 outlook?
LGI expects 4,600–4,800 home closings in 2026 and maintained its other guidance. Expected average selling prices remain $360,000–$370,000, with homebuilding gross margin of 19.0%–21.0% and adjusted homebuilding gross margin of 22.5%–24.5%. Expected selling and administrative expenses remain 15.0%–16.0% of total revenue, with an effective tax rate of approximately 26.5%.
How much liquidity did LGI Homes have at September 30, 2026?
LGI Homes had $447.7 million of total liquidity at September 30, 2026. This included $69.4 million of cash and cash equivalents and $378.3 million available under its revolving credit facility.
What assumptions underpin LGI Homes' 2026 guidance?
LGI's outlook assumes that remaining-2026 economic conditions and construction costs stay similar to recent experience. This includes input costs, labor and material availability, interest rates, mortgage availability, land availability and development costs. It also assumes similar land-development and construction regulations and excludes additional U.S. trade-policy changes, including tariffs and duties on homebuilding products.