Profit falls as Dream Finders Homes (NYSE: DFH) posts record Q1 sales
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Dream Finders Homes, Inc. reported weaker profitability for the first quarter of 2026 while delivering record sales activity. Total revenues were $887.8 million, down from $989.9 million a year earlier, as homebuilding revenues fell to $836.7 million. Net income attributable to Dream Finders dropped to $13.3 million, or $0.11 per basic share, from $54.9 million, or $0.55 per basic share, driven by lower average selling prices, higher incentives and cost pressures that reduced homebuilding gross margin to 14.5% from 19.2%. At the same time, net sales rose 19% to a record 2,408 homes and the cancellation rate improved to 7.5% from 11.7%, supporting a higher backlog of 2,377 homes valued at about $1.1 billion. Financial services revenues surged to $51.2 million, helped by the Alliant Title acquisition, with pre-tax income from that segment increasing to $9 million. The company ended March 31, 2026 with $435.4 million in cash and total liquidity of $661 million and reaffirmed full-year 2026 guidance of approximately 9,250 home closings.
Positive
- Record net sales and improved cancellations: Net sales rose 19% to 2,408 homes and the cancellation rate improved to 7.5% from 11.7%, supporting a larger backlog of 2,377 homes valued at about $1.1 billion.
- Rapid growth in financial services: Financial services revenues increased 159% to $51.2 million and segment pre-tax income rose 33% to $9 million, helped by the Alliant Title acquisition and hedging execution at Jet HomeLoans.
- Strong liquidity despite higher leverage: Cash and cash equivalents increased to $435.4 million, contributing to total liquidity of $661 million as of March 31, 2026, while the company continued to invest in inventories and lots.
- Active community expansion: Active communities grew to 332 from 258 year over year, providing a broader platform for future sales and supporting management’s reiterated 2026 guidance of approximately 9,250 home closings.
Negative
- Sharp earnings and margin compression: Net income attributable to Dream Finders fell to $13.3 million from $54.9 million, with homebuilding gross margin declining to 14.5% from 19.2% as incentives, land and financing costs weighed on profitability.
- Lower revenues and average selling prices: Total revenues declined to $887.8 million from $989.9 million and average sales price of homes closed fell to $447,753 from $498,284, reflecting heavier use of sales incentives and mix changes.
- Higher leverage on the balance sheet: Net homebuilding debt to net capitalization increased to 44.7% from 40.4% a year earlier and total debt reached $1.89 billion, raising balance sheet risk if market conditions weaken further.
Insights
Strong orders but sharply weaker margins and earnings in Q1 2026.
Dream Finders Homes increased net sales 19% to 2,408 homes, cut its cancellation rate to 7.5%, and grew backlog value to about $1.1 billion. These indicators show solid buyer demand despite higher mortgage rates.
However, homebuilding revenues declined to $836.7 million and homebuilding gross margin compressed to 14.5% from 19.2%. Combined with higher interest and land costs, this pushed pre-tax income down to $18.8 million and net income attributable to the company to $13.3 million, compared with $54.9 million a year earlier.
The company’s 24.3% adjusted homebuilding gross margin and 44.7% net homebuilding debt to net capitalization highlight an asset-light but more leveraged balance sheet than a year ago. Management reiterated full-year guidance of approximately 9,250 home closings for 2026, so future quarters will show whether pricing and incentives stabilize margins.
Leverage inches higher but liquidity remains solid.
Total debt rose to $1.89 billion with net homebuilding debt of about $1.29 billion. Net homebuilding debt to net capitalization increased to 44.7% versus 40.4% a year earlier, indicating somewhat higher leverage alongside elevated incentives and margin pressure.
At the same time, cash and cash equivalents nearly doubled to $435.4 million, contributing to total liquidity of $661 million as of March 31, 2026. The company also repurchased 1,063,560 Class A shares for $18 million, signaling continued capital return while funding growth in inventories and lot deposits.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Total revenues: $887.8M
Net income attributable to DFH: $13.3M
Basic EPS: $0.11 per share
+5 more
8 metrics
Total revenues
$887.8M
Three months ended March 31, 2026
Net income attributable to DFH
$13.3M
Q1 2026 vs $54.9M in Q1 2025
Basic EPS
$0.11 per share
Q1 2026 basic earnings per share
Homebuilding gross margin
14.5%
Q1 2026, down from 19.2% in Q1 2025
Adjusted homebuilding gross margin
24.3%
Non-GAAP metric for Q1 2026
Net homebuilding debt to net capitalization
44.7%
As of March 31, 2026
Key Terms
Adjusted homebuilding gross margin, Net homebuilding debt to net capitalization, Cancellation rate, Backlog, +1 more
5 terms
Adjusted homebuilding gross margin financial
"Adjusted homebuilding gross margin in the first quarter of 2026 was 24.3%, compared to 27.8% in the first quarter of 2025."
A measure of the profit a homebuilder earns on its core house-construction operations after removing or normalizing items that can distort the picture, such as one-time charges, unusual write-downs or accounting treatments for land and lots. Think of it as the builder’s “clean” margin on each house, like a baker calculating cake profit after excluding a one-off oven repair. Investors use it to see true operating performance, compare builders, and judge pricing power and cost control over time.
Net homebuilding debt to net capitalization financial
"Net homebuilding debt to net capitalization is a non-GAAP financial measure calculated as homebuilding debt, less cash and cash equivalents..."
Cancellation rate financial
"The cancellation rate in the first quarter of 2026 was 7.5%, an improvement of 420 bps compared with the first quarter of 2025 cancellation rate of 11.7%."
The cancellation rate is the share of orders, bookings, subscriptions or appointments that are cancelled before they are completed, expressed as a percentage of total commitments. Investors care because a rising cancellation rate is like many diners calling off reservations: it can signal weaker demand, lower predictable revenue, higher costs to replace lost business, and risks to future growth and cash flow forecasts.
Backlog financial
"As of March 31, 2026, DFH had a backlog of 2,377 homes, valued at $1.1 billion..."
A backlog is the amount of work or orders that a company has received but hasn't completed yet. It’s like a restaurant with many dishes to serve; the backlog shows how many orders are still waiting to be finished. It matters because a large backlog can indicate strong demand or potential delays in delivering products or services.
Mortgage warehouse facilities financial
"Mortgage warehouse facilities | 139,031 | | | 192,837 |"
Mortgage warehouse facilities are short-term lines of credit banks or investors provide to mortgage lenders so they can fund borrowers’ home loans before those loans are sold or packaged and paid off. Think of it as a temporary storage or bridge loan that keeps day-to-day lending running; if the facility tightens or fails, a lender can’t fund new mortgages, which can quickly hurt revenue, liquidity and investor returns.
Earnings Snapshot
Total revenues: $887.8M · Guidance included
Q1 2026
Total revenues
$887.8M
Homebuilding revenues
$836.7M
-14% vs Q1 2025
Net income attributable to DFH
$13.3M
Basic EPS
$0.11
Homebuilding gross margin
14.5%
Net sales units
2,408
+19% vs Q1 2025
Guidance
The company reiterated full-year 2026 guidance of approximately 9,250 expected home closings.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 30, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code: (904 ) 644-7670
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On April 30, 2026 , Dream Finders Homes, Inc. (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2026. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference into this Item 2.02.
The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Number | Description | |||||||
99.1 | Earnings Press Release dated | |||||||
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DREAM FINDERS HOMES, INC. | ||||||||
Date: | By: | /s/ Robert E. Riva | ||||||
| Robert E. Riva | ||||||||
| Vice President, General Counsel and Corporate Secretary | ||||||||
Exhibit 99.1
Dream Finders Homes Announces First Quarter 2026 Results
Record Quarter Net Sales of 2,408, Up 19%
Jacksonville, FL. — April 30, 2026 — Dream Finders Homes, Inc. (the “Company”, “Dream Finders Homes”, “Dream Finders” or “DFH”) (NYSE: DFH) announced its financial results for the first quarter ended March 31, 2026.
First Quarter 2026 Highlights (As Compared to First Quarter 2025)
•Net sales increased 19% to 2,408 from 2,032
•Homebuilding revenues of $837 million compared to $970 million
•Home closings of 1,870 compared to 1,925
•Homebuilding gross margin of 14.5% compared to 19.2%
•Adjusted homebuilding gross margin (non-GAAP) of 24.3% compared to 27.8%
•Pre-tax income of $19 million compared to $71 million
•Net income attributable to DFH of $13 million, or $0.11 per basic share, compared to $55 million, or $0.55 per basic share
•Financial services pre-tax income of $9 million compared to $7 million
•Controlled lot pipeline of 60,629 as of March 31, 2026 compared to 63,121 as of December 31, 2025
•Total liquidity of $661 million as of March 31, 2026, comprised of cash and cash equivalents and availability under the revolving credit facility
•Return on participating equity of 12.0% compared to 28.5%
•Repurchased 1,063,560 Class A common shares for $18 million during the three months ended March 31, 2026
Management Commentary
Patrick Zalupski, Dream Finders Homes Chairman and CEO, said, “We continue to operate in a challenging environment as elevated mortgage rates and broader macroeconomic uncertainty have impacted affordability and consumer confidence across our markets. Despite these headwinds, I believe the team did an admirable job showing our ability to adapt pricing and incentive strategies to align with current market conditions, which enabled us to generate record net sales in the first quarter of 2,408, a 19% increase from the prior year quarter.
While closings and profitability were impacted in the short term, our strong sales performance reflects continued demand for our product and the effectiveness of our approach in maintaining absorption in a competitive environment. As we have consistently stated, our focus remains on managing the business with discipline while positioning for long-term growth.
We remain committed to driving operational efficiencies and delivering high-quality, affordable homes that meet the needs of our customers. Although near-term conditions remain dynamic, we believe our disciplined approach and scalable platform position us well to navigate the current environment and capitalize on opportunities over the long term. We reiterate our 2026 full year guidance of approximately 9,250 expected home closings.”
Homebuilding
First Quarter 2026 Results
Homebuilding revenues in the first quarter of 2026 were $837 million, a decrease of 14% when compared to the first quarter of 2025. The decrease in revenues was driven by lower average selling prices (“ASP”) and home closings. Declines in ASP across all segments were attributable to the continued use of sales incentives during the first quarter of 2026, as well as changes in our geographic and product mix.
Homebuilding gross margin percentage in the first quarter of 2026 was 14.5%, compared to 19.2% in the first quarter of 2025. The decrease in homebuilding gross margin percentage was primarily the result of higher sales incentives, as well as land and financing costs.
Adjusted homebuilding gross margin in the first quarter of 2026 was 24.3%, compared to 27.8% in the first quarter of 2025. Adjusted homebuilding gross margin is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures” below.
Selling, general and administrative expense (“SG&A”) in the first quarter of 2026 decreased 5% to $111 million, compared to $117 million in the first quarter of 2025. The decrease in SG&A was primarily due to lower compensation costs from payroll and incentive reductions commensurate with operational volume and financial results. SG&A as a percentage of homebuilding revenues in the first quarter of 2026 increased 130 bps to 13.3%, compared to 12.0% in the first quarter of 2025 due to reduced absorption.
Other expense, net of customary other income items in the first quarter of 2026 includes investing activities unrelated to our core homebuilding operations, which resulted in a net loss of approximately $1 million, primarily driven by an unrealized loss due to changes in fair value.
Consolidated net income attributable to DFH in the first quarter of 2026 was $13 million, or $0.11 per basic share, compared to $55 million, or $0.55 per basic share, in the first quarter of 2025. Current quarter net income was negatively affected by approximately $1 million due to a higher effective tax rate, primarily as a result of decreased tax benefits from stock-based compensation.
Net sales in the first quarter of 2026 were 2,408, an increase of 19% compared to 2,032 net sales for the first quarter of 2025. During the three months ended March 31, 2026, net sales included 145 sales related to a built-for-rent contract in our Mid-Atlantic segment. The cancellation rate in the first quarter of 2026 was 7.5%, an improvement of 420 bps compared with the first quarter of 2025 cancellation rate of 11.7%. The record level of sales and low cancellation rate this quarter highlight the effectiveness of our sales incentive strategies in driving traffic, as well as our continued focus on offering high-quality, affordable homes in desirable communities across our markets.
2
First Quarter 2026 Backlog
As of March 31, 2026, DFH had a backlog of 2,377 homes, valued at $1.1 billion, compared to the backlog of 1,839 homes, valued at $0.8 billion as of December 31, 2025. As of March 31, 2026, the ASP in backlog was $465,237 compared to $446,597 as of December 31, 2025. As of March 31, 2026, approximately 106 homes are expected to be delivered in 2027 and beyond.
The following table shows the backlog units and ASP as of March 31, 2026 by homebuilding segment:
| As of March 31, 2026 (unaudited) | |||||||||||
| Backlog: | Units | Average Sales Price | |||||||||
| Southeast | 1,037 | $ | 448,491 | ||||||||
| Mid-Atlantic | 778 | 370,459 | |||||||||
| Midwest | 562 | 627,344 | |||||||||
| Total | 2,377 | $ | 465,237 | ||||||||
Financial Services
Financial services revenues increased by $31 million, or 159%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, mostly due to the April 2025 acquisition of Alliant Title. Income before taxes increased by $2 million, or 33%, during the first quarter of 2026 as compared to the same period in 2025, primarily due to execution efficiency and hedging strategies implemented by Jet HomeLoans after the first quarter of 2025.
Full Year 2026 Outlook
Dream Finders Homes maintains its guidance of approximately 9,250 home closings for the full year 2026.
About Dream Finders Homes
Dream Finders Homes (NYSE: DFH), headquartered in Jacksonville, Florida, was recognized as the 2025 National Builder of the Year by Builder magazine. Dream Finders Homes builds single-family homes throughout the Southeast, Mid-Atlantic and Midwest, including Florida, Texas, Tennessee, North Carolina, South Carolina, Georgia, Colorado, Arizona, and the Washington, D.C. metropolitan area, which comprises Washington D.C., Northern Virginia and Maryland. As the Official Home Builder of the PGA TOUR, the Jacksonville Jaguars and the Tampa Bay Rays, Dream Finders Homes is deeply committed to excellence beyond homebuilding and into the communities it serves. Through its wholly owned subsidiaries, DFH also provides mortgage financing as well as title agency and underwriting services to homebuyers. Dream Finders Homes achieves its growth and returns by maintaining an asset-light homebuilding model. For more information, please visit www.dreamfindershomes.com.
Forward-Looking Statements
This press release includes forward-looking statements regarding future events which include, but are not limited to, projected 2026 home closings and market conditions, possible or assumed future results of operations, and statements regarding the Company’s strategies and expectations as they relate to market opportunities and growth. All forward-looking statements are based on Dream Finders Homes’ beliefs as well as assumptions made by and information currently available to Dream Finders Homes. These statements reflect Dream Finders Homes’ current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in Dream Finders Homes’ Annual Report on Form 10-K for the year ended December 31, 2025 and other filings with the U.S. Securities and Exchange Commission. Dream Finders Homes undertakes no obligation to update or revise any forward-looking statement, except as may be required by applicable law.
3
Dream Finders Homes, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share and share amounts)
| March 31, 2026 (unaudited) | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 435,375 | $ | 234,766 | |||||||
| Restricted cash | 43,638 | 49,624 | |||||||||
| Accounts receivable | 32,823 | 39,120 | |||||||||
| Inventories | 2,140,634 | 2,025,662 | |||||||||
| Lot deposits | 534,159 | 545,253 | |||||||||
| Mortgage loans held for sale | 147,184 | 205,089 | |||||||||
| Other assets | 241,462 | 223,999 | |||||||||
| Investments in unconsolidated entities | 20,256 | 26,610 | |||||||||
| Goodwill | 377,361 | 377,361 | |||||||||
| Total assets | $ | 3,972,892 | $ | 3,727,484 | |||||||
| Liabilities | |||||||||||
| Accounts payable | $ | 123,162 | $ | 126,130 | |||||||
| Accrued liabilities | 279,781 | 321,457 | |||||||||
| Customer deposits | 86,123 | 69,593 | |||||||||
| Revolving credit facility and other borrowings | 1,158,261 | 822,296 | |||||||||
| Senior unsecured notes, net | 591,693 | 591,060 | |||||||||
| Mortgage warehouse facilities | 139,031 | 192,837 | |||||||||
| Total liabilities | 2,378,051 | 2,123,373 | |||||||||
| Mezzanine Equity | |||||||||||
| Redeemable preferred stock | 148,500 | 148,500 | |||||||||
| Redeemable noncontrolling interests | 29,539 | 29,539 | |||||||||
| Equity | |||||||||||
Class A common stock, $0.01 per share; 289,000,000 authorized, 37,390,538 and 36,667,477 issued as of March 31, 2026 and December 31, 2025, respectively | 374 | 367 | |||||||||
Class B common stock, $0.01 per share; 61,000,000 authorized, 57,726,153 issued as of March 31, 2026 and December 31, 2025 | 577 | 577 | |||||||||
Accumulated other comprehensive (loss) income | (452) | 613 | |||||||||
| Additional paid-in capital | 298,679 | 298,594 | |||||||||
| Retained earnings | 1,183,831 | 1,173,950 | |||||||||
Treasury stock, at cost, 3,187,654 and 2,124,094 shares of Class A common stock as of March 31, 2026 and December 31, 2025, respectively | (68,008) | (49,526) | |||||||||
| Total Dream Finders Homes, Inc. stockholders’ equity | 1,415,001 | 1,424,575 | |||||||||
| Noncontrolling interests | 1,801 | 1,497 | |||||||||
| Total equity | 1,416,802 | 1,426,072 | |||||||||
| Total liabilities, mezzanine equity and equity | $ | 3,972,892 | $ | 3,727,484 | |||||||
4
Dream Finders Homes, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share and share amounts)
| Three Months Ended March 31, (unaudited) | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Revenues: | ||||||||||||||
| Homebuilding | $ | 836,659 | $ | 970,108 | ||||||||||
| Financial services | 51,180 | 19,763 | ||||||||||||
| Total revenues | 887,839 | 989,871 | ||||||||||||
| Homebuilding cost of sales | 715,643 | 783,536 | ||||||||||||
| Financial services expense | 42,711 | 12,866 | ||||||||||||
| Selling, general and administrative expense | 110,903 | 116,694 | ||||||||||||
| Income from unconsolidated entities | (335) | (180) | ||||||||||||
| Contingent consideration revaluation | — | 1,100 | ||||||||||||
| Other expense, net | 111 | 4,690 | ||||||||||||
| Income before taxes | 18,806 | 71,165 | ||||||||||||
Income tax expense | (5,246) | (16,155) | ||||||||||||
| Net income | 13,560 | 55,010 | ||||||||||||
| Net income attributable to noncontrolling interests | (304) | (107) | ||||||||||||
| Net income attributable to Dream Finders Homes, Inc. | $ | 13,256 | $ | 54,903 | ||||||||||
| Earnings per share | ||||||||||||||
| Basic | $ | 0.11 | $ | 0.55 | ||||||||||
| Diluted | $ | 0.11 | $ | 0.54 | ||||||||||
| Weighted-average number of shares | ||||||||||||||
| Basic | 92,020,167 | 93,550,316 | ||||||||||||
| Diluted | 92,429,194 | 101,360,214 | ||||||||||||
5
Dream Finders Homes, Inc.
Other Financial and Operating Data
| Three Months Ended March 31, (unaudited) | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Other Financial and Operating Data: | ||||||||||||||
| Home closings | 1,870 | 1,925 | ||||||||||||
Average sales price of homes closed(1) | $ | 447,753 | $ | 498,284 | ||||||||||
Net sales | 2,408 | 2,032 | ||||||||||||
| Cancellation rate | 7.5 | % | 11.7 | % | ||||||||||
Homebuilding gross margin (in thousands)(2) | $ | 121,016 | $ | 186,572 | ||||||||||
Homebuilding gross margin %(3) | 14.5 | % | 19.2 | % | ||||||||||
Adjusted homebuilding gross margin (in thousands)(4) | $ | 203,322 | $ | 270,100 | ||||||||||
Adjusted homebuilding gross margin %(3)(4) | 24.3 | % | 27.8 | % | ||||||||||
Selling, general and administrative expense %(3) | 13.3 | % | 12.0 | % | ||||||||||
Active communities as of period end(5) | 332 | 258 | ||||||||||||
Backlog as of period end - units | 2,377 | 2,802 | ||||||||||||
Backlog as of period end - value (in thousands) | $ | 1,105,868 | $ | 1,386,954 | ||||||||||
Net homebuilding debt to net capitalization(4) | 44.7 | % | 40.4 | % | ||||||||||
Return on participating equity(6) | 12.0 | % | 28.5 | % | ||||||||||
(1)Average sales price of homes closed is calculated based on homebuilding revenues, adjusted for the impact of percentage of completion revenues, and excluding deposit forfeitures and land sales, over homes closed.
(2)Homebuilding gross margin is homebuilding revenues less homebuilding cost of sales.
(3)Calculated as a percentage of homebuilding revenues.
(4)Adjusted homebuilding gross margin and net homebuilding debt to net capitalization are non-GAAP financial measures. For definitions of these non-GAAP financial measures and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “Reconciliation of Non-GAAP Financial Measures” below.
(5)A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five homesites remaining to sell.
(6)Return on participating equity is calculated as net income attributable to DFH, less redeemable preferred stock dividends, divided by average beginning and ending total Dream Finders Homes, Inc. stockholders’ equity (“participating equity”) for the trailing twelve months.
| Three Months Ended March 31, (unaudited) | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Home Closings: | Units | Average Sales Price | Units | Average Sales Price | |||||||||||||||||||
| Southeast | 614 | $ | 437,746 | 687 | $ | 445,901 | |||||||||||||||||
| Mid-Atlantic | 626 | 380,147 | 521 | 454,581 | |||||||||||||||||||
| Midwest | 630 | 524,682 | 717 | 580,221 | |||||||||||||||||||
| Total | 1,870 | $ | 447,753 | 1,925 | $ | 498,284 | |||||||||||||||||
6
Reconciliation of Non-GAAP Financial Measures
Management utilizes specific non-GAAP financial measures as supplementary tools to evaluate operating performance. These include adjusted homebuilding gross margin and net homebuilding debt to net capitalization. Other companies may not calculate non-GAAP financial measures in the same manner that we do. Accordingly, these non-GAAP financial measures should be considered only as a supplement to relevant GAAP information, as reconciled for each measure below. In the future, we may incorporate additional adjustments to these non-GAAP financial measures as we find them relevant and beneficial for both management and investors.
Adjusted Homebuilding Gross Margin
The following table presents a reconciliation of adjusted homebuilding gross margin to the GAAP financial measure of homebuilding gross margin for each of the periods indicated (in thousands, except percentages):
| Three Months Ended March 31, (unaudited) | |||||||||||
| 2026 | 2025 | ||||||||||
Homebuilding gross margin(1) | $ | 121,016 | $ | 186,572 | |||||||
Interest expense in homebuilding cost of sales(2) | 46,786 | 41,805 | |||||||||
Amortization in homebuilding cost of sales(3) | (65) | 1,329 | |||||||||
| Commission expense | 35,585 | 40,394 | |||||||||
| Adjusted homebuilding gross margin | $ | 203,322 | $ | 270,100 | |||||||
Homebuilding gross margin %(4) | 14.5 | % | 19.2 | % | |||||||
Adjusted homebuilding gross margin %(4) | 24.3 | % | 27.8 | % | |||||||
(1)Homebuilding gross margin is homebuilding revenues less homebuilding cost of sales.
(2)Includes interest charged to homebuilding cost of sales related to our senior unsecured notes, net, revolving credit facility and other homebuilding-related debt (“homebuilding debt”), as well as lot option fees.
(3)Represents amortization of purchase accounting adjustments from our acquisitions.
(4)Calculated as a percentage of homebuilding revenues.
We define adjusted homebuilding gross margin as homebuilding gross margin excluding the effects of capitalized interest, lot option fees, amortization included in homebuilding cost of sales (adjustments resulting from the application of purchase accounting in connection with acquisitions) and commission expense. Our management believes this information is meaningful as it isolates the impact that these excluded items have on homebuilding gross margin. We include internal and external commission expense in homebuilding cost of sales, not selling, general and administrative expense, and therefore commission expense is taken into account in homebuilding gross margin.
As a result, in order to provide a meaningful comparison to the public company homebuilders that include commission expense below the homebuilding gross margin line in selling, general and administrative expense, we have excluded commission expense from adjusted homebuilding gross margin. However, because adjusted homebuilding gross margin information excludes capitalized interest, lot option fees, purchase accounting amortization and commission expense, which have real economic effects and could impact our results of operations, the utility of adjusted homebuilding gross margin information as a measure of our operating performance may be limited.
7
Net Homebuilding Debt to Net Capitalization
The following table presents a reconciliation of net homebuilding debt to net capitalization to the GAAP financial measure of total debt to total capitalization for each of the periods indicated (in thousands, except percentages):
| As of March 31, (unaudited) | As of December 31, (unaudited) | As of March 31, (unaudited) | |||||||||||||||
| 2026 | 2025 | 2025 | |||||||||||||||
| Total debt | $ | 1,888,985 | $ | 1,606,193 | $ | 1,476,442 | |||||||||||
| Total mezzanine equity | 178,039 | 178,039 | 177,519 | ||||||||||||||
| Total equity | 1,416,802 | 1,426,072 | 1,293,849 | ||||||||||||||
| Total capitalization | $ | 3,483,826 | $ | 3,210,304 | $ | 2,947,810 | |||||||||||
| Total debt to total capitalization | 54.2 | % | 50.0 | % | 50.1 | % | |||||||||||
| Total debt | $ | 1,888,985 | $ | 1,606,193 | $ | 1,476,442 | |||||||||||
Less: Mortgage warehouse facilities and other secured borrowings | 162,980 | 217,133 | 181,457 | ||||||||||||||
| Less: Cash and cash equivalents | 435,375 | 234,766 | 297,468 | ||||||||||||||
| Net homebuilding debt | 1,290,630 | $ | 1,154,294 | 997,517 | |||||||||||||
| Total mezzanine equity | 178,039 | 178,039 | 177,519 | ||||||||||||||
| Total equity | 1,416,802 | 1,426,072 | 1,293,849 | ||||||||||||||
| Net capitalization | $ | 2,885,471 | $ | 2,758,405 | $ | 2,468,885 | |||||||||||
| Net homebuilding debt to net capitalization | 44.7 | % | 41.8 | % | 40.4 | % | |||||||||||
Net homebuilding debt to net capitalization is a non-GAAP financial measure calculated as homebuilding debt, less cash and cash equivalents (“net homebuilding debt”), divided by the sum of net homebuilding debt, total mezzanine equity and total equity (“net capitalization”). Net homebuilding debt excludes borrowings under our mortgage warehouse facilities, as well as any other non-homebuilding borrowings the Company may incur from time to time. Management believes the ratio of net homebuilding debt to net capitalization is meaningful as it is used to assess the performance of our homebuilding segments and is a relevant measure of our overall leverage.
Contacts:
Investor Contact: investors@dreamfindershomes.com
Media Contact: mediainquiries@dreamfindershomes.com
8
FAQ
How did Dream Finders Homes (DFH) perform financially in Q1 2026?
Dream Finders Homes generated total revenues of $887.8 million in Q1 2026, down from $989.9 million a year earlier. Net income attributable to DFH declined to $13.3 million, or $0.11 per basic share, compared with $54.9 million, or $0.55 per basic share.
What were Dream Finders Homes’ Q1 2026 home sales and cancellations?
In Q1 2026, Dream Finders Homes reported net sales of 2,408 homes, a 19% increase from 2,032 a year earlier. The cancellation rate improved to 7.5% from 11.7%, reflecting stronger order quality and effective use of sales incentives across its markets.
How did margins and profitability trend for Dream Finders Homes in Q1 2026?
Homebuilding gross margin fell to 14.5% from 19.2% in Q1 2025, while adjusted homebuilding gross margin declined to 24.3% from 27.8%. These pressures contributed to a drop in pre-tax income to $18.8 million from $71.2 million year over year.
What was Dream Finders Homes’ backlog at March 31, 2026?
As of March 31, 2026, Dream Finders Homes had a backlog of 2,377 homes valued at approximately $1.1 billion. The average sales price in backlog was $465,237, up from $446,597 at December 31, 2025, supporting visibility into future closings.
How did the financial services segment perform for DFH in Q1 2026?
Financial services revenues grew to $51.2 million, a 159% increase from $19.8 million in Q1 2025, largely due to the Alliant Title acquisition. Segment income before taxes rose to $9 million from $7 million, helped by execution efficiency and hedging strategies.
What is Dream Finders Homes’ leverage and liquidity position after Q1 2026?
At March 31, 2026, Dream Finders Homes held $435.4 million in cash and reported total liquidity of $661 million. Net homebuilding debt to net capitalization stood at 44.7%, compared with 40.4% a year earlier, indicating somewhat higher leverage.
Did Dream Finders Homes change its 2026 home closing guidance?
Dream Finders Homes maintained its full-year 2026 guidance for approximately 9,250 home closings. Management highlighted strong demand, record net sales and an expanded community count as support for this outlook, despite current margin pressures and macroeconomic headwinds.