LGI Homes (NASDAQ: LGIH) posts 2025 results and sets 2026 guidance

Rhea-AI Filing Summary

LGI Homes reported significantly lower results for 2025 while laying out cautious guidance for 2026. Full‑year home sales revenue was $1.7 billion, down from $2.2 billion, with net income of $72.6 million or $3.12 diluted EPS versus $8.30 a year earlier. Gross margin fell to 20.7%, though adjusted gross margin was higher at 24.0% after excluding interest, purchase‑accounting effects and inventory impairments. The company closed 4,685 homes at an average price of $364,035 and ended the year with 1,394 homes in backlog valued at $501.3 million, more than double 2024, helped by a wholesale agreement to deliver 480 homes in 2026. For 2026, LGI Homes targets 4,600–5,400 closings, average prices of $355,000–$365,000, and gross margin of 18.0%–20.0% (adjusted 21.0%–23.0%), implying continued margin pressure despite a larger community count and a sizeable land pipeline.

Positive

• Backlog more than doubled: Ending backlog rose to 1,394 homes valued at $501.3 million, up from 599 homes and $236.5 million, helped by wholesale contracts including 480 homes scheduled for delivery in 2026.
• Strong land and liquidity position: LGI Homes controlled 60,842 lots at December 31, 2025 and reported total liquidity of $334.8 million, including $61.2 million in cash and $273.6 million of revolver availability.

Negative

• Revenue and earnings down sharply year over year: Home sales revenue fell from $2.20 billion in 2024 to $1.71 billion in 2025, while net income dropped from $196.1 million to $72.6 million and diluted EPS declined from $8.30 to $3.12.
• Margin compression and higher cancellations: Gross margin decreased from 24.2% to 20.7%, and the cancellation rate rose to 32.8% from 22.8%, pointing to weaker profitability and choppier demand.
• 2026 guidance implies continued margin pressure: For 2026, the company forecasts gross margin of only 18.0%–20.0% and adjusted gross margin of 21.0%–23.0%, both below 2025 levels despite similar projected closing volumes.

Insights

Homebuilding equity analyst

LGI Homes shows sharply lower 2025 earnings and guides to thinner 2026 margins despite strong backlog growth.

LGI Homes generated $1.7 billion in 2025 home sales revenue versus $2.2 billion in 2024, with net income dropping to $72.6 million and diluted EPS of $3.12. Gross margin compressed from 24.2% to 20.7%, even after leveraging self‑developed land and cost controls.

The company emphasized non‑GAAP metrics: adjusted net income of $77.6 million, adjusted EPS of $3.34, and adjusted gross margin of 24.0%. At the same time, cancellation rates increased to 32.8% from 22.8%, highlighting a tougher demand environment despite an average sales price around $364,000.

Backlog ended at $501.3 million across 1,394 homes, aided by a wholesale agreement for 480 homes in 2026, and owned and controlled lots totaled 60,842. Yet 2026 guidance calls for gross margin of only 18.0%–20.0% and adjusted gross margin of 21.0%–23.0%, below 2025 levels, indicating management is assuming continued pricing and incentive pressure through 2026.

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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): February 17, 2026

LGI HOMES, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-36126

46-3088013

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification Number)

 

1450 Lake Robbins Drive,

Suite 430,

The Woodlands,

Texas

77380

(Address of principal executive offices)

(Zip Code)

(281) 362-8998

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

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 Instructions A.2. below):

☐ 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

Common Stock, par value $0.01 per share

LGIH

NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

                                    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 February 17, 2026, LGI Homes, Inc. (the “Company”) issued a press release announcing its financial results for the three months and fiscal year ended December 31, 2025. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

None of the information furnished in this Item 2.02 and the accompanying exhibit will be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor will it be deemed incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended.

Item 7.01 Regulation FD Disclosure.

The information set forth in Item 2.02 above and in Exhibit 99.1 to this Current Report on Form 8-K is incorporated herein by reference.

None of the information furnished in this Item 7.01 and the accompanying exhibit will be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor will it be deemed incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits.

            

(d)			Exhibits.
99.1			Press Release of LGI Homes, Inc. issued on February 17, 2026.
104			Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

SIGNATURES

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.

 

Dated: February 17, 2026
			LGI HOMES, INC.
			By:			/s/ Eric Lipar
						Eric Lipar
						Chief Executive Officer and Chairman of the Board

EXHIBIT 99.1

LGI Homes, Inc. Reports Fourth Quarter and Full Year 2025 Results and Issues Guidance for 2026

THE WOODLANDS, Texas, February 17, 2026 (GLOBE NEWSWIRE) – LGI Homes, Inc. (NASDAQ: LGIH) today announced financial results for the fourth quarter and year ended December 31, 2025.

“Our team delivered a solid finish to the year and further strengthened the foundation that supports our long-term growth plans,” said Eric Lipar, Chairman and Chief Executive Officer of LGI Homes.

“During the quarter, we closed 1,362 homes, including 61 currently and previously leased homes. Of this total, 1,301 homes contributed directly to our reported revenue of $474.0 million. Supported by our strong performance in December, we averaged 3.1 closings per community per month in the fourth quarter, the highest pace of the year.

“Our self‑developed land position continued to provide structural margin support, helping offset the impact of financing incentives and price adjustments offered on older inventory. As a result, fourth-quarter adjusted gross margin was 22.3%.

“Fourth-quarter orders benefited from an agreement with a wholesale buyer to deliver 480 homes over the course of 2026, which contributed to a 133% increase in our backlog. Excluding that wholesale contract, backlog at year‑end was still up 53% compared to 2024.

“Looking ahead, our 2026 guidance reflects the conditions we are seeing in the market today and assumes they persist through the balance of the year. We are projecting full‑year home closings between 4,600 and 5,400, at an average sales price between $355,000 and $365,000 with gross margin expected to range between 18.0% and 20.0% and adjusted gross margin between 21.0% and 23.0%.”

Mr. Lipar concluded, “Throughout the year, we remained disciplined in our operations, rightsized inventory, and leveraged the cost advantages of our self‑developed land pipeline. As we move into 2026, we do so with resilience, focus, and a deep commitment to navigating the market with the same discipline that guided us throughout 2025. Our strategy remains focused on affordability and aligning with today’s homebuyer needs while maintaining the long‑term fundamentals that differentiate LGI Homes. I’m grateful for the dedication of our team and confident we are well‑positioned to capitalize on opportunities in the year ahead.”

Fourth Quarter 2025 Highlights

•Home sales revenues of $474.0 million

•Home closings of 1,301

•Total home closings of 1,362, including 61 currently and previously leased homes

•Average sales price per home closed of $364,310

•Gross margin as a percentage of home sales revenues of 17.7%

•Gross margin excluding inventory impairment* as a percentage of home sales revenues of 19.2%

•Adjusted gross margin* as a percentage of home sales revenues of 22.3%

•Net income before income taxes of $24.0 million

•Net income of $17.3 million or $0.75 basic EPS and $0.75 diluted EPS

•Adjusted net income* of $22.4 million, or $0.97 adjusted basic EPS* and $0.97 adjusted diluted EPS*

Full Year 2025 Highlights

•Home sales revenues of $1.7 billion

•Home closings of 4,685

•Total home closings of 4,788, including 103 currently and previously leased homes

•Average sales price per home closed of $364,035

•Gross margin as a percentage of home sales revenues of 20.7%

•Gross margin excluding inventory impairment* as a percentage of home sales revenues of 21.1%

•Adjusted gross margin* as a percentage of home sales revenues of 24.0%

•Net income before income taxes of $98.5 million

•Net income of $72.6 million or $3.13 basic EPS and $3.12 diluted EPS

•Adjusted net income* of $77.6 million, or $3.35 adjusted basic EPS* and $3.34 adjusted diluted EPS*

•Active selling communities at December 31, 2025 of 144

•Total owned and controlled lots at December 31, 2025 of 60,842

•Ending backlog at December 31, 2025 of 1,394 homes

•Ending backlog value at December 31, 2025 of $501.3 million

*Please see “Non-GAAP Measures” for reconciliations of Gross Margin Excluding Inventory Impairment (a non-GAAP measure) and Adjusted Gross Margin (a non-GAAP measure) to 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 $334.8 million at December 31, 2025, including cash and cash equivalents of $61.2 million and $273.6 million of availability under the Company’s revolving credit facility

•Net debt to capital ratio* of 43.2% at December 31, 2025

*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.

2026 Outlook

Subject to the caveats in the Forward-Looking Statements section of this press release and the assumptions noted below, the Company is providing the following guidance for the full year 2026. The Company expects:

•Home closings between 4,600 and 5,400

•Active selling communities at the end of 2026 between 150 and 160

•Average sales price per home closed between $355,000 and $365,000

•Gross margin as a percentage of home sales revenues between 18.0% and 20.0%, adjusted for estimated capitalized interest and estimated purchase accounting of approximately 3.0%, which results in Adjusted gross margin (non-GAAP) as a percentage of home sales revenues between 21.0% and 23.0%

•SG&A as a percentage of home sales revenues between 15.0% and 16.0%

•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 the average sales price per home closed, 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, February 17, 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 more than 1,000 employees, earning the Company numerous workplace awards at the local, state, and national level, including the Top Workplaces USA 2025 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, gross margin as a percentage of home sales revenues, adjusted gross margin as a percentage of homes sales revenues, SG&A as a percentage of home sales 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, 2024, including the “Cautionary Statement about Forward-Looking Statements” subsection within the “Risk Factors” section, the “Risk Factors” and “Cautionary Statement about Forward-Looking Statements” sections in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025, June 30, 2025, and September 30, 2025 and subsequent filings by the Company with the Securities and Exchange Commission (“SEC”), including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 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)

						December 31,
						2025						2024
ASSETS
Cash and cash equivalents						$	61,247					$	53,197
Accounts receivable						32,467						28,717
Real estate inventory						3,520,563						3,387,853
Pre-acquisition costs and deposits						28,950						36,049
Property and equipment, net						107,145						57,038
Other assets						154,948						174,391
Deferred tax assets, net						9,904						9,271
Goodwill						12,018						12,018
Total assets						$	3,927,242					$	3,758,534
LIABILITIES AND EQUITY
Accounts payable						$	16,179					$	33,271
Accrued expenses and other liabilities						157,971						207,317
Notes payable						1,656,803						1,480,718
Total liabilities						1,830,953						1,721,306
COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock, par value $0.01, 250,000,000 shares authorized, 27,789,678 shares issued and 23,133,086 shares outstanding as of December 31, 2025 and 27,644,413 shares issued and 23,397,074 shares outstanding as of December 31, 2024						277						276
Additional paid-in capital						347,308						337,161
Retained earnings						2,158,339						2,085,787
Treasury stock, at cost, 4,656,592 shares as of December 31, 2025 and 4,247,339 shares as of December 31, 2024						(409,635)						(385,996)
Total equity						2,096,289						2,037,228
Total liabilities and equity						$	3,927,242					$	3,758,534

LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share data)

						Three Months Ended December 31,												Year Ended December 31,
						2025						2024						2025						2024
Home sales revenues						$	473,967					$	557,396					$	1,705,504					$	2,202,598
Cost of sales						389,854						429,885						1,351,958						1,669,310
Selling expenses						42,547						50,754						162,149						199,950
General and administrative						23,051						31,170						111,621						121,192
Operating income						18,515						45,587						79,776						212,146
Other income, net						(5,506)						(21,497)						(18,710)						(46,767)
Net income before income taxes						24,021						67,084						98,486						258,913
Income tax provision						6,700						16,214						25,934						62,842
Net income						$	17,321					$	50,870					$	72,552					$	196,071
Earnings per share:
Basic						$	0.75					$	2.16					$	3.13					$	8.33
Diluted						$	0.75					$	2.15					$	3.12					$	8.30
Weighted average shares outstanding:
Basic						23,085,786						23,497,275						23,188,965						23,529,724
Diluted						23,178,160						23,620,777						23,254,595						23,610,457

Home Sales 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 December 31, 2025																														As of December 31, 2025
Reportable Segment						Revenues						Home Closings						ASP						Average Community Count						Average Monthly Absorption Rate						Community Count at End of Period
Central						$	105,753					343						$	308,318					46.7						2.4						48
Southeast						118,939						364						326,755						31.7						3.8						32
Northwest						51,837						110						471,245						14.3						2.6						14
West						128,238						287						446,822						24.7						3.9						26
Florida						69,200						197						351,269						24.3						2.7						24
Total						$	473,967					1,301						$	364,310					141.7						3.1						144

						Three Months Ended December 31,2024																														As of December 31, 2024
Reportable Segment						Revenues						Home Closings						ASP						Average Community Count						Average Monthly Absorption Rate						Community Count at End of Period
Central						$	122,999					394						$	312,180					48.0						2.7						50
Southeast						131,102						404						324,510						30.0						4.5						31
Northwest						71,154						139						511,899						16.7						2.8						18
West						120,775						292						413,613						24.7						3.9						26
Florida						111,366						304						366,336						24.3						4.2						26
Total						$	557,396					1,533						$	363,598					143.7						3.6						151

						Year Ended December 31, 2025																														As of December 31, 2025
Reportable Segment						Revenues						Home Closings						ASP						Average Community Count						Average Monthly Absorption Rate						Community Count at End of Period
Central						419,240						1,340						$	312,866					47.5						2.4						48
Southeast						472,150						1,431						$	329,944					31.8						3.8						32
Northwest						188,969						384						$	492,107					15.4						2.1						14
West						387,232						879						$	440,537					25.2						2.9						26
Florida						237,913						651						$	365,458					24.5						2.2						24
Total						1,705,504						4,685						$	364,035					144.4						2.7						144.0

						Year Ended December 31, 2024																														As of December 31, 2024
Reportable Segment						Revenues						Home Closings						ASP						Average Community Count						Average Monthly Absorption Rate						Community Count at End of Period
Central						564,608						1,757						$	321,348					44.8						3.3						50
Southeast						538,170						1,635						$	329,156					27.2						5.0						31
Northwest						258,407						483						$	535,004					14.3						2.8						18
West						472,655						1,140						$	414,610					21.7						4.4						26
Florida						368,758						1,013						$	364,026					22.5						3.8						26
Total						2,202,598						6,028						$	365,394					130.5						3.8						151

Owned and Controlled Lots

The table below shows (i) home closings by reportable segment for the year ended December 31, 2025 and (ii) the Company’s owned or controlled lots by reportable segment as of December 31, 2025.

						Year Ended December 31, 2025						As of December 31, 2025
Reportable Segment						Home Closings						Owned(1)						Controlled						Total
Central						1,340						19,108						517						19,625
Southeast						1,431						13,372						2,629						16,001
Northwest						384						5,877						1,250						7,127
West						879						8,367						3,323						11,690
Florida						651						5,166						1,233						6,399
Total						4,685						51,890						8,952						60,842

(1)Of the 51,890 owned lots as of December 31, 2025, 35,416 were raw/under development lots and 16,474 were finished lots. Finished lots included 2,311 completed homes, including information centers, and 1,054 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):

						Twelve Months Ended December 31,
Backlog Data						2025 (4)						2024 (5)
Net orders (1)						5,549						6,037
Cancellation rate (2)						32.8		%				22.8		%
Ending backlog – homes (3)						1,394						599
Ending backlog – value (3)						$	501,296					$	236,511

(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 December 31, 2025, the Company had 506 units related to bulk sales agreements associated with its wholesale business.

(5)As of December 31, 2024, the Company had 146 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, gross margin excluding inventory impairment, adjusted 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, unaudited):

			Three Months Ended December 31,												Year Ended December 31,
			2025						2024						2025						2024
Net income			$	17,321					$	50,870					$	72,552					$	196,071
Basic weighted average number of shares outstanding			23,085,786						23,497,275						23,188,965						23,529,724
Basic earnings per share			$	0.75					$	2.16					$	3.13					$	8.33
Diluted weighted average number of shares outstanding			23,178,160						23,620,777						23,254,595						23,610,457
Diluted earnings per share			$	0.75					$	2.15					$	3.12					$	8.30

Adjusted Net Income, Adjusted Basic Earnings per Share, and Adjusted Diluted Earnings per Share

Net income			$	17,321					$	50,870					$	72,552					$	196,071
Inventory Impairment			6,717						—						6,717						—
Tax impact due to above non-GAAP reconciling item			(1,641)						—						(1,641)						—
Adjusted net income			$	22,397					$	50,870					$	77,628					$	196,071
Basic weighted average number of shares outstanding			23,085,786						23,497,275						23,188,965						23,529,724
Adjusted basic earnings per share			$	0.97					$	2.16					$	3.35					$	8.33
Diluted weighted average number of shares outstanding			23,178,160						23,620,777						23,254,595						23,610,457
Adjusted diluted earnings per share			$	0.97					$	2.15					$	3.34					$	8.30

Gross Margin Excluding Inventory Impairment and Adjusted Gross Margin

Gross margin excluding inventory impairment and adjusted gross margin are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance. The Company defines gross margin excluding inventory impairment as gross margin less inventory impairment charges. The Company defines adjusted gross margin as 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 adjusted gross margin is useful because it isolates the impact that capitalized interest, purchase accounting adjustments, and inventory impairment have on gross margin. However, because adjusted gross margin excludes capitalized interest, purchase accounting adjustments, and inventory impairment, which have real economic effects and could impact the Company’s results, the utility of adjusted gross margin as a measure of the Company’s operating performance may be limited. In addition, other companies may not calculate gross margin excluding inventory impairment and adjusted gross margin in the same manner that the Company does. Accordingly, gross margin excluding inventory impairment and adjusted gross margin should be considered only as supplements to gross margin as a measure of the Company’s performance.

The following table reconciles gross margin excluding inventory impairment and adjusted gross margin to gross margin, which is the GAAP financial measure that management believes to be most directly comparable (dollars in thousands, unaudited):

						Three Months Ended December 31,												Year Ended December 31,
						2025						2024						2025						2024
Home sales revenues						$	473,967					$	557,396					$	1,705,504					$	2,202,598
Cost of sales						389,854						429,885						1,351,958						1,669,310
Gross margin						84,113						127,511						353,546						533,288
Inventory impairment						6,717						—						6,717						—
Gross margin excluding inventory impairment						$	90,830					$	127,511					$	360,263					$	533,288
Capitalized interest charged to cost of sales						14,436						11,884						45,543						42,071
Purchase accounting adjustments (1)						609						900						3,459						4,034
Adjusted gross margin						$	105,875					$	140,295					$	409,265					$	579,393
Gross margin % (2)						17.7		%				22.9		%				20.7		%				24.2		%
Gross margin % excluding inventory impairment (2)						19.2		%				22.9		%				21.1		%				24.2		%
Adjusted gross margin % (2)						22.3		%				25.2		%				24.0		%				26.3		%

(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 home sales 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 (a non-GAAP financial measure) to debt to capital ratio, which is the GAAP financial measure that management believes to be most directly comparable (dollars in thousands, unaudited):

						December 31,
						2025						2024
Total debt (Notes payable)						$	1,656,803					$	1,480,718
Total equity						2,096,289						2,037,228
Total capital						$	3,753,092					$	3,517,946
Debt to capital ratio						44.1		%				42.1		%
Total debt (Notes payable)						$	1,656,803					$	1,480,718
Less: Cash and cash equivalents						61,247						53,197
Net debt						$	1,595,556					$	1,427,521
Total equity						2,096,289						2,037,228
Total net capital						$	3,691,845					$	3,464,749
Net debt to capital ratio(1)						43.2		%				41.2		%

(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, Investor Relations and Capital Markets

(281) 210-2586

investorrelations@lgihomes.com

FAQ

How did LGI Homes (LGIH) perform financially in full year 2025?

LGI Homes reported 2025 home sales revenue of $1.7 billion, down from $2.2 billion in 2024. Net income was $72.6 million, with diluted EPS of $3.12, reflecting lower volumes and margin compression versus the prior year’s $8.30 diluted EPS.

What were LGI Homes (LGIH) key fourth quarter 2025 results?

In Q4 2025, LGI Homes generated $474.0 million in home sales revenue on 1,301 home closings, with an average sales price of $364,310. Net income was $17.3 million, or $0.75 basic and diluted EPS, and adjusted gross margin reached 22.3%.

What guidance did LGI Homes (LGIH) provide for 2026?

For 2026, LGI Homes expects 4,600–5,400 home closings, end‑of‑year active communities between 150 and 160, and average sales prices of $355,000–$365,000. It projects gross margin of 18.0%–20.0% and adjusted gross margin of 21.0%–23.0%.

How strong is LGI Homes (LGIH) backlog entering 2026?

At December 31, 2025, LGI Homes’ ending backlog totaled 1,394 homes valued at $501.3 million, up from 599 homes and $236.5 million. This includes units tied to bulk sales agreements, such as 506 homes related to wholesale arrangements.

What is LGI Homes (LGIH) gross margin trend and non-GAAP margin?

In 2025, LGI Homes’ gross margin was 20.7%, down from 24.2% in 2024. After excluding inventory impairment, capitalized interest and purchase‑accounting effects, adjusted gross margin was 24.0%, versus 26.3% a year earlier, indicating profitability pressure despite adjustments.

What is LGI Homes (LGIH) leverage and liquidity position at year-end 2025?

As of December 31, 2025, LGI Homes reported total debt of $1.66 billion and total equity of $2.10 billion, for a net debt to capital ratio of 43.2%. Total liquidity was $334.8 million, including $61.2 million in cash and $273.6 million of revolver availability.

How many homes and lots does LGI Homes (LGIH) control?

In 2025, LGI Homes closed 4,685 homes and ended the year with 144 active selling communities. It owned 51,890 lots and controlled another 8,952 lots, for a total of 60,842 lots across its five reportable segments.

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