Meritage Homes (NYSE: MTH) Q2 2026 profit falls as demand softens
Rhea-AI Filing Summary
Meritage Homes Corporation reported second quarter 2026 results with home closing revenue of $1.4 billion, down 14% from 2025, on 3,725 homes closed and a 4% lower average sales price of $373,000. Home closing gross margin fell to 18.3% from 21.1%, and net earnings declined 38% to $90.6 million, or $1.37 diluted EPS (adjusted diluted EPS $1.42).
Orders decreased 9% to 3,575 homes, while ending backlog slipped to 1,715 homes valued at $661.9 million. Meritage ended June 30, 2026 with $807 million in cash, no borrowings on its revolving credit facility, and a net debt-to-capital ratio of 17.1%. The company returned $131 million to shareholders in the quarter via dividends and $100 million of share repurchases, and refinanced its revolver, increasing capacity to $980 million. Management now expects full-year 2026 home closing volume and revenue to be around 5% below 2025, and notes revenue could be lower if incentives increase.
Positive
- None.
Negative
- Second quarter 2026 home closing revenue fell 14% to about $1.4 billion, while diluted EPS declined 33% to $1.37 year-over-year.
- Home closing gross margin compressed from 21.1% to 18.3% in Q2 2026, with adjusted home closing gross margin down to 18.6% from 21.4%.
- Management updated 2026 outlook to home closing volume and revenue around 5% below 2025, with revenue potentially lower if higher buyer incentives are needed.
Filing Explained
Through June 30, Meritage Homes had completed
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
Q2 2026 home closing revenue: $1,387,911 thousand
Q2 2026 net earnings: $90,630 thousand
Q2 2026 diluted EPS: $1.37
+5 more
8 metrics
Q2 2026 home closing revenue
$1,387,911 thousand
Three months ended June 30, 2026; 14% lower than Q2 2025
Q2 2026 net earnings
$90,630 thousand
Three months ended June 30, 2026; 38% decrease versus Q2 2025
Q2 2026 diluted EPS
$1.37
Three months ended June 30, 2026; down 33% year-over-year
Q2 2026 home closing gross margin
18.3%
Compared to 21.1% in the second quarter of 2025
Cash and cash equivalents
$807 million
Cash balance at June 30, 2026
Net debt-to-capital ratio
17.1%
As of June 30, 2026
Q2 2026 share repurchases
$100 million
Cost to repurchase 1,528,340 shares, 2.3% of beginning shares
2026 year-to-date home closing revenue
$2,495,733 thousand
Six months ended June 30, 2026; 16% below prior year period
Key Terms
backlog conversion rate, average absorption pace, net debt-to-capital ratio, terminated land deal walk-away charges, +2 more
6 terms
backlog conversion rate financial
"inventory and improved cycle times drove a backlog conversion rate of 200%"
Backlog conversion rate measures how quickly work that a company has promised but not yet delivered—orders, contracts or production backlog—turns into actual revenue or completed shipments over a set period. For investors it signals whether promised demand is being fulfilled on schedule and how reliably future sales will materialize; a higher rate is like seeing a long grocery list steadily checked off, while a lower rate suggests delays, capacity problems, or weakening demand that can affect near-term cash flow and growth forecasts.
average absorption pace financial
"decreased 9% year-over-year mainly as a result of 19% lower average absorption pace"
net debt-to-capital ratio financial
"no borrowings under our revolving credit facility and a net debt-to-capital ratio of 17.1%"
Net debt-to-capital ratio measures how much of a company’s long-term funding comes from borrowed money after subtracting cash on hand, compared with the total of that net debt plus the owners’ stake. Think of it like comparing your mortgage (minus your savings) to the combined value of your mortgage and your home equity; it tells investors how leveraged the business is and how much financial risk or room to borrow it may have.
terminated land deal walk-away charges financial
"excluding $3.6 million of real estate inventory impairments and $0.3 million in terminated land deal walk-away charges"
capitalized interest financial
"Summary of Capitalized Interest: Capitalized interest, beginning of period"
Capitalized interest is the interest that is added to the total amount of a loan or project cost instead of being paid immediately. This means the interest becomes part of the principal, growing over time, much like compounding interest in a savings account. For investors, it matters because it affects the total amount owed and the future value of the investment or project.
capped calls financial
"our exposure to counterparty risk with respect to our capped calls"
A capped call is a type of option tied to a company’s convertible securities that gives the holder the right to buy shares up to a set price, but with a fixed ceiling on the payout. Companies commonly use capped calls to reduce the number of new shares that would dilute existing shareholders if convertibles turn into stock; for investors this matters because capped calls can limit dilution, affect share supply, and alter the potential upside and risk of owning the stock.
Earnings Snapshot
Home closing revenue (Q2 2026): $1,387,911 thousand · Guidance included
Quarter and six months ended June 30, 2026
Home closing revenue (Q2 2026)
$1,387,911 thousand
(14)% vs Q2 2025
Net earnings (Q2 2026)
$90,630 thousand
(38)% vs Q2 2025
Diluted EPS (Q2 2026)
$1.37
(33)% vs Q2 2025
Home closing gross margin (Q2 2026)
18.3%
down 280 bps vs Q2 2025
Guidance
Full year 2026 home closing volume and home closing revenue are updated to around 5% below full year 2025 results; management notes home closing revenue could trend lower if market conditions require higher incentives.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Meritage Homes (MTH) perform financially in Q2 2026?
Meritage Homes reported Q2 2026 home closing revenue of $1.4 billion, down 14% year-over-year, and net earnings of $90.6 million. Diluted EPS was $1.37, a 33% decline from $2.04 in Q2 2025, reflecting lower volume and margins.
What happened to Meritage Homes (MTH) orders and backlog in Q2 2026?
Second quarter 2026 home orders were 3,575, a 9% decrease from 2025, with order value down 11% to $1.38 billion. Ending backlog was 1,715 homes valued at $661.9 million, modestly lower than a year earlier.
How did margins and SG&A trend for Meritage Homes (MTH) in Q2 2026?
Home closing gross margin declined to 18.3% from 21.1% in Q2 2025, mainly from lower leverage and higher lot costs. SG&A rose slightly to 10.4% of home closing revenue versus 10.2%, as lower revenue offset cost controls.
What guidance did Meritage Homes (MTH) give for full year 2026?
Management now expects 2026 home closing volume and home closing revenue to be around 5% below full year 2025 results. It also indicated revenue could trend lower if market conditions require higher sales incentives.
What is Meritage Homes (MTH) liquidity and leverage as of June 30, 2026?
As of June 30, 2026, Meritage held $807 million in cash and had no borrowings on its revolving credit facility. Debt-to-capital was 26.8% and net debt-to-capital 17.1%, indicating moderate leverage with substantial liquidity.
Did Meritage Homes (MTH) make any significant financing changes in Q2 2026?
Yes. Meritage refinanced its revolving credit facility in Q2 2026, primarily increasing the facility size to $980 million and extending its maturity from 2030 to 2031, while maintaining no outstanding borrowings at quarter end.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): July 29, 2026
_______________________
(Exact Name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||||||||
(Address of Principal Executive Offices, including Zip Code)
(480 ) 515-8100
(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: | |||||||||||||||||
| 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 (§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 July 29, 2026, Meritage Homes Corporation (the "Company") announced in a press release information concerning its results for the quarterly period ended June 30, 2026. A copy of this press release, including information concerning forward-looking statements and factors that may affect the Company's future results, is attached as Exhibit 99.1. This press release is being furnished, not filed, under Item 2.02 in this Report on Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
| Exhibit Number | Description | ||||
| 99.1 | Press Release dated July 29, 2026 | ||||
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. | ||||
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: July 29, 2026
| MERITAGE HOMES CORPORATION | |||||
| /s/ | Alison Sasser | ||||
| By: | Alison Sasser | ||||
| Senior Vice President and Chief Accounting Officer | |||||
Exhibit 99.1
| Contacts: | Emily Tadano, VP Investor Relations and External Communications | ||||||||||
| (480) 515-8979 (office) | |||||||||||
| investors@meritagehomes.com | |||||||||||
Meritage Homes reports second quarter 2026 results
SCOTTSDALE, Ariz., July 29, 2026 - Meritage Homes Corporation (NYSE: MTH), the fifth-largest U.S. homebuilder, reported second quarter results for the period ended June 30, 2026.
Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Chg | 2026 | 2025 | % Chg | |||||||||||||||||||||||||||||||||
| Homes closed (units) | 3,725 | 4,170 | (11) | % | 6,692 | 7,586 | (12) | % | ||||||||||||||||||||||||||||||
| Home closing revenue | $ | 1,387,911 | $ | 1,615,709 | (14) | % | $ | 2,495,733 | $ | 2,957,813 | (16) | % | ||||||||||||||||||||||||||
| Average sales price — closings | $ | 373 | $ | 387 | (4) | % | $ | 373 | $ | 390 | (4) | % | ||||||||||||||||||||||||||
| Home orders (units) | 3,575 | 3,914 | (9) | % | 7,239 | 7,790 | (7) | % | ||||||||||||||||||||||||||||||
| Home order value | $ | 1,376,338 | $ | 1,547,438 | (11) | % | $ | 2,776,778 | $ | 3,105,615 | (11) | % | ||||||||||||||||||||||||||
| Average sales price — orders | $ | 385 | $ | 395 | (3) | % | $ | 384 | $ | 399 | (4) | % | ||||||||||||||||||||||||||
| Ending backlog (units) | 1,715 | 1,748 | (2) | % | ||||||||||||||||||||||||||||||||||
| Ending backlog value | $ | 661,906 | $ | 695,476 | (5) | % | ||||||||||||||||||||||||||||||||
| Average sales price — backlog | $ | 386 | $ | 398 | (3) | % | ||||||||||||||||||||||||||||||||
| Home closing gross margin | 18.3% | 21.1% | (280) bps | 17.9% | 21.5% | (360) bps | ||||||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 120,564 | $ | 193,060 | (38) | % | $ | 193,088 | $ | 353,219 | (45) | % | ||||||||||||||||||||||||||
| Net earnings | $ | 90,630 | $ | 146,879 | (38) | % | $ | 145,939 | $ | 269,685 | (46) | % | ||||||||||||||||||||||||||
| Diluted EPS | $ | 1.37 | $ | 2.04 | (33) | % | $ | 2.18 | $ | 3.73 | (42) | % | ||||||||||||||||||||||||||
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MANAGEMENT COMMENTS
"The 2026 spring selling season remained softer than expected this quarter as macroeconomic uncertainty and volatile interest rates continued to pressure buyer psychology. Although below prior year levels, our second quarter 2026 absorptions reflected pockets of solid performance which accelerated community close outs in some markets," said Steven J. Hilton, executive chairman of Meritage Homes.
"Our available home inventory and improved cycle times drove a backlog conversion rate of 200% and 3,725 closings this quarter, with nearly 60% generated from intra-quarter sales," added Phillippe Lord, chief executive officer of Meritage Homes. "Second quarter 2026 home closing revenue totaled $1.4 billion which generated adjusted home closing gross margin of 18.6% and adjusted diluted EPS of $1.42, excluding $3.6 million of real estate inventory impairments and $0.3 million in terminated land deal walk-away charges."
"We remain committed to a disciplined capital allocation strategy that balances growth and shareholder returns while ensuring sufficient liquidity in a volatile interest rate environment. During the current quarter, we returned $131 million to shareholders via share repurchases and dividends. And while we moderated land spend to $357 million from $509 million in the second quarter of 2025, we are reiterating our prior community count growth expectation of 5-10% year-over-year for full year 2026," concluded Mr. Lord. "We ended the second quarter of 2026 with cash of $807 million, no borrowings under our revolving credit facility and a net debt-to-capital ratio of 17.1%. As of June 30, 2026, our book value per share increased 5% year-over-year."
SECOND QUARTER RESULTS
•Orders of 3,575 homes for the second quarter of 2026 decreased 9% year-over-year mainly as a result of 19% lower average absorption pace, which was partially offset by a 14% increase in average community count. Second quarter 2026 average sales price ("ASP") on orders of $385,000 was down 3% from the second quarter of 2025, primarily due to geographic mix.
•The 14% year-over-year decrease in home closing revenue in the second quarter of 2026 to $1.4 billion was due to 11% lower closing volume of 3,725 homes combined with a 4% decrease in ASP on closings to $373,000. The closing ASP decline was a function of geographic mix.
•Home closing gross margin of 18.3% in the second quarter of 2026 was 280 bps lower than 21.1% in the prior year as a result of lost leverage on lower home closing revenue and higher lot costs, which were partially offset by direct cost savings and quicker cycle times. Excluding $3.6 million of real estate inventory impairments and $0.3 million in terminated land deal walk-away charges in the second quarter of 2026, compared to no impairments and $4.2 million in terminated land deal walk-away charges in the prior year, adjusted home closing gross margin was 18.6% and 21.4% for the second quarters of 2026 and 2025, respectively.
2
•Selling, general and administrative expenses ("SG&A") as a percentage of second quarter 2026 home closing revenue were 10.4% compared to 10.2% in the second quarter of 2025, as a result of lost leverage on lower home closing revenue, which was partially offset by decreased compensation expense and an intentional pull back in discretionary expenses.
•The second quarter effective income tax rate was 24.8% in 2026 compared to 23.9% in 2025 due to higher income state tax.
•Net earnings were $91 million ($1.37 per diluted share) for the second quarter 2026, a 38% decrease from $147 million ($2.04 per diluted share) for the second quarter of 2025, mainly resulting from lower home closing revenue and gross profit. Excluding quarterly impairments and walk-away charges for each period, adjusted diluted EPS was $1.42 and $2.09 for the second quarters of 2026 and 2025, respectively.
YEAR TO DATE RESULTS
•Total sales orders for the first six months of 2026 decreased 7% year-over-year, reflecting an 18% decrease in average absorption pace partially offset by a 14% increase in average communities compared to the first six months of 2025. The 4% lower ASP on orders for the first six months of 2026 year-over-year was primarily due to geographic mix.
•Home closing revenue decreased 16% year-over-year in the first six months of 2026 to $2.5 billion, driven by 12% lower home closing volume and a 4% decrease in ASP on closings compared to the first six months of 2025. The 4% lower ASP on closings for the first six months of 2026 compared to prior year reflected geographic mix.
•Home closing gross margin of 17.9% decreased 360 bps in the first six months of 2026 from 21.5% in the prior year due to lost leverage on lower home closing revenue and higher lot costs, which were partially offset by direct cost savings and quicker cycle times. Excluding $6.0 million of real estate inventory impairments and $1.6 million in terminated land deal walk-away charges in the first six months of 2026, compared to no impairments and $5.6 million in terminated land deal walk-away charges in the prior year, adjusted home closing gross margin was 18.2% and 21.7% for the first six months of 2026 and 2025, respectively.
•SG&A as a percentage of home closing revenue was 11.0% in the first six months of 2026 compared to 10.7% in the prior year, as a result of lost leverage on lower home closing revenue, which was partially offset by decreased compensation expense and an intentional reduction in discretionary expenses.
•The effective income tax rate in the first six months of 2026 was 24.4% compared to 23.6% in 2025 due to higher income state tax.
•Net earnings were $146 million ($2.18 per diluted share) for the first six months of 2026, a 46% decrease from $270 million ($3.73 per diluted share) for the first six months of 2025, primarily reflecting lower home closing
3
revenue and gross margins. Excluding year-to-date impairments and walk-away charges for each period, adjusted diluted EPS was $2.27 and $3.79 for the first six months of 2026 and 2025, respectively.
BALANCE SHEET & LIQUIDITY
•Cash and cash equivalents at June 30, 2026 totaled $807 million. This compared to cash and cash equivalents of $775 million at December 31, 2025.
•Land acquisition and development spend, net of land development reimbursements, totaled $357 million and $509 million for the second quarter of 2026 and 2025, respectively.
•Approximately 73,200 lots were owned or controlled as of June 30, 2026, compared to approximately 81,900 lots as of June 30, 2025. Nearly 1,700 net new lots were added in the second quarter of 2026, representing an estimated 13 future communities.
•Second quarter 2026 ending community count of 340 was up 9% compared to prior year and down 1% sequentially from the first quarter of 2026.
•Debt-to-capital and net debt-to-capital ratios were 26.8% and 17.1%, respectively, at June 30, 2026, which compared to 26.0% and 16.9%, respectively, at December 31, 2025.
•The Company declared and paid quarterly cash dividends of $0.48 per share totaling $31 million in the second quarter of 2026. This compared to $0.43 per share totaling $31 million in the second quarter of 2025. Year-to-date dividends paid were $63 million and $61 million in 2026 and 2025, respectively.
•During the second quarter of 2026, the Company repurchased 1,528,340 shares of stock, or 2.3% of shares outstanding at the beginning of the quarter, for $100 million. This compared to $45 million in the second quarter of 2025. For the first six months of 2026, the Company repurchased 3,344,160 shares of stock, or 4.9% of shares outstanding at the beginning of the year, for $230 million. This compared to year-to-date 2025 spend of $90 million. As of June 30, 2026, $284 million remained available to repurchase.
•During the second quarter of 2026, the Company refinanced the revolving credit facility, primarily to increase the facility size to $980 million and extend its maturity from 2030 to 2031.
4
GUIDANCE
Based on current market conditions and year-to-date results, we are updating our guidance for full year 2026 home closing volume and revenue to around 5% below full year 2025 results, although home closing revenue could trend lower if market conditions require higher incentives.
CONFERENCE CALL
Management will host a conference call to discuss its second quarter 2026 results at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) on Thursday, July 30, 2026. To listen, please go to Meritage's Investor Relations page for the live webcast or dial in to 1-800-445-7795 US toll free or 1-785-424-1699. A replay will be available on the Investor Relations page.
5
Meritage Homes Corporation and Subsidiaries
Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)
| Three Months Ended June 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | Change $ | Change % | |||||||||||||||||||||||
| Homebuilding: | ||||||||||||||||||||||||||
| Home closing revenue | $ | 1,387,911 | $ | 1,615,709 | $ | (227,798) | (14) | % | ||||||||||||||||||
| Land closing revenue | 12,720 | 8,277 | 4,443 | 54 | % | |||||||||||||||||||||
| Total closing revenue | 1,400,631 | 1,623,986 | (223,355) | (14) | % | |||||||||||||||||||||
| Cost of home closings | (1,134,298) | (1,274,381) | (140,083) | (11) | % | |||||||||||||||||||||
| Cost of land closings | (12,196) | (8,996) | 3,200 | 36 | % | |||||||||||||||||||||
| Total cost of closings | (1,146,494) | (1,283,377) | (136,883) | (11) | % | |||||||||||||||||||||
| Home closing gross profit | 253,613 | 341,328 | (87,715) | (26) | % | |||||||||||||||||||||
| Land closing gross profit/(loss) | 524 | (719) | 1,243 | 173 | % | |||||||||||||||||||||
| Total closing gross profit | 254,137 | 340,609 | (86,472) | (25) | % | |||||||||||||||||||||
| Financial Services: | ||||||||||||||||||||||||||
| Revenue | 7,784 | 9,425 | (1,641) | (17) | % | |||||||||||||||||||||
| Expense | (4,141) | (4,656) | (515) | (11) | % | |||||||||||||||||||||
| Earnings from financial services unconsolidated entities and other, net | 1,684 | 842 | 842 | 100 | % | |||||||||||||||||||||
| Financial services profit | 5,327 | 5,611 | (284) | (5) | % | |||||||||||||||||||||
| Commissions and other sales costs | (91,805) | (108,830) | (17,025) | (16) | % | |||||||||||||||||||||
| General and administrative expenses | (52,380) | (55,183) | (2,803) | (5) | % | |||||||||||||||||||||
| Interest expense | (2,187) | — | 2,187 | N/A | ||||||||||||||||||||||
| Other income, net | 7,472 | 10,853 | (3,381) | (31) | % | |||||||||||||||||||||
| Earnings before income taxes | 120,564 | 193,060 | (72,496) | (38) | % | |||||||||||||||||||||
| Provision for income taxes | (29,934) | (46,181) | (16,247) | (35) | % | |||||||||||||||||||||
| Net earnings | $ | 90,630 | $ | 146,879 | $ | (56,249) | (38) | % | ||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||
| Basic | Change $ or shares | Change % | ||||||||||||||||||||||||
| Earnings per common share | $ | 1.38 | $ | 2.06 | $ | (0.68) | (33) | % | ||||||||||||||||||
| Weighted average shares outstanding | 65,787 | 71,456 | (5,669) | (8) | % | |||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
| Earnings per common share | $ | 1.37 | $ | 2.04 | $ | (0.67) | (33) | % | ||||||||||||||||||
| Weighted average shares outstanding | 66,131 | 71,900 | (5,769) | (8) | % | |||||||||||||||||||||
6
| Six Months Ended June 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | Change $ | Change % | |||||||||||||||||||||||
| Homebuilding: | ||||||||||||||||||||||||||
| Home closing revenue | $ | 2,495,733 | $ | 2,957,813 | $ | (462,080) | (16) | % | ||||||||||||||||||
| Land closing revenue | 22,081 | 23,698 | (1,617) | (7) | % | |||||||||||||||||||||
| Total closing revenue | 2,517,814 | 2,981,511 | (463,697) | (16) | % | |||||||||||||||||||||
| Cost of home closings | (2,048,322) | (2,320,835) | (272,513) | (12) | % | |||||||||||||||||||||
| Cost of land closings | (21,826) | (21,252) | 574 | 3 | % | |||||||||||||||||||||
| Total cost of closings | (2,070,148) | (2,342,087) | (271,939) | (12) | % | |||||||||||||||||||||
| Home closing gross profit | 447,411 | 636,978 | (189,567) | (30) | % | |||||||||||||||||||||
| Land closing gross profit | 255 | 2,446 | (2,191) | (90) | % | |||||||||||||||||||||
| Total closing gross profit | 447,666 | 639,424 | (191,758) | (30) | % | |||||||||||||||||||||
| Financial Services: | ||||||||||||||||||||||||||
| Revenue | 14,069 | 16,507 | (2,438) | (15) | % | |||||||||||||||||||||
| Expense | (7,764) | (8,848) | (1,084) | (12) | % | |||||||||||||||||||||
Earnings from financial services unconsolidated entities and other, net | 2,515 | 1,515 | 1,000 | 66 | % | |||||||||||||||||||||
| Financial services profit | 8,820 | 9,174 | (354) | (4) | % | |||||||||||||||||||||
| Commissions and other sales costs | (171,277) | (203,550) | (32,273) | (16) | % | |||||||||||||||||||||
| General and administrative expenses | (103,782) | (112,180) | (8,398) | (7) | % | |||||||||||||||||||||
| Interest expense | (2,774) | — | 2,774 | N/A | ||||||||||||||||||||||
| Other income, net | 14,435 | 20,351 | (5,916) | (29) | % | |||||||||||||||||||||
| Earnings before income taxes | 193,088 | 353,219 | (160,131) | (45) | % | |||||||||||||||||||||
| Provision for income taxes | (47,149) | (83,534) | (36,385) | (44) | % | |||||||||||||||||||||
| Net earnings | $ | 145,939 | $ | 269,685 | $ | (123,746) | (46) | % | ||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||
| Basic | Change $ or shares | Change % | ||||||||||||||||||||||||
| Earnings per common share | $ | 2.19 | $ | 3.76 | $ | (1.57) | (42) | % | ||||||||||||||||||
| Weighted average shares outstanding | 66,573 | 71,684 | (5,111) | (7) | % | |||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
| Earnings per common share | $ | 2.18 | $ | 3.73 | $ | (1.55) | (42) | % | ||||||||||||||||||
| Weighted average shares outstanding | 66,934 | 72,246 | (5,312) | (7) | % | |||||||||||||||||||||
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Meritage Homes Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
| June 30, 2026 | December 31, 2025 | |||||||||||||
| Assets: | ||||||||||||||
| Cash and cash equivalents | $ | 807,267 | $ | 775,157 | ||||||||||
| Other receivables | 304,098 | 306,956 | ||||||||||||
Real estate (1) | 5,891,978 | 5,987,120 | ||||||||||||
| Deposits on real estate under option or contract | 168,977 | 174,170 | ||||||||||||
| Investments in unconsolidated entities | 59,423 | 57,268 | ||||||||||||
| Property and equipment, net | 46,085 | 46,647 | ||||||||||||
| Deferred tax asset, net | 47,064 | 53,293 | ||||||||||||
| Prepaids, other assets and goodwill | 230,041 | 221,676 | ||||||||||||
| Total assets | $ | 7,554,933 | $ | 7,622,287 | ||||||||||
| Liabilities: | ||||||||||||||
| Accounts payable | $ | 215,737 | $ | 200,679 | ||||||||||
| Accrued and other liabilities | 423,865 | 387,698 | ||||||||||||
| Home sale deposits | 10,017 | 9,213 | ||||||||||||
| Loans payable and other borrowings | 39,535 | 24,328 | ||||||||||||
| Senior and convertible senior notes, net | 1,807,842 | 1,804,726 | ||||||||||||
| Total liabilities | 2,496,996 | 2,426,644 | ||||||||||||
| Stockholders' Equity: | ||||||||||||||
| Preferred stock | — | — | ||||||||||||
| Common stock, par value $0.01. Authorized 125,000,000 shares; 65,174,093 and 68,168,923 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively | 652 | 682 | ||||||||||||
| Additional paid-in capital | — | — | ||||||||||||
| Retained earnings | 5,057,285 | 5,194,961 | ||||||||||||
| Total stockholders’ equity | 5,057,937 | 5,195,643 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 7,554,933 | $ | 7,622,287 | ||||||||||
(1) Real estate – Allocated costs: | ||||||||||||||
| Homes completed and under construction | $ | 1,891,356 | $ | 2,069,548 | ||||||||||
| Finished home sites and home sites under development | 3,922,515 | 3,917,572 | ||||||||||||
| Consolidated real estate not owned | 78,107 | — | ||||||||||||
| Total real estate | $ | 5,891,978 | $ | 5,987,120 | ||||||||||
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Meritage Homes Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net earnings | $ | 145,939 | $ | 269,685 | ||||||||||
| Adjustments to reconcile net earnings to net cash provided by/(used in) operating activities: | ||||||||||||||
| Depreciation and amortization | 11,451 | 12,612 | ||||||||||||
| Real estate and land impairments | 6,009 | — | ||||||||||||
| Write-off of terminated land deals | 1,649 | 5,638 | ||||||||||||
| Stock-based compensation | 11,682 | 9,922 | ||||||||||||
| Equity in earnings from unconsolidated entities | (2,085) | (2,164) | ||||||||||||
| Distribution of earnings from unconsolidated entities | 2,027 | 2,116 | ||||||||||||
| Other | 6,173 | 2,189 | ||||||||||||
| Changes in assets and liabilities: | ||||||||||||||
| Decrease/(increase) in real estate | 132,331 | (224,617) | ||||||||||||
| Decrease/(increase) in deposits on real estate under option or contract | 2,625 | (30,415) | ||||||||||||
| Increase in other receivables, prepaids and other assets | (3,101) | (43,264) | ||||||||||||
| Decrease in accounts payable and accrued and other liabilities | (24,723) | (21,013) | ||||||||||||
| Increase/(decrease) in home sale deposits | 804 | (9,564) | ||||||||||||
| Net cash provided by/(used in) operating activities | 290,781 | (28,875) | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Investments in unconsolidated entities | (15,583) | (9,377) | ||||||||||||
| Purchases of property and equipment | (9,876) | (12,359) | ||||||||||||
| Proceeds from sales of property and equipment | 190 | 126 | ||||||||||||
| Maturities/sales of investments and securities | — | 750 | ||||||||||||
| Payments to purchase investments and securities | — | (750) | ||||||||||||
| Net cash used in investing activities | (25,269) | (21,610) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Repayment of loans payable and other borrowings | (48) | (11,213) | ||||||||||||
| Proceeds from issuance of senior notes | — | 497,195 | ||||||||||||
| Payment of debt issuance costs | — | (5,106) | ||||||||||||
| Proceeds from liabilities related to consolidated real estate not owned | 59,947 | — | ||||||||||||
| Dividends paid | (63,301) | (61,484) | ||||||||||||
| Repurchase of shares | (230,000) | (89,999) | ||||||||||||
| Net cash (used in)/provided by financing activities | (233,402) | 329,393 | ||||||||||||
| Net increase in cash and cash equivalents | 32,110 | 278,908 | ||||||||||||
| Beginning cash and cash equivalents | 775,157 | 651,555 | ||||||||||||
| Ending cash and cash equivalents | $ | 807,267 | $ | 930,463 | ||||||||||
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Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(Unaudited)
We aggregate our homebuilding operating segments into reporting segments based on similar long-term economic characteristics and geographical proximity. Our three reportable homebuilding segments are as follows:
•West: Arizona, California, Colorado, and Utah
•Central: Tennessee and Texas
•East: Alabama, Florida, Georgia, Mississippi, North Carolina and South Carolina
| Three Months Ended June 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Homes | Value | Homes | Value | |||||||||||||||||||||||
| Homes Closed: | ||||||||||||||||||||||||||
| West Region | 825 | $ | 400,755 | 1,165 | $ | 549,205 | ||||||||||||||||||||
| Central Region | 1,308 | 446,726 | 1,374 | 480,425 | ||||||||||||||||||||||
| East Region | 1,592 | 540,430 | 1,631 | 586,079 | ||||||||||||||||||||||
| Total | 3,725 | $ | 1,387,911 | 4,170 | $ | 1,615,709 | ||||||||||||||||||||
| Homes Ordered: | ||||||||||||||||||||||||||
| West Region | 762 | $ | 391,197 | 1,001 | $ | 484,756 | ||||||||||||||||||||
| Central Region | 1,259 | 439,882 | 1,298 | 475,275 | ||||||||||||||||||||||
| East Region | 1,554 | 545,259 | 1,615 | 587,407 | ||||||||||||||||||||||
| Total | 3,575 | $ | 1,376,338 | 3,914 | $ | 1,547,438 | ||||||||||||||||||||
| Six Months Ended June 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Homes | Value | Homes | Value | |||||||||||||||||||||||
| Homes Closed: | ||||||||||||||||||||||||||
| West Region | 1,511 | $ | 736,938 | 2,163 | $ | 1,028,841 | ||||||||||||||||||||
| Central Region | 2,416 | 823,026 | 2,561 | 892,962 | ||||||||||||||||||||||
| East Region | 2,765 | 935,769 | 2,862 | 1,036,010 | ||||||||||||||||||||||
| Total | 6,692 | $ | 2,495,733 | 7,586 | $ | 2,957,813 | ||||||||||||||||||||
| Homes Ordered: | ||||||||||||||||||||||||||
| West Region | 1,660 | $ | 835,490 | 2,094 | $ | 1,024,350 | ||||||||||||||||||||
| Central Region | 2,575 | 897,181 | 2,663 | 964,435 | ||||||||||||||||||||||
| East Region | 3,004 | 1,044,107 | 3,033 | 1,116,830 | ||||||||||||||||||||||
| Total | 7,239 | $ | 2,776,778 | 7,790 | $ | 3,105,615 | ||||||||||||||||||||
| At June 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Homes | Value | Homes | Value | |||||||||||||||||||||||
| Order Backlog: | ||||||||||||||||||||||||||
| West Region | 334 | $ | 173,220 | 366 | $ | 182,308 | ||||||||||||||||||||
| Central Region | 616 | 218,725 | 583 | 220,889 | ||||||||||||||||||||||
| East Region | 765 | 269,961 | 799 | 292,279 | ||||||||||||||||||||||
| Total | 1,715 | $ | 661,906 | 1,748 | $ | 695,476 | ||||||||||||||||||||
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| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Ending | Average | Ending | Average | Ending | Average | Ending | Average | ||||||||||||||||||||||||||||||||||||||||
| Active Communities: | |||||||||||||||||||||||||||||||||||||||||||||||
| West Region | 89 | 88.5 | 85 | 85.0 | 89 | 86.6 | 85 | 87.0 | |||||||||||||||||||||||||||||||||||||||
| Central Region | 99 | 103.0 | 85 | 83.5 | 99 | 106.1 | 85 | 85.6 | |||||||||||||||||||||||||||||||||||||||
| East Region | 152 | 151.0 | 142 | 132.5 | 152 | 147.7 | 142 | 125.2 | |||||||||||||||||||||||||||||||||||||||
| Total | 340 | 342.5 | 312 | 301.0 | 340 | 340.4 | 312 | 297.8 | |||||||||||||||||||||||||||||||||||||||
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Meritage Homes Corporation and Subsidiaries
Supplement and Non-GAAP information
(Unaudited)
Supplemental Information (Dollars in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Depreciation and amortization | $ | 6,078 | $ | 6,663 | $ | 11,451 | $ | 12,612 | |||||||||||||||
| Summary of Capitalized Interest: | |||||||||||||||||||||||
| Capitalized interest, beginning of period | $ | 84,464 | $ | 57,107 | $ | 77,064 | $ | 53,678 | |||||||||||||||
| Interest incurred | 20,114 | 19,995 | 40,119 | 34,709 | |||||||||||||||||||
| Interest expensed | (2,187) | — | (2,774) | — | |||||||||||||||||||
| Interest amortized to cost of home and land closings | (15,654) | (13,288) | (27,672) | (24,573) | |||||||||||||||||||
| Capitalized interest, end of period | $ | 86,737 | $ | 63,814 | $ | 86,737 | $ | 63,814 | |||||||||||||||
Reconciliation of Non-GAAP Information (Dollars in thousands):
This press release includes comments and discussion about our operating results that reflect certain adjustments, including to home closing gross profit, home closing gross margin, earnings before income taxes, net earnings, diluted earnings per common share, and debt-to-capital ratios. These are considered non-GAAP financial measures and should be considered in addition to, rather than as a substitute for, the comparable GAAP financial measures. We believe these non-GAAP financial measures are relevant and useful to investors in understanding our operating results and may be helpful in comparing our company with other companies in the homebuilding and other industries to the extent they provide similar information. We encourage investors to understand the methods used by other companies to calculate these non-GAAP financial measures and any adjustments thereto before comparing to our non-GAAP financial measures.
| Home Closing Gross Profit and Home Closing Gross Margin | ||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Home closing gross profit | $ | 253,613 | $ | 341,328 | $ | 447,411 | $ | 636,978 | ||||||||||||||||||
| Home closing gross margin | 18.3 | % | 21.1 | % | 17.9 | % | 21.5 | % | ||||||||||||||||||
| Add: Real estate-related impairments | 3,582 | — | 6,009 | — | ||||||||||||||||||||||
| Add: Write-off of terminated land deals | 276 | 4,205 | 1,649 | 5,638 | ||||||||||||||||||||||
| Adjusted home closing gross profit | $ | 257,471 | $ | 345,533 | $ | 455,069 | $ | 642,616 | ||||||||||||||||||
| Adjusted home closing gross margin | 18.6 | % | 21.4 | % | 18.2 | % | 21.7 | % | ||||||||||||||||||
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| Earnings before income taxes, Net earnings and Diluted earnings per common share | ||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Earnings before income taxes | $ | 120,564 | $ | 193,060 | $ | 193,088 | $ | 353,219 | ||||||||||||||||||
| Add: Real estate-related impairments | 3,582 | — | 6,039 | — | ||||||||||||||||||||||
| Add: Write-off of terminated land deals | 276 | 4,205 | 1,649 | 5,638 | ||||||||||||||||||||||
| Adjusted earnings before income taxes | $ | 124,422 | $ | 197,265 | $ | 200,776 | $ | 358,857 | ||||||||||||||||||
| Incremental tax rate | 24.6 | % | 24.1 | % | 24.7 | % | 24.3 | % | ||||||||||||||||||
| Adjusted provision for income tax | (30,883) | (47,194) | (49,048) | (84,904) | ||||||||||||||||||||||
| Adjusted net earnings | 93,539 | 150,071 | 151,728 | 273,953 | ||||||||||||||||||||||
| Diluted earnings per common share | $ | 1.37 | $ | 2.04 | $ | 2.18 | $ | 3.73 | ||||||||||||||||||
| Adjusted diluted earnings per common share | $ | 1.42 | $ | 2.09 | $ | 2.27 | $ | 3.79 | ||||||||||||||||||
| Debt-to-Capital Ratios | |||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| Senior and convertible senior notes, net and loans payable and other borrowings | $ | 1,847,377 | $ | 1,829,054 | |||||||
| Stockholders' equity | 5,057,937 | 5,195,643 | |||||||||
| Total capital | $ | 6,905,314 | $ | 7,024,697 | |||||||
| Debt-to-capital | 26.8% | 26.0% | |||||||||
| Senior and convertible senior notes, net and loans payable and other borrowings | $ | 1,847,377 | $ | 1,829,054 | |||||||
| Less: cash and cash equivalents | (807,267) | (775,157) | |||||||||
| Net debt | $ | 1,040,110 | $ | 1,053,897 | |||||||
| Stockholders’ equity | 5,057,937 | 5,195,643 | |||||||||
| Total net capital | $ | 6,098,047 | $ | 6,249,540 | |||||||
| Net debt-to-capital | 17.1% | 16.9% | |||||||||
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About Meritage Homes Corporation
Meritage is the fifth-largest public homebuilder in the United States, based on homes closed in 2025. The Company offers energy-efficient and affordable entry-level and first move-up homes. Operations span across Arizona, California, Colorado, Utah, Tennessee, Texas, Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina.
Meritage has delivered over 210,000 homes in its 41-year history, and has a reputation for its distinctive style, quality construction, and award-winning customer experience. The Company is an industry leader in energy-efficient homebuilding, an eleven-time recipient of the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR® Partner of the Year for Sustained Excellence Award and Residential New Construction Market Leader Award, as well as a four-time recipient of the EPA's Indoor airPLUS Leader Award.
For more information, visit www.meritagehomes.com.
The information included in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include expectations about the housing market in general and our future results including our full year 2026 projected home closing volume, home closing revenue and community count growth.
Such statements are based on the current beliefs and expectations of Company management and current market conditions, which are subject to significant uncertainties and fluctuations. Actual results may differ from those set forth in the forward-looking statements. The Company makes no commitment, and disclaims any duty, except as required by law, to update or revise any forward-looking statements to reflect future events or changes in these expectations. Meritage's business is subject to a number of risks and uncertainties. As a result of those risks and uncertainties, the Company's stock and note prices may fluctuate dramatically. These risks and uncertainties include, but are not limited to, the following: increases in interest rates or decreases in mortgage availability, and the cost and use of rate locks and buy-downs; the cost of materials used to develop communities and construct homes; shortages in the availability and cost of subcontract labor; legislation related to tariffs; cancellation rates; supply chain and labor constraints; the ability of our potential buyers to sell their existing homes; the adverse effect of slow absorption rates; our ability to acquire and develop lots may be negatively impacted if we are unable to obtain performance and surety bonds; impairments of our real estate inventory; competition; home warranty and construction defect claims; failures in health and safety performance; fluctuations in quarterly operating results; our level of indebtedness; our exposure to counterparty risk with respect to our capped calls; our ability to obtain financing if our credit ratings are downgraded; our exposure to and impacts from natural disasters or severe weather conditions; the availability and cost of finished lots and undeveloped land; the success of our strategy to offer and market entry-level and first move-up homes; a change to the feasibility of projects under option or contract that could result in the write-down or write-off of earnest money or option deposits; our limited geographic diversification; sustainability matters and disclosures; our exposure to information technology failures and security breaches and the impact thereof; the loss of key personnel; changes in tax laws that adversely impact us or our homebuyers; our inability to prevail on contested tax positions; failure of our employees and representatives to comply with laws and regulations; our compliance with government regulations; liabilities or restrictions resulting from regulations applicable to our financial services operations; negative publicity that affects our reputation;
14
potential disruptions to our business by an epidemic or pandemic, and measures that federal, state and local governments and/or health authorities implement to address it; and other factors identified in documents filed by the Company with the Securities and Exchange Commission, including those set forth in our Form 10-K for the year ended December 31, 2025 and our subsequent Form 10-Qs under the caption "Risk Factors," which can be found on our website at https://investors.meritagehomes.com.
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