Beazer Homes USA, Inc. BZH Form 10-Q filing Q3 FY2026

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

BEAZER HOMES USA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Description of Business

Beazer Homes USA, Inc. (“we,” “us,” “our,” “Beazer,” “Beazer Homes” or the “Company”) is a nationally recognized homebuilder committed to building homes and communities designed to inspire sustainable and healthier living. Operating across 13 states in the West, East, and Southeast geographic regions of the United States, Beazer Homes offers a diverse portfolio of products tailored to meet the evolving needs of homebuyers that value a well-constructed and energy efficient home.

For an additional description of our business, refer to Item 1 within our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (2025 Annual Report).

(2) Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited condensed consolidated financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2025 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. The results of the Company's consolidated operations presented herein for the three and nine months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full fiscal year due to seasonal variations in our operations and other factors.

Basis of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Our net (loss) income is equivalent to our comprehensive (loss) income, so we have not presented a separate statement of comprehensive (loss) income.

Our fiscal year 2026 began on October 1, 2025 and ends on September 30, 2026. Our fiscal year 2025 began on October 1, 2024 and ended on September 30, 2025.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates.

Share Repurchase Program

In April 2025, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $100.0 million of its outstanding common stock. The repurchase program has no expiration date and repurchases may be conducted through open market purchases, 10b5-1 plans, accelerated share repurchases, or private transactions. The Company repurchased 1.0 million shares of its common stock for an aggregate $21.0 million (inclusive of commissions and exclusive of accrued excise tax) at an average price per share of $21.01 during the three months ended June 30, 2026. This brings the total repurchases for the nine months ended June 30, 2026 to 2.9 million shares of common stock for $66.2 million (inclusive of commissions and exclusive of accrued excise tax) at an average price per share of $23.04.

During the three months ended June 30, 2025, 586 thousand shares were repurchased for $12.5 million at an average price per share of $21.38 (inclusive of commissions and exclusive of accrued excise tax). During the nine months ended June 30, 2025, 1.5 million shares were repurchased for $33.1 million at an average price per share of $22.20 (inclusive of commissions and exclusive of accrued excise tax).

Since the authorization of the share repurchase program in April 2025, we have repurchase an aggregated 3.5 million shares of common stock for $78.7 million at an average price per share of $22.75. All shares have been retired upon repurchase. As of June 30, 2026, the remaining availability of the share repurchase program was $21.3 million.

Revenue Recognition

We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the process specified in Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers.

The following table presents our total revenue disaggregated by revenue stream for the periods presented:

(a) Please see Note 14 for total revenue disaggregated by reportable segment.

Homebuilding revenue

Homebuilding revenue is reported net of price concessions, including discounts on home prices, discounts on homebuilding options and option upgrades. Closing cost incentives, such as seller-paid financing or closing costs, including rate buydowns, are recognized as a cost of selling the home and are included in home construction expenses.

Homebuilding revenue is generally recognized when title to and possession of the home is transferred to the buyer on the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date. Home sale contract assets consist of cash from home closings held by title companies in escrow for our benefit, typically for less than five days, and are considered accounts receivable. Contract liabilities include customer deposits related to sold but undelivered homes and totaled $21.3 million and $14.3 million as of June 30, 2026 and September 30, 2025, respectively. Of the customer deposits outstanding as of September 30, 2025, $1.1 million and $12.4 million were recognized in revenue during the three and nine months ended June 30, 2026, upon closing of the related homes.

Land sales and other revenue

Land sales revenue relates to land that does not fit within our homebuilding programs or strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. We also provide title examinations for our homebuyers in certain markets. Revenues associated with our title operations are recognized when closing services are rendered and title insurance policies are issued, both of which generally occur as each home is closed.

Recent Accounting Pronouncements

Income Taxes. In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for our fiscal year ending September 30, 2026. Early adoption is permitted and the amendments in this update should be applied on a prospective basis. The Company is still evaluating the impact of the adoption of ASU 2023-09 and expects to include additional disclosures within the consolidated financial statements for the fiscal year ending September 30, 2026.

Income Statement Disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires disclosure of additional information about specific expense categories in the notes to the financial statements. ASU 2024-03 will be effective for our fiscal year ending September 30, 2028. Early adoption is permitted and the amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact that the adoption of ASU 2024-03 may have on our consolidated financial statements and disclosures.

Credit Losses. In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which allows entities to use the practical expedient to estimate expected credit losses. ASU 2025-05 will be effective for our fiscal year ending September 30, 2027, and interim reporting periods within this annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-05 may have on our consolidated financial statements and disclosures.

Internal-Use Software. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for the costs of internal-use software by removing all references to software development project stages so that the guidance is neutral to different software development methods. ASU 2025-06 will be effective for our fiscal year ending September 30, 2029, and interim reporting periods within this annual reporting period. Early adoption is permitted and the amendments in this update may be applied on a retrospective, modified transition, or prospective basis. The Company does not expect the adoption of ASU 2025-06 to have a material impact on our consolidated financial statements and disclosures.

(3) Supplemental Cash Flow Information

The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the condensed consolidated balance sheets and condensed consolidated statements of cash flows for the periods presented:

(a) Represents leases renewed or additional leases that commenced during the nine months ended June 30, 2026 and 2025.

(4) Inventory

The components of our inventory are as follows as of June 30, 2026 and September 30, 2025:

Homes under construction include homes substantially finished and ready for delivery and homes in various stages of construction, including costs of the underlying lot, direct construction costs and capitalized indirect costs. As of June 30, 2026, we had 2,532 homes under construction, including 1,403 speculative (spec) homes totaling $513.1 million (1,016 in-process spec homes totaling $339.6 million, and 387 finished spec homes totaling $173.5 million). As of September 30, 2025, we had 1,800 homes under construction, including 1,078 spec homes totaling $417.4 million (577 in-process spec homes totaling $201.8 million, and 501 finished spec homes totaling $215.6 million).

Land under development consists principally of land acquisition, land development and other common costs. These land-related costs are allocated to individual lots on a pro-rata basis, and the lot costs are transferred to homes under construction when home construction begins for the respective lots. Certain of the fully developed lots in this category are reserved by a customer deposit or sales contract.

Land held for future development consists of communities for which construction and development activities are expected to occur in the future or have been idled and are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. All applicable carrying costs, such as interest and real estate taxes, are expensed as incurred.

Land held for sale includes land and lots that do not fit within our homebuilding programs or strategic plans in certain markets, and land is classified as held for sale once certain criteria are met (refer to Note 2 to the consolidated financial statements within our 2025 Annual Report). These assets are recorded at the lower of the carrying value or fair value less cost to sell.

The amount of interest we are able to capitalize depends on our qualified inventory balance, which considers the status of our inventory holdings. Our qualified inventory balance includes the majority of our homes under construction and land under development but excludes land held for future development and land held for sale (see Note 5 for additional information on capitalized interest).

Land not owned under option agreements includes the remaining contractual purchase price for certain land and lot option agreements that we account for as financing arrangements pursuant to ASC Subtopic 470-40, Product Financing Arrangements, which occurs when we are economically compelled to exercise the option and purchase the land, even though the Company has no direct obligation to pay these future amounts. For these contracts, the remaining purchase price is recorded within land not owned under option agreements with a corresponding liability recorded within obligations related to land not owned under option agreements within other liabilities on our condensed consolidated balance sheet.

Total inventory by reportable segment and Corporate and unallocated is presented in the table below as of June 30, 2026 and September 30, 2025:

(a) Projects in progress include homes under construction, land under development, capitalized interest, model homes, and land not owned under option agreements categories from the preceding table.

(b) Projects in progress amount include capitalized interest and indirect costs that are maintained within Corporate and unallocated.

Inventory Impairments

Inventory assets are assessed for recoverability periodically in accordance with the policies described in Notes 2 and 4 to the consolidated financial statements within our 2025 Annual Report.

The following table presents, by reportable segment and Corporate and unallocated, our total impairment and abandonment charges for the periods presented:

(a) Amount represents capitalized interest and indirects balance that was impaired. Capitalized interest and indirects are maintained within Corporate and unallocated.

Projects in Progress Impairments

Projects in progress inventory includes homes under construction and land under development grouped together as communities. Projects in progress are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable.

We assess our projects in progress inventory for indicators of impairment at the community level on a quarterly basis. If indicators of impairment are present for a community with more than ten homes remaining to close, we perform a recoverability test by comparing the expected undiscounted cash flows for the community to its carrying value. If the aggregate undiscounted cash flows are in excess of the carrying value, the asset is considered to be recoverable and is not impaired. If the carrying value exceeds the aggregate undiscounted cash flows, we perform a discounted cash flow analysis to determine the fair value of the community, and impairment charges are recorded if the fair value of the community's inventory is less than its carrying value.

Valuation assumptions for communities tested for impairment are specific to each community. For projects in progress impaired during the periods presented, we determined the fair value of each community by discounting its estimated future cash flows at a rate commensurate with the risks associated with the underlying community. The discount rate used depends on (1) community specific factors such as product types, development stage and expected duration of the project, and competitive factors influencing the sales performance of the community, (2) local market factors such as employment levels, consumer confidence and existing supply of new and used homes for sale, and (3) other specific factors. The estimated future cash flows for each community were determined based on the expected pace of closings and average sales price less expected costs for land acquisition and land development, direct construction, overhead and interest. The assumptions used in the determination of fair value of projects in progress communities are based on factors known to us at the time such estimates are made and our expectations of future operations and market conditions. Due to uncertainties in the estimation process, the significant volatility in market conditions, the long life cycles of many communities, and potential changes in our strategy related to certain communities, actual results could differ significantly from our estimates.

No project in progress impairments were recognized during the three months ended June 30, 2026. During the nine months ended June 30, 2026, we recognized a $1.3 million projects in progress impairment charge in one community located in our Houston market, principally due to a reduction in price driven by the competitive market dynamics. During the three and nine months ended June 30, 2025, we recognized $8.6 million of projects in progress impairments.

The following table presents by reportable segment and Corporate and unallocated details of the impairment charges taken on projects in progress for the period presented:

(a) Amount represents the capitalized interest and indirects balances that were impaired. Capitalized interest and indirects are maintained within Corporate and unallocated.

(b) Projects in progress assets are measured at fair value on a non-recurring basis when events and circumstances indicate that their carrying value is not recoverable. The fair val ue of projects in progress is determined using Level 3 unobservable inputs. Refer to Note 9 for further discussion of our fair value measurements and hierarchy levels.

The following table presents the ranges or values of significant quantitative unobservable inputs we used in determining the fair value of the communities impaired during the period presented:

Land Held for Sale Impairments

We evaluate the fair value less cost to sell of a land held for sale asset when indicators of impairment are present. Impairments on land held for sale generally represent write downs of these properties from their carrying values to estimated fair value less cost to sell based on executed sales contracts, current sales prices for comparable assets in the area, recent market analysis studies, appraisals, recent legitimate offers and listing prices of similar properties, as applicable. Absent an executed sales contract, our assumptions related to land sales prices are based on factors known to us at the time such estimates are made and require significant judgment because the real estate market is highly sensitive to changes in economic conditions, and our estimates of sale prices could differ significantly from actual results.

During the three months ended June 30, 2026, we recognized $2.3 million of land held for sale impairment charges related to four communities in our West and East segments. This brings the total for the nine months ended June 30, 2026 to $3.4 million of land held for sale impairment charges. Estimated fair value less selling cost for these impaired assets at the time of impairment was $34.0 million. The fair values of the impaired land held for sale assets were determined using Level 3 unobservable inputs. During the three and nine months ended June 30, 2025, we recognized $1.5 million of land held for sale impairments.

Abandonments

From time to time, we may determine to abandon lots or not exercise certain option agreements that are not projected to produce adequate results or no longer fit with our long-term strategic plan. Additionally, in certain limited instances, we are forced to abandon lots due to seller non-performance, permitting or other regulatory issues that do not allow us to build on those lots. If we intend to no longer pursue the purchase of property, we record an abandonment charge to earnings for the non-refundable deposit amount and any related capitalized costs in the period such decision is made.

No abandonment charges were recognized during the three months ended June 30, 2026. During the nine months ended June 30, 2026, we recognized $1.3 million of abandonment charges. During the three and nine months ended June 30, 2025, we recognized $0.2 million and $0.8 million of abandonment charges. As we grow our business in the years ahead, the dollar value of abandonment charges may also grow.

Lot Option Agreements

In addition to purchasing land directly, we utilize lot option agreements that enable us to defer acquiring portions of properties owned by third parties and unconsolidated entities until we have determined whether to exercise our lot option. The majority of our lot option agreements require a non-refundable cash deposit or issuance of an irrevocable letter of credit or surety bond based on a percentage of the purchase price of the land for the right to acquire lots during a specified period at a specified price. Purchase of the properties under these agreements is contingent upon satisfaction of certain requirements by us and the sellers. Under lot option agreements, our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred. If the Company cancels a lot option agreement, the cancellation would result in a write-off of the related deposits and pre-acquisition costs but would not expose the Company to the overall risks or losses of the applicable entity we are purchasing from. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our remaining option agreements. Various factors, some of which are beyond our control, such as market conditions, weather conditions, and the timing of the completion of development activities, will have a significant impact on the timing of option exercises or whether lot options will be exercised at all.

The following table provides a summary of our interests in lot option agreements as of June 30, 2026 and September 30, 2025:

(a) Amount is included as a component of land under development and land not owned under option agreements within our inventory in the condensed consolidated balance sheets.

(5) Interest

Interest capitalized during the three and nine months ended June 30, 2026 and 2025 was based upon the balance of inventory eligible for capitalization. The following table presents certain information regarding interest for the periods presented:

(a) Capitalized interest amortized to home construction and land sales expenses varies based on the number of homes closed during the period and land sales, if any, as well as other factors.

(6) Borrowings

The Company's debt, net of unamortized debt issuance costs consisted of the following as of June 30, 2026 and September 30, 2025:

Senior Unsecured Revolving Credit Facility

The Senior Unsecured Revolving Credit Facility (Unsecured Facility) provides working capital and letter of credit capacity. In March 2026, the Company executed an amendment to increase its available borrowing capacity under the Unsecured Facility from $365.0 million to $525.0 million. The $525.0 million borrowing capacity includes a letter of credit facility of up to $100.0 million. The Company will have the right from time to time to request to increase the size of the commitments under the Unsecured Facility by up to $100.0 million for a maximum of $625.0 million. The Company also extended the termination date (Termination Date) from March 15, 2028 to March 13, 2030. The Company may borrow, repay, and reborrow amounts under the Unsecured Facility until the Termination Date.

Borrowings under the Unsecured Facility bear interest, at our option, at either (i) a secured overnight financing rate (SOFR) plus an applicable margin ranging from 2.15% to 2.90% per annum or (ii) an alternate base rate (ABR) plus an applicable margin ranging from 1.15% to 1.90% per annum. Commitment fees on the unused portion of the facility range from 0.25% to 0.40% per annum. The applicable margin and the commitment fees vary based on the Company's leverage ratio, as defined under the Unsecured Facility.

Substantially all of the Company's significant subsidiaries are full and unconditional guarantors of the Unsecured Facility and are jointly and severally liable for obligations under the Unsecured Facility. For additional discussion of the Unsecured Facility, refer to Note 7 to the consolidated financial statements within our 2025 Annual Report.

As of June 30, 2026, we had $340.0 million in borrowings and $45.8 million in letters of credit outstanding under the Unsecured Facility, resulting in a remaining capacity of $139.2 million. The weighted-average interest rate on outstanding borrowings as of June 30, 2026 was 6.97%. The Unsecured Facility requires compliance with certain covenants, including affirmative covenants, negative covenants and financial covenants. As of June 30, 2026, the Company believes it was in compliance with all such covenants.

Senior Notes

The Company's senior notes (Senior Notes) are unsecured obligations that rank equally in right of payment with all existing and future senior unsecured obligations, senior to all of the Company's existing and future subordinated indebtedness, and effectively subordinated to the Company's future secured indebtedness, to the extent of the value of the assets securing such indebtedness. Substantially all of the Company's significant subsidiaries are full and unconditional guarantors of the Senior Notes and are jointly and severally liable for obligations under the Senior Notes. Each guarantor subsidiary is a wholly owned subsidiary of Beazer Homes. The Senior Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company's subsidiaries that do not guarantee these notes.

The Company's Senior Notes are issued under indentures that contain certain restrictive covenants which, among other things, restrict our ability to pay dividends, repurchase our common stock, incur certain types of additional indebtedness, and make certain investments. Compliance with the Senior Note covenants does not significantly impact the Company's operations. The Company believes it was in compliance with the covenants contained in the indentures of all of its Senior Notes as of June 30, 2026.

In June 2026, we issued and sold $400.0 million aggregate principal amount of the 2032 Notes at par (before underwriting and other issuance costs) through a private placement to qualified institutional buyers. Interest on the 2032 Notes is payable semiannually, beginning in January 2027. The 2032 Notes will mature in January 2032. The covenants related to the 2032 Notes are substantially consistent with our other Senior Notes.

During the three months ended June 30, 2026, we redeemed the remaining $357.3 million of our outstanding 2027 Notes using proceeds from the issuance of the 2032 Notes, resulting in a loss on extinguishment of debt of $0.7 million. The Company has terminated, cancelled, and discharged all of its obligations under the 2027 Notes as of June 30, 2026. No debt repurchases were made during the three and nine months ended June 30, 2025.

For additional redemption features, refer to the table below that summarizes the redemption terms of our Senior Notes:

Junior Subordinated Notes

The Company's unsecured junior subordinated notes (Junior Subordinated Notes) mature on July 30, 2036 and have an aggregate principal balance of $100.8 million as of June 30, 2026. The securities have a floating interest rate as defined in the Junior Subordinated Notes Indentures, which was a weighted-average of 6.38% as of June 30, 2026. The obligations relating to these notes are subordinated to the Unsecured Facility and the Senior Notes. In January 2010, the Company restructured $75.0 million of these notes (Restructured Notes) and recorded them at their then estimated fair value. Over the remaining life of the Restructured Notes, we will increase their carrying value until this carrying value equals the face value of the notes. As of June 30, 2026, the unamortized accretion was $20.8 million and will be amortized over the remaining life of the Restructured Notes. The remaining $25.8 million of the Junior Subordinated Notes are subject to the terms of the original agreement, have a floating interest rate equal to a three-month SOFR plus 2.71% per annum, resetting quarterly, and are redeemable in whole or in part at par value. The material terms of the $75.0 million Restructured Notes are identical to the terms of the original agreement except that the floating interest rate is subject to a floor of 4.25% and a cap of 9.25%. In addition, beginning on June 1, 2012, the Company has the option to redeem the $75.0 million principal balance in whole or in part at 75% of par value, and beginning on June 1, 2022, the redemption price has increased by 1.785% annually. As of June 30, 2026, the Company believes it was in compliance with all covenants under the Junior Subordinated Notes.

(7) Operating Leases

The Company leases certain office space and equipment under operating leases for use in our operations. We recognize operating lease expense on a straight-line basis over the lease term. Some of our lease agreements include one or more options to renew. The exercise of lease renewal options is generally at our discretion. Variable lease expense primarily relates to maintenance and other monthly expenses that do not depend on an index or rate.

We determine if an arrangement is a lease at contract inception. Lease and non-lease components are accounted for as a single component for all leases. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term, which includes optional renewal periods if we determine it is reasonably certain that the option will be exercised. As our leases do not provide an implicit rate, the discount rate used in the present value calculation represents our incremental borrowing rate determined using information available at the commencement date.

Operating lease expense is included as a component of general and administrative expenses in our condensed consolidated statements of operations. Sublease income and variable lease expenses are de minimis. The following table presents operating lease expense and cash payments on lease liabilities for the periods presented:

At June 30, 2026 and 2025, the weighted-average remaining lease term and discount rate were as follows:

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of June 30, 2026:

(a) Remaining lease payments are for the period beginning July 1, 2026 through September 30, 2026.

(b) Lease payments exclude $3.5 million of legally binding minimum lease payments for office leases signed but not yet commenced. The related right-of-use asset and operating lease liability are not reflected on the Company's condensed consolidated balance sheet as of June 30, 2026.

(8) Contingencies

Beazer Homes and certain of its subsidiaries have been and continue to be named as defendants in various construction defect claims, complaints, and other legal actions. The Company is subject to the possibility of loss contingencies related to these alleged defects as well as others arising from its business. In determining loss contingencies, we consider the likelihood of loss and our ability to reasonably estimate the amount of such loss. An estimated loss is recorded in other liabilities on the condensed consolidated balance sheets when it is considered probable that a liability has been incurred and the amount of loss can be reasonably estimated.

Warranty Reserves

We currently provide a limited warranty ranging from one to two years covering workmanship and materials per our defined quality standards. In addition, we provide a limited warranty for up to ten years covering certain defined structural element failures.

Warranty reserves are included in other liabilities within the consolidated balance sheets, and the provision for warranty accruals is included in home construction expenses in the consolidated statements of operations. Reserves covering anticipated warranty expenses are recorded for each home closed, which are a function of the number of home closings in the period, the selling prices of the homes closed and the rates of accrual per home estimated as a percentage of the selling price of the home. Management assesses the adequacy of warranty reserves each reporting period based on historical experience and the expected costs to remediate potential claims. Our review includes a quarterly analysis of the historical data and trends in warranty expense by division. An analysis by division allows us to consider market specific factors such as warranty experience, the number of home closings, the selling prices of homes, product mix, and other data in estimating warranty reserves. In addition, the analysis also contemplates the existence of any non-recurring or community-specific warranty-related matters that might not be included in historical data and trends that may need to be separately estimated based on management's judgment of the ultimate cost of repair for that specific issue. While estimated warranty liabilities are adjusted each reporting period based on the results of our quarterly analyses, we may not accurately predict actual warranty costs, which could lead to significant changes in the reserve.

Changes in warranty reserves are as follows for the periods presented:

Our homebuilding work is performed by subcontractors who typically must agree to indemnify us with regard to their work and provide certificates of insurance demonstrating that they have met our insurance requirements and have named us as an additional insured under their policies. Therefore, many claims relating to workmanship and materials that result in warranty spending are the primary responsibility of these subcontractors. In addition, we maintain third-party insurance policies that provide for the reimbursement of certain warranty costs incurred in the normal course of business, subject to applicable self-insured retentions. Amounts recorded for anticipated insurance and other third-party recoveries are reflected within the consolidated statements of operations as a reduction to home construction expense, if applicable. Anticipated recoveries not yet received from our insurer or other third-parties are recorded within accounts receivable on our consolidated balance sheets, if applicable.

We believe that our warranty and litigation accruals and third-party insurance are adequate to cover the ultimate resolution of our potential liabilities associated with known and anticipated warranty and construction-defect related claims and litigation. However, there can be no assurance that the terms and limitations of the limited warranty will be effective against claims made by homebuyers; that we will be able to renew our insurance coverage or renew it at reasonable rates; that we will not be liable for damages, the cost of repairs, and/or the expense of litigation surrounding possible construction defects, soil subsidence, or building related claims; or that claims will not arise out of events or circumstances not covered by insurance and/or not subject to effective indemnification agreements with our subcontractors.

Litigation

In the normal course of business, we and certain of our subsidiaries are subject to various lawsuits and have been named as defendants in various claims, complaints, and other legal actions, most relating to construction defects, moisture intrusion, and product liability. Certain of the liabilities resulting from these actions are covered in whole or in part by insurance. We cannot predict or determine the timing or final outcome of these lawsuits or the effect that any adverse findings or determinations in pending lawsuits may have on us. In addition, an estimate of possible loss or range of loss, if any, cannot presently be made with respect to certain of these pending matters. An unfavorable determination in pending lawsuits could result in the payment by us of substantial monetary damages that may not be fully covered by insurance. Further, the legal costs associated with the lawsuits and the amount of time required to be spent by management and our Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our financial condition, results of operations, or cash flows.

We have an accrual of $12.3 million and $9.9 million in other liabilities on our condensed consolidated balance sheets related to litigation matters as of June 30, 2026 and September 30, 2025, respectively.

Surety Bonds and Letters of Credit

We had outstanding letters of credit, surety bonds, and surety-backed letters of credit of $45.8 million, $361.3 million, and $4.6 million, respectively, as of June 30, 2026, related principally to our obligations to local governments to construct roads and other improvements in various developments.

(9) Fair Value Measurements

As of the dates presented, we had assets on our condensed consolidated balance sheets that were required to be measured at fair value on a recurring or non-recurring basis. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows:

• Level 1 – Quoted prices in active markets for identical assets or liabilities;
• Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; and
• Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.

Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value of these assets may not be recoverable. We review our long-lived assets, including inventory, for recoverability when factors indicate an impairment may exist, but no less than quarterly. The fair value of assets deemed to be impaired is determined based upon the type of asset being evaluated. The fair value of our inventory assets, when required to be calculated, is further discussed within Note 4. Due to the substantial use of unobservable inputs in valuing the assets on a non-recurring basis, they are classified within Level 3.

Determining within which hierarchical level an asset or liability falls requires significant judgment. We evaluate our hierarchy disclosures each quarter. The following table presents the period-end balances of assets measured at fair value on a recurring basis for each hierarchy level:

(a) Amount is included in other assets within the condensed consolidated balance sheets.

The fair value of cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, and amounts due under the Unsecured Facility (if outstanding) approximate their carrying amounts due to the short maturity of these assets and liabilities. When outstanding, obligations related to land not owned under option agreements approximate fair value.

The following table presents the carrying value and estimated fair value of certain other financial liabilities as of June 30, 2026 and September 30, 2025:

(a) Carrying amounts for financial liabilities are net of unamortized debt issuance costs or accretion.

(b) The estimated fair value of our publicly-held Senior Notes has been determined using quoted market rates (Level 2).

(c) Since there is no trading market for our Junior Subordinated Notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (Level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange.

(10) Income Taxes

Income Tax Provision

Our income tax expense or benefit is not always directly correlated to the amount of pre-tax income or loss for the associated period due to a variety of factors, including, but not limited to, the impact of tax credits and permanent differences. Historically, the Company's income tax provision for quarterly interim periods was based on an estimated annual effective income tax rate, adjusted for the effect of discrete items arising in that quarter. For the three and nine months ended June 30, 2026, the Company utilized the discrete effective tax rate method, as allowed by ASC Subtopic 740- 270, Income Taxes—Interim Reporting, to calculate its interim income tax provision. The discrete method is applied when the use of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year-to-date period as if it were the annual period and determines the income tax expense or benefit on that basis. The Company believes that use of the discrete method is more appropriate than the estimated annual effective tax rate method because the significant impact of expected energy efficiency tax credits for the current fiscal year prevents the Company from reliably estimating its annual effective tax rate.

We recognized income tax benefit of $6.3 million and $22.4 million for the three and nine months ended June 30, 2026, compared to income tax benefit of $2.2 million and $0.8 million for the three and nine months ended June 30, 2025. Income tax benefit for the nine months ended June 30, 2026 was primarily driven by income tax benefit on loss from operations and energy efficiency tax credits generated from closings during the current fiscal year, partially offset by permanent differences and stock-based compensation activity in the period. Income tax benefit for the nine months ended June 30, 2025 was primarily driven by energy efficiency tax credits generated from expected closings during the current fiscal year and stock-based compensation activity in the period, partially offset by income tax expense on earnings from continuing operations and permanent differences.

Deferred Tax Assets and Liabilities

The Company continues to evaluate its deferred tax assets each period to determine if a valuation allowance is required based on whether it is more likely than not that some portion of these deferred tax assets will not be realized. As of June 30, 2026, management concluded that it is more likely than not that all of our federal and certain state deferred tax assets will be realized. As part of our analysis, we considered both positive and negative factors that impact profitability and whether those factors would lead to a change in the estimate of our deferred tax assets that may be realized in the future. At this time, our conclusions on the valuation allowance and Internal Revenue Code Section 382 and Section 383 limitations related to our deferred tax assets remain consistent with the determinations we made during the period ended September 30, 2025, and such conclusions are based on similar company specific and industry factors to those discussed in Note 12 to the consolidated financial statements within our 2025 Annual Report.

(11) Stock-Based Compensation

Stock-based compensation expense is included in general and administrative expenses in our condensed consolidated statements of operations. The f ollowing table presents a summary of stock-based compensation expense related to stock options and restricted stock awards for the periods presented:

Stock Options

Following is a summary of stock option activity for the nine months ended June 30, 2026:

As of June 30, 2026 and September 30, 2025, total unrecognized compensation cost related to unvested stock options was $0.2 million and less than $0.1 million, respectively. The remaining cost as of June 30, 2026 is expected to be recognized over a weighted average period of 2.3 years.

Restricted Stock Awards

During the nine months ended June 30, 2026, the Company issued time-based and performance-based restricted stock awards. The time-based restricted shares granted to our non-employee directors vest on the first anniversary of the grant, while the time-based restricted shares granted to our executive officers and other employees generally vest ratably over three years from the date of grant. Performance-based restricted share awards vest subject to the achievement of performance and market conditions over a three-year performance period.

Following is a summary of restricted stock activity for the nine months ended June 30, 2026:

(a) Each of our performance shares represent a contingent right to receive one share of the Company's common stock if vesting is satisfied at the end of the three-year performance period. Our performance stock award plans provide that any performance shares earned in excess of the target number of performance shares issued may be settled in cash or additional shares at the discretion of the Human Capital Committee. We have no current plans to settle any additional performance-based restricted shares in the future in cash. During November 2025, 3,599 of the 143,634 performance-based shares issued under the fiscal 2023 performance-based award plan were forfeited by the holders of the awards based on the performance level achieved under the terms of the plan.

As of June 30, 2026 and September 30, 2025, total unrecognized compensation costs related to unvested restricted stock awards were $12.0 million and $9.1 million, respectively. The costs remaining as of June 30, 2026 are expected to be recognized over a weighted average period of 2.0 years.

(12) Earnings Per Share

Basic (loss) income per share is calculated by dividing net (loss) income by the weighted-average number of shares outstanding during the period. Diluted (loss) income per share adjusts the basic (loss) income per share for the effects of any potentially dilutive securities in periods in which the Company has net income and such effects are dilutive under the treasury stock method.

Following is a summary of the components of basic and diluted (loss) income per share for the periods presented:

(13) Other Liabilities

Other liabilities include the following as of June 30, 2026 and September 30, 2025:

(14) Segment Information

Per ASC Topic 280, Segment Reporting (ASC 280), an operating segment is defined as a component of an enterprise that engages in business activities from which it earns revenues and incurs expenses and has discrete financial information available that is reviewed regularly by the Company's chief operating decision maker (CODM) to evaluate performance, make operating decisions, and determine how to allocate resources. We have identified each homebuilding component as an operating segment because each homebuilding component is engaged in development, design, construction, marketing, and sale of homes as well as land and lot sales, and provides title examinations for our homebuyers in certain markets. In accordance with the aggregation criteria defined in ASC 280, we aggregate our homebuilding operating segments into reportable segments based on similar long-term economic characteristics and geographical proximity.

We currently operate in 13 states that are grouped into three reportable segments as follows:

West: Arizona, California, Nevada, and Texas

East: Delaware, Indiana, Maryland, Tennessee, and Virginia

Southeast: Florida, Georgia, North Carolina, and South Carolina

Our Corporate and unallocated component includes amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, expenses for various shared services functions that benefit all segments but are not allocated, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments.

The Company's CODM is the Chief Executive Officer. The CODM is regularly provided with the operating results of individual operating segments which comprise our reportable segments. Segment performance is evaluated, and resources are allocated primarily based on segment operating income (loss), which also plays a central role in the Company's forecasting process. In addition, the CODM considers forecast-to-actual variances when determining the allocation of operating and capital resources across segments. The accounting policies of our segments are those described in Note 2 to the consolidated financial statements within our 2025 Annual Report.

The following tables provide financial information about our reportable segments and Corporate and unallocated component for the periods presented:

The following table presents assets by segment as of June 30, 2026 and September 30, 2025:

(a) Total assets at Corporate and unallocated include cash and cash equivalents, restricted cash, deferred taxes, capitalized interest and indirect costs, and other items that are not allocated to the segments.

(15) Subsequent Events

Merger with Dream Finders Homes, Inc.

On August 6, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Dream Finders Homes, Inc. (“Dream Finders”) and Bulldogs Merger Sub, Inc., a wholly-owned subsidiary of Dream Finders (“Merger Sub”). Subject to the terms and conditions of the Merger Agreement, Dream Finders has agreed to acquire the Company in an all-cash transaction for $33.50 per share of the Company’s common stock. Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”) with the Company surviving the Merger as a wholly-owned subsidiary of Dream Finders. Upon the consummation of the Merger, the Company will cease to be a publicly traded company. The Company has agreed to various customary covenants and agreements, including, among others, agreements to conduct its business in the ordinary course during the period between the execution of the Merger Agreement and the effective time of the Merger. The Company does not believe these restrictions will prevent it from meeting its debt service obligations, ongoing costs of operations, working capital needs, or capital expenditure requirements. The transaction is currently expected to close during the fourth quarter of calendar 2026. Consummation of the Merger is subject to stockholder approval, regulatory approval and completion of other customary closing conditions.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview and Outlook

Market Conditions and Strategy

During the third quarter of fiscal 2026, consumer sentiment remained near all-time lows, reflecting ongoing uncertainties around geopolitical events and economic conditions. While financial market volatility caused by the start of the military conflict in the Middle East has since subsided, energy prices have continued to fluctuate and mortgage rates remain elevated near 52-week highs. We believe these macro factors contributed to sales pace remaining relatively soft versus historical levels. Despite the impact of these trends on homebuyers, the Company continued to execute on several margin-enhancing cost and mix initiatives that were realized in the quarter.

In response to persistent affordability concerns and overall economic uncertainty, we have maintained a disciplined approach to operations and capital allocation. We continue to focus on our differentiated product strategy, increasing margins, selling non-strategic assets, and improving the efficiency of our land spend to support community count growth and facilitate share repurchases. Further, we are utilizing capital-efficient option agreements, when possible, to finance land spending, while keeping a prudent balance between optioned lots and on-balance sheet inventory.

With our common stock trading below book value, we continued our share buyback program in the third quarter, repurchasing another 1.0 million shares of our common stock, or approximately 3.5% of our outstanding shares at the end of our fiscal second quarter, for an aggregate $21.0 million. This brings our year-to-date share repurchases to $66.2 million, or 2.9 million shares, representing approximately 9.7% of our outstanding shares at fiscal year end 2025.

We believe the Company is uniquely positioned to address affordability concerns of today’s buyers and deliver a superior product and buying experience. Our differentiated strategy focuses on:

• Advanced Home Performance, which provides energy savings and lower utility bills, cleaner air, and a quieter and more durable home,
• Curated Choices, which include competitive mortgage pricing to drive customer savings, and a range of floorplan and interior design styles,
• Elevated Experiences, highlighting our easy shopping process and trusted homebuyer support teams to drive high customer satisfaction, and
• Community Impact, featuring the Beazer Charity Foundation and our commitment to make a positive impact in the communities where we build.

Together, these lower the total ongoing costs of homeownership and deliver meaningful financial and lifestyle benefits that make buying a Beazer home more attainable and rewarding.

Overview of Results for Our Fiscal Third Quarter

The following is a summary of our performance against certain key operating and financial metrics during the quarter ended June 30, 2026 and a comparison to the quarter ended June 30, 2025:

• During the quarter ended June 30, 2026, orders per community per month were 1.8 compared to 1.7 in the prior year quarter, and our net new orders were 900, up 4.5% from 861 in the prior year quarter. The year-over-year increase was primarily attributed to softer sales performance in the prior year quarter. However, the sales environment remains challenging due to affordability constraints, weaker consumer sentiment, and broader macroeconomic uncertainty. We continue to adjust prices, features and incentives to align with the current competitive market conditions.
• During the quarter ended June 30, 2026, our average active community count of 169 was up 0.8% from 167 in the prior year quarter. We ended the quarter with 170 active communities, up 1.8% from 167 a year ago, as we continue to work toward reaching 200 active communities by the end of fiscal 2027.
• As of June 30, 2026, our land position included 24,489 controlled lots, down 11.9% from 27,794 as of June 30, 2025. We invested $199.6 million in land acquisition and land development during the quarter ended June 30, 2026, up from $153.8 million during the quarter ended June 30, 2025. We continued to manage our land spend and lot position to improve our capital efficiency and support future community count growth. As part of these efforts, we have realigned the portfolio, divested non-strategic assets, and sustained the efficiency of our land spend by using lot option agreements. As of June 30, 2026, we had 13,841 lots, or 60.0% of our total active lots, under option agreements as compared to 16,195 lots, or 60.1% of our total active lots, under option agreements as of June 30, 2025.
• Our Average Selling Price (ASP) for homes closed during the quarter ended June 30, 2026 was $547.8 thousand, up 5.9% from $517.3 thousand in the prior year quarter. Our backlog ASP as of June 30, 2026 was $582.1 thousand, up 6.0% from $549.2 thousand in the prior year quarter. The increase in closing and backlog ASP compared to the prior year quarter was primarily due to changes in product and community mix.
• Homebuilding gross margin for the quarter ended June 30, 2026 was 13.6%, up from 13.5% compared to the prior year quarter. Homebuilding gross margin, excluding impairments, abandonments, and interest amortization, for the quarter ended June 30, 2026 was 16.9%, down from 18.4% in the prior year quarter. The decrease in homebuilding gross margin compared to the prior year quarter was primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin was up by 160 basis points sequentially from 12.0% in the prior fiscal quarter, and up 130 basis points from 15.6% sequentially when excluding impairments, abandonments, and interest amortization, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities.
• SG&A for the quarter ended June 30, 2026 was 14.1% of total revenue, up from 13.2% in the prior year quarter. The increase in SG&A as a percentage of total revenue compared to the prior year quarter was primarily due to lower homebuilding revenue. SG&A expense was relatively flat compared to the prior year quarter, as we remain focused on prudently managing overhead costs.

Seasonal and Quarterly Variability

Our homebuilding operating cycle historically has reflected escalating new order activity in the second and third fiscal quarters and increased closings in the third and fourth fiscal quarters. However, these seasonal patterns may be impacted by a variety of factors, including periods of market volatility and changes in mortgage interest rates, which may result in increased or decreased new orders and/or revenues and closings that are outside of the normal ranges typically realized on account of seasonality. Accordingly, our financial results for the three and nine months ended June 30, 2026 may not be indicative of our full year results.

RESULTS OF OPERATIONS:

The following table summarizes certain key income statement metrics for the periods presented:

(a) Excluding impairments, abandonments, and interest amortized to cost of sales, homebuilding gross margin was 16.9% and 18.4% for the three months ended June 30, 2026 and 2025, respectively, and 15.6% and 18.3% for the nine months ended June 30, 2026 and 2025, respectively. During the nine months ended June 30, 2026, homebuilding gross margin was impacted by a litigation-related charge associated with a confidential settlement agreement with a homeowners' association. This charge reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.5%. Please see the "Homebuilding Gross Profit and Gross Margin" section below for a reconciliation of homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized to cost of sales (non-GAAP measures) to homebuilding gross profit and gross margin, the most directly comparable GAAP measure.

(b) Calculated as land sales and other gross profit divided by land sales and other revenue.

(c) Calculated as tax (benefit) expense for the period divided by (loss) income before income taxes. Our income tax (benefit) expense is not always directly correlated to the amount of pre-tax (loss) income for the associated period due to a variety of factors, including, but not limited to, the impact of tax credits and permanent differences. Our tax credits are predominantly due to the energy efficiency of our homes, with credits valued between $2,000 and $5,000 per single family home. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA repeals many of the energy efficiency credits enacted under the Inflation Reduction Act, including our ability to claim energy efficient new home tax credits for homes that close after June 30, 2026. For the three and nine months ended June 30, 2026, the Company's effective tax rates were also affected by a change in the approach used to calculate the interim income tax provision, reducing comparability with the prior year periods. Refer to Note 10 to the condensed consolidated financial statements included in this Form 10-Q for additional details.

Reconciliation of Net (Loss) Income (GAAP) to Adjusted EBITDA (Non-GAAP)

Reconciliation of Net (Loss) Income (GAAP measure) to Adjusted EBITDA (Non-GAAP measure) is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing core operating results and underlying business trends by eliminating many of the differences in companies' respective capitalization, tax position, level of impairments, and other non-recurring items. This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

The following table reconciles our net (loss) income (GAAP) to Adjusted EBITDA (non-GAAP) for the periods presented:

(a) "LTM" indicates amounts for the trailing 12 months.

(b) In periods during which we impaired certain of our inventory assets, capitalized interest that is impaired is included in the line above titled "Interest amortized to home construction and land sales expenses and capitalized interest impaired."

Reconciliation of Total Debt to Total Capitalization Ratio (GAAP) to Net Debt to Net Capitalization Ratio (Non-GAAP)

Reconciliation of total debt to total capitalization ratio (GAAP measure) to net debt to net capitalization ratio (non-GAAP measure) is provided for each period below. Management believes that net debt to net capitalization ratio is useful in understanding the leverage employed in our operations and as an indicator of our ability to obtain financing. This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

Homebuilding Operations Data

The following table summarizes net new orders and cancellation rates by reportable segment for the periods presented:

Net new orders for the quarter ended June 30, 2026 increased to 900, up 4.5% from the quarter ended June 30, 2025. The increase in net new orders compared to the prior year quarter was driven by a 3.7% increase in sales pace from 1.7 orders per community per month in the prior year quarter to 1.8 and a 0.8% increase in average active community count from 167 in the prior year quarter to 169.

Net new orders for the nine months ended June 30, 2026 decreased to 2,711, down 6.2% from the nine months ended June 30, 2025. The decrease in net new orders compared to the prior year period was driven by an 8.5% decrease in sales pace from 2.0 orders per community per month in the prior year period to 1.8, partially offset by a 2.4% increase in average active community count from 164 in the prior year period to 168.

Three Months Ended June 30, 2026 as compared to 2025

West Segment: Net new orders for the quarter ended June 30, 2026 increased to 520, up 7.9% from the quarter ended June 30, 2025. The increase in net new orders compared to the prior year quarter was driven by a 4.5% increase in average active community count from 103 in the prior year quarter to 107 and a 3.2% increase in sales pace from 1.57 orders per community per month in the prior year quarter to 1.62.

East Segment: Net new orders for the quarter ended June 30, 2026 decreased to 220, down 1.8% from the quarter ended June 30, 2025. The decrease in net new orders compared to the prior year quarter was driven by a 24.3% decrease in average active community count from 38 in the prior year quarter to 29, partially offset by a 29.8% increase in sales pace from 1.9 orders per community per month in the prior year quarter to 2.5.

Southeast Segment: Net new orders for the quarter ended June 30, 2026 increased to 160, up 3.2% from the quarter ended June 30, 2025. The increase in net new orders compared to the prior year quarter was driven by a 22.8% increase in average active community count from 26 in the prior year quarter to 32, partially offset by a 16.0% decrease in sales pace from 2.0 orders per community per month in the prior year quarter to 1.6.

Nine Months Ended June 30, 2026 as compared to 2025

West Segment: Net new orders for the nine months ended June 30, 2026 decreased to 1,577, down 9.2% from the nine months ended June 30, 2025. The decrease in net new orders was driven by a 12.7% decrease in sales pace from 1.9 orders per community per month to 1.7, partially offset by a 4.0% increase in average active community count from 102 to 106.

East Segment: Net new orders for the nine months ended June 30, 2026 decreased to 645, down 8.9% from the nine months ended June 30, 2025. The decrease in net new orders was driven by a 15.2% decrease in average active community count from 36 to 31, partially offset by a 7.5% increase in sales pace from 2.2 orders per community per month to 2.3.

Southeast Segment: Net new orders for the nine months ended June 30, 2026 increased to 489, up 9.4% from the nine months ended June 30, 2025. The increase in net new orders was driven by a 21.5% increase in average active community count from 25 to 31, partially offset by a 10.0% decrease in sales pace from 2.0 orders per community per month to 1.8.

The table below summarizes backlog units by reportable segment as well as the aggregate dollar value and ASP of homes in backlog as of June 30, 2026 and 2025:

Backlog reflects the number of homes for which the Company has entered into a sales contract with a customer but has not yet delivered the home. The decrease in backlog units was primarily due to beginning the fiscal quarter with fewer backlog units for the quarter ended June 30, 2026. The aggregate dollar value of homes in backlog as of June 30, 2026 increased 2.2% compared to June 30, 2025 due to a 6.0% increase in the ASP of homes in backlog, partially offset by a 3.6% decrease in backlog units. The increase in backlog ASP compared to the prior year quarter was primarily due to changes in product and community mix.

Homebuilding Revenue, Average Selling Price, and Closings

The table below summarizes homebuilding revenue, ASP of our homes closed, and closings by reportable segment for the periods presented:

Three Months Ended June 30, 2026 as compared to 2025

West Segment: Homebuilding revenue decreased by 14.1% for the three months ended June 30, 2026 compared to the prior year quarter due to an 18.5% decrease in closings, partially offset by a 5.5% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year quarter.

East Segment: Homebuilding revenue decreased by 27.1% for the three months ended June 30, 2026 compared to the prior year quarter due to a 27.0% decrease in closings and a 0.1% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year quarter.

Southeast Segment: Homebuilding revenue increased by 60.2% for the three months ended June 30, 2026 compared to the prior year quarter due to a 37.9% increase in closings and a 16.2% increase in ASP. The increase in closings was primarily due to higher beginning backlog and improved construction cycle times compared to the prior year quarter.

Nine Months Ended June 30, 2026 as compared to 2025

West Segment: Homebuilding revenue decreased by 25.6% for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025 due to a 26.5% decrease in closings, partially offset by a 1.2% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year period.

East Segment: Homebuilding revenue decreased by 22.6% for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025 due to a 23.6% decrease in closings, partially offset by a 1.4% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year period.

Southeast Segment: Homebuilding revenue increased by 16.2% for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025 due to a 14.2% increase in ASP and a 1.8% increase in closings. The increase in closings was primarily due to higher beginning backlog and improved construction cycle times compared to the prior year period.

Homebuilding Gross Profit and Gross Margin

The following tables present our homebuilding (HB) gross profit and gross margin by reportable segment and Corporate and unallocated. In addition, such amounts are presented excluding inventory impairments and abandonments and interest amortized to cost of sales (COS). Homebuilding gross profit is defined as homebuilding revenue less home cost of sales (which includes land and land development costs, home construction costs, capitalized interest, indirect costs of construction, estimated warranty costs, closing costs, and inventory impairment and abandonment charges).

Reconciliation of homebuilding gross profit and homebuilding gross margin (GAAP measures) to homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized to cost of sales (non-GAAP measures) is provided for each period discussed below. Management believes that this information assists investors in comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective level of impairments and level of debt. These non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

(a) Corporate and unallocated includes amortization of capitalized interest, capitalization and amortization of indirect costs related to homebuilding activities, as well as capitalized interest and capitalized indirect costs impaired in order to reflect projects in progress assets at fair value, when applicable. For the nine months ended June 30, 2026, Corporate and unallocated also included a litigation-related charge that reduced total homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.5%.

Three Months Ended June 30, 2026 as compared to 2025

Our homebuilding gross profit decreased by $5.9 million to $66.6 million for the three months ended June 30, 2026, compared to $72.5 million in the prior year quarter. The decrease in homebuilding gross profit compared to the prior year quarter was primarily due to a decrease in homebuilding revenue of $44.5 million, partially offset by an increase in gross margin of 10 basis points to 13.6%. As shown in the tables above, the comparability of our gross profit and gross margin was impacted by impairment and abandonment charges, which decreased by $8.9 million, and interest amortized to homebuilding cost of sales, which decreased by $1.3 million compared to the prior year quarter (refer to Note 4 and Note 5 to the condensed consolidated financial statements in this Form 10-Q for additional details). When excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $16.0 million compared to the prior year quarter, while homebuilding gross margin decreased by 150 basis points to 16.9%. The decrease in gross margin for the three months ended June 30, 2026 compared to the prior year quarter was primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin was up by 160 basis points sequentially from 12.0% in the prior fiscal quarter, and up 130 basis points from 15.6% sequentially when excluding impairments, abandonments, and interest amortization, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities.

West Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $12.0 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 15.9%, down from 18.1% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales was up by 130 basis points sequentially from 14.6% in the prior fiscal quarter, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities.

East Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $9.7 million due to a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 15.3%, down from 17.8% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales was up by 70 basis points sequentially from 14.6% in the prior fiscal quarter, primarily driven by a decrease in price concessions.

Southeast Segment: Compared to the prior year quarter, homebuilding gross profit increased by $14.8 million due to an increase in homebuilding revenue and higher gross margin. Homebuilding gross margin, excluding impairments and abandonments, increased to 19.6%, up from 17.7% in the prior year quarter, primarily due to a reduction in direct construction costs, partially offset by an increase in land costs and price concessions. Although down year-over-year, homebuilding gross margin excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales was up by 250 basis points sequentially from 17.1% in the prior fiscal quarter, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities.

Nine Months Ended June 30, 2026 as compared to 2025

Our homebuilding gross profit decreased by $74.9 million to $151.7 million for the nine months ended June 30, 2026, from $226.6 million in the prior year period. The decrease in homebuilding gross profit was primarily due to a decrease in homebuilding revenue of $303.5 million and a decrease in gross margin of 240 basis points to 12.2%. Similar to the three-month period discussed above, the comparability of our gross profit and gross margin for the nine-month period was impacted by impairment and abandonment charges, which decreased by $6.8 million, and interest amortized to homebuilding cost of sales, which decreased by $7.6 million year-over-year (refer to Note 4 and Note 5 to the condensed consolidated financial statements in this Form 10-Q for additional details). When excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $89.3 million compared to the prior year period, while homebuilding gross margin decreased by 270 basis points to 15.6%. The decrease in gross margin for the nine months ended June 30, 2026 compared to the prior year period was primarily due to an increase in price concessions and closing cost incentives, changes in existing product and community mix, and a litigation-related charge recognized in Corporate and unallocated during the quarter ended December 31, 2025. The litigation-related charge reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.5%.

West Segment: Compared to the prior year period, homebuilding gross profit decreased by $72.7 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.9%, down from 18.5% in the prior year period, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix.

East Segment: Compared to the prior year period, homebuilding gross profit decreased by $16.8 million due to a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.9%, down from 16.0% in the prior year period, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix.

Southeast Segment: Compared to the prior year period, homebuilding gross profit increased by $13.3 million due to an increase in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, increased to 17.7%, up from 16.7% in the prior year period, primarily due to a reduction in direct construction costs, partially offset by an increase in land costs and price concessions.

Measures of homebuilding gross profit and gross margin after excluding inventory impairments and abandonments, interest amortized to cost of sales, and other non-recurring items are non-GAAP financial measures. These measures should not be considered alternatives to homebuilding gross profit and gross margin determined in accordance with GAAP as an indicator of operating performance.

Land Sales and Other Revenue and Gross Profit

Land sales relate to land and lots sold that do not fit within our homebuilding programs or strategic plans. We also have other revenue related to title examinations provided for our homebuyers in certain markets. The following tables summarize our land sales and other revenue and related gross profit by reportable segment and Corporate and unallocated for the periods presented:

(a) Corporate and unallocated includes capitalized interest and capitalized indirect costs expensed to land cost of sales related to land and lots sold, as well as capitalized interest and capitalized indirect costs impaired in order to reflect land held for sale assets at fair value less cost to sell.

For the three months ended June 30, 2026, land sales and other revenue increased by $15.5 million to $25.4 million, and land sales and other gross profit decreased by $0.6 million to a loss of $0.5 million compared to the prior year quarter. For the nine months ended June 30, 2026, land sales and other revenue increased by $13.5 million to $41.3 million, and land sales and other gross profit decreased by $3.7 million to $0.3 million compared to the prior year period. Also, during the nine months ended June 30, 2026, we recognized $3.4 million in land held for sale impairment charges related to six held for sale communities in our West and East segments.

Period-over-period fluctuations on land sales and other revenue are primarily driven by the timing and volume of land and lot sales closings. As we continue to proactively manage our land position and divest land assets that no longer align with our strategic priorities, the dollar value of land sales and other revenue may grow. Land sales and other gross profit are primarily impacted by the profitability of individual land and lot sale transactions as well as the volume of our title examinations operations. Future land and lot sales will depend on a variety of factors, including local market conditions, individual community performance, and changing strategic plans.

Operating Income

The table below summarizes operating income by reportable segment and Corporate and unallocated for the periods presented:

(a) Includes amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, when applicable, expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments.

Our operating income decreased by $7.7 million to a loss of $11.4 million for the three months ended June 30, 2026, compared to operating loss of $3.7 million for the three months ended June 30, 2025. This decrease compared to the prior year quarter was primarily due to the previously discussed decrease in gross profit and gross margin. SG&A as a percentage of total revenue increased by 90 basis points compared to the prior year quarter, from 13.2% to 14.1%, primarily due to lower homebuilding revenue.

Our operating income decreased by $74.0 million to a loss of $62.2 million for the nine months ended June 30, 2026, compared to operating income of $11.8 million for the nine months ended June 30, 2025. This decrease compared to the prior year period was primarily due to the previously discussed decrease in gross profit and gross margin. SG&A as a percentage of total revenue increased by 260 basis points compared to the prior year period, from 13.0% to 15.6%, primarily due to lower homebuilding revenue.

Three Months Ended June 30, 2026 as compared to 2025

West Segment: The $12.5 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed and higher sales and marketing costs, partially offset by lower commissions expense on lower homebuilding revenue.

East Segment: The $9.0 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed and higher sales and marketing costs, partially offset by lower commissions expense on lower homebuilding revenue.

Southeast Segment: The $12.5 million increase in operating income compared to the prior year quarter was primarily due to the higher gross profit previously discussed, partially offset by higher commissions expense on higher homebuilding revenue and higher sales and marketing costs.

Corporate and Unallocated: Our corporate and unallocated results include amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, expenses for various shared services functions that benefit all segments but are not allocated, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments. For the three months ended June 30, 2026, corporate and unallocated net expenses decreased by $1.3 million from the prior year quarter primarily due to lower impairment of capitalized interest and capitalized indirect costs recognized in the current quarter compared to the prior year quarter.

Nine Months Ended June 30, 2026 as compared to 2025

West Segment: The $69.2 million decrease in operating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed and higher sales and marketing costs, partially offset by lower commissions expense on lower homebuilding revenue.

East Segment: The $15.3 million decrease in operating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed and higher sales and marketing costs, partially offset by lower commissions expense on lower homebuilding revenue.

Southeast Segment: The $10.7 million increase in operating income compared to the prior year period was primarily due to the increase in gross profit previously discussed and a decrease in other G&A costs, partially offset by higher sales and marketing costs and higher commissions expense on higher homebuilding revenue.

Corporate and Unallocated: For the nine months ended June 30, 2026, corporate and unallocated net expenses increased by $0.2 million from the prior year period primarily due to a litigation-related charge, partially offset by lower amortization of capitalized interest costs expensed to homebuilding cost of sales on lower closings and homebuilding revenue.

Below operating income, for the three and nine months ended June 30, 2026 compared to the prior period, we experienced a year-over-year decrease within other income, net primarily due to a loss on extinguishment of debt of $0.7 million during the current year as compared to no such loss in the prior year period.

Income Taxes

Our income tax expense or benefit and related effective tax rate are affected by a variety of factors, including, but not limited to, tax credits, permanent differences and other discrete items. A comparison of our effective tax rates should also consider the changes in valuation allowance in periods when a change occurs. As such, our income tax expense or benefit is not always directly correlated to the amount of pre-tax income or loss for the associated periods. For the three and nine months ended June 30, 2026, the Company's effective tax rates were also affected by a change in the approach used to calculate the interim income tax provision, reducing comparability with the prior year periods. Refer to Note 10 to the condensed consolidated financial statements included in this Form 10-Q for additional details.

We recognized income tax benefit of $6.3 million and $22.4 million for the three and nine months ended June 30, 2026, compared to income tax benefit of $2.2 million and $0.8 million for the three and nine months ended June 30, 2025. Income tax benefit for the nine months ended June 30, 2026 was primarily driven by income tax benefit on loss from operations and energy efficiency tax credits generated from closings during the current fiscal year, partially offset by permanent differences and stock-based compensation activity in the period. Income tax benefit for the nine months ended June 30, 2025 was primarily driven by energy efficiency tax credits generated from expected closings during the current fiscal year and stock-based compensation activity in the period, partially offset by income tax expense on earnings from continuing operations and permanent differences.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA repeals many of the energy efficiency credits enacted under the Inflation Reduction Act, including our ability to claim energy efficient new home tax credits for homes that close after June 30, 2026.

Liquidity and Capital Resources

Our sources of liquidity include, but are not limited to, cash from operations, proceeds from Senior Notes, our Senior Unsecured Revolving Credit Facility and other bank borrowings, the issuance of equity and equity-linked securities, and other external sources of funds. Our short-term and long-term liquidity depends primarily upon our level of net income, working capital management (cash, accounts receivable, accounts payable and other liabilities), and available credit facilities.

Net changes in cash, cash equivalents, and restricted cash are as follows for the periods presented:

Operating Activities

Net cash used in operating activities was $375.7 million for the nine months ended June 30, 2026. The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development spending. Net cash used in operating activities during the period was primarily driven by an increase in inventory of $342.6 million resulting from land acquisition, land development and house construction spending and loss before income taxes of $60.1 million, which included $24.7 million of non-cash charges. This was partially offset by cash inflows from a net decrease in non-inventory working capital balances of $2.3 million.

Net cash used in operating activities was $218.2 million for the nine months ended June 30, 2025. Net cash used in operating activities during the period was primarily driven by an increase in inventory of $258.9 million resulting from land acquisition, land development and house construction spending and a net increase in non-inventory working capital balances of $3.5 million. This was partially offset by cash inflows from income before income taxes of $14.8 million, which included $29.4 million of non-cash charges.

Investing Activities

Net cash used in investing activities was $21.6 million for the nine months ended June 30, 2026, primarily driven by capital expenditures for model homes and information systems infrastructure and purchases of investment securities.

Net cash used in investing activities was $12.7 million for the nine months ended June 30, 2025, primarily driven by capital expenditures for model homes and information systems infrastructure and purchase of investment securities, partially offset by proceeds from maturities in investment securities.

Financing Activities

Net cash provided by financing activities was $306.8 million for the nine months ended June 30, 2026, primarily driven by inflows from the issuance of the 2032 Notes and net borrowings from our Unsecured Facility, partially offset by redemption of our 2027 Notes, common stock repurchases under our share repurchase program, debt issuance costs incurred in connection with the 2032 Notes and the amendment of our Unsecured Facility to increase borrowing capacity and extend its maturity (refer to Note 6 to the condensed consolidated financial statements included in this Form 10-Q for further discussion), and tax payments for stock-based compensation awards vesting.

Net cash provided by financing activities was $78.7 million for the nine months ended June 30, 2025, primarily driven by net borrowings from our Unsecured Facility, partially offset by common stock repurchases under our share repurchase program and tax payments for stock-based compensation awards vesting.

Financial Position

As of June 30, 2026, our liquidity position consisted of $124.6 million in cash and cash equivalents and $139.2 million of remaining capacity under the Unsecured Facility, compared to $82.9 million in cash and cash equivalents and $209.4 million of remaining capacity under the Unsecured Facility as of June 30, 2025.

While we believe we possess sufficient liquidity, we are mindful of potential short-term or seasonal requirements for enhanced liquidity that may arise to operate and grow our business. As of the date of this report, we believe we have adequate capital resources and sufficient access to external financing sources to satisfy our current and long-term liquidity needs for funds to conduct our operations and meet other needs in the ordinary course of our business, however, we are continually reviewing our capital resources to determine whether we can meet our short- and long-term goals, and we may require additional capital to do so.

At times, we may also engage in capital markets, bank loans, project debt or other financial transactions, including the repurchase of debt or potential new issuances of debt or equity securities to support our business needs. The amounts involved in these transactions, if any, may be material. In addition, as necessary or desirable, we may adjust or amend the terms of and/or expand the capacity of the Unsecured Facility, or enter into additional letter of credit facilities, or other similar facility arrangements, in each case with the same or other financial institutions, or allow any such facilities to mature or expire.

Debt

We generally fulfill our short-term cash requirements with cash generated from our operations and available borrowings. Additionally, our Unsecured Facility provides working capital and letter of credit capacity of $525.0 million, which includes a letter of credit facility of up to $100.0 million. As of June 30, 2026, we had $340.0 million in borrowings and $45.8 million in letters of credit outstanding under the Unsecured Facility, resulting in a remaining borrowing capacity of $139.2 million.

In the future, we may from time to time seek to continue to retire or purchase our outstanding debt through cash repurchases or in exchange for other debt securities, in open market purchases, privately negotiated transactions, or otherwise. In addition, any material variance from our projected operating results could require us to obtain additional equity or debt financing. There can be no assurance that we will be able to complete any of these transactions in the future on favorable terms or at all. See Note 6 of the notes to the condensed consolidated financial statements in this Form 10-Q for additional details related to our borrowings.

Supplemental Guarantor Information

As discussed in Note 6 of the notes to the condensed consolidated financial statements in this Form 10-Q, the Company's obligations to pay principal and interest under certain debt agreements are guaranteed on a joint and several basis by substantially all of the Company's subsidiaries. Some of the immaterial subsidiaries do not guarantee the Senior Notes. The guarantees are full and unconditional. Summarized financial information is not presented for Beazer Homes USA, Inc. and the guarantor subsidiaries on a combined basis as the assets, liabilities and results of operations of the combined issuer and guarantors of the guaranteed security are not materially different than corresponding amounts presented in the condensed consolidated financial statements of the parent company.

Credit Ratings

Our credit ratings are periodically reviewed by rating agencies. In June 2026, upon the issuance of our 2032 Notes, S&P revised the Company's Senior Notes' rating from B to B-, revised the Company’s corporate credit rating from B to B-, and reaffirmed the Company's outlook of negative. Also in June 2026, Moody's reaffirmed the Company's Senior Notes rating of B2, reaffirmed the issuer corporate family rating of B2, and reaffirmed the Company's outlook of stable. These ratings and our current credit condition affect, among other things, our ability to access new capital. These ratings are not recommendations to buy, sell or hold debt securities. Negative changes to these ratings may result in more stringent covenants and higher interest rates under the terms of any new debt. Our credit ratings could be lowered, or rating agencies could issue adverse commentaries in the future, which could have a material adverse effect on our business, financial condition, results of operations, and liquidity. In particular, a weakening of our financial condition, including any further increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, could result in a credit rating downgrade or change in outlook, or could otherwise increase our cost of borrowing.

Share Repurchases and Dividends Paid

In April 2025, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $100.0 million of its outstanding common stock. The repurchase program has no expiration date and repurchases may be conducted through open market purchases, 10b5-1 plans, accelerated share repurchases, or private transactions. The Company repurchased 1.0 million shares of its common stock for an aggregate $21.0 million (inclusive of commissions and exclusive of accrued excise tax) at an average price per share of $21.01 during the three months ended June 30, 2026. This brings the total repurchases for the nine months ended June 30, 2026 to 2.9 million shares of common stock for $66.2 million (inclusive of commissions and exclusive of accrued excise tax) at an average price per share of $23.04.

During the three months ended June 30, 2025, 586 thousand shares were repurchased for $12.5 million at an average price per share of $21.38. During the nine months ended June 30, 2025, 1.5 million shares were repurchased for $33.1 million at an average price per share of $22.20.

Since the authorization of the share repurchase program in April 2025, we have repurchase an aggregated 3.5 million shares of common stock for $78.7 million at an average price per share of $22.75. All shares have been retired upon repurchase. As of June 30, 2026, the remaining availability of the share repurchase program was $21.3 million.

The indentures under which our Senior Notes were issued contain certain restrictive covenants, including limitations on the payment of dividends. There were no dividends paid during the three and nine months ended June 30, 2026 or 2025.

Off-Balance Sheet Arrangements and Aggregate Contractual Commitments

Lot Option Agreements

In addition to purchasing land directly, we control a portion of our land supply through lot option agreements with land developers and land bankers, which generally require the payment of cash or issuance of an irrevocable letter of credit or surety bond for the right to acquire lots during a specified period of time at a specified price. In recent years, we have focused on increasing our lot option agreement usage to minimize risk as we grow our land position. As of June 30, 2026, we controlled 24,489 lots, which includes 251 lots of land held for future development and 1,155 lots of land held for sale. Of the 23,083 active lots, we controlled 13,841 of these lots, or 60.0%, through option agreements, as compared to 16,195 active lots controlled, or 60.1% of our total active lots, through option agreements as of June 30, 2025. Lot option agreements allow us to position for future growth while providing the flexibility to respond to market conditions by renegotiating the terms of the options prior to exercise or terminating the agreement.

Under option agreements, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers, and our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred, which totaled $387.4 million as of June 30, 2026. The total remaining purchase price, net of cash deposits, committed under all options was $1.63 billion as of June 30, 2026. Subject to market conditions and our liquidity, we may further expand our use of option agreements to supplement our inventory supply.

We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our option agreements. Various factors, some of which are beyond our control, such as market conditions, weather conditions, and the timing of the completion of development activities, will have a significant impact on the timing of option exercises or whether lot options will be exercised at all.

We have historically funded the exercise of lot options with operating cash flows. We expect these sources to continue to be adequate to fund anticipated future option exercises. Therefore, we do not anticipate that the exercise of our lot options will have a material adverse effect on our liquidity.

Letters of Credit and Surety Bonds

In connection with the development of our communities, we are frequently required to provide performance, maintenance, and other bonds and letters of credit in support of our related obligations with respect to such developments. The amount of such obligations outstanding at any time varies in accordance with our pending development activities. In the event any such bonds or letters of credit are drawn upon, we would be obligated to reimburse the issuer of such bonds or letters of credit. We had outstanding letters of credit, surety bonds, and surety-backed letters of credit of $45.8 million, $361.3 million, and $4.6 million respectively, as of June 30, 2026, primarily related to our obligations to local governments to construct roads and other improvements in various developments.

Critical Accounting Estimates

Our critical accounting policies require the use of judgment in their application and in certain cases require estimates of inherently uncertain matters. Although our accounting policies are in compliance with accounting principles generally accepted in the United States of America (GAAP), a change in the facts and circumstances of the underlying transactions could significantly change the application of the accounting policies and the resulting financial statement impact. It is also possible that other professionals applying reasonable judgment to the same set of facts and circumstances could reach a different conclusion. As disclosed in our 2025 Annual Report, our most critical accounting policies relate to inventory valuation of projects in progress, warranty reserves, and income tax valuation allowances. There have been no significant changes to our critical accounting policies and estimates during the nine months ended June 30, 2026 as compared to those described in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Annual Report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a number of market risks in the ordinary course of business. Our primary market risk exposure relates to fluctuations in interest rates. We do not believe that our exposure in this area is material to our cash flows or results of operations. As of June 30, 2026, we had variable rate debt outstanding related to our Junior Subordinated Notes and outstanding borrowings under our Unsecured Facility totaling approximately $420.0 million. A one percent increase in the interest rate for these notes would result in an increase of our interest expense by approximately $4.4 million over the next twelve-month period. The estimated fair value of our fixed-rate debt as of June 30, 2026 was $1.00 billion, compared to a carrying amount of $989.1 million. The effect of a hypothetical one-percentage point decrease in our estimated discount rates would increase the estimated fair value of the fixed rate debt instruments from $1.00 billion to $1.04 billion as of June 30, 2026.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed based on criteria established in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Act). Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026 at a reasonable assurance level.

Attached as exhibits to this Form 10-Q are certifications of our CEO and CFO, which are required by Rule 13a-14 of the Act. This Disclosure Controls and Procedures section includes information concerning management’s evaluation of disclosure controls and procedures referred to in those certifications and should be read in conjunction with the certifications of the CEO and CFO.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of our legal proceedings, see Note 8 of the notes to our condensed consolidated financial statements in this Form 10-Q.

Item 1A. Risk Factors

There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended September 30, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes the Company's common stock repurchases during the quarter ended June 30, 2026:

(a) In April 2025, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $100.0 million of its outstanding common stock. The repurchase program has no expiration date and repurchases may be conducted through open market purchases, 10b5-1 plans, accelerated share repurchases, or private transactions. As of June 30, 2026, the remaining availability of the share repurchase program was $21.3 million.

Item 5. Other Information

Rule 10b5-1 Trading Plans

During the fiscal quarter ended June 30, 2026, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

Item 6. Exhibits

Furnished, not filed.