BZH 10-K & 10-Q changes, risk factors and insider trading

Negative changes in national and regional economic conditions, as well as local economic conditions where we conduct our operations, may result in more caution on the part of homebuyers and, consequently, fewer home purchases. Demand softened during the second half of fiscal 2023 remained relatively steady2025 as homebuyers facedcontinued ato higherface an elevated interest rate environment anddespite ainterest lackrate ofcuts supplyby ofthe existingFederal homes.Reserve Inmultiple times during fiscal 2024,2025. the new home sales environmentThis continued toeconomic be affordability-challenged, and demanduncertainty is highly sensitive to fluctuations in mortgage rates. These economic conditions are out of our controlcontrol, and affectaffects buyer sentiment and behavior and the demand for the homes we sell.sell, Theseand conditionsnegatively also impactimpacts consumer confidence, upon which our business is highly dependent. Adverse changes in any of these conditions could decrease demand and pricing for our homes or result in customer cancellations of pending contracts, which could adversely affect the number of home sales we make or reduce home prices, either of which could result in a decrease in our revenues and earnings and adversely affect our financial condition and results of operations.

DuringA worsening of these conditions and/or further downturns in the homebuilding industry,industry housingcould marketsalso, acrossamong theother Unitedthings, Statesresult may experiencein an oversupply of both new and resale home inventory,inventory across housing markets in the U.S., an increase in foreclosures, reduced levels of consumer demand for new homes, increased cancellation rates, aggressive price competition among homebuilders, and increased incentives for home sales.sales, In the eventany of awhich downturn,could weresult would likely experiencein a material reductiondecrease in revenuesour andrevenues, earnings, or margins and adversely affect our financial condition as well as ourand results of operations could be adversely affected.operations.

Most of the purchasers of our homes finance their acquisition with mortgage financing. InDespite themodest lastinterest fewrate years,reductions thein FederalSeptember Reserve raised2025, interest rates multiplehave timesremained inat responsea heightened level for a prolonged period, and may continue to concernsremain aboutat inflationa andheightened economiclevel. uncertainties,Higher andrate itperiods may raise them again. Despite the September 2024 reduction in interest rates,or future increases in interest rates could directly impact mortgage rates and increase the costs of owning a home, which could adversely affect the purchasing power of consumers. Elevated mortgage rates for prolonged periods could also lower demand for the homes we sell, resulting in a decrease in our revenues and earnings and adversely affect our financial condition.

The availability of mortgage financing is significantly influenced by governmental entities such as the Federal Housing Administration, Veteran’s Administration, and Government National Mortgage Association and government-sponsored enterprises known as Fannie Mae and Freddie Mac. If these or other lenders’ borrowing standards are tightened and/or the federal government were to reduce or eliminate these mortgage loan programs (including due to any failure of lawmakers to agree on a budget or appropriation legislation to fund relevant programs or operations or the continuance of the U.S. federal government shutdown which may result in these or other government agencies furloughing employees and stopping activities critical to the mortgage financing process), it would likely make it more difficult for our customers to obtain acceptable financing, which would, in turn, adversely affect our business, financial condition and results of operations.

Mortgage interest expenses and real estate taxes represent significant costs of homeownership. Therefore, when there are changes in federal or state income tax laws that eliminate or substantially limit the income tax deductions relating to these expenses, the after-tax costs of owning a new home can increase significantly. For example, in July 2025, H.R. 1, or the TaxOne CutsBig andBeautiful JobsBill Act,Act which("OBBBA"), was enactedenacted, in December 2017,which includes provisions that impose significant limitations with respect to these income tax deductions. Under this legislation, through the end of 2025,2029, the annual deduction for real estate property taxes and state and local income or sales taxes has been limited to a combined amount of $10,000$40,000 ($5,000$20,000 in the case of a separate return filed by a married individual). In addition, through the end of 2025, the deduction for mortgage interest will generally only be available with respect to acquisition indebtedness that does not exceed $750,000 ($375,000 in the case of a separate return filed by a married individual). These changes could reduce the perceived affordability of homeownership, and therefore the demand for homes, or have a moderating impact on home sales prices in areas with relatively high housing prices or high state and local income and real estate taxes.

Although inflation has moderated slightly, it has remained persistent in the United States in recent years due, in part, to supply chain issues, elevated energy prices, labor shortages and trade policies, among other factors. Inflation can adversely affect us by increasing costs of land, materials, and labor. In addition, inflation is often accompanied by higher interest rates. In an inflationary environment, depending on homebuilding industry and other economic conditions, we may be unable to raise home prices enough to keep up with the rate of inflation, which would reduce our profit margins.

If we are unsuccessful in competing against ourother competitors,homebuilders, our market share could decline or our growth could be impeded and, as a result, our financial condition and results of operations could suffer.

Competition in the homebuilding industry is intense, and there are relatively low barriers to entry into our business. Increased competition could hurt our business, as it could prevent us from acquiring attractive parcels of land on which to build homes or make such acquisitions more expensive, hinder our market share expansion and lead to pricing pressures on our homes that may adversely impact our margins and revenues. If we are unable to successfully compete, our financial results could suffer and our ability to service our debt could be adversely affected. Our competitors may independently develop land and construct housing units that are superior or substantially similar to our products. Furthermore, many of our competitors have substantially greater financial resources, less leverage, and lower costs of funds and operations than we do. In addition, the homebuilding industry has been subject to increasing consolidation and mergers and acquisition activity, which could result in existing competitors increasing their market share. Such changes have the potential to increase competitive dynamics in affected markets. Many of these competitors also have longstanding relationships with subcontractors and suppliers in the markets in which we operate. We currently build in several of the top markets in the nation and, therefore, we expect to continue to face additional competition from new entrants into our markets.

The climates and geology of many of the states in which we operate present increased risks of natural disasters. To the extent that hurricanes, tornadoes, severe storms, heavy or prolonged precipitation, earthquakes, droughts, floods, wildfires or other natural disasters or similar events occur, our homes under construction or our building lots in such states could be damaged or destroyed, which may result in losses exceeding our insurance coverage. Natural disasters or severe weather can also lead to increased competition for subcontractors,subcontractors and/or unavailability of laborers or service providers, both of which can delay our progress even after the event has concluded. Additionally, and as discussed above,below, increased competition for skilled labor can lead to cost overruns, as we may have to incentivize the impacted region’s limited trade base to work on our homes. Finally, natural disasters and other related events may also temporarily impact demand, as buyers are not as willing to shop for new homes during or after the event. These risks could adversely affect our business, financial condition, and results of operations.

The residential construction industry experiences price fluctuations and shortages in labor and materials from time to time. Shortages in labor can be due to shortages in qualified trades people, changes in immigration laws and trends in labor migration, lack of availability of adequate utility infrastructure and services, or our need to rely on local subcontractors who may not be adequately capitalized or insured. Shortages of materials can be due to certain disruptions, such as natural disasters, civil or political unrest and conflicts, trade disputes, difficulties in production or delivery or health issues like a pandemic. Labor and material shortages can be more severe during periods of strong demand for housing or during periods in which the markets where we operate experience natural disasters such as hurricanes or flooding as discussed more fully above. Pricing for labor and materials can be affected by the factors discussed above, changes in energy prices, and various other national, regional, and local economic and political factors. ForAdditionally, example,heightened governmentimmigration imposed tariffsguidelines and tradeenforcement, regulationsincluding onfederal importedimmigration buildingprovisions supplies have, andcontained in the future could have, significant impacts on the cost to construct our homes. Additionally, in 2023, Florida enacted legislation that will impose more stringent immigrant eligibility requirements. This legislation or similar legislation if adopted in other jurisdictions in which we operate,OBBBA, could result in labor shortagesshortages, particularly with our trade partners. Many of these changes may result in adverse impacts for us or our trade partners that could materially affect our operations. Such measuresactions limit our ability to control costs, which if we are not able to successfully offset such increased costs through higher sales prices, could adversely affect our margins on the homes we build.

We are subject to a variety of local, state and federal statutes, ordinances, rules and regulations concerning the protection of health and the environment. The particular environmental laws that apply to any given community vary greatly according to the location of the community site, the site’s environmental conditions and the present and former use of the site. Environmental laws may result in delays, may cause us to implement time consuming and expensive compliance programs and may prohibit or severely restrict development in certain environmentally sensitive regions or areas. From time to time, the United States Environmental Protection Agency (EPA) and similar federal or state agencies review homebuilders’ compliance with environmental laws and may levy fines and penalties for failure to strictly comply with applicable environmental laws or impose additional requirements for future compliance as a result of past failures. Any such actions taken with respect to us may increase our costs or harm our reputation. Further, we expect that increasingly stringent requirements willmay be imposed on homebuilders in the future. In particular, our communities in California and Phoenix are especially susceptible to restrictive government regulations and environmental laws, particularly surrounding water usage.

In recent years, we, along with many other companies, have been subject to increased focus and scrutiny from regulators, investors, employees and customers and other stakeholders regarding sustainability efforts, including compliance with evolving disclosure requirements. For example, the SEC has issued final rules that would require expanded disclosures related to climate change. Although these rules are currently stayed pending judicial review, if implemented as proposed, these rules would significantly increase our climate-related disclosure obligations. The State of California has also enacted legislation that will require large U.S. companies doing business in California to make broad-based climate-related disclosures, and other states arehave also consideringconsidered similar measures. We are assessing our obligations under these proposed and enacted rules and expect that compliance could require substantial effort in the future. Standards for tracking and reporting on sustainability matters, including climate-related matters, have also not been harmonized. Changes to these standards could require adjustments to our accounting or operational policies, as well as updates to our existing systems to meet these reporting obligations. We will therefore likely need to be prepared to contend with overlapping, yet distinct, climate-related disclosure approaches, frameworks and requirements.

OurAt 2023the Sustainabilitysame Reporttime, isan availableincreasing onnumber ourof website.stakeholders, lawmakers and regulators have expressed or pursued contrary views, policy, and investment expectations with respect to sustainability matters, which may expose us to additional legal, financial or reputational risks. If our sustainability practicespractices, commitments or disclosures do not meet, or are perceived not to meet, evolving regulatory, investor and other stakeholder expectations and standards, our reputation, our ability to attract or retain employees, and our attractiveness as an investment or business partner could be negatively affected. Similarly, our failure, or perceived failure, to pursue or fulfill any sustainability-focused goals, targets, or objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation. While we monitor a broad range of sustainability matters, we cannot be certain that we will manage such matters successfully, or that we will successfully meet the expectations of regulators, investors, employees, customers and other stakeholders.

We use information technology and other computer resources to perform important operational and marketing activities and to maintain our business records. Certain of these resources are provided to us and/or maintained by third-party service providers pursuant to agreements that specify certain security and service level standards. Presently, we employ a limited array of both traditional and generative artificial intelligence (“AI”) solutions for certain functions for our operations. ItWe isare conceivableconsistently thatconsidering new ways we might further integrate further AI solutions into our information systems in the future,systems, potentially assuming a more critical role in our operations over time. AI programs can incur significant costs and demand substantial expertise for development, pose challenges in setup and management, and necessitate periodic updates. CompetitorsIn addition, the AI-related legal and regulatory landscape is constantly evolving and therefore remains uncertain and may be inconsistent from jurisdiction to jurisdiction. Our obligations to comply with the evolving legal and regulatory landscape could entail significant costs or limit our ability to incorporate certain AI capabilities into our operations. Our competitors or other entities may also integrate AI into their information systems and business operations more swiftly or effectively than us, potentially impairing our competitive edge and negatively impacting our financial performance.

Our computer systems, including our back-up systems and portable electronic devices, and those of our third-party providers, are subject to damage or interruption from power outages, computer and telecommunication failures, computer viruses, security breaches including malware and phishing, cyberattacks, natural disasters, usage errors or misconduct by our employees or contractors, and other related risks. As part of our normal business activities, we collect and store certain confidential information, including information about employees, homebuyers, customers, vendors and suppliers. This information is entitled to protection under a number of regulatory regimes. We share some of this information with third parties who assist us with certain aspects of our business. A significant and extended disruption of, or breach of, security related to our computer systems and back-up systems may result in business disruption, damage our reputation and cause us to lose customers, sales and revenue, result in the unintended misappropriation of proprietary, personal and confidential information, and require us to incur significant expense to remediate or otherwise resolve these issues including financial obligations to third parties, fines, penalties, regulatory proceedings and private litigation with potentially large costs and other competitive disadvantages. Additionally, the techniques and sophistication used to conduct cyber-attacks and breaches of information systems frequently change. For example, the deployment of evolving AI tools used to identify vulnerabilities and create more deceptive phishing attempts have the potential to not be recognized until such attacks are launched or have been in place for a period of time. A significant cybersecurity breach or attack could have a material impact on our business or results of operations, there can be no assurance that our efforts to maintain the security and integrity of these types of IT networks and related systems will be effective or that attempted security breaches or disruptions would not be successful or damaging.

Our business could be adversely affected by unstable economic and political conditions within the United States, including the 2024 election cycle, and foreign jurisdictions and geopolitical conflicts,conflicts such asaround the conflict between Russia and Ukraine, the conflict in Gaza and other conflicts in the Middle East.world. While we do not have any customerinternational operations or direct supplier relationships in Russia, Ukraine, or the Middle East, therelationships, current military conflicts,conflicts and related sanctions, as well as export controls or actions that may be initiated by nations (e.g., potential cyberattacks, disruption of energy flows, etc.) and other potential uncertainties could adversely affect our supply chain by causing shortages or increases in costs for materials necessary to construct homes and/or increases to the price of gasoline and other fuels. In addition, suchchanges eventsin U.S. trade policy and retaliatory actions from other nations could cause higher interest rates, inflation or general economic uncertainty, which could negatively impact consumer confidence, our business partners, employees or customers, or otherwise adversely impact our business.

We currently possess meaningful assets in the form net operating loss carryforwards (NOLs) and Energy-Efficiency Tax Credits. Section 382 and Section 383 of the Internal Revenue Code containscontain rules that limit the ability of a company that undergoes an “ownership change,” which is generally defined as any change in ownership of more than 50% of its common stock over a three-year period, to utilize its net operating loss carryforwards,NOLs, tax credits (including, among others, Energy-Efficiency Tax Credits) and certain built-in losses or deductions, as of the ownership change date, that are recognized during the five-year period after the ownership change. These rules generally operate by focusing on changes in the ownership among shareholders owning, directly or indirectly, 5% or more of the Company’s common stock (including changes involving a shareholder becoming a 5% shareholder) or any change in ownership arising from a new issuance of stock or share repurchases by the Company.

WeNOLs, currentlygenerated haveprior anto immaterialfiscal amount of “built-in losses” in our assets, i.e., an excess tax basis over current fair market value, which may result in tax losses as such assets are sold. Those “built-in losses” could become significant in the future if market conditions worsen, and our inventory is impaired. Net operating losses2019, and tax credits (including the Energy-Efficiency Tax Credits) generally may be carried forward for a 20-year period to offset future earnings and reduce our federal income tax liability. Any net operating lossesNOLs created during or after our fiscal 2019 may be carried forward indefinitely;indefinitely, however,but the loss canmay only be utilized to offset 80% of taxable income generated in a tax year. Built-in losses, if and when recognized, generally will result in tax losses that may then be deducted or carried forward. However, wedue experiencedto anthe “ownership change” underwe Sectionexperienced 382 as ofin January 12, 2010. As a result of this previous “ownership change”2010, for purposes of Section 382,382 and Section 383, our ability to use certain net operating loss carryforwards,NOLs, tax credits and built-in losses or deductions in existence prior to the ownership change was limited by Section 382.382 and/or Section 383. We cannot predict or control the occurrence or timing of another ownership change in the future. If another ownership change were to occur, the limitations imposed by Section 382 and Section 383 could result in a material amount of our net operating loss carryforwardsNOLs and taxEnergy-Efficiency creditsTax Credits expiring unused and, therefore, significantly impair the future value of our deferred tax assets.

The realization of all or a portion of our deferred income tax assets (including net operating loss carryforwardsNOLs and taxEnergy-Efficiency creditsTax Credits) is dependent upon the generation of future income during the statutory carryforward periods. Our inability to utilize our limited pre-ownership change netNOLs, operating loss carryforwards,other tax credits and recognized built-in losses or deductions, or the occurrence of a future ownership change and resulting additional limitations to these tax attributes, could have a material adverse effect on our financial condition, results of operations, and cash flows.

Our goal is to allocate capital to maximize our overall long-term returns. This includes growing profitability, improving balance sheet efficiency and generating returns above our cost of capital. In addition, from time to time we may engage in bond repurchases to reduce our indebtedness and return value to our stockholders through share repurchases. If we do not properly allocate our capital, we may fail to produce optimal financial results and we may experience a reduction in stockholder value, including increased volatility in our stock price.

•increasingGrowth: active communities toreaching more than 200 active communities by the end of fiscal 2026,2027,

•Deleveraging: reducing our net debt to net capitalization ratio to belowthe low 30% range by the end of fiscal 2026,2027, and

•During the fiscal year ended September 30, 2024, our average active community count of 144 was up 15.7% from 125 in the prior year. As of September 30, 2024,2025, our ending active community count was 162,169, up 20.9%4.3% from 134162 in the prior year. Our fiscal fourth quarterThis marks the tenththird consecutive quarteryear of year-over-year growth in community count as we work towards our goal of reaching more than 200 active communities by the end of fiscal 2026. We invested $776.5 million in land acquisition and land development during the year ended September 30, 2024, representing an increase of 35.5% compared to $573.1 million in land spend during the year ended September 30, 2023.2027.

•During the fiscal year ended September 30, 2024,2025, salesorders per community per month waswere 2.42.0 compared to 2.62.4 in the prior year, and our net new orders were 4,221,3,890, updown 9.2%7.8% from 3,8664,221 in the prior year. The expanded average active community count allowed us to deliver higher net new orders year-over-year despite a declinedecrease in sales pace compared to 2.4 orders per community per month during the prior year endedreflected Septemberweaker 30,consumer 2024sentiment duedriven by affordability challenges and uncertainties in the macroeconomic environment. We continue to elevatedadjust mortgageprices, ratesfeatures and affordabilityincentives challenges.to align with the current competitive market conditions.

•SG&A for the fiscal year ended September 30, 20242025 was 11.4%11.9% of total revenue compared with 11.5%11.4% a year earlier. SG&A expense was $266.4$281.7 million for the fiscal year ended September 30, 2024,2025, up 5.2%5.8% compared to prior year primarily due to higher commissions expense and higher sales and marketing costs asand weother continueG&A expenses to growsupport community count.count Wegrowth, remainpartially focusedoffset onby prudentlylower managing overhead costs.commissions.

(c) Calculated as tax (benefit) expense for the period divided by income from continuing operations.operations before income taxes. Our income tax expenses(benefit) areexpense is not always directly correlated to the amount of pre-tax 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 homeshomes, and,with historically, werecredits valued atbetween $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 ActAct, increasedincluding theseour creditsability to $2,500 or $5,000 per single family home meeting Energy Star or Zero Energy Ready qualifications, respectively. As we work towards our goal of building 100% Zero Energy Ready homes, we expect ourclaim energy efficiencyefficient new home tax credits tofor shifthomes increasinglythat towardsclose $5,000after perJune single30, family2026. homeWhile inthis change does not impact our fiscal 2025 effective rate and deferred tax balances, we are evaluating the currentfull impact of the OBBBA on our future tax provision and futurefinancial years.results.

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

Net new orders for the year ended September 30, 20242025 increaseddecreased to 4,221,3,890, updown 9.2%7.8% from the year ended September 30, 2023.2024. The increasedecrease in net new orders was driven primarily by an increase in average active community count from 125 in the prior year to 144, partially offset by a decrease in sales pace from 2.62.4 orders per community per month in the prior year to 2.4.2.0, partially offset by an increase in average active community count from 144 in the prior year to 164.

West Segment: Net new orders for the year ended September 30, 20242025 was 2,753,2,365, updown 22.7%14.1% from the year ended September 30, 2023.2024. The increasedecrease in net new orders compared to the prior year was driven by a 24.0%22.4% decrease in sales pace from 2.5 orders per community per month in the prior year to 1.9, partially offset by a 10.7% increase in average active community count from 7593 in the prior year to 93, while sales pace remained flat year-over-year at 2.5 orders per community.103.

East Segment: Net new orders for the year ended September 30, 20242025 was 912,935, up 6.2%2.5% from the year ended September 30, 2023.2024. The increase in net new orders compared to the prior year was driven by a 25.0%20.6% increase in average active community count from 2430 in the prior year to 30,36, partially offset by a 16.7%15.0% decrease in sales pace from 3.02.5 orders per community per month in the prior year to 2.5. The decrease in sales pace was due to a softening in demand in various sub-markets due to affordability challenges.2.2.

Southeast Segment: Net new orders for the year ended September 30, 20242025 was 556,590, downup 27.1%6.1% from the year ended September 30, 2023.2024. The decreaseincrease in net new orders compared to the prior year was driven by a 16.0%20.2% decreaseincrease in average active community count from 2521 in the prior year to 21,25, andpartially aoffset 12.0%by an 11.7% decrease in sales pace from 2.52.2 orders per community per month in the prior year to 2.2. The decrease in sales pace was due to a softening in demand in various sub-markets due to affordability challenges.1.9.

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 aggregate dollar value of homes in backlog as of September 30, 2024 decreased 10.1% compared to the prior year due to a 13.4% decrease in backlog units, partially offset by a 3.8% increase in the ASP of homes in backlog. The decrease in backlog units was primarily due to closings exceeding net new orders for the year ended September 30, 2024.2025. The aggregate dollar value of homes in backlog as of September 30, 2025 decreased 35.2% compared to the prior year due to a 36.2% decrease in backlog units, partially offset by a 1.6% increase in the ASP of homes in backlog. The increase in backlog ASP was primarily due to changes in product and community mix as well as price appreciation in certain communities.mix.

West Segment: Homebuilding revenue increaseddecreased by 12.1%1.8% for the fiscal year ended September 30, 20242025 compared to the prior fiscal year due to a 14.3% increase in closings, partially offset by a 1.9%1.3% decrease in ASP.ASP and a 0.6% decrease in closings. The year-over-year increaseslight decrease in closings in the West segment was primarily due to higherlower communitybeginning count,backlog, partially offset by higher volume of spec homes that sold and closed within the current year,year period and improved construction cycle times for fiscal 20242025 compared to fiscal 2023.2024.

East Segment: Homebuilding revenue decreasedincreased by 3.9%19.0% for the fiscal year ended September 30, 20242025 compared to the prior fiscal year due to aan 2.7%11.1% decreaseincrease in closings as well as a 1.2%7.1% decreaseincrease in ASP. The year-over-year decreaseincrease in closings in the East segment was primarily due to lowerhigher beginningvolume backlog,of spec homes that sold and closed within the current year period and improved construction cycle times, partially offset by improvedlower constructionbeginning cycle timesbacklog, for fiscal 20242025 compared to fiscal 2023.2024.

Southeast Segment: Homebuilding revenue decreased by 10.4%15.5% for the fiscal year ended September 30, 20242025 compared to the prior fiscal year due to a 14.8%15.4% decrease in closings, partially offset byand a 5.1%0.1% increasedecrease in ASP. The year-over-year decrease in closings in the Southeast segment is primarily due to lower beginning backlog, partially offset by improvedhigher constructionvolume cycleof timesspec homes that sold and closed within the current year period for fiscal 20242025 compared to fiscal 2023.2024.

The following tables present our homebuilding (HB) gross profit and gross margin by reportable segment and inCorporate total.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 impairmentsimpairment and abandonment charges).

Our homebuilding gross profit decreased by $24.5$84.2 million to $413.6$329.4 million for the fiscal year ended September 30, 2024,2025, compared to $438.1$413.6 million in the prior year. The decrease in homebuilding gross profit was primarily driven by a decrease in gross margin of 190370 basis points to 18.0%,14.3%, partially offset by an increase in homebuilding revenue of $94.6$9.6 million. However, as shown in the tables above, the comparability of our gross profit and gross margin was modestly impacted by impairments and abandonment charges which increased by $1.4$8.2 million and interest amortized to homebuilding cost of sales which decreasedincreased by $0.8$6.1 million year-over-year (refer to Note 4 and Note 5 of the notes to the consolidated financial statements in this Form 10-K for additional details). When excluding the impact of impairments and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $24.0$69.9 million compared to the prior year while homebuilding gross margin decreased by 200310 basis points to 21.1%.18.0%. The year-over-year decrease in gross margin for the fiscal year ended September 30, 20242025 was primarily driven by an increase in price concessions and incentives, such as mortgage rate buydowns, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix and an increase in closing cost incentives.mix.

West Segment: Compared to the prior fiscal year, homebuilding gross profit decreased by $0.9$51.0 million due to lower gross margin,margin partiallyand offseta by an increasedecrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 21.3%,18.2%, down from 23.8%21.3% in the prior year. The decrease in gross margin was primarily driven by an increase in price concessions and incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix and an increase in closing cost incentives.mix.

SoutheastEast Segment: Compared to the prior fiscal year, homebuilding gross profit decreasedincreased by $13.0$10.7 million due to aan decreaseincrease in homebuilding revenuerevenue, andpartially offset by lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 22.0%,17.1%, down from 22.9%18.1% in the prior year. The decrease in gross margin was primarily driven by an increase in price concessions and incentives, an increased share of spec home closings which generally have lower margins than "to be built" homes, and changes in product and community mix and an increase in closing cost incentives.mix.

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) IncludesCorporate and unallocated includes capitalized interest and capitalized indirect costs expensed to land cost of salesales 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 netfair realizablevalue value.less cost to sell.

For the fiscal year ended September 30, 2024, land sales and other revenue increased by 343.8% to $37.2 million, and land sales and other gross profit increased by 133.5% to $10.7 million compared to the prior year. Year-over-year fluctuations onin 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.

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

During the secondthird quarter of fiscal 2026, salesconsumer pacessentiment reflectedremained positivenear earlyall-time momentumlows, beforereflecting plateauingongoing inuncertainties Marcharound withgeopolitical events and economic conditions. While financial market volatility caused by the disruptionstart fromof geopolitical events. Thethe military conflict in the Middle East heightenedhas existingsince economicsubsided, uncertaintyenergy prices have continued to fluctuate and mortgage rates remain elevated near 52-week highs. We believe these macro factors contributed to asales rapidpace increaseremaining inrelatively mortgagesoft rates,versus sharplyhistorical higher energy prices, and other adverse macroeconomic pressures.levels. Despite the impact of these uncertainties,trends on homebuyers, the Company continued to execute on several margin-enhancing cost and mix initiatives that are expected to bewere realized overin the remainder of fiscal 2026.quarter.

In response to the 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 acceleratedcontinued our share buyback program in the secondthird quarterquarter, andrepurchasing repurchasedanother 1.21.0 million shares of our common stock, or approximately 4.0%3.5% of our outstanding shares at the end of our fiscal firstsecond quarter, for an aggregate $30.0$21.0 million. This brings our year-to-date share repurchases to $45.1$66.2 million, equatingor to2.9 million shares, representing approximately 6.3%9.7% of our outstanding shares at fiscal year end 2025. We expect to continue buyback activity in the coming quarters, using a portion of land sale proceeds to fund the repurchases.

•Curated Choices, which include competitive mortgage pricing to drive customer savings, and a range of floorplan and styleinterior options,design styles,

Overview of Results for Our Fiscal SecondThird Quarter

The following is a summary of our performance against certain key operating and financial metrics during the quarter ended MarchJune 31,30, 2026 and a comparison to the quarter ended MarchJune 31,30, 2025:

•During the quarter ended MarchJune 31,30, 2026, orders per community per month were 2.11.8 compared to 2.31.7 in the prior year quarter, and our net new orders were 1,048,900, downup 4.6%4.5% from 1,098861 in the prior year quarter. The decreaseyear-over-year inincrease was primarily attributed to softer sales paceperformance compared toin the prior year reflectedquarter. However, the sales environment remains challenging due to affordability constraints, weaker consumer sentiment driven by affordability challengessentiment, and uncertainties in thebroader macroeconomic environment.uncertainty. We continue to adjust prices, features and incentives to align with the current competitive market conditions.

•As of MarchJune 31,30, 2026, our land position included 24,82424,489 controlled lots, down 12.3%11.9% from 28,29027,794 as of MarchJune 31,30, 2025. We invested $187.0$199.6 million in land acquisition and land development during the quarter ended MarchJune 31,30, 2026, downup from $197.0$153.8 million during the quarter ended MarchJune 31,30, 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 improvedsustained the efficiency of our land spend by using lot option agreements. As of MarchJune 31,30, 2026, we had 14,14513,841 lots, or 59.9%60.0% of our total active lots, under option agreements as compared to 16,32216,195 lots, or 59.3%60.1% of our total active lots, under option agreements as of MarchJune 31,30, 2025.

•Our Average Selling Price (ASP) for homes closed during the quarter ended MarchJune 31,30, 2026 was $525.4$547.8 thousand, up 2.0%5.9% from $515.3$517.3 thousand in the prior year quarter. Our backlog ASP as of MarchJune 31,30, 2026 was $582.1 thousand, up 6.8%6.0% from $544.9$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 MarchJune 31,30, 2026 was 12.0%,13.6%, downup from 15.1%13.5% compared to the prior year quarter. Homebuilding gross margin was impacted by inventory impairment and abandonment charges of $1.3 million during the quarter ended March 31, 2026 related to a project in progress community in our Houston market, principally due to a reduction in price driven by the competitive market dynamics. Refer to Note 4 to the condensed consolidated financial statements included in this Form 10-Q for further discussion. Homebuilding gross margin, excluding impairments, abandonmentsabandonments, and interest amortization, for the quarter ended MarchJune 31,30, 2026 was 15.6%,16.9%, down from 18.3%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,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 MarchJune 31,30, 2026 was 15.5%14.1% of total revenue, up from 12.0%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 $63.6relatively million for the quarter ended March 31, 2026, down 6.5%flat compared to the prior year quarterquarter, primarilyas due to lower commissions. Wewe remain focused on prudently managing overhead costs.

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 sixnine months ended MarchJune 31,30, 2026 may not be indicative of our full year results.

(a) Excluding impairments, abandonments, and interest amortized to cost of sales, homebuilding gross margin was 15.6%16.9% and 18.3%18.4% for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 14.9%15.6% and 18.3% for the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively. ADuring the nine months ended June 30, 2026, homebuilding gross margin was impacted by a litigation-related charge wasassociated recognizedwith duringa theconfidential sixsettlement monthsagreement endedwith Marcha 31,homeowners' 2026,association. whichThis charge reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.8%.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.

(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 sixnine months ended MarchJune 31,30, 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.

Net new orders for the quarter ended MarchJune 31,30, 2026 decreasedincreased to 1,048,900, downup 4.6%4.5% from the quarter ended MarchJune 31,30, 2025. The decreaseincrease in net new orders compared to the prior year quarter was driven by a 7.2%3.7% decreaseincrease in sales pace from 2.31.7 orders per community per month in the prior year quarter to 2.1,1.8 partially offset byand a 2.9%0.8% increase in average active community count from 163167 in the prior year quarter to 167.169.

Net new orders for the sixnine months ended MarchJune 31,30, 2026 decreased to 1,811,2,711, down 10.8%6.2% from the sixnine months ended MarchJune 31,30, 2025. The decrease in net new orders compared to the prior year period was driven by aan 13.6%8.5% decrease in sales pace from 2.12.0 orders per community per month in the prior year period to 1.8, partially offset by a 3.3%2.4% increase in average active community count from 162164 in the prior year period to 167.168.

EastWest Segment: Net new orders for the quarter ended MarchJune 31,30, 2026 decreasedincreased to 249,520, downup 3.1%7.9% from the quarter ended MarchJune 31,30, 2025. The decreaseincrease in net new orders compared to the prior year quarter was driven by a 9.3%4.5% decreaseincrease in average active community count from 36103 in the prior year quarter to 32,107 partially offset byand a 6.9%3.2% increase in sales pace from 2.41.57 orders per community per month in the prior year quarter to 2.6.1.62.

SoutheastEast Segment: Net new orders for the quarter ended MarchJune 31,30, 2026 increaseddecreased to 200,220, updown 13.6%1.8% from the quarter ended MarchJune 31,30, 2025. The increasedecrease in net new orders compared to the prior year quarter was driven by a 19.2%24.3% increasedecrease in average active community count from 2638 in the prior year quarter to 31,29, partially offset by a 4.7%29.8% decreaseincrease in sales pace from 2.31.9 orders per community per month in the prior year quarter to 2.2. The growth in average active communities is mainly attributed to our Atlanta submarket.2.5.

EastSoutheast Segment: Net new orders for the six monthsquarter ended MarchJune 31,30, 2026 decreasedincreased to 425,160, downup 12.2%3.2% from the six monthsquarter ended MarchJune 31,30, 2025. The decreaseincrease in net new orders compared to the prior year quarter was driven by a 10.3%22.8% decreaseincrease in average active community count from 3626 in the prior year quarter to 3232, andpartially offset by a 2.1%16.0% decrease in sales pace from 2.32.0 orders per community per month in the prior year quarter to 2.2.1.6.

SoutheastWest Segment: Net new orders for the sixnine months ended MarchJune 31,30, 2026 increaseddecreased to 329,1,577, updown 12.7%9.2% from the sixnine months ended MarchJune 31,30, 2025. The increasedecrease in net new orders was driven by a 20.8%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 25102 to 30, partially offset by a 6.7% decrease in sales pace from 2.0 orders per community per month to 1.8. The growth in average active communities is mainly attributed to our Atlanta submarket.106.

The table below summarizes backlog units by reportable segment as well as the aggregate dollar value and ASP of homes in backlog as of MarchJune 31,30, 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 and year-over-year lower net new orders for the quarter ended MarchJune 31,30, 2026. The aggregate dollar value of homes in backlog as of MarchJune 31,30, 2026 decreasedincreased 9.1%2.2% compared to MarchJune 31,30, 2025 due to a 14.9% decrease in backlog units, partially offset by a 6.8%6.0% increase in the ASP of homes in backlog.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.

EastWest Segment: Homebuilding revenue decreased by 24.6%14.1% for the three months ended MarchJune 31,30, 2026 compared to the prior year quarter due to aan 30.0%18.5% decrease in closings, partially offset by a 7.7%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.

WestEast Segment: Homebuilding revenue decreased by 31.3%27.1% for the sixthree months ended MarchJune 31,30, 2026 compared to the sixprior monthsyear ended March 31, 2025quarter due to a 30.5%27.0% decrease in closings and a 1.1%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 period.quarter.

Southeast Segment: Homebuilding revenue decreasedincreased by 6.4%60.2% for the sixthree months ended MarchJune 31,30, 2026 compared to the sixprior monthsyear ended March 31, 2025quarter due to a 16.1%37.9% decreaseincrease in closings,closings partiallyand offseta by an 11.5%16.2% increase in ASP. The decreaseincrease in closings was primarily due to lowerhigher beginning backlog,backlog partially offset byand improved construction cycle times compared to the prior year period.quarter.

(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 sixnine months ended MarchJune 31,30, 2026, Corporate and unallocated also included a litigation-related charge that reduced total homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.8%.0.5%.

Our homebuilding gross profit decreased by $36.5$5.9 million to $47.6$66.6 million for the three months ended MarchJune 31,30, 2026, compared to $84.1$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 $158.3$44.5 millionmillion, andpartially aoffset decreaseby an increase in gross margin of 31010 basis points to 12.0%.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 increaseddecreased by $0.8$8.9 million, and interest amortized to homebuilding cost of sales, which decreased by $4.1$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 $39.9$16.0 million compared to the prior year quarter, while homebuilding gross margin decreased by 270150 basis points to 15.6%.16.9%. The decrease in gross margin for the three months ended MarchJune 31,30, 2026 compared to the prior year quarter was primarily due to an increase in price concessions and closing cost incentives,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 $36.7$12.0 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.6%,15.9%, down from 19.1%18.1% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives,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.

WestEast Segment: Compared to the prior year period,quarter, homebuilding gross profit decreased by $60.6$9.7 million due to a decrease in homebuilding revenue and lower gross margin.revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.3%,15.3%, down from 18.7%17.8% in the prior year period,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 period,quarter, homebuilding gross profit decreasedincreased by $1.5$14.8 million due to aan decreaseincrease in homebuilding revenue.revenue and higher gross margin. Homebuilding gross margin, excluding impairments and abandonments, remained relatively flat at 16.1% comparedincreased to 16.2%19.6%, up from 17.7% in the prior year period,quarter, asprimarily 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 largely offset increases in price concessions and landa costs.larger share of closings from newer, higher-margin communities.

For the three months ended MarchJune 31,30, 2026, land sales and other revenue increased by $2.8$15.5 million to $12.1$25.4 million, and land sales and other gross profit decreased by $0.8$0.6 million to $1.1a loss of $0.5 million compared to the prior year quarter. For the sixnine months ended MarchJune 31,30, 2026, land sales and other revenue decreasedincreased by $2.0$13.5 million to $15.8$41.3 million, and land sales and other gross profit decreased by $3.1$3.7 million to $0.8$0.3 million compared to the prior year period. Also, during the sixnine months ended MarchJune 31,30, 2026, we recognized $1.0$3.4 million in land held for sale impairment charges related to twosix held for sale communities in our West and East segments.

Our operating income decreased by $66.3$7.7 million to a loss of $50.8$11.4 million for the sixthree months ended MarchJune 31,30, 2026, compared to operating incomeloss of $15.5$3.7 million for the sixthree months ended MarchJune 31,30, 2025. This decrease compared to the prior year periodquarter was primarily due to the previously discussed decrease in gross profit and gross margin. SG&A expense decreased 3.9% compared to the prior year primarily due to lower commissions expense on lower homebuilding revenue, partially offset by higher sales and marketing costs. SG&A as a percentage of total revenue increased by 37090 basis points compared to the prior year period,quarter, from 12.9%13.2% to 16.6%,14.1%, primarily due to lower homebuilding revenue.

Southeast Segment: The $0.8$12.5 million increase in operating income compared to the prior year quarter was primarily due to the higher gross profit previously discussed and lower other G&A costs,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 MarchJune 31,30, 2026, corporate and unallocated net expenses decreased by $3.5$1.3 million from the prior year quarter primarily due to lower amortizationimpairment of capitalized interest and capitalized indirect costs expensedrecognized in the current quarter compared to homebuildingthe costprior ofyear sales on lower closings and homebuilding revenue, and lower G&A costs.quarter.

East Segment: The $6.4$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 commissioncommissions expensesexpense on lower homebuilding revenue.

Southeast Segment: The $1.8$10.7 million decreaseincrease in operating income compared to the prior year period was primarily due to the decreaseincrease in gross profit previously discussed and highera salesdecrease andin marketingother G&A costs, partially offset by lowerhigher sales and marketing costs and higher commissions expense on lowerhigher homebuilding revenue.

Corporate and Unallocated: For the sixnine months ended MarchJune 31,30, 2026, corporate and unallocated net expenses increased by $1.5$0.2 million from the prior year period primarily due to a litigation-related charge (refer to Note 8 to the condensed consolidated financial statements included in this Form 10-Q for further discussion),charge, partially offset by lower amortization of capitalized interest costs expensed to homebuilding cost of sales on lower closings and homebuilding revenue.