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10/08/2026 | Press release | Distributed by Public on 10/08/2026 14:39

Quarterly Report for Quarter Ending August 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
OVERVIEW
Revenues are generated from our homebuilding and financial services operations. The following table presents a summary of our consolidated results of operations (dollars in thousands, except per share amounts):
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025
Variance
2026 2025
Variance
Revenues:
Homebuilding $ 1,292,350 $ 1,614,462 (20) % $ 3,471,516 $ 4,526,219 (23) %
Financial services 4,751 6,012 (21) 15,031 15,617 (4)
Total revenues $ 1,297,101 $ 1,620,474 (20) % $ 3,486,547 $ 4,541,836 (23) %
Pretax income:
Homebuilding $ 73,799 $ 134,542 (45) % $ 139,172 $ 400,595 (65) %
Financial services 7,381 8,686 (15) 19,581 24,373 (20)
Total pretax income 81,180 143,228 (43) 158,753 424,968 (63)
Income tax expense
(15,900) (33,400) 52 (32,700) (97,700) 67
Net income $ 65,280 $ 109,828 (41) % $ 126,053 $ 327,268 (61) %
Diluted earnings per share
$ 1.05 $ 1.61 (35) % $ 2.00 $ 4.60 (57) %
During the 2026 third quarter, housing market conditions remained challenging, weakening from the prior quarter as an increase in mortgage loan interest rates further pressured affordability in many of our served markets. Higher interest rates coupled with persistent inflation, attributable in part to rising commodity and oil prices, heightened macroeconomic uncertainties and geopolitical tensions, including the military conflicts in the Middle East and in Ukraine, caused prospective buyers to become more cautious on purchasing a home. In addition, resale home inventory, which is our largest competitor, increased to its highest levels in a decade, and we are seeing pricing trending downward in several areas within our operational footprint. Even with the significant headwinds, demand for our Built to Order® homes contributed to our first year-over-year increase in ending backlog in four years, as these homes are generally sold prior to the start of construction and remain in backlog until delivered.
Reflecting the operating environment, we produced 2,604 net orders in the 2026 third quarter, down 12% from the year-earlier quarter, which contributed, along with a higher average community count, to a decline in the monthly net order pace per community to 3.1, compared to 3.8 for the prior-year period. Our average community count increased 8% year over year to 279, and our ending community count rose 5% to 277, primarily reflecting our continued investments in land and land development to support future growth. The value of net orders for the quarter was $1.21 billion, down 8% from the year-earlier period, primarily due to lower net orders, partly offset by a 4% increase in their average selling price to $463,600.
To support orders, we have remained focused in 2026 on our strategy of offering customers a simple, straightforward and transparent base price with limited, if any, concessions or incentives, intended to provide a compelling value competitive with area resale home prices. In addition, while selling through our existing inventory, we have continued to prioritize orders of our Built to Order homes, which are our core competency and a key industry differentiator for us that typically generate higher gross profit margins than inventory homes, and we generated predominantly Built to Order net orders in each of the first three quarters of 2026.
We believe this reflects, in part, how the value proposition of our Built to Order homes to prospective customers has increased with the meaningful reduction in build times we have achieved over the past few years. In 2026, our average build times improved year over year by 22% in the first quarter, 24% in the second quarter and 19% in the third quarter. With the substantial Built to Order net orders we generated in the first nine months of the year, we reached our goal of a predominantly Built to Order mix of homes delivered in the 2026 third quarter, with these homes comprising 74% of homes delivered and benefiting our housing gross profit margin.
Homebuilding revenues for the three months ended August 31, 2026 were generated solely from housing operations. For the three months ended August 31, 2025, homebuilding revenues were generated from housing operations and nominal land sales. Housing revenues for the 2026 third quarter decreased 20% year over year to $1.29 billion, due to a 19% decrease in the number of homes delivered to 2,732 and a slight decline in their average selling price to $473,000. Approximately 50% of our
homes delivered in the 2026 third quarter were to first-time homebuyers. Our homes delivered as a percentage of backlog at the beginning of the quarter were 60% for the 2026 third quarter, compared to 71% for the year-earlier quarter. This decrease reflects growth in our backlog since the beginning of the year, as well as a lower percentage of homes sold and delivered within the same quarter, corresponding to our strategic shift toward increasing our mix of Built to Order net orders.
Homebuilding operating income for the three months ended August 31, 2026 was $67.1 million, compared to $131.2 million for the year-earlier period. As a percentage of revenues, homebuilding operating income was 5.2% for the 2026 third quarter, compared to 8.1% for the corresponding 2025 period, mainly due to a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of revenues. Excluding inventory-related charges of $3.0 million for the current quarter and $11.3 million for the year-earlier quarter, the homebuilding operating income margin was 5.4%, compared to 8.8%. Our housing gross profit margin was 16.5%, compared to 18.2% for the year-earlier quarter. Excluding the above-mentioned inventory-related charges, the housing gross profit margin was 16.8%, compared to 18.9%, primarily reflecting pricing pressure, higher relative land costs and reduced operating leverage. Selling, general and administrative expenses as a percentage of housing revenues increased 130 basis points year over year to 11.3%, mainly due to a decrease in operating leverage from lower housing revenues.
Total pretax income for the 2026 third quarter was $81.2 million, including a $3.5 million gain associated with the sale of an investment in equity securities of a privately held technology company, compared to $143.2 million for the year-earlier period. Net income and diluted earnings per share for the three months ended August 31, 2026 were $65.3 million and $1.05, respectively, compared to $109.8 million and $1.61, respectively, for the three months ended August 31, 2025. Our diluted earnings per share for the 2026 third quarter reflected lower net income, partly offset by a 9% reduction in our weighted-average diluted share count attributable to common stock repurchases over the past several quarters.
We continue to take a balanced approach to capital allocation, guided by market conditions and our priorities of investing in land and land development to support future growth and returning capital to our stockholders. Our investments in land and land development for the 2026 third quarter totaled $722.3 million, a 40% increase compared to the year-earlier quarter. During the 2026 third quarter, we repurchased .9 million shares of our common stock at a total cost of $50.0 million, compared to 3.3 million shares at a total cost of $188.5 million in the year-earlier quarter. For the nine months ended August 31, 2026, we invested $1.79 billion in land and land development, representing an 8% decrease from the corresponding year-earlier period, and repurchased 3.1 million shares of our common stock at a total cost of $175.0 million. We ended the 2026 third quarter with total liquidity of $942.4 million, including cash and cash equivalents and $783.4 million of available capacity under the Credit Facility. We had $415.0 million of cash borrowings outstanding under the Credit Facility at August 31, 2026.
With our ending backlog value at August 31, 2026 up 3% year over year to approximately $2.05 billion, we believe we are well positioned to achieve our projections for the 2026 fourth quarter and full year, as described below under "Outlook."
HOMEBUILDING
Financial Results. The following table presents a summary of certain financial and operational data for our homebuilding operations (dollars in thousands, except average selling price):
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 2026 2025
Revenues:
Housing $ 1,292,350 $ 1,613,975 $ 3,470,076 $ 4,525,732
Land - 487 1,440 487
Total 1,292,350 1,614,462 3,471,516 4,526,219
Costs and expenses:
Construction and land costs
Housing (1,078,590) (1,320,611) (2,923,732) (3,658,080)
Land - (536) (1,296) (536)
Total (1,078,590) (1,321,147) (2,925,028) (3,658,616)
Selling, general and administrative expenses (146,626) (162,152) (418,217) (477,638)
Total (1,225,216) (1,483,299) (3,343,245) (4,136,254)
Operating income 67,134 131,163 128,271 389,965
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 2026 2025
Interest income and other $ 4,518 $ 1,870 $ 6,963 $ 5,628
Equity in income of unconsolidated joint ventures
2,147 1,509 3,938 5,002
Homebuilding pretax income $ 73,799 $ 134,542 $ 139,172 $ 400,595
Homes delivered 2,732 3,393 7,497 9,283
Average selling price $ 473,000 $ 475,700 $ 462,900 $ 487,500
Housing gross profit margin as a percentage of housing revenues 16.5 % 18.2 % 15.7 % 19.2 %
Adjusted housing gross profit margin as a percentage of housing revenues 16.8 % 18.9 % 16.1 % 19.6 %
Selling, general and administrative expenses as a percentage of housing revenues 11.3 % 10.0 % 12.0 % 10.6 %
Operating income as a percentage of revenues 5.2 % 8.1 % 3.7 % 8.6 %
Revenues. Homebuilding revenues for the three months ended August 31, 2026 consisted solely of housing revenues. In the three months ended August 31, 2025, homebuilding revenues were generated from housing operations and nominal land sale revenues. Housing revenues for the 2026 third quarter declined 20% from the year-earlier quarter due to a decrease of 19% in the number of homes delivered and a slight decline in their overall average selling price. Each of our homebuilding reporting segments posted year-over-year decreases in third-quarter housing revenues, ranging from 7% in our West Coast segment to 34% in our Southwest and Central segments. The decline in the overall number of homes delivered primarily resulted from our having 5% fewer homes in backlog at the beginning of the 2026 third quarter compared to the year-earlier period, as well as our strategic shift toward a higher mix of Built to Order sales in the 2026 first nine months.
For the nine months ended August 31, 2026 and 2025, homebuilding revenues consisted of housing revenues and land sale revenues. Housing revenues for the nine months ended August 31, 2026 decreased 23% from the corresponding 2025 period due to a 19% decline in the number of homes delivered and a 5% decrease in their average selling price.
There were no land sale revenues for the three months ended August 31, 2026, compared to land sale revenues of $.5 million for the corresponding 2025 period. For the nine months ended August 31, 2026, land sale revenues totaled $1.4 million, compared to $.5 million for the nine months ended August 31, 2025. Generally, land sale revenues fluctuate with our decisions to maintain or decrease our land ownership position in certain markets based upon the volume of our holdings, our business strategy, the strength and number of developers and other land buyers in particular markets at given points in time, the availability of opportunities to sell land at acceptable prices and prevailing market conditions.
Operating Income. Our homebuilding operating income for the three months ended August 31, 2026 decreased 49% from the prior-year period, reflecting lower housing gross profits, partly offset by lower selling, general and administrative expenses. Operating income for the 2026 third quarter included $3.0 million of inventory-related charges, compared to $11.3 million for the year-earlier quarter. As a percentage of revenues, our operating income for the three months ended August 31, 2026 was 5.2%, compared to 8.1% for the corresponding 2025 period, due to a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of housing revenues. Excluding inventory-related charges, our operating income as a percentage of revenues was 5.4% for the three months ended August 31, 2026, compared to 8.8% for the year-earlier period.
For the nine months ended August 31, 2026, our homebuilding operating income declined 67% from the year-earlier period mainly due to a decrease in housing gross profits, partially offset by lower selling, general and administrative expenses. Operating income for the nine months ended August 31, 2026 included inventory-related charges of $10.7 million, compared to $18.4 million of such charges for the corresponding 2025 period. As a percentage of revenues, our operating income for the nine months ended August 31, 2026 decreased 490 basis points year over year to 3.7%, mainly reflecting a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of revenues. Excluding inventory-related charges, our operating income as a percentage of revenues declined 500 basis points to 4.0% for the nine months ended August 31, 2026.
•Housing Gross Profits - Housing gross profits of $213.8 million for the three months ended August 31, 2026 were down 27% year over year, reflecting lower housing revenues and a 170 basis-point decrease in our housing gross profit margin to
16.5%. The decline in the housing gross profit margin primarily reflected continued pricing pressure, higher relative land costs and reduced operating leverage. As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations, which is included in construction and land costs, was 1.7% for both the three months ended August 31, 2026 and 2025. Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 16.8% for the 2026 third quarter decreased 210 basis points year over year.
For the nine months ended August 31, 2026, our housing gross profits of $546.3 million decreased from $867.7 million for the year-earlier period due to lower housing revenues and a 350 basis-point decline in our housing gross profit margin. The housing gross profit margin decrease primarily reflected the same factors described above for the three months ended August 31, 2026. As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations was 1.7% for both the nine months ended August 31, 2026 and 2025. Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 16.1% for the nine months ended August 31, 2026 decreased 350 basis points year over year.
The calculation of adjusted housing gross profit margin, which we believe provides a clearer measure of the performance of our business, is described below under "Non-GAAP Financial Measures."
•Land Sale Profits - There were no land sales during the three months ended August 31, 2026. Land sales generated nominal results for the nine months ended August 31, 2026 and the three-month and nine-month periods ended August 31, 2025.
•Selling, General and Administrative Expenses - The following table presents the components of our selling, general and administrative expenses (dollars in thousands):
Three Months Ended August 31, Nine Months Ended August 31,
2026 % of Housing Revenues 2025 % of Housing Revenues 2026 % of Housing Revenues 2025 % of Housing Revenues
Marketing expenses $ 39,722 3.1 % $ 39,894 2.4 % $ 117,498 3.4 % $ 122,159 2.7 %
Commission expenses (a) 44,358 3.4 56,062 3.5 124,099 3.5 155,742 3.5
General and administrative expenses 62,546 4.8 66,196 4.1 176,620 5.1 199,737 4.4
Total $ 146,626 11.3 % $ 162,152 10.0 % $ 418,217 12.0 % $ 477,638 10.6 %
(a)Commission expenses include sales commissions on homes delivered paid to internal sales counselors and external real estate brokers.
Our selling, general and administrative expenses for the three months ended August 31, 2026 decreased 10% compared to the year-earlier period, primarily reflecting a decrease in commission expenses resulting from fewer homes delivered in the 2026 period and a reduction in general and administrative expenses largely due to lower costs associated with performance-based compensation and personnel reductions. As a percentage of housing revenues, our selling, general and administrative expenses for the three months ended August 31, 2026 increased 130 basis points year over year, mainly due to a decrease in operating leverage from lower housing revenues, partly offset by lower costs associated with certain performance-based employee compensation plans and personnel reductions. For the nine months ended August 31, 2026, selling, general and administrative expenses decreased 12% year over year, primarily due to the same factors described above for the three months ended August 31, 2026 as well as the favorable impact of $8.0 million in insurance recoveries. As a percentage of housing revenues, selling, general and administrative expenses for the nine months ended August 31, 2026 increased 140 basis points, primarily reflecting decreased operating leverage from lower housing revenues, partly offset by lower costs associated with certain performance-based employee compensation plans and personnel reductions, and the insurance recoveries.
Interest Income/Expense and Other. Interest income and other for the three months and nine months ended August 31, 2026 consisted of interest income and a $3.5 million gain associated with the sale of an investment in equity securities of a privately held technology company. Further information regarding this gain is provided in Note 10 - Other Assets in the Notes to Consolidated Financial Statements in this report. For the three months and nine months ended August 31, 2025, interest income and other was comprised solely of interest income.
Interest income, which is generated from short-term investments, was $1.0 million for the three months ended August 31, 2026, compared to $1.9 million for the year-earlier quarter. For the nine months ended August 31, 2026, interest income was $3.5 million, compared to $5.6 million for the corresponding 2025 period. The year-over-year decreases for the three-month and nine-month periods ended August 31, 2026 reflected our lower average balance of cash equivalents and a lower interest rate in the 2026 periods. Generally, increases and decreases in interest income are attributable to changes in the interest-bearing average balances of short-term investments and fluctuations in interest rates.
We incur interest principally from our borrowings to finance land acquisitions, land development, home construction and other operating and capital needs. All interest incurred during the three-month and nine-month periods ended August 31, 2026 and 2025 was capitalized as the average amount of our inventory qualifying for interest capitalization was higher than our average debt level for each period. Accordingly, we had no interest expense for these periods. Further information regarding our interest incurred and capitalized is provided in Note 6 - Inventories in the Notes to Consolidated Financial Statements in this report.
Equity in Income of Unconsolidated Joint Ventures. Our equity in income of unconsolidated joint ventures was $2.1 million for the three months ended August 31, 2026, compared to $1.5 million for the year-earlier period. For the nine months ended August 31, 2026, our equity in income of unconsolidated joint ventures was $3.9 million, compared to $5.0 million for the corresponding 2025 period. Further information regarding our investments in homebuilding unconsolidated joint ventures is provided in Note 9 - Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report.
Net Orders, Cancellation Rates, Backlog and Community Count. The following table presents information about our net orders, cancellation rate, ending backlog and community count (dollars in thousands):
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 2026 2025
Net orders 2,604 2,950 8,767 9,182
Net order value (a) $ 1,207,224 $ 1,314,607 $ 4,119,932 $ 4,271,688
Cancellation rate (b) 18 % 17 % 14 % 16 %
Ending backlog - homes 4,398 4,333 4,398 4,333
Ending backlog - value $ 2,053,208 $ 1,988,863 $ 2,053,208 $ 1,988,863
Ending community count 277 264 277 264
Average community count 279 259 276 258
(a) Net order value represents potential future housing revenues associated with net orders generated during the period, as well as homebuyer selections of lot and product premiums and design choices and options for homes in backlog during the same period.
(b) Cancellation rate represents the total number of contracts for new homes cancelled during a period divided by the total (gross) orders for new homes generated during the same period.
Net Orders. Net orders for the 2026 third quarter were down 12% compared to the year-earlier quarter, driven by decreases ranging from 2% in our Southwest homebuilding reporting segment to 26% in our Central segment, partly offset by an increase of 8% in our West Coast segment. The pace of monthly net orders per community was 3.1 in the 2026 third quarter, compared to 3.8 for the corresponding 2025 quarter, reflecting the lower net order volume and our higher average community count. The value of net orders for the 2026 third quarter was $1.21 billion, a decline of 8% from year-earlier quarter, reflecting the lower net order volume, partly offset by a 4% increase in average selling price of those net orders to $463,600. Our cancellation rate as a percentage of gross orders for the three months ended August 31, 2026 was nearly even with the year-earlier period.
To support sales in the nine months ended August 31, 2026, we remained focused on offering customers a simple, straightforward, transparent base price with limited, if any, concessions or incentives, intended to provide a compelling value competitive with area resale home prices. Further, while selling through our existing inventory, we have continued to prioritize orders of our Built to Order homes, which are our core competency and a key industry differentiator for us that typically generate higher gross margins than inventory homes, and we generated predominantly Built to Order net orders in each of the first three quarters of 2026. This momentum contributed to a 74% mix of Built to Order homes delivered in the 2026 third quarter and helped drive the first year-over-year increase in our ending backlog in four years, as these homes are generally sold prior to the start of construction and remain in backlog until delivered.
Backlog. The number of homes in our backlog at August 31, 2026 increased 2% compared to August 31, 2025. Our overall backlog value at August 31, 2026 grew 3% year over year due to the increased number of homes in backlog and their higher average selling price. Backlog value reflected a year-over-year increase of 22% in our West Coast homebuilding reporting segment, partially offset by decreases ranging from 9% in our Southwest segment to 12% in our Southeast segment. Based on our historical experience, a portion of the homes in backlog will not result in homes delivered due to cancellations. Among other benefits, our larger backlog of Built to Order homes generally provides us with greater visibility into future deliveries and enhanced predictability of housing gross profit margins compared to inventory homes, as the selling price and cost to build are usually known prior to starting the home.
Community Count. We use the term "community count" to refer to the number of communities open for sale with at least five homes left to sell at the end of a reporting period. Our ending community count for the 2026 third quarter grew 5% and our average community count increased 8%, each as compared to the year-earlier quarter.
HOMEBUILDING REPORTING SEGMENTS
Operational Data. The following tables present information about our homes delivered, net orders, cancellation rates as a percentage of gross orders, net order value, average community count and ending backlog (number of homes and value) by homebuilding reporting segment (dollars in thousands):
Three Months Ended August 31,
Homes Delivered Net Orders Cancellation Rates
Segment 2026 2025 2026 2025 2026 2025
West Coast 966 972 937 870 16 % 18 %
Southwest 503 681 448 459 17 15
Central 609 943 587 795 19 17
Southeast 654 797 632 826 20 17
Total 2,732 3,393 2,604 2,950 18 % 17 %
Net Order Value Average Community Count
Segment 2026 2025 Variance 2026 2025 Variance
West Coast $ 596,541 $ 550,753 8 % 111 89 25 %
Southwest 194,690 218,931 (11) 38 36 6
Central 188,092 255,530 (26) 67 66 2
Southeast 227,901 289,393 (21) 63 68 (7)
Total $ 1,207,224 $ 1,314,607 (8) % 279 259 8 %
Nine Months Ended August 31,
Homes Delivered Net Orders Cancellation Rates
Segment 2026 2025 2026 2025 2026 2025
West Coast 2,494 2,789 3,142 2,872 13 % 15 %
Southwest 1,256 2,020 1,485 1,561 12 14
Central 1,880 2,505 2,050 2,545 15 16
Southeast 1,867 1,969 2,090 2,204 15 19
Total 7,497 9,283 8,767 9,182 14 % 16 %
Nine Months Ended August 31,
Net Order Value Average Community Count
Segment 2026 2025 Variance 2026 2025 Variance
West Coast $ 2,025,545 $ 1,886,073 7 % 106 88 20 %
Southwest 644,590 757,074 (15) 38 38 -
Central 691,528 823,869 (16) 67 67 -
Southeast 758,269 804,672 (6) 65 65 -
Total $ 4,119,932 $ 4,271,688 (4) % 276 258 7 %
August 31,
Backlog - Homes Backlog - Value
Segment 2026 2025 Variance 2026 2025 Variance
West Coast 1,589 1,294 23 % $ 1,019,253 $ 833,715 22 %
Southwest 696 675 3 296,130 326,959 (9)
Central 1,042 1,173 (11) 351,418 390,780 (10)
Southeast 1,071 1,191 (10) 386,407 437,409 (12)
Total 4,398 4,333 2 % $ 2,053,208 $ 1,988,863 3 %
The composition of our homes delivered, net orders and backlog shifts with the product and geographic mix of our active communities and the corresponding average selling prices of the homes ordered and/or delivered at these communities in any particular period, changing as new communities open and existing communities wind down or sell out in the ordinary course. In addition, with our Built to Order business model, the selling prices of individual homes within a community may vary due to differing lot sizes and locations, home square footage, product premiums and the design choices and options buyers select. These intrinsic variations in our business limit the comparability of our homes delivered, net orders and backlog, as well as their corresponding values, between sequential and year-over-year periods, in addition to the effect of prevailing economic or housing market conditions in or across any particular periods.
Financial Results. Below is a discussion of the financial results for each of our homebuilding reporting segments. Further information regarding these segments, including their pretax income (loss), is included in Note 2 - Segment Information in the Notes to Consolidated Financial Statements in this report. The difference between each homebuilding reporting segment's operating income (loss) and pretax income (loss) is generally due to the equity in income (loss) of unconsolidated joint ventures and/or interest income and expense.
In addition to the results of our homebuilding reporting segments presented below, our consolidated homebuilding operating income includes the results of Corporate and other, a non-operating segment. Corporate and other had operating losses of $31.4 million and $36.4 million in the three months ended August 31, 2026 and 2025, respectively. For the nine months ended August 31, 2026, Corporate and other had an operating loss of $101.9 million, compared to $113.3 million for the corresponding year-earlier period.
The financial results of our homebuilding reporting segments for the three months and nine months ended August 31, 2026 and 2025 were impacted to varying degrees by price reductions and other homebuyer concessions we extended to buyers in conjunction with our sales strategies, as well as product and geographic mix shifts of homes delivered.
West Coast. The following table presents financial information related to our West Coast segment (dollars in thousands, except average selling price):
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 Variance 2026 2025 Variance
Revenues $ 620,017 $ 664,880 (7) % $ 1,580,719 $ 1,926,722 (18) %
Construction and land costs (516,320) (549,332) 6 (1,340,827) (1,579,624) 15
Selling, general and administrative expenses (50,723) (45,899) (11) (135,026) (135,363) -
Operating income $ 52,974 $ 69,649 (24) % $ 104,866 $ 211,735 (50) %
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 Variance 2026 2025 Variance
Homes delivered 966 972 (1) % 2,494 2,789 (11) %
Average selling price $ 641,800 $ 684,000 (6) % $ 633,500 $ 690,800 (8) %
Operating income as a percentage of revenues 8.5 % 10.5 % (200) bps 6.6 % 11.0 % (440) bps
This segment's revenues for the three months ended August 31, 2026 and the three-month and nine-month periods ended August 31, 2025 were generated solely from housing operations. For the nine months ended August 31, 2026, this segment's revenues consisted of housing revenues and nominal land sale revenues. Housing revenues for the three months and nine months ended August 31, 2026 decreased from the corresponding year-earlier periods, reflecting declines in both the number of homes delivered and their average selling price. Operating income for the three months ended August 31, 2026 decreased year over year due to lower housing gross profits and higher selling, general and administrative expenses. Operating income as a percentage of revenues decreased from the prior-year quarter due to a 70 basis-point decline in the housing gross profit margin to 16.7% and a 130 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 8.2%. For the nine months ended August 31, 2026, operating income decreased from the corresponding 2025 period, primarily reflecting lower housing gross profits. Operating income as a percentage of revenues also declined, mainly due to a 280 basis-point decrease in the housing gross profit margin to 15.2% and a 160 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 8.5%.
The year-over-year decrease in the housing gross profit margin for the three months and nine months ended August 31, 2026 was primarily due to continued pricing pressure, higher relative land costs, and product and geographic mix. For the nine months ended August 31, 2026, the housing gross profit margin was also impacted by higher relative construction costs and reduced operating leverage. For the three months ended August 31, 2026, inventory-related charges associated with housing operations were $.7 million, compared to $1.1 million for the year-earlier period. For the nine months ended August 31, 2026, inventory-related charges associated with housing operations were $5.7 million, compared to $3.0 million for the year-earlier period. The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for the three months and nine months ended August 31, 2026 was mainly due to higher marketing and other expenses associated with our expanded community count in this segment as well as a decrease in operating leverage from lower housing revenues. For the nine months ended August 31, 2026, these impacts were partly offset by insurance recoveries.
Southwest. The following table presents financial information related to our Southwest segment (dollars in thousands, except average selling price):
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 Variance 2026 2025 Variance
Revenues $ 222,080 $ 335,505 (34) % $ 568,937 $ 962,486 (41) %
Construction and land costs
(178,287) (254,515) 30 (453,207) (723,639) 37
Selling, general and administrative expenses
(17,844) (23,544) 24 (48,781) (67,245) 27
Operating income $ 25,949 $ 57,446 (55) % $ 66,949 $ 171,602 (61) %
Homes delivered 503 681 (26) % 1,256 2,020 (38) %
Average selling price $ 441,500 $ 492,700 (10) % $ 453,000 $ 476,500 (5) %
Operating income as a percentage of revenues 11.7 % 17.1 % (540) bps 11.8 % 17.8 % (600) bps
For the three-month and nine-month periods ended August 31, 2026 and 2025, this segment's revenues were generated solely from housing operations. This segment's housing revenues declined year over year in both periods, reflecting decreases in both the number of homes delivered and their average selling price. Operating income for the three-month and nine-month periods ended August 31, 2026 decreased from the corresponding year-earlier periods due to lower housing gross profits, partially offset by lower selling, general and administrative expenses. As a percentage of revenues, operating income for the 2026 third quarter declined from the year-earlier quarter, reflecting a 440 basis-point decrease in the housing gross profit margin to 19.7% and a 100 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 8.0%. For the nine months ended August 31, 2026, operating income as a percentage of revenues also decreased year over year due to a
450 basis-point decrease in the housing gross profit margin to 20.3% and a 150 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 8.6%.
The year-over-year decrease in the housing gross profit margin for the three months and nine months ended August 31, 2026 primarily reflected continued pricing pressure, higher relative land costs and decreased operating leverage on lower housing revenues. There were no inventory-related charges associated with housing operations for the three months ended August 31, 2026, and such charges totaled $.4 million for the nine months ended August 31, 2026, compared to $.5 million and $1.6 million, respectively, for the corresponding year-earlier periods. The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for both the three months and nine months ended August 31, 2026 was mainly due to a decrease in operating leverage from lower housing revenues.
Central. The following table presents financial information related to our Central segment (dollars in thousands, except average selling price):
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 Variance 2026 2025 Variance
Revenues $ 205,567 $ 310,603 (34) % $ 635,004 $ 869,182 (27) %
Construction and land costs
(177,382) (261,299) 32 (541,462) (712,516) 24
Selling, general and administrative expenses
(24,742) (31,096) 20 (72,032) (92,291) 22
Operating income $ 3,443 $ 18,208 (81) % $ 21,510 $ 64,375 (67) %
Homes delivered 609 943 (35) % 1,880 2,505 (25) %
Average selling price $ 337,500 $ 329,400 2 % $ 337,800 $ 347,000 (3) %
Operating income as a percentage of revenues 1.7 % 5.9 % (420) bps 3.4 % 7.4 % (400) bps
This segment's revenues for the three-month and nine-month periods ended August 31, 2026 and 2025 were generated solely from housing operations. Housing revenues for the three months and nine months ended August 31, 2026 were down from the corresponding year-earlier periods primarily due to a decrease in the number of homes delivered. Operating income for the three-month and nine-month periods ended August 31, 2026 declined from the corresponding year-earlier periods due to lower housing gross profits, partly offset by lower selling, general and administrative expenses. This segment's operating income as a percentage of revenues for the 2026 third quarter decreased from the year-earlier period due to a 220 basis-point decline in the housing gross profit margin to 13.7% and a 200 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 12.0%. For the nine months ended August 31, 2026, operating income as a percentage of revenues decreased year over year, reflecting a 330 basis-point decrease in the housing gross profit margin to 14.7%, and a 70 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 11.3%.
The housing gross profit margin declined year over year for both the three-month and nine-month periods ended August 31, 2026, mainly due to continued pricing pressure, higher relative land costs, product and geographic mix, and decreased operating leverage on lower housing revenues, partly offset by decreased inventory-related charges. Inventory-related charges associated with housing operations for the three months ended August 31, 2026 were $.9 million, compared to $7.2 million for the year-earlier period. For the nine months ended August 31, 2026, inventory-related charges associated with housing operations were $1.9 million, compared to $9.4 million for the year-earlier period. The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for the three months and nine months ended August 31, 2026 primarily reflected a decrease in operating leverage from lower housing revenues. For the nine months ended August 31, 2026, the year-over-year increase was largely offset by the favorable impact of insurance recoveries.
Southeast. The following table presents financial information related to our Southeast segment (dollars in thousands, except average selling price):
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 Variance 2026 2025 Variance
Revenues $ 244,686 $ 303,474 (19) % $ 686,856 $ 767,829 (11) %
Construction and land costs
(204,228) (254,025) 20 (583,070) (637,145) 8
Selling, general and administrative expenses
(24,328) (27,224) 11 (66,950) (75,152) 11
Operating income $ 16,130 $ 22,225 (27) % $ 36,836 $ 55,532 (34) %
Homes delivered 654 797 (18) % 1,867 1,969 (5) %
Average selling price $ 374,100 $ 380,200 (2) % $ 367,600 $ 389,700 (6) %
Operating income as a percentage of revenues 6.6 % 7.3 % (70) bps 5.4 % 7.2 % (180) bps
For the three months ended August 31, 2026, this segment's revenues were generated solely from housing operations. For the nine months ended August 31, 2026 and the three-month and nine-month periods ended August 31, 2025, this segment's revenues were comprised of housing revenues and nominal land sale revenues. Housing revenues for the three months ended August 31, 2026 decreased 19% year over year and, for the nine months ended August 31, 2026, declined 11% from the corresponding year-earlier period. In both periods, the decline reflected decreases in both the number of homes delivered and their average selling price. Operating income for the three months and nine months ended August 31, 2026 was down from the corresponding year-earlier periods mainly due to lower housing gross profits, partially offset by lower selling, general and administrative expenses. As a percentage of revenues, operating income for the 2026 third quarter declined from the year-earlier quarter primarily due to a 90 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 9.9%, partially offset by a 20 basis-point increase in the housing gross profit margin to 16.5%. Operating income as a percentage of revenues for the nine months ended August 31, 2026 declined from the year-earlier period due to a 190 basis-point decrease in the housing gross profit margin to 15.1%, partly offset by a 10 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 9.8%.
The year-over-year increase in the housing gross profit margin for three months ended August 31, 2026 primarily reflected lower construction costs, which more than offset the effects of continued pricing pressure and higher relative land costs. For the nine months ended August 31, 2026, the housing gross profit margin decreased from the year-earlier period, mainly due to continued pricing pressure, higher land costs, and product and geographic mix, partially offset by lower construction costs. Inventory-related charges associated with housing operations for the three months ended August 31, 2026 were $1.4 million, compared to $2.5 million for the year-earlier quarter. For the nine months ended August 31, 2026, inventory-related charges associated with housing operations were $2.7 million, compared to $4.4 million for the corresponding 2025 period. The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for the three months ended August 31, 2026 was mainly due to a decrease in operating leverage from lower housing revenues.
FINANCIAL SERVICES REPORTING SEGMENT
The following table presents a summary of selected financial and operational data for our financial services reporting segment (dollars in thousands):
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 2026 2025
Revenues $ 4,751 $ 6,012 $ 15,031 $ 15,617
Expenses (1,464) (1,580) (4,507) (4,689)
Equity in income of unconsolidated joint venture
4,094 4,254 9,057 13,445
Pretax income $ 7,381 $ 8,686 $ 19,581 $ 24,373
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 2026 2025
Total originations (a):
Loans 2,010 2,314 5,331 6,630
Principal $ 812,099 $ 917,658 $ 2,105,042 $ 2,717,138
Percentage of homebuyers using KBHS 85 % 83 % 83 % 86 %
Average FICO score 742 740 742 743
Loans sold (a):
Loans sold to GR Alliance 1,536 1,786 4,107 5,021
Principal $ 634,695 $ 712,367 $ 1,653,980 $ 2,034,811
Loans sold to third parties 510 469 1,207 1,457
Principal $ 186,307 $ 189,837 $ 429,040 $ 631,511
(a)Loan originations and sales occurred within KBHS.
Revenues. Financial services revenues for the three months ended August 31, 2026 declined 21% year over year, reflecting lower title services revenues and insurance commission revenues. For the nine months ended August 31, 2026, financial services revenues decreased 4% from the corresponding year-earlier period, as lower title services revenues were partly offset by higher insurance commission revenues. Lower title services revenues in both periods primarily reflected fewer homes delivered in the 2026 periods. Insurance commission revenues decreased in the three-month period and increased in the nine-month period, primarily due to changes in estimated future renewal commissions.
Pretax income. Financial services pretax income for the three months ended August 31, 2026 decreased 15% from the year-earlier period, mainly reflecting lower results from title and insurance operations. Our equity in income of KBHS declined 4% year over year due to a decline in KBHS' income that primarily reflected fewer loans originated resulting from the lower number of homes we delivered, partially offset by a higher percentage of our homebuyers using KBHS. The impact of the lower loan volume on KBHS' income was partly offset by a $1.2 million gain in the fair value of IRLCs in the three months ended August 31, 2026, compared to a $3.0 million loss for the year-earlier period.
For the nine months ended August 31, 2026, financial services pretax income declined 20% from the corresponding year-earlier period, primarily due to a 33% decrease in the equity in income of our unconsolidated joint venture, KBHS. Our equity in income of KBHS declined from the corresponding year-earlier period due to a decrease in KBHS' income that mainly reflected fewer loans originated as a result of both the lower number of homes we delivered and a lower percentage of our homebuyers using KBHS. The impact of the lower loan volume for the nine months ended August 31, 2026 was partially offset by a $2.2 million gain in the fair value of IRLCs, compared to a $6.6 million loss in the corresponding period of 2025.
Further information regarding our investments in unconsolidated joint ventures, including KBHS, is provided in Note 9 - Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report.
INCOME TAXES
Income Tax Expense. Our income tax expense and effective tax rates were as follows (dollars in thousands):
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 2026 2025
Income tax expense $ 15,900 $ 33,400 $ 32,700 $ 97,700
Effective tax rate 19.6 % 23.3 % 20.6 % 23.0 %
Our effective tax rate for the three months ended August 31, 2026 decreased from the year-earlier period, primarily due to an increase in excess benefits from stock based compensation as well as the lower pretax income we generated for the 2026 period, which heightened their relative impact. For the nine months ended August 31, 2026, our effective tax rate decreased from the year-earlier period, mainly due to the lower pretax income, which resulted in a higher relative impact of excess tax benefits from stock-based compensation in the 2026 period, partly offset by a higher relative impact of non-deductible executive compensation expense.
On July 4, 2025, the OBBBA was signed into law. Among its provisions is the repeal of Section 45L tax credits for new energy-efficient homes delivered after June 30, 2026. As a result, our income tax expense and effective tax rate for the three months and nine months ended August 31, 2026 reflected the lower Section 45L benefit for the homes delivered after the effective date. The other tax-related provisions of the OBBBA did not have a material impact on our consolidated financial statements.
Further information regarding our income taxes is provided in Note 13 - Income Taxes in the Notes to Consolidated Financial Statements in this report.
NON-GAAP FINANCIAL MEASURES
This report contains information about our adjusted housing gross profit margin, which is not calculated in accordance with GAAP. We believe this non-GAAP financial measure is relevant and useful to investors in understanding our operations, and may be helpful in comparing us with other companies in the homebuilding industry to the extent they provide similar information. However, because it is not calculated in accordance with GAAP, this non-GAAP financial measure may not be completely comparable to other companies in the homebuilding industry and, thus, should not be considered in isolation or as an alternative to operating performance and/or financial measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement the most directly comparable GAAP financial measure in order to provide a greater understanding of the factors and trends affecting our operations.
Adjusted Housing Gross Profit Margin. The following table reconciles our housing gross profit margin calculated in accordance with GAAP to the non-GAAP financial measure of our adjusted housing gross profit margin (dollars in thousands):
Three Months Ended August 31, Nine Months Ended August 31,
2026 2025 2026 2025
Housing revenues $ 1,292,350 $ 1,613,975 $ 3,470,076 $ 4,525,732
Housing construction and land costs (1,078,590) (1,320,611) (2,923,732) (3,658,080)
Housing gross profits 213,760 293,364 546,344 867,652
Add: Inventory-related charges (a)
2,986 11,338 10,720 18,351
Adjusted housing gross profits $ 216,746 $ 304,702 $ 557,064 $ 886,003
Housing gross profit margin as a percentage of housing revenues 16.5 % 18.2 % 15.7 % 19.2 %
Adjusted housing gross profit margin as a percentage of housing revenues 16.8 % 18.9 % 16.1 % 19.6 %
(a) Represents inventory impairment and land option contract abandonment charges associated with housing operations.
Adjusted housing gross profit margin is a non-GAAP financial measure, which we calculate by dividing housing revenues less housing construction and land costs excluding housing inventory impairment and land option contract abandonment charges (as applicable) recorded during a given period, by housing revenues. The most directly comparable GAAP financial measure is housing gross profit margin. We believe adjusted housing gross profit margin is a relevant and useful financial measure to investors in evaluating our performance as it measures the gross profits we generated specifically on the homes delivered during a given period. This non-GAAP financial measure isolates the impact that the housing inventory impairment and land option contract abandonment charges have on housing gross profit margins, and allows investors to make comparisons with our competitors that adjust housing gross profit margins in a similar manner. We also believe investors will find adjusted housing gross profit margin relevant and useful because it represents a profitability measure that may be compared to a prior period without regard to variability of housing inventory impairment and land option contract abandonment charges. This financial measure assists us in making strategic decisions regarding community location and product mix, product pricing and construction pace.
Liquidity and Capital Resources
Overview. We have funded our homebuilding and financial services activities over the last several years with:
•internally generated cash flows;
•public issuances of debt securities;
•borrowings under the Credit Facility;
•the Term Loan;
•land option contracts and other similar contracts and seller notes;
•public issuances of our common stock; and
•letters of credit and performance bonds.
We manage our use of cash in the operation of our business to support the execution of our primary strategic goals. Over the past several years, we have primarily used cash for:
•land acquisitions and land development;
•home construction;
•operating expenses;
•principal and interest payments on notes payable;
•repayments of borrowings under the Credit Facility;
•dividends paid to stockholders; and
•repurchases of our common stock.
We ended the 2026 third quarter with total liquidity of $942.4 million, including cash and cash equivalents and $783.4 million of available capacity under the Credit Facility, with $415.0 million of cash borrowings outstanding. Cash and cash equivalents totaled $159.0 million at August 31, 2026, compared to $228.6 million at November 30, 2025. Cash equivalents included in the total were $35.7 million at August 31, 2026 and $152.6 million at November 30, 2025, and were mainly invested in interest-bearing bank deposit accounts and money market funds. Based on our financial position as of August 31, 2026, and our business forecast as discussed below under "Outlook," we have no material concerns related to our liquidity. We believe that our existing cash and cash equivalents, our anticipated cash flows from operations and amounts available under our Credit Facility will be sufficient to fund our anticipated operating and land-related investment needs for at least the next 12 months.
Cash Requirements. In the nine months ended August 31, 2026, there have been no significant changes in our cash requirements from those reported in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our Annual Report on Form 10-K for the year ended November 30, 2025.
Investments in Land and Land Development. Our investments in land and land development for the nine months ended August 31, 2026 totaled $1.79 billion, an 8% decrease compared to the year-earlier period; the prior period included our purchase of two sizable land parcels in our Southwest homebuilding reporting segment. In the nine months ended August 31, 2026, land acquisition expenditures, which are included in our investments in land and land development, decreased to $650.3 million, or 36% of our total investments, compared to $771.3 million, or 40% of our total investments, in the corresponding period of 2025. While land and land development investments were made in all of our homebuilding reporting segments during the nine months ended August 31, 2026 and 2025, our West Coast segment comprised 47% and 51%, respectively, of our total investments.
In the 2026 fourth quarter, we intend to continue to invest in and develop land positions within attractive submarkets and selectively acquire or control additional land that meets our investment standards, depending significantly on market conditions and available opportunities that meet our investment return standards.
The following table presents the number of lots we owned or controlled under land option contracts and other similar contracts and the carrying value of inventory by homebuilding reporting segment (dollars in thousands):
August 31, 2026 November 30, 2025 Variance
Segment Lots Carrying Value Lots Carrying Value Lots Carrying Value
West Coast 20,471 $ 3,214,169 20,750 $ 3,048,056 (279) $ 166,113
Southwest 10,165 1,173,794 11,142 969,260 (977) 204,534
Central 18,967 757,883 20,614 758,962 (1,647) (1,079)
Southeast 11,978 835,336 12,106 894,524 (128) (59,188)
Total 61,581 $ 5,981,182 64,612 $ 5,670,802 (3,031) $ 310,380
The carrying value of lots we owned or controlled under land option contracts and other similar contracts at August 31, 2026 increased 5% from November 30, 2025, mainly due to land and land development investments during the nine months ended August 31, 2026. The number of lots we owned or controlled as of August 31, 2026 decreased 5% from November 30, 2025, largely reflecting homes delivered and our strategic abandonment of 8,777 previously controlled lots, partly offset by newly optioned lots during the period. The number of lots in inventory as of August 31, 2026 included 9,549 lots under contract where the associated deposits were refundable at our discretion, compared to 7,715 of such lots at November 30, 2025. Our lots controlled under land option contracts and other similar contracts as a percentage of total lots was 40% at August 31, 2026, compared to 43% at November 30, 2025. Generally, this percentage fluctuates with our decisions to control (or abandon) lots under land option contracts and other similar contracts or to purchase (or sell owned) lots based on available opportunities and our investment return standards.
Land Option Contracts and Other Similar Contracts. As discussed in Note 8 - Variable Interest Entities in the Notes to Consolidated Financial Statements in this report, our land option contracts and other similar contracts generally do not contain provisions requiring our specific performance. Our decision to exercise a particular land option contract or other similar contract depends on the results of our due diligence reviews and ongoing market and project feasibility analysis that we conduct after entering into such a contract. In some cases, our decision to exercise a land option contract or other similar contract may be conditioned on the land seller obtaining necessary entitlements, such as zoning rights and environmental and development approvals, and/or physically developing the underlying land by a pre-determined date. We typically have the ability not to exercise our rights to the underlying land for any reason and, if applicable, forfeit our deposits without further penalty or obligation to the sellers. If we were to acquire all the land we had under land option contracts and other similar contracts at August 31, 2026, we estimate the remaining purchase price to be paid would be as follows: 2026 - $358.3 million; 2027 - $859.0 million; 2028 - $297.3 million; 2029 - $98.5 million; 2030 - $4.0 million; and thereafter - $0.
Liquidity. The table below summarizes our cash and cash equivalents, and total liquidity (in thousands):
August 31,
2026 		November 30,
2025
Cash and cash equivalents $ 159,018 $ 228,614
Credit Facility commitment 1,200,000 1,200,000
Borrowings outstanding under the Credit Facility (415,000) -
Letters of credit outstanding under the Credit Facility (1,610) (1,610)
Credit Facility availability 783,390 1,198,390
Total liquidity $ 942,408 $ 1,427,004
Capital Resources. Our notes payable consisted of the following (in thousands):
August 31,
2026 		November 30,
2025 		Variance
Credit Facility $ 415,000 $ - $ 415,000
Term Loan 358,640 358,317 323
Senior notes 1,333,070 1,331,584 1,486
Mortgages and land contracts due to land sellers and other loans 2,435 3,076 (641)
Total
$ 2,109,145 $ 1,692,977 $ 416,168
Our financial leverage, as measured by the ratio of debt to capital, increased 540 basis points to 35.7% at August 31, 2026, compared to 30.3% at November 30, 2025 due to cash borrowings outstanding under the Credit Facility. The ratio of debt to capital is calculated by dividing notes payable by capital (notes payable plus stockholders' equity).
LOC Facility. We maintain the LOC Facility to obtain letters of credit from time to time in the ordinary course of operating our business. Under the LOC Facility, which expires on February 13, 2028, we may issue up to $100.0 million of letters of credit. As of August 31, 2026 and November 30, 2025, we had letters of credit outstanding under the LOC Facility of $53.5 million and $68.2 million, respectively.
Performance Bonds. As discussed in Note 16 - Commitments and Contingencies in the Notes to Consolidated Financial Statements in this report, we had $1.35 billion and $1.37 billion of performance bonds outstanding at August 31, 2026 and November 30, 2025, respectively.
Unsecured Revolving Credit Facility. We have a $1.20 billion Credit Facility that will mature on November 12, 2030. The Credit Facility contains an uncommitted accordion feature under which its aggregate principal amount of available loans can be increased to a maximum of $1.70 billion under certain conditions, including obtaining additional bank commitments. The amount of the Credit Facility available for cash borrowings and the issuance of letters of credit depends on the total cash borrowings and letters of credit outstanding under the Credit Facility and the maximum available amount under the terms of the Credit Facility. As of August 31, 2026, we had $415.0 million of cash borrowings and $1.6 million of letters of credit outstanding under the Credit Facility. The Credit Facility is further described in Note 14 - Notes Payable in the Notes to Consolidated Financial Statements in this report.
Under the terms of the Credit Facility and the Term Loan, we are required, among other things, to maintain compliance with various covenants, including financial covenants regarding our consolidated tangible net worth, Leverage Ratio, and either an Interest Coverage Ratio or minimum liquidity level, each as defined therein. Our compliance with these financial covenants is measured by calculations and metrics that are specifically defined or described by the terms of the Credit Facility and the Term Loan and can differ in certain respects from comparable GAAP or other commonly used terms. The financial covenant requirements under the Credit Facility and the Term Loan are set forth below:
•Consolidated tangible net worth - We must maintain a consolidated tangible net worth at the end of any fiscal quarter greater than or equal to the sum of (a) $2.70 billion, plus (b) an amount equal to 50% of the aggregate of the cumulative consolidated net income for each fiscal quarter commencing after August 31, 2025 and ending as of the last day of such fiscal quarter (though there is no reduction if there is a consolidated net loss in any fiscal quarter), plus (c) an amount equal to 50% of the cumulative net proceeds we receive from the issuance of our capital stock after August 31, 2025.
•Leverage Ratio - We must also maintain a Leverage Ratio of less than or equal to .60 at the end of each fiscal quarter. The Leverage Ratio is calculated as the ratio of our consolidated total indebtedness to the sum of consolidated total indebtedness and consolidated tangible net worth, all as defined under the Credit Facility and the Term Loan.
•Interest Coverage Ratio or liquidity - We are also required to maintain either (a) an Interest Coverage Ratio of greater than or equal to 1.50 at the end of each fiscal quarter; or (b) a minimum level of liquidity, but not both. The Interest Coverage Ratio is the ratio of our consolidated adjusted EBITDA to consolidated interest incurred, each as defined under the Credit Facility and the Term Loan, in each case for the previous 12 months. Our minimum liquidity is required to be greater than or equal to consolidated interest incurred, as defined under the Credit Facility and the Term Loan, for the four most recently ended fiscal quarters in the aggregate.
In addition, under the Credit Facility and the Term Loan, our equity investments in joint ventures and non-guarantor subsidiaries and other unconsolidated entities as of the end of each fiscal quarter cannot exceed the sum of (a) $104.8 million and (b) 20% of consolidated tangible net worth. Further, for so long as we do not hold an investment grade rating, as defined under the Credit Facility and the Term Loan, the Credit Facility and the Term Loan do not permit our borrowing base indebtedness, which, subject to certain exceptions, is the aggregate principal amount of our and certain of our subsidiaries' outstanding indebtedness for borrowed money and non-collateralized financial letters of credit, to be greater than our borrowing base (a measure relating to our inventory and unrestricted cash assets).
The covenants and other requirements under the Credit Facility and the Term Loan represent the most restrictive covenants that we are subject to with respect to our notes payable. The following table summarizes the financial covenants and other requirements under the Credit Facility and the Term Loan, and our actual levels or ratios (as applicable) with respect to those covenants and other requirements, in each case as of August 31, 2026:
Financial Covenants and Other Requirements Covenant Requirement Actual
Consolidated tangible net worth > $2.82 billion $3.76 billion
Leverage Ratio <</span> .600 .345
Interest Coverage Ratio (a) > 1.500 3.863
Minimum liquidity (a) > $112.7 million $942.4 million
Investments in joint ventures and non-guarantor subsidiaries <</span> $856.9 million $472.0 million
Borrowing base in excess of borrowing base indebtedness (as defined) n/a $2.07 billion
(a) Under the terms of the Credit Facility and the Term Loan, we are required to maintain either a minimum Interest Coverage Ratio or a minimum level of liquidity.
The indenture governing our senior notes does not contain any financial covenants. Subject to specified exceptions, the indenture contains certain restrictive covenants that, among other things, limit our ability to incur secured indebtedness, or engage in sale-leaseback transactions involving property above a certain specified value. In addition, the indenture contains certain limitations related to mergers, consolidations, and sales of assets.
As of August 31, 2026, we were in compliance with the applicable terms of all of our covenants and other requirements under the Credit Facility, the Term Loan, the senior notes, the indenture, the LOC Facility and the mortgages and land contracts due to land sellers and other loans. Our ability to access the Credit Facility for cash borrowings and letters of credit and our ability to secure future debt financing depend, in part, on our ability to remain in such compliance. Our ability to access the Credit Facility's full borrowing capacity, as well as the LOC Facility's full issuance capacity, also depends on the ability and willingness of the applicable lenders and financial institutions, including any substitute or additional lenders and financial institutions, to meet their commitments to fund loans, extend credit or provide payment guarantees to or for us under those instruments.
There are no agreements that restrict our payment of dividends other than the Credit Facility and the Term Loan, which would restrict our payment of certain dividends, such as cash dividends on our common stock, if a default under the Credit Facility or the Term Loan exists at the time of any such payment, or if any such payment would result in such a default (other than dividends paid within 60 days after declaration, if there was no default at the time of declaration).
Depending on available terms, we finance certain land acquisitions with purchase-money financing from land sellers or with other forms of financing from third parties. At August 31, 2026, we had outstanding mortgages and land contracts due to land sellers and other loans payable in connection with such financing of $2.4 million, secured primarily by the underlying property, which had an aggregate carrying value of $22.7 million.
Senior Unsecured Term Loan. We have a $360.0 million Term Loan with the lenders party thereto that will mature on November 12, 2029, or earlier if we secure borrowings under the Credit Facility without similarly securing the Term Loan (subject to certain exceptions). The Term Loan is further described in Note 14 - Notes Payable in the Notes to Consolidated Financial Statements in this report.
Unconsolidated Joint Ventures. As discussed in Note 9 - Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report, we have investments in unconsolidated joint ventures in various markets where our homebuilding operations are located. As of August 31, 2026, two of our unconsolidated joint ventures had borrowings outstanding with third-party lenders, secured by the underlying property and related project assets.
Credit Rating. Our credit ratings are periodically reviewed by rating agencies. In July 2026, S&P Global Ratings downgraded our corporate credit rating to BB from BB+ and changed its rating outlook to negative from stable based primarily on the impact of persistent macroeconomic headwinds and softer homebuilding business conditions on our financial performance.
Consolidated Cash Flows. The following table presents a summary of net cash provided by (used in) our operating, investing and financing activities (in thousands):
Nine Months Ended August 31,
2026 2025
Net cash provided by (used in):
Operating activities $ (228,880) $ 31,840
Investing activities (15,347) (42,237)
Financing activities 173,842 (256,498)
Net decrease in cash and cash equivalents
$ (70,385) $ (266,895)
Operating Activities. Generally, our net operating cash flows fluctuate mainly based on changes in our inventories and our profitability. Our net cash used by operating activities for the nine months ended August 31, 2026 mainly reflected a net increase in inventories of $326.5 million, a net decrease in accounts payable, accrued expenses and other liabilities of $49.2 million, and a net increase in receivables of $32.7 million, partly offset by net income of $126.1 million. In the nine months ended August 31, 2025, our net cash provided by operating activities primarily reflected net income of $327.3 million and a net decrease in receivables of $7.2 million, partly offset by a net increase in inventories of $330.0 million and a net decrease in accounts payable, accrued expenses and other liabilities of $63.8 million.
Investing Activities. In the nine months ended August 31, 2026, net cash used in investing activities consisted of $32.5 million for net purchases of property and equipment and $19.4 million of contributions to unconsolidated joint ventures, partially offset by $20.0 million of proceeds from the sale of our investment in the equity securities of a privately held technology company and a $16.6 million return of investments in unconsolidated joint ventures. In the nine months ended August 31, 2025, our net cash used in investing activities included $34.6 million for net purchases of property and equipment and $10.6 million for contributions to unconsolidated joint ventures, partly offset by a $3.0 million return of investments in unconsolidated joint ventures.
Financing Activities. In the nine months ended August 31, 2026, cash was provided by $415.0 million of net borrowings under the Credit Facility and $5.7 million of issuances of common stock under employee stock plans. The cash provided was partly offset by stock repurchases and excise taxes paid of $180.1 million, dividend payments on our common stock of $47.7 million, and tax payments associated with stock-based compensation awards of $18.3 million. In the nine months ended August 31, 2025, our uses of cash included stock repurchases of $438.5 million, dividend payments on our common stock of $52.8 million and tax payments associated with stock-based compensation awards of $15.9 million. The cash used was partially offset by $250.0 million of net borrowings under the Credit Facility and $.7 million of issuances of common stock under employee stock plans.
Dividends. In the 2026 and 2025 third quarters, our board of directors declared, and we paid, a quarterly cash dividend of $.25 per share. Quarterly dividends declared and paid during each of the nine-month periods ended August 31, 2026 and 2025 totaled $.75 per share. The declaration and payment of future cash dividends on our common stock, whether at current levels or at all, are at the discretion of our board of directors, and depend upon, among other things, our expected future earnings, cash flows, capital requirements, access to external financing, debt structure and any adjustments thereto, operational and financial investment strategy and general financial condition, as well as general business conditions.
Share Repurchase Program. On October 9, 2025, our board of directors authorized us to repurchase up to $1.00 billion of our outstanding common stock. As of November 30, 2025, there was $900.0 million of remaining availability under this share repurchase authorization. In the nine months ended August 31, 2026, we repurchased 3,104,677 shares of our common stock at a total cost of $175.0 million. Repurchases under the authorization may occur periodically through open market purchases, privately negotiated transactions or otherwise, with the timing and amount at management's discretion and dependent on market, business and other conditions. This share repurchase authorization will continue in effect until fully used or earlier terminated or suspended by our board of directors, and does not obligate us to purchase any shares. As of August 31, 2026, there was $725.0 million of remaining availability under this share repurchase authorization.
Shelf Registration. On July 14, 2026, we filed the 2026 Shelf Registration with the SEC. The 2026 Shelf Registration registers the offering of securities that we may issue from time to time in amounts to be determined. Our ability to issue securities is subject to market conditions and, with respect to debt securities, other factors impacting our borrowing capacity. The 2026 Shelf Registration replaced our previous such registration statement filed with the SEC on July 10, 2023. We have not made any offerings of securities under the 2026 Shelf Registration.
As stated above, we believe we have adequate capital resources and sufficient access to external financing sources to satisfy our current and reasonably anticipated requirements for funds to conduct our operations and meet other needs in the ordinary course of our business. For the remainder of 2026, we expect to use or redeploy our cash resources or cash borrowings under the Credit Facility to support our business within the context of prevailing market conditions. During this time, we may also engage in capital markets, bank loan, project debt or other financial transactions, including the repurchase of debt or equity securities 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 Credit Facility or the LOC 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 or loans to mature or expire. Our ability to engage in such transactions may be constrained by volatile or tight economic, capital, credit and/or financial market conditions or other factors, including those described below under "Outlook," and/or our liquidity, leverage and net worth, and we can provide no assurance as to successfully completing, the costs of, or the operational limitations arising from any one or series of such transactions.
Supplemental Guarantor Financial Information
As of August 31, 2026, we had $1.34 billion in aggregate principal amount of outstanding senior notes, $415.0 million of borrowings outstanding under the Credit Facility and $360.0 million in aggregate principal amount of borrowings outstanding under the Term Loan. Our obligations to pay principal and interest on the senior notes and borrowings, if any, under the Credit Facility and the Term Loan are guaranteed on a joint and several basis by our Guarantor Subsidiaries. Our other subsidiaries, including all of our subsidiaries associated with our financial services operations, do not guarantee any such indebtedness (collectively, "Non-Guarantor Subsidiaries"), although we may cause a Non-Guarantor Subsidiary to become a Guarantor Subsidiary if we believe it to be in our or the relevant subsidiary's best interest. See Note 14 - Notes Payable in the Notes to Consolidated Financial Statements in this report for additional information regarding the terms of our senior notes, the Credit Facility and the Term Loan.
The guarantees are full and unconditional, and the Guarantor Subsidiaries are 100% owned by us. The guarantees are senior unsecured obligations of each of the Guarantor Subsidiaries and rank equally in right of payment with all unsecured and unsubordinated indebtedness and guarantees of such Guarantor Subsidiaries. The guarantees are effectively subordinated to any secured indebtedness of such Guarantor Subsidiaries to the extent of the value of the assets securing such indebtedness, and structurally subordinated to indebtedness and other liabilities of Non-Guarantor Subsidiaries.
Pursuant to the terms of the indenture governing the senior notes and the terms of the Credit Facility and the Term Loan, if any of the Guarantor Subsidiaries ceases to be a "significant subsidiary" as defined by Rule 1-02 of Regulation S-X using a 5% rather than a 10% threshold (provided that the assets of our Non-Guarantor Subsidiaries do not in the aggregate exceed 10% of an adjusted measure of our consolidated total assets), it will be automatically and unconditionally released and discharged from its guaranty of the senior notes, the Credit Facility and the Term Loan so long as all guarantees by such Guarantor Subsidiary of any other of our or our subsidiaries' indebtedness are terminated at or prior to the time of such release.
The following tables present summarized financial information for KB Home and the Guarantor Subsidiaries on a combined basis, excluding unconsolidated joint ventures and after the elimination of (a) intercompany transactions and balances between KB Home and the Guarantor Subsidiaries and (b) equity in earnings from and investments in the Non-Guarantor Subsidiaries. See Note 9 - Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report for additional information regarding our unconsolidated joint ventures.
August 31,
2026 		November 30,
2025
Summarized Balance Sheet Data (in thousands)
Assets
Cash $ 119,843 $ 170,338
Inventories 5,633,436 5,311,390
Amounts due from Non-Guarantor Subsidiaries 236,066 278,680
Total assets 6,632,617 6,360,871
August 31,
2026 		November 30,
2025
Summarized Balance Sheet Data (in thousands)
Liabilities and Stockholders' Equity
Notes payable $ 2,109,145 $ 1,692,977
Amounts due to Non-Guarantor Subsidiaries 461,472 438,762
Total liabilities 3,228,296 2,831,933
Stockholders' equity 3,404,321 3,528,938
Summarized Statement of Operations Data (in thousands) Nine Months Ended
August 31, 2026
Revenues $ 3,164,958
Construction and land costs (2,648,617)
Selling, general and administrative expenses (401,080)
Interest income from Non-Guarantor Subsidiaries 13,736
Pretax income 135,079
Net income 107,879
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements requires the use of judgment in the application of accounting policies and estimates of uncertain matters. There have been no significant changes to our critical accounting policies and estimates during the three months ended August 31, 2026 from those disclosed in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our Annual Report on Form 10-K for the year ended November 30, 2025.
Recent Accounting Pronouncements
There are no recent accounting pronouncements that are expected to have a material impact on our consolidated financial statements.
Outlook
We expect housing market conditions to remain challenging through the 2026 fourth quarter and into 2027 as higher mortgage loan interest rates, which increased further during the 2026 third quarter, continue to challenge affordability and, along with rising resale inventory levels, contribute to pricing pressure across many of our served markets. In addition, consumer confidence and homebuyer demand are expected to be negatively affected by persistent inflation, attributable in part to rising commodity and oil prices, heightened macroeconomic uncertainties and geopolitical tensions, including the military conflicts in the Middle East and in Ukraine. To the extent these conditions continue or worsen, net order activity, including net orders for our Built to Order homes, could remain subdued. As we navigate these near-term headwinds, we remain focused on executing our Built to Order strategy, balancing sales pace, pricing, and profitability, and selectively investing in land and land development to support future growth. We continue to believe that favorable demographic trends, an ongoing structural undersupply of homes and the appeal of new, personalized energy-efficient homes support the long-term outlook for our business.
Entering the 2026 fourth quarter, we plan to maintain the simplified sales approach we implemented more than a year ago. Additionally, while selling through our existing inventory, we will continue to emphasize sales of our Built to Order homes. Our mix of net orders in the 2026 first, second and third quarters was predominantly Built to Order. As a result, we believe we are positioned to achieve our goal of a 2026 full-year mix of Built to Order homes delivered within our historical average of 60% to 70%, compared to 56% for 2025.
The number of homes in our backlog at August 31, 2026 was up 2% from August 31, 2025, marking the first year-over-year increase in our ending backlog in four years. Among other benefits, a larger backlog of Built to Order homes generally provides us with greater visibility into future deliveries. We also intend to continue focusing on improving our build times and tightly managing our direct construction costs. However, as our average build time for the 2026 third quarter was the lowest in more than a decade, we expect the pace of future improvement to be more gradual relative to recent periods.
Based on the present and expected housing market environment and our results through the first nine months of 2026, we currently expect our housing gross profit margin for the 2026 fourth quarter to decline sequentially from the third quarter. Accordingly, we have modestly lowered and narrowed our full-year housing gross profit margin outlook compared to our prior outlook.
We have maintained a strong financial position and financial flexibility, supported by our Credit Facility, which we expanded at the end of our 2025 fiscal year. For the 2026 fourth quarter, in order to strengthen our long-term growth platform, we intend, subject to the operating environment and available opportunities, to acquire and control additional land positions within attractive submarkets in our served markets that meet our investment standards. We also plan to continue to develop land we own in a manner that prioritizes capital efficiency, including developing lots in smaller phases, where possible, and aligning development with our starts pace to optimally manage our inventory of finished lots. Reflecting our ongoing investments in land and land development, our ending community count for the 2026 third quarter increased 5% year over year to 277.
Consistent with our balanced approach to capital allocation, we plan to continue returning capital to our stockholders, primarily through additional share repurchases. As of August 31, 2026, we had $725.0 million remaining under our current board of directors share repurchase authorization. This provides us with the opportunity to repurchase our common stock in the 2026 fourth quarter, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our common stock, and the housing market and general economic conditions.
Based on the foregoing, we have updated the 2026 full-year projections that were previously disclosed in our Quarterly Report on Form 10-Q for the quarterly period ended May 31, 2026. Our present outlook for the 2026 fourth quarter and full-year for certain metrics is as follows:
2026 Fourth Quarter
•We expect deliveries to be in the range of 3,000 to 3,500, compared to 3,619 for the 2025 fourth quarter.
•We expect to generate housing revenues in the range of $1.45 billion to $1.65 billion, compared to $1.68 billion for the corresponding 2025 period.
•We expect our housing gross profit margin will be in the range of 16.0% to 16.6%, assuming no inventory-related charges, compared to 17.8% for the corresponding 2025 quarter.
•We expect our selling, general and administrative expenses as a percentage of housing revenues to be in the range of 10.3% to 10.9%, compared to 10.0% for the 2025 fourth quarter.
•We expect our effective tax rate will be approximately 26.0%, compared to 21.4% for the year-earlier quarter.
•We expect our ending community count will be in the range of 270 to 275, compared to 271 for the 2025 fourth quarter.
•We expect to repurchase up to $50.0 million of our common stock.
2026 Full Year
•We expect deliveries to be in the range of 10,500 to 11,000, compared to 12,902 for 2025.
•We expect our housing revenues to be in the range of $4.90 billion to $5.10 billion, compared to $6.21 billion for 2025.
•We expect our housing gross profit margin will be in the range of 16.0% to 16.2%, assuming no inventory-related charges, compared to 19.1% for 2025.
•We expect our selling, general and administrative expenses as a percentage of housing revenues to be in the range of 11.5% to 11.7%, compared to 10.4% for 2025.
•We expect our effective tax rate will be approximately 23.0%, compared to 22.6% for 2025.
In addition to factors discussed elsewhere in this report, our future performance and the strategies we implement (and adjust or refine as necessary or appropriate) will depend significantly on economic, employment, homebuilding industry and capital, credit and financial market conditions, as well as a fairly stable and constructive political and regulatory environment, particularly in regard to housing and mortgage loan financing policies. This includes U.S. trade policy and any tariffs, and other countries' countervailing measures, including those recently established between the U.S. and Canada, that remain in effect on raw building materials such as steel, lumber, drywall and concrete, and/or finished products. Though certain tariffs
and countervailing measures instituted in 2025 have affected pricing in adjacent sectors, we have not experienced significant cost increases or raw material/finished product availability constraints to date. However, if U.S. or foreign governments take actions that cause tariff-related cost or availability pressures to escalate or expand, we could experience higher construction costs and/or supply chain disruptions that would affect our business and consolidated financial statements in future reporting periods.
We also believe the ongoing significant volatility in global energy, credit and capital markets, international shipping instability, and negative consumer confidence impacts from the conflicts in the Middle East and in Ukraine, particularly if it intensifies or is prolonged, could cause supply chain disruptions, increase our land development and input costs - such as for lumber and oil- and petroleum-based building products - or reduce our revenues or housing gross profit margins beyond our ability to offset through pricing or cost-management initiatives. Additionally, as the Federal Reserve increased interest rates in September 2026 and its projections pointed to another possible increase before year-end, there can be no assurance it will implement rate reductions or other monetary policy changes in the near term that would meaningfully lower mortgage loan interest rates, increase demand or positively affect our business, results of operations or consolidated financial statements.
The potential extent and effect of these and other factors on our business is highly uncertain, unpredictable and outside our control, and our past performance, including in the three months ended August 31, 2026, should not be considered indicative of our future results on any metric or set of metrics, including, but not limited to, our net orders, backlog, revenues, margins and returns.
Forward-Looking Statements
Investors are cautioned that certain statements contained in this report, as well as some statements by us in periodic press releases and other public disclosures and some oral statements by us to securities analysts, stockholders and others during presentations, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expect," "anticipate," "intend," "plan," "believe," "estimate," "hope," and similar expressions constitute forward-looking statements. In addition, any statements that we may make or provide concerning future financial or operating performance (including without limitation future revenues, community count, homes delivered, net orders, selling prices, sales pace per new community, expenses, expense ratios, housing gross profits, housing gross profit margins, earnings or earnings per share, or growth or growth rates), future market conditions, future interest rates, and other economic conditions, ongoing business strategies or prospects, future dividends and changes in dividend levels, the value of our backlog (including amounts that we expect to realize upon delivery of homes included in our backlog and the timing of those deliveries), the value of our net orders, potential future asset acquisitions and the impact of completed acquisitions, future share issuances or repurchases, future debt issuances, repurchases or redemptions and other possible future actions are also forward-looking statements as defined by the Act. Forward-looking statements are based on our current expectations and projections about future events and are subject to risks, uncertainties, and assumptions about our operations, economic and market factors, and the homebuilding industry, among other things. These statements are not guarantees of future performance, and we have no specific policy or intention to update these statements. If we update or revise any such statement(s), no assumption should be made that we will further update or revise that statement(s) or update or revise any other such statement(s). In addition, forward-looking and other statements in this report and in other public or oral disclosures that express or contain opinions, views or assumptions about market or economic conditions; the success, performance, effectiveness and/or relative positioning of our strategies, initiatives or operational activities; and other matters, may be based in whole or in part on general observations or opinions of our management, limited or anecdotal evidence and/or business or industry experience without in-depth or any particular empirical investigation, inquiry or analysis and are not intended, and do not express, factual assertions about past events.
Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The most important risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, the following:
•general economic, employment and business conditions (including, without limitation, consumer and producer price inflation; interest rates and terms available from outside financing sources for our business and for consumer mortgage loans; and consumer confidence, either generally or specifically with respect to purchasing homes);
•material and trade costs and availability;
•disruptions in world and regional trade flows and supply chains due to the military conflicts in the Middle East and in Ukraine and/or U.S. trade policies, including the imposition of tariffs and duties on homebuilding materials and products, and related trade disputes with and retaliatory measures taken by other countries;
•population, household formations and demographic trends;
•government actions, policies, programs and regulations, including tax-related, directed at or affecting, directly or indirectly, the housing market, the homebuilding industry, or our business;
•our ability to successfully implement our business strategies, achieve any associated financial and operational targets and objectives, and manage the related challenges or risks, including those identified or discussed in this report or in any of our other public filings, presentations or disclosures;
•changes in our credit rating;
•homebuyer interest in and ability to afford to purchase our homes (including their ability to obtain typical or lender-required insurance or other policies to cover hazards to their homes);
•our debt level, including our ratio of debt to capital, and our ability to adjust our debt level and maturity schedule;
•our compliance with the terms of our Credit Facility and our Term Loan;
•the execution of any securities repurchases pursuant to our board of directors' authorization;
•impairment, land option contract abandonment or other inventory-related charges, including any stemming from decreases in the value of our land assets;
•volatility in the market price of our common stock;
•the costs we incur in connection with relocating our corporate headquarters office from Los Angeles, California to Tempe, Arizona in 2027;
•the performance of mortgage lenders for our homebuyers;
•the performance of KBHS;
•information technology failures and data security breaches; and
•other events outside of our control.
Please see our Annual Report on Form 10-K for the year ended November 30, 2025 and other filings with the SEC for a further discussion of these and other risks and uncertainties applicable to our business.
KB Home published this content on October 08, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 08, 2026 at 20:39 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]