Thanks and good afternoon. I'll remind listeners that this call contains forward-looking statements, including management's views on the company's business strategy, outlook, plans, objectives, and guidance for future periods.

Such statements reflect management's current expectations and involve assumptions and estimates that are subject to risks and uncertainties that could cause those expectations to be incorrect. You should review our filings with the SEC for a discussion of the risks, uncertainties, and other factors that could cause actual results to differ from those presented today.

All forward-looking statements must be considered in light of those related risks, and you shouldn't place undue reliance on such statements, which reflect management's current viewpoints and are not guarantees of future performance. On this call, we'll discuss non-GAAP financial measures that are not intended to be considered in isolation or as substitutes for financial information presented in accordance with GAAP.

Reconciliations of non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be found in the press release we issued this morning and in our quarterly report on Form 10-Q for the period ended March 31st, 2026, that will be filed with the SEC today. This filing will be accessible on LGI Homes' and the SEC's websites.

I'm joined today by Eric Lipar, LGI Homes' Chief Executive Officer and Chairman of the Board, and Charles Merdian, Chief Financial Officer and Treasurer. I'll now turn the call over to Eric.

Thanks, Josh. Good afternoon and welcome to our earnings call.

The first quarter played out largely as we expected, reflecting disciplined execution across the organization and steady demand for our homes. As the quarter progressed, sales activity improved across most of our markets, enabling continued backlog growth and providing a solid foundation as we have transitioned into the spring selling season.

During the quarter, we delivered a total of 916 homes. Of this total, 881 homes contributed directly to our revenue of $320 million.

The remaining 35 closings were currently or previously leased homes, the gains from which were reflected in other income. Notably, our average selling price increased nearly 3% to approximately $363,000, demonstrating our ability to preserve pricing while continuing to support affordability through targeted price discounts and financing strategies.

We ended the quarter with 142 active communities and averaged 2.2 closings per community per month. This was consistent with the pace achieved last year and in line with our expectations for the period.

During the first quarter, our top five markets on a closings per community basis were Charlotte with 4.6, Las Vegas with 3.2, Phoenix with 2.8, and Northern California and Seattle, each with 2.7 closings per community per month. Our gross margin before inventory-related charges of 20.2% and adjusted gross margin of 23.4% were both modestly above the high end of our full-year outlook, highlighting the benefits of self-development, the durability of our operating model, and the strategic choices we continue to make around pricing, incentives, and inventory management.

Sales activity during the quarter was positive. Net orders were 1,221 homes, and our cancellation rate was 45.6%, driven by buyers who are ultimately unable to qualify for financing.

Our backlog at quarter end was 1,699 homes, which represents a 63% increase year-over-year, a 22% increase sequentially, and marks the highest number of units in backlog since the first quarter of 2022. Before turning the call over to Charles, I want to emphasize our confidence in the long-term fundamentals of the housing market.

The persistent undersupply of attainable housing, coupled with favorable demographic trends, continues to support a long runway of demand for homeownership. LGI Homes' 100% spec, entry-level-focused business model, centered on providing an affordable alternative to renting, is purpose-built for this backdrop.

Underpinning that model is a strong, low-cost land pipeline, which is nearly 100% on-balance sheet, providing investors full transparency into our capital structure, driving margin durability by capturing the developer's economic value, and minimizing reliance on external partners whose priorities may not align with the long-term value creation we're focused on. These advantages underpin our confidence as we focus on execution today while investing to drive durable, long-term growth for many years to come.

With that, I'll invite Charles to provide additional details on our financial results.

Thank you, Eric, and good afternoon. Revenue in the first quarter was $319.7 million, based on 881 homes closed at an average sales price of $362,924, up 2.9% year-over-year, primarily driven by geographic mix and a lower volume of wholesale closings.

The 9% year-over-year decrease in revenue was driven by an 11.5% decline in closings, partially offset by a higher ASP. Of our total closings, 111 were through our wholesale channel, representing 12.6% of total closings, compared to 179 or 18% during the same period last year.

Our first quarter gross margin was 18.7%, in line with the guidance provided on our last call. Gross margin excluding impairment-related charges was 20.2%, compared to 21% in the same period last year.

The year-over-year decline was primarily attributable to financing incentives and discounts on older inventory, partially offset by the structural margin benefit of our self-developed lot positions and our disciplined approach to pricing. Adjusted gross margin was 23.4%, up 110 basis points sequentially, in line with our result last year, and above the guidance we provided on our last call.

Adjusted gross margin excluded $10 million of capitalized interest and $389,000 related to purchase accounting. Combined selling, general, and administrative expenses totaled $60.5 million, or 18.9% of revenue, an improvement of 200 basis points year-over-year.

Selling expenses were $32.7 million, or 10.2% of revenue, compared to 12% in the same period last year. The decrease was primarily due to overall cost efficiencies in advertising spend.

General and administrative expenses were $27.9 million, or 8.7% of revenue, compared to 8.9% in the same period last year. Other income was $4.9 million, driven primarily by the sale of 35 currently or previously leased homes, and gains coming from the sale of finished lots and commercial land.

Adjusted EBITDA increased 30% to $24.4 million, representing 7.6% of revenue, compared to 5.3% in the first quarter of last year. Pre-tax net income was $4.3 million, or 1.4% of revenue.

Effective tax rate in the first quarter was 50%, above our outlook, and reflects the timing impact of share-based compensation expenses that vested during the quarter. This impact is isolated to the first quarter, and we continue to expect our full-year effective tax rate to be approximately 26.5%, in line with our previously issued guidance.

First quarter net income was $2.2 million, or 9 cents per basic and diluted share. Excluding impairment-related charges and associated tax impacts, net income was $5.6 million, or 24 cents per basic and diluted share.

Turning to our land position, at March 31st, we owned and controlled 59,028 lots, a decrease of 12.9% year-over-year and 3% sequentially. The decrease reflects our continued strategy of aligning land investment with current sales trends, acquiring lots in markets where demand supports it, and moderating investment where inventory rebalancing is still underway.

Of our total lots, 51,193 or 86.7% were owned, and 7,835 lots or 13.3% were controlled. Of our owned lots, 34,168 were raw land or land under development, approximately 20% of which were in active development, and 80% were in engineering or undeveloped land.

Of the remaining 17,025 owned lots, 13,404 were finished vacant lots, and 3,621 were completed homes or homes under construction. During the quarter, we started 1,137 homes to support the seasonal uplift in sales trends.

I'll now turn the call over to Josh for a discussion of our capital position.

Thanks, Charles. We ended the quarter with $1.7 billion of debt outstanding, including $579 million drawn on our revolver, resulting in a debt-to-cap ratio of 44.8% and a net debt-to-cap ratio of 44%.

The slight increase sequentially reflects our typical first quarter cadence as we invest in vertical construction ahead of the spring selling season. We remain focused on reducing leverage as we work through older inventory and selectively monetize lot positions with the long-term objective of maintaining a ratio of total debt-to-cap near the midpoint of our 35% to 45% target range.

Total liquidity at the end of the quarter was $355 million, including $61 million of cash on hand and $294 million available under our revolving credit facility. We ended the quarter with over $2.1 billion in equity, equating to a book value per share of $90.50.

At this point, I'll turn the call back over to Eric.

Thanks, Josh. We are encouraged by what we're experiencing in the market as we transition into the spring selling season.

As always, affordability and consumer confidence remain important considerations for buyers, particularly in a volatile rate environment. However, despite an uptick in interest rates late in the quarter, driven by geopolitical uncertainty, recent trends have remained healthy across most of our markets, suggesting many buyers are looking beyond short-term rate movements and focusing on value and the impact of the tools we're using to support affordability.

Buyers continue to inquire about homeownership and engage with our sales teams, and we are right on track to achieve the full-year guidance metrics we provided on our last call, including annual closings between 4,600 and 5,400 homes, 150 to 160 active communities by year end, an average selling price between $355,000 and $365,000, and SG&A as a percentage of revenue between 15% and 16%. However, based on first quarter margins exceeding the range of our previous guidance, and our visibility into our growing backlog, we are raising our full-year gross margin to a range between 18.5% and 20.5%, and adjusted gross margin between 22% and 24%.

We believe we are executing well on the elements of our business that we can control, and we're positive about our ability to achieve our full-year expectations. Finally, I want to thank our team members for their ongoing dedication to our company and our customers.

Being recognized for the sixth consecutive year as a Top Workplaces USA employer based on direct employee feedback is a significant honor and underscores the strength of our culture as experienced by our people. Thank you for your hard work and for ensuring that LGI Homes is providing the best customer experience in the industry.

We'll now open the call for questions.

Hi, good afternoon and thank you for taking my questions. First one's on gross margin, better than you guys were anticipating.

You're raising your full-year guidance as well, so that's encouraging heading in the right direction. You talked about some strategic decisions around pricing incentives.

Can you just talk about what drove the better gross margin than what you were anticipating and what's driving your improved outlook for the year?

Trevor, thanks. This is Eric.

I can start. I think the drive for gross margin, a couple of different things.

One is we're seeing cost relief consistently throughout the quarter. The team's doing a great job of reducing our older inventory, our newer inventory that's closing in the quarter.

We were able to push pricing in a number of select communities across the country in the quarter. Also, geographic mix always plays a part in gross margin as well.

Because of the success in the first quarter, we thought it was prudent to raise gross margin for the year and are comfortable with that new range.

Thanks for that, Eric. Then second is on demand trends through the quarter.

Sounds like those were still relatively healthy. Did you see any impact in March as rates went up and you had the Iran conflict really start to take off?

Then how has demand trended so far in April, perhaps relative to seasonality? I'm not sure if I heard an April closings number as well as to any color so far on how April shaping up as well.

Sure. This is Eric again.

I can start with that. January and February were tougher closing months.

March recovered based on the strength of February sales. Then that strength continued into March.

We anticipate closing between 400 and 450 in April. It's still a little early.

We're waiting for all of our final underwriting and mortgage commitments to get everything scheduled over the next couple days here. Should be similar to March, similar to last year, and somewhere in that 400 to 450 range for the month of April.

I would say sales trends in April have been similar to March. There does not seem to be an impact because of war or higher rates.

There's a little bit of seasonality built in, but we continue to spend money on marketing. We're continuing seeing demand.

Our teams continue to do a great job with that customer experience, working with them on affordability, working with them on down payment, paying off debt, whatever's needed to get them into the house. It's still a challenging time.

Our teams are doing a great job dealing with those challenges of affordability and really working hard and producing results. I think relative to the last couple years are more positive.

Thanks for all the color, and good luck moving forward.

Thank you, appreciate it.

Hi, good afternoon. Thanks for taking my questions.

Just also, obviously going to be a lot of focus on the gross margins, just to kind of revisit that if I may. Eric, I think you cited cost relief, some pricing power, and some mix.

I just wanted to clarify: are those factors all kind of what played out to the upside relative to your original expectations when you provided guidance for the quarter, or was there one particular factor that was more kind of drove the upside versus others?

No, I think that's all played a factor, Michael. Also, the way we usually focus on guidance, we want being conservative with our guidance.

We weren't sure going into the year where gross margin was going to be exactly, it was probably a conservative guide to start with, which we hope it's still conservative, but comfortable with the number for now. Then also we've been talking about the strength of our balance sheet, the value of our land.

LGI does a lot of self-development across the United States, our gross margin should be higher than our peer group. We have to make sure we're capturing that developer profit inside of that gross margin as well as providing incentives to our customers to keep up with the competition.

We're still leaning into incentives, but increasing gross margin at the same time. Okay.

No, I appreciate that. Then I guess, also as we kind of think about the rest of the year for this metric, I believe you took up the adjusted gross margin outlook to a range of 22% to 24%.

In the first quarter, excluding purchase accounting, you were, closer to the high end of that range, 23.4%. How should we think about the second quarter?

How should we think about the second quarter coming up, and are there any factors that might kind of push you more towards the middle of the range, which would imply maybe the rest of the year on average being slightly below the first quarter?

Obviously we're still selling a lot of houses for the second quarter. It's going to depend on mix.

It's going to depend on other factors on pricing. Generally we expect the second quarter adjusted gross margin to be similar to the first, which is why right in the middle or just above the mid-part of our range on our annual guidance.

Great. One more if I could.

The cancellation rate being somewhat elevated the last couple of quarters, I'm just curious on what impact that might have on the operations. Certainly, this quarter you were able to achieve a solid gross margin above guidance.

That's certainly a positive, but anything we should think about in terms of maybe any impact, potentially negative or not, of the 40% plus can rate that we've seen for a couple quarters now?

I think the emphasis should be on our closing guide, and the closing guide remains the same. Our backlog is the highest since 2022, which we're excited about.

Then from this point forward, it's really just managing the pipeline. Because of the challenging affordability situations and the challenging absorption rate, we've been working with customers.

We've had a lot more flexibility of keeping the customers on the houses longer as they're saving up for down payment or working on paying off some debt, working on their credit scores. We think that's been a positive strategy and a great customer experience, as well as benefiting LGI.

As that backlog has grown, that may not be a tool that's needed. We'll look at that and analyze that community by community across the United States.

We need to continue to work with those customers, continue to follow up. Our team of 400-plus sales people across the United States, that's one of the benefits of LGI and our strength, is we have the team in place to keep in contact with these customers because we are still dealing with an affordability-challenged markets.

We believe we're up for that challenge. The team's doing a great job, leadership's doing a great job.

We anticipate cancellation rate remaining elevated for the last couple years based on historicals, but we think that's a positive and necessary for this point in the cycle.

Great. Thanks so much.

You're welcome. Thank you.

Thank you. Backlog has increased sequentially.

Has the time to close on this also increased and/or do you see any evidence that time to close could be improving?

I would say generally yes, Alex. We don't have the information in front of us, but time to close with customers saving for down payment as an example, is going to be elevated.

Then the other thing that's happening in our business, which is positive, is sales relative to the amount of houses we had under construction is increasing. We're selling more customers further out and customers that are going on houses that are under construction or going on houses that are permits in hand or permits pending that we haven't started construction on.

That's going to lengthen the time under contract to close, but we also think that's positive as well.

To kind of sort of follow up on that, are you still seeing an improvement in the move-up buyers?

I think the overall business is so focused on the entry-level buyer, it's tough to judge. We are seeing success in our Terrata brand.

It's about 10% of our community count nationwide, around 15 communities. The overall market, like we said in our scripted remarks, is still a challenging market.

We're dealing with some economic uncertainty, some consumer confidence. All those headwinds are still there.

I think where our optimism comes from is relative to expectations. We feel really good where we are, and we feel really good with our guidance for the year.

Thank you.

You're welcome.

Hey, good afternoon, everyone. The first question I had, really good gains in the Northwest average sales price, up 7%.

The West was up 5%. Was this more of a one-off thing, or is this representative of what you have sitting in backlog right now and maybe help you guys get to the high end of that ASP guide for the year?

I think it's it's community-by-community specific, Jay. We've opened up some new communities, and I think the whole industry's going to be, facing this as new communities come online.

Our lot cost is going to be higher. That's directly going to have an impact on ASP.

There is going to be a geographical mix component in our average ASP for the year. Certainly the West has the has the highest average sales price, a percentage, how the West compares to the rest of the company for the year will certainly dictate where we are in the ASP range or or even exceeding it.

I guess that's kind of my next question then. If you think about the price cost right now, it sounds like you guys are seeing a little lower direct cost, but what are you seeing for land and especially with lumber prices starting to move up?

How are you feeling about that for the balance of the year?

Haven't seen a lot of land development cost increases. With oil where it is right now, we don't expect our house costs to go down.

We don't really forecast costs going down over the next few quarters or a year, or 3 to 5 years from now. We tell all of our employees we believe house prices are going up because every component of building a house and developing land is likely to be higher over the next few quarters and next few years.

That's going to continually drive our ASP higher. You got anything to add to that, Charles?

The other thing I would add, Jay, is we have 13,000 finished vacant lots. Most of those communities will be 12 to 18 months out.

Another reason why we feel very strongly about our balance sheet, our land in inventory, because those costs are generally pretty locked already as those sections have been developed. We run about just above 20% of our ASP in finished lot costs and feel pretty confident in that number going forward and maybe some potential upside as we get into the later part of the year and next year.

Just two more for me. Eric, in your prepared comments, you talk about how the age of some of the specs you're selling now are younger.

Do you guys have any type of quantification around what the average age of your homes in the field are now, maybe versus where they were a year ago?

I don't have anything quantifiable. Charles, you got anything to add?

I think what I would say is we're running about 2,100 completed units right now, Jay, and that's a little heavier than we typically would like on our overall inventory. We have about 1,300 that we've started.

We didn't start a lot in January or February, but that trend is increasing as we're kind of getting into the summer. I think as we continue to work on our older inventory, we would expect our completed inventory units to start to work their way down into a more balance.

Typically, we would want to see about half of our inventory in complete and about half of our inventory in progress. Still a little bit heavier weighted to complete, but that's been a focus that we've been working on and we expect that to trend down.

Great. Tall task.

Thanks, guys.

Thank you.

You bet.

Hi, good afternoon. I just wanted to confirm your order ASP seems to have gone up in the quarter.

I'm just getting that from looking at the ASP in the backlog relative to last quarter. I was just wondering what drove that?

Do you guys have a big change in mix or any other explanation there?

I think the backlog ASP is elevated primarily because of the results in the West. In the West, we tend to sell further out, not as much spec inventory on the ground, so that's probably comes down a little bit in the future and consistent with our annual guidance for ASP.

Got it. In terms of the wholesale business, do you guys have any sort of breakdown as far as what percentage of the orders came from that versus just regular sales?

That I can start, and Charles can add to it. The wholesale business was 12.6% of our closings in Q1.

We may have to get back to you on the order number, unless you have it, Charles.

I would say the backlog at the end of the quarter is going to have about just over 400 units related to wholesale. We had a fairly large transaction in the fourth quarter that we booked and not a lot of activity in the first quarter, I would say the order activity in the first quarter was pretty limited from wholesale business, but we do have a decent backlog with the backlog over 400 is up 70% from last year first quarter.

We feel good about the units we have under contract going in, and then as the wholesale market kind of starts to evolve as the year goes on, we'll kind of be able to evaluate where the full-year results are going to end up.

Okay. Do you guys have any guidance or suggestions how to think about the other income line item?

Because I'm not

sure

how much visibility we have there.

Sure, Alex. It is pretty variable.

This is Charles. I think over the last few quarters we've been around the $5 million number, and that's a combination of mix of selling lots and commercial land, and also the profit from our previously leased homes.

There's a potential for that one to bounce around a little bit, but I think for modeling purposes, if you kind of look at what we've done over the last several quarters and then extend that out, that's a reasonable guess at this point.

All right. Thank you so much.

Thanks.

You're welcome.

Thanks, everyone, for participating on today's call, your interest in LGI Homes, and have a great day.