Dream Finders Homes, Inc. (DFH)

CIK: 0001825088. SIC: 1531 Operative Builders. Latest 10-K as of: 2026-02-24.

SIC breadcrumb: Construction > Building Construction General Contractors And Operative Builders > SIC 1531 Operative Builders

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1825088. Latest filing source: 0001628280-26-010837.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001825088.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-01. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001825088.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001628280-26-029073.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-01. Report date: 2026-03-31.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying financial statements and related notes thereto. Unless the context otherwise requires, the terms “Dream Finders,” “DFH,” the “Company,” “we,” “us” and “our” refer to Dream Finders Homes, Inc. and its subsidiaries.

Business Overview and Outlook

We design, build and sell homes primarily in high-growth markets using our asset-light lot acquisition strategy. Our primary focus is on constructing and selling single-family homes across entry-level, first-time move-up, second-time move-up and active adult markets, and we also sell homes to third-party investors that intend to lease the homes (“built-for-rent contracts”). To fully serve our homebuyers and capture ancillary business opportunities, we have financial services operations that offer mortgage banking solutions and title insurance—inclusive of agency and underwriting services. Additionally, we offer homeowners insurance and adjacent products to homebuyers.

Affordability remains the primary challenge for homebuyers across our markets, particularly within entry-level price points, as mortgage interest rates continue to remain elevated and macroeconomic uncertainty weighs on consumer confidence. In response, we continue to align pricing with current market conditions to promote sales activity, primarily through targeted incentives, including mortgage rate buydowns.

These actions have impacted margins and profitability, and may continue to do so in the near term as we balance pricing, incentives, and sales pace in a competitive and evolving environment. Demand has varied across our communities and remains highly sensitive to changes in mortgage interest rates and broader economic conditions.

We remain focused on executing our land-light strategy, improving operational efficiency and delivering homes that meet customer needs and differentiate us in our markets. While longer-term housing fundamentals, including supply constraints, remain positive, near-term performance may continue to be influenced by macroeconomic conditions and interest rate trends.

Recent Developments

Official Homebuilder of the Tampa Bay Rays

In the first quarter of 2026, the Company announced it will serve as the Official Homebuilder of the Tampa Bay Rays and Tampa Bay Rowdies. These partnerships are expected to provide opportunities in our new Tampa Bay market and other Florida communities, including expanding our marketing footprint.

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Table of Contents

Results of Consolidated Operations

The following table summarizes our results of operations and other financial data (in thousands, except per share amounts and percentages) for the periods indicated:

Three Months Ended

March 31,

2026

2025

Income before taxes:

Homebuilding

$

15,288 

$

62,704 

Financial services

9,069 

6,825 

Other(1)

(5,551)

1,636 

Income before taxes

18,806 

71,165 

Income tax expense

(5,246)

(16,155)

Net income

13,560 

55,010 

Net income attributable to noncontrolling interests

(304)

(107)

Net income attributable to Dream Finders Homes, Inc.

$

13,256 

$

54,903 

Other Financial Data:

Basic EPS(2)

$

0.11 

$

0.55 

Diluted EPS(2)

$

0.11 

$

0.54 

Selling, general and administrative expense %(3)

13.3 

%

12.0 

%

EBITDA (in thousands)(4)

$

70,812 

$

116,545 

EBITDA margin %(4)(5)

8.0 

%

11.8 

%

Return on participating equity(6)

12.0 

%

28.5 

%

Balance Sheet Data (as of period end):

Cash and cash equivalents

$

435,375 

$

297,468 

Revolving credit facility and other borrowings

1,158,261 

999,599 

Senior unsecured notes, net

591,693 

295,386 

Mortgage warehouse facilities

139,031 

181,457 

Total mezzanine equity

178,039 

177,519 

Total Dream Finders Homes, Inc. stockholders’ equity

1,415,001 

1,292,094 

Total equity

1,416,802 

1,293,849 

(1)Represents amounts within our corporate component (“Corporate”).

(2)Refer to Note 13, Earnings Per Share to the condensed consolidated financial statements for disclosures related to the calculation of earnings per share (“EPS”). Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the redeemable preferred stock and the associated preferred dividends.

(3)Selling, general and administrative expense (“SG&A”) of the consolidated Company calculated as a percentage of homebuilding revenues.

(4)EBITDA is a non-GAAP financial measure. For a definition of this non-GAAP financial measure and a reconciliation to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”

(5)Calculated as a percentage of total revenues.

(6)Return on participating equity is calculated as net income attributable to DFH, less redeemable preferred stock dividends, divided by average beginning and ending total Dream Finders Homes, Inc. stockholders’ equity (“participating equity”) for the trailing twelve months.

Net Income. In addition to the operational results by segment discussed below, in the first quarter of 2026, investing activities unrelated to our core homebuilding operations resulted in a net loss of approximately $1 million. Additionally, consolidated net income was negatively affected by approximately $1 million due to a higher effective tax rate primarily as a result of decreased tax benefits from stock-based compensation.

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Table of Contents

Results of Homebuilding Operations

The following table sets forth our results of homebuilding operations and other financial data (in thousands, except for percentages), as well as other operating data for the periods indicated:

Three Months Ended

March 31,

2026

2025

Change

% Change

Homebuilding revenues

$

836,659 

$

970,108 

$

(133,449)

(14)

%

Homebuilding cost of sales

715,643 

783,536 

(67,893)

(9)

%

Selling, general and administrative expense

104,931 

116,296 

(11,365)

(10)

%

Income from unconsolidated entities

— 

1 

(1)

(100)

%

Contingent consideration revaluation

— 

1,100 

(1,100)

(100)

%

Other expense, net

797 

6,471 

(5,674)

(88)

%

Income before taxes of homebuilding operations

$

15,288 

$

62,704 

$

(47,416)

(76)

%

Other Financial and Operating Data:

Home closings

1,870 

1,925 

(55)

(3)

%

Average sales price of homes closed(1)

$

447,753 

$

498,284 

$

(50,531)

(10)

%

Net sales

2,408 

2,032 

376 

19 

%

Cancellation rate

7.5

%

11.7

%

(4.2)

%

(36)

%

Homebuilding gross margin(2)

$

121,016 

$

186,572 

$

(65,556)

(35)

%

Homebuilding gross margin %(2)(3)

14.5 

%

19.2 

%

(4.7)

%

(24)

%

Adjusted homebuilding gross margin(4)

$

203,322 

$

270,100 

$

(66,778)

(25)

%

Adjusted homebuilding gross margin %(3)(4)

24.3 

%

27.8 

%

(3.5)

%

(13)

%

Homebuilding selling, general and administrative expense %(5)

12.5 

%

12.0 

%

0.5 

%

4 

%

Active communities as of period end(6)

332 

258 

74 

29 

%

Backlog - units

2,377 

2,802 

(425)

(15)

%

Backlog - value (in thousands)

$

1,105,868 

$

1,386,954 

$

(281,086)

(20)

%

Net homebuilding debt to net capitalization(4)

44.7 

%

40.4 

%

4.3 

%

11 

%

(1)Average sales price of homes closed is calculated based on homebuilding revenues, adjusted for the impact of percentage of completion revenues, excluding deposit forfeitures and land sales, over homes closed.

(2)Homebuilding gross margin is homebuilding revenues less homebuilding cost of sales.

(3)Calculated as a percentage of homebuilding revenues.

(4)Adjusted homebuilding gross margin and net homebuilding debt to net capitalization are non-GAAP financial measures. For definitions of these non-GAAP financial measures and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”

(5)Selling, general and administrative expense of homebuilding operations (“Homebuilding SG&A”) calculated as a percentage of homebuilding revenues.

(6)A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five homesites remaining to sell.

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Table of Contents

The following tables summarize home closings and average sales price (“ASP”) of homes closed by homebuilding segment for the three months ended March 31, 2026 and 2025, as well as active communities as of March 31, 2026 and 2025:

Three Months Ended

March 31, 2026

As of

March 31, 2026

Segment

Home Closings

ASP

 Active Communities

Southeast

614

$

437,746 

109

Mid-Atlantic

626

380,147 

87

Midwest

630

524,682 

136

Total

1,870

$

447,753 

332

Three Months Ended

March 31, 2025

As of

March 31, 2025

Segment

Home Closings

ASP

Active Communities

Southeast

687

$

445,901 

84

Mid-Atlantic

521

454,581 

69

Midwest

717

580,221 

105

Total

1,925

$

498,284 

258

The following table presents income before taxes (in thousands) and homebuilding gross margin (or “gross margin”) percentage by segment for the three months ended March 31, 2026 and 2025:

Three Months Ended

March 31,

2026

2025

Segment

Income Before Taxes

Gross Margin %

Income Before Taxes

Gross Margin %

Southeast

$

9,732 

15.8 

%

$

25,774 

19.5 

%

Mid-Atlantic

5,217 

15.6 

14,416 

21.6 

Midwest

339 

12.6 

22,514 

17.7 

Total

$

15,288 

14.5 

%

$

62,704 

19.2 

%

Homebuilding Revenues. The decrease in homebuilding revenues was primarily attributable to a lower consolidated ASP of homes closed, which decreased 10% when comparing the three months ended March 31, 2026 to the three months ended March 31, 2025, largely due to the higher use of sales incentives as a percentage of homebuilding revenues, which increased by 120 basis points (“bps”), or 15%, when compared to the three months ended March 31, 2025. This reduction in homebuilding revenues was also due to a decrease in home closings of 55 homes for the three months ended March 31, 2026 to 1,870 from 1,925 home closings for the three months ended March 31, 2025.

Homebuilding Gross Margin. The lower homebuilding gross margin was primarily due to the decrease in consolidated ASP of homes closed, as well as the decrease in home closings, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. In addition to the increased use of sales incentives as a percentage of homebuilding revenues, the decrease in homebuilding gross margin as a percentage of homebuilding revenues when comparing the three months ended March 31, 2026 and 2025 was primarily attributable to higher land and financing costs, partially offset by direct cost reductions and cycle-time improvements.

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Table of Contents

Southeast. Our Southeast segment homebuilding revenues for the three months ended March 31, 2026 were $273 million, a decrease of $35 million, or 11%, from $308 million for the three months ended March 31, 2025. This revenue contraction was primarily driven by a decrease in home closings of 73, or 11%, as well as a 2% decrease in the ASP of homes closed. Homebuilding gross margin percentage was 15.8% for the three months ended March 31, 2026, representing a decrease of 370 bps, or 19%, when compared to the three months ended March 31, 2025. The decrease in homebuilding gross margin percentage was mostly the result of higher land and financing costs, partially offset by direct cost reductions.

Mid-Atlantic. Our Mid-Atlantic segment homebuilding revenues for the three months ended March 31, 2026 were $232 million, a decrease of $6 million, or 3%, from $238 million for the three months ended March 31, 2025. This decline in revenue was primarily driven by a decrease in ASP of homes closed of $74,434, or 16%, and was large

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-24. Report date: 2025-12-31.

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying financial statements and related notes thereto. Unless the context otherwise requires, the terms “Dream Finders,” “DFH,” “the Company,” “we,” “us” and “our” refer to Dream Finders Homes, Inc. and its subsidiaries.

The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand our business, operations and present business environment and is provided as a supplement to, and should be read together with the sections entitled “Risk Factors,” and the financial statements and the accompanying notes included elsewhere in this Form 10-K. In addition, the statements in this discussion and analysis regarding outlook, our expectations regarding the performance of our business, anticipated financial results and liquidity are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Forward-Looking Statements” and in “Risk Factors” above. Our actual results may differ materially from those contained in or implied by any forward-looking statements."

Business Overview and Outlook

We design, build and sell homes primarily in high-growth markets using our asset-light lot acquisition strategy. Our primary focus is on constructing and selling single-family homes across entry-level, first-time move-up, second-time move-up and active adult markets, as well as homes under built-for-rent contracts. To fully serve our homebuyers and capture ancillary business opportunities, we have financial services operations that offer mortgage banking solutions and title insurance—inclusive of agency and underwriting services. Additionally, we offer homeowners insurance and adjacent products to homebuyers.

Homebuyers across our markets continue to face significant affordability challenges, especially in entry-level price points. These challenges have been exacerbated by macroeconomic uncertainty and have resulted in a decline in consumer confidence. Considering this backdrop, we remain focused on providing competitive pricing relative to market demand, predominately through providing mortgage buydown commitments and incentives that align with each sales cycle.

While we face intense competition as well as macroeconomic and political headwinds in the short term, we are committed to our land-light strategy, our operational improvements and to building a high-quality, affordable product that meets our customers’ needs and differentiates us in our markets. Our long-term outlook remains positive; we are optimistic about future housing demand, especially given the undersupply of homes in the U.S.

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Table of Contents

Recent Developments

Sawgrass Marriott

In the fourth quarter of 2025, we entered into a strategic partnership to acquire the Sawgrass Marriott Golf Resort & Spa in Ponte Vedra Beach, Florida, a 66-acre parcel adjacent to the renowned PLAYERS Stadium Course at TPC Sawgrass. This partnership provides opportunities to expand our lot pipeline and supports our future growth and profitability.

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Table of Contents

Results of Consolidated Operations

The following table summarizes our results of operations and other financial data (in thousands, except per share amounts and percentages) for the periods indicated:

Year Ended

December 31,

2025

2024

Income before taxes:

Homebuilding

$

241,575 

$

399,783 

Financial services

35,023 

31,308 

Other(1)

7,504 

6,763 

Income before taxes

284,102 

437,854 

Income tax expense

(66,698)

(97,272)

Net income

217,404 

340,582 

Net income attributable to noncontrolling interests

(207)

(5,241)

Net income attributable to Dream Finders Homes, Inc.

$

217,197 

$

335,341 

Other Financial Data:

Basic EPS(2)

$

2.19 

$

3.44 

Diluted EPS(2)

$

2.14 

$

3.34 

EBITDA (in thousands)(3)

$

493,688 

$

629,750 

EBITDA margin %(3)(4)

11.4

%

14.2

%

Return on participating equity(5)

15.3

%

29.7

%

Balance Sheet Data (as of period end):

Cash and cash equivalents

$

234,766 

$

274,384 

Revolving credit facility and other borrowings

822,296 

701,386 

Senior unsecured notes, net

591,060 

295,049 

Mortgage warehouse facilities

192,837 

289,617 

Total mezzanine equity

178,039 

169,951 

Total Dream Finders Homes, Inc. stockholders’ equity

1,424,575 

1,244,922 

Total equity

1,426,072 

1,250,409 

(1)Represents amounts within our corporate component (“Corporate”).

(2)Refer to Note 15, Earnings Per Share to our consolidated financial statements for disclosures related to the calculation of earnings per share (“EPS”). Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the redeemable preferred stock and the associated preferred dividends.

(3)EBITDA is a non-GAAP financial measure. For a definition of this non-GAAP financial measure and a reconciliation to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”

(4)Calculated as a percentage of total revenues.

(5)Return on participating equity is calculated as net income attributable to DFH, less redeemable preferred stock distributions, divided by average beginning and ending total Dream Finders Homes, Inc. stockholders’ equity (“participating equity”) for the trailing twelve months.

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Results of Homebuilding Operations

The following table sets forth our results of homebuilding operations and other financial data (in thousands, except for percentages), as well as other operating data for the periods indicated:

Year Ended

December 31,

2025

2024

Change

% Change

Homebuilding revenues

$

4,145,347 

$

4,397,877 

$

(252,530)

(6)

%

Homebuilding cost of sales

3,423,354 

3,591,483 

(168,129)

(5)

%

Selling, general and administrative expense

483,628 

394,548 

89,080 

23 

%

Loss (income) from unconsolidated entities

1 

(433)

434 

(100)

%

Contingent consideration revaluation

(9,820)

13,939 

(23,759)

(170)

%

Other expense (income), net

6,609 

(1,443)

8,052 

(558)

%

Income before taxes of homebuilding operations

$

241,575 

$

399,783 

$

(158,208)

(40)

%

Other Financial and Operating Data:

Home closings

8,608 

8,583 

25 

— 

%

Average sales price of homes closed(1)

$

477,917 

$

509,249 

$

(31,332)

(6)

%

Net sales

7,747 

6,727 

1,020 

15 

%

Cancellation rate

13.5

%

16.6

%

(3.1)

%

(19)

%

Homebuilding gross margin(2)

$

721,993 

$

806,394 

$

(84,401)

(10)

%

Homebuilding gross margin %(2)(3)

17.4 

%

18.3 

%

(0.9)

%

(5)

%

Adjusted homebuilding gross margin(4)

$

1,098,694 

$

1,186,019 

$

(87,325)

(7)

%

Adjusted homebuilding gross margin %(3)(4)

26.5 

%

27.0 

%

(0.5)

%

(2)

%

Selling, general and administrative expense %(3)

11.7 

%

9.0 

%

2.7 

%

30 

%

Active communities as of period end(5)

313 

242 

71 

29 

%

Backlog - units

1,839 

2,599 

(760)

(29)

%

Backlog - value (in thousands)

$

821,292 

$

1,304,463 

$

(483,171)

(37)

%

Net homebuilding debt to net capitalization(4)

41.8 

%

33.7 

%

8.1 

%

24 

%

(1)Average sales price of homes closed is calculated based on homebuilding revenues, adjusted for the impact of percentage of completion revenues, and excluding deposit forfeitures and land sales, over homes closed.

(2)Homebuilding gross margin is homebuilding revenues less homebuilding cost of sales.

(3)Calculated as a percentage of homebuilding revenues.

(4)Adjusted homebuilding gross margin and net homebuilding debt to net capitalization are non-GAAP financial measures. For definitions of these non-GAAP financial measures and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”

(5)A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five homesites remaining to sell.

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The following tables summarize home closings and average sales price (“ASP”) of homes closed by homebuilding segment for the year ended December 31, 2025 and 2024, as well as active communities as of December 31, 2025 and 2024:

Year Ended December 31, 2025

As of

December 31, 2025

Segment

Home Closings

ASP

Active Communities

Southeast

3,126 

$

447,667 

103 

Mid-Atlantic

2,463 

426,375 

77 

Midwest

3,019 

551,290 

133 

Total

8,608 

$

477,917 

313 

Year Ended December 31, 2024

As of

December 31, 2024

Segment

Home Closings

ASP

Active Communities

Southeast

2,838

$

484,345 

67 

Mid-Atlantic

2,594

446,667 

59 

Midwest

3,151

583,198 

116 

Total

8,583

$

509,249 

242 

The following table presents income before taxes (in thousands) and homebuilding gross margin (or “gross margin”) percentage by segment for the years ended December 31, 2025 and 2024:

Year Ended December 31,

2025

2024

Segment

Income Before Taxes

Gross Margin %

Income Before Taxes

Gross Margin %

Southeast

$

93,177 

18.6 

%

$

130,776 

19.1 

%

Mid-Atlantic

59,403 

18.3 

%

121,585 

19.6 

%

Midwest

88,995 

15.8 

%

147,422 

17.0 

%

Total

$

241,575 

17.4 

%

$

399,783 

18.3 

%

Homebuilding Revenues. The decrease in homebuilding revenues was primarily attributable to a lower consolidated ASP of homes closed, which decreased 6% when comparing the year ended December 31, 2025 to the year ended December 31, 2024, largely due to the increased use of sales incentives by $35 million and, to a lesser extent, changes in product mix during the year. This reduction in homebuilding revenues was partially offset by an increase in home closings of 25 homes for the year ended December 31, 2025 to 8,608 from 8,583 home closings for the year ended December 31, 2024. The January 2025 Liberty Communities acquisition contributed 744 home closings with an ASP of $335,446 during the year ended December 31, 2025.

Homebuilding Gross Margin. The lower homebuilding gross margin was primarily due to the decrease in consolidated ASP of homes closed, partially offset by the slight increase in home closings for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The decrease in homebuilding gross margin as a percentage of homebuilding revenues when comparing the years ended December 31, 2025 and 2024 was primarily attributable to the increased use of sales incentives, as well as higher land and financing costs and changes in geographical product mix, partially offset by direct cost reductions and cycle-time improvements.

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Southeast. Our Southeast segment homebuilding revenues for the year ended December 31, 2025 were $1,390 million, an increase of $3 million from $1,387 million for the year ended December 31, 2024. This revenue growth was primarily driven by an increase in home closings of 288, or 10%, which was mostly offset by a decrease of 8% in the ASP of homes closed. Homebuilding gross margin percentage was 18.6% for the year ended December 31, 2025, representing a decrease of 50 bps, or 3%, when compared to the year ended December 31, 2024. The decrease in homebuilding gross margin percentage was mostly the result of higher land and financing costs and, to a lesser extent, increased sales incentives, partially offset by direct cost reductions. The Liberty Communities operations in Atlanta (“Liberty Atlanta”) contributed $193 million in homebuilding revenues and 543 home closings with an ASP of $354,276 for the year ended December 31, 2025.

Mid-Atlantic. Our Mid-Atlantic segment homebuilding revenues for the year ended December 31, 2025 were $1,062 million, a decrease of $101 million, or 9%, from $1,163 million for the year ended December 31, 2024. This decline in revenue was primarily driven by a decrease in home closings of 131, or 5%, and a decrease in the ASP of $20,292, or 5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. Homebuilding gross margin percentage was 18.3% for the year ended December 31, 2025, representing a decrease of 130 bps, or 7%, when compared to the year ended December 31, 2024. The reduction in homebuilding gross margin percentage was mainly due to increased sales incentives and land and financing costs, partially offset by direct cost reductions.

Midwest. Our Midwest segment homebuilding revenues for the year ended December 31, 2025 were $1,693 million, a decrease of $155 million, or 8%, from $1,848 million for the year ended December 31, 2024. This decrease was primarily due to a decrease of 5% in the ASP of homes closed, as well as lower home closings of 132, or 4%, partially offset by strategic lot sales within the segment, which resulted in $12 million of additional homebuilding revenues during the year ended December 31, 2025 as compared to the previous period. Homebuilding gross margin percentage was 15.8% for the year ended December 31, 2025, representing a decrease of 120 bps, or 7%, when compared to the year ended December 31, 2024. The reduction in homebuilding gross margin percentage was primarily due to changes in product mix and higher sales incentives, as well as increased land and financing costs, partially offset by direct cost reductions.

Selling, General and Administrative Expense. Selling, general and administrative expense for the homebuilding segments (“SG&A”) as a percentage of homebuilding revenues was 11.7% for the year ended December 31, 2025, an increase of 270 bps from 9.0% for the year ended December 31, 2024. The dollar and percentage increase in SG&A was primarily attributable to $105 million of spend on forward mortgage commitment programs to allow our homebuyers to access lower mortgage interest rates on home loans, representing a $54 million increase when compared to the year ended December 31, 2024. Additionally, for the year ended December 31, 2025, SG&A included higher marketing and model home related expenses of $10 million due to the increased active community count, as well as higher compensation costs of $5 million, largely due to our continued growth, including from acquisitions and operational expansions into new geographic regions. The impact of the Liberty acquisition was $24 million of SG&A in the year ended December 31, 2025.

Contingent Consideration Revaluation. The $24 million change from contingent consideration expense to income for the year ended December 31, 2025 was primarily attributable to lower actual results achieved during the last earnout period for the MHI acquisition when compared to pre-tax income forecasts for the same period. The earnout period for the MHI acquisition concluded as of the end of the third quarter of 2025 and the final payment was made in December 2025. The earnout period related to the 2020 acquisition of H&H Constructors of Fayetteville, LLC concluded in the third quarter of 2024.

Other Expense (Income), Net. The increase in other expense, net for the year December 31, 2025 as compared to the year ended December 31, 2024 was primarily due to $7 million of purchase price adjustments related to the Crescent acquisition, which were recognized outside of the measurement period during the first quarter of 2025. Refer to Note 2, Acquisitions to our consolidated financial statements for additional information.

Income before Taxes of Homebuilding Operations. The decrease in income before taxes of homebuilding operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily attributable to the increases in SG&A, as well as the reduction in ASP and homebuilding gross margin, partially offset by the change in contingent consideration from expense to income, all of which are explained above.

Refer to the Form 10-K for the year ended December 31, 2024 filed on February 25, 2025 for the results of operations and related discussion for December 31, 2024 compared to the year ended December 31, 2023.

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Net Sales, Closings and Backlog

The following table presents information concerning our net sales, starts and closings in each of our homebuilding segments for the year ended December 31, 2025 and 2024:

Year Ended December 31,

Period Over Period

Percent Change

2025

2024

Segment

Net Sales

Starts

Closings

Net Sales

Starts

Closings

Net Sales

Starts

Closings

Southeast(1)

2,727 

2,810 

3,126 

1,754 

2,868 

2,838 

55 

%

-2 

%

10 

%

Mid-Atlantic

2,397 

2,645 

2,463 

2,196 

2,623 

2,594 

9 

%

1 

%

-5 

%

Midwest(2)

2,623 

2,742 

3,019 

2,777 

3,252 

3,151 

-6 

%

-16 

%

-4 

%

Total

7,747 

8,197 

8,608 

6,727 

8,743 

8,583 

15 

%

-6 

%

1 

%

(1)This increase was primarily due to net sales from the January 2025 Liberty Communities acquisition.

(2)The lower net sales and starts in the Midwest segment were primarily the result of weakening demand in the Texas markets.

The following table presents information concerning our backlog in number of homes, ASP and aggregate value (in thousands) for our homebuilding segments as of the dates set forth below:

As of December 31,

2025

2024

Segment

Homes

ASP

Value

Homes

ASP

Value

Southeast

833 

$

412,422 

$

343,548 

1,150 

$

406,246 

$

467,183 

Mid-Atlantic

631 

367,559 

231,930 

678 

464,798 

315,133 

Midwest

375 

655,505 

245,814 

771 

677,234 

522,147 

Total

1,839 

$

446,597 

$

821,292 

2,599 

$

501,910 

$

1,304,463 

Backlog of sold homes as of December 31, 2025 was 1,839 homes valued at approximately $821 million based on ASP, a decrease of 760 homes and $483 million in value, or 29% and 37%, respectively, from 2,599 homes valued at approximately $1,304 million as of December 31, 2024. Approximately 72 of the homes in our backlog are expected to be delivered in 2027 and beyond. The overall decrease in backlog was reflective of a constrained sales environment as well as a continued trend toward move-in ready spec homes relative to pre-order sales and, to a lesser extent, fewer built-for-rent contracts in backlog. Spec homes typically result in quicker closings and turnover of the backlog within the same reporting period.

Southeast. Backlog for the Southeast segment as of December 31, 2025 was 833 homes, a decrease of 317 from 1,150 homes as of December 31, 2024. The decrease from prior year was primarily attributable to fewer built-for-rent contracts in ending backlog and a continued trend toward more sales of move-in-ready spec homes relative to pre-order sales.

Mid-Atlantic. Backlog for the Mid-Atlantic segment as of December 31, 2025 was 631 homes, a decrease of 47 from 678 homes as of December 31, 2024. The decrease in backlog from prior year was primarily attributable to the constrained sales environment and the continued trend toward more sales of move-in-ready spec homes relative to pre-order sales. The decline in backlog value was also due to an increase in built-for-rent contracts in backlog this period, which have lower ASPs relative to retail sales contracts in backlog.

Midwest. Backlog for the Midwest segment as of December 31, 2025 was 375 homes, a decrease of 396 from 771 homes as of December 31, 2024. The decrease from prior year was mostly a result of higher closings relative to net sales, as well as the continued trend toward more sales of move-in-ready spec homes relative to pre-order sales. Lower net sales in the Midwest segment were primarily the result of weakening Texas markets.

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The following table presents information concerning our cancellation rates for each of our homebuilding segments for the periods set forth below:

Year Ended December 31,

Segment

2025

2024

Southeast

13.1 

%

23.7 

%

Mid-Atlantic

12.2 

%

12.9 

%

Midwest

15.1 

%

14.4 

%

Total

13.5 

%

16.6 

%

Our cancellation rate for the year ended December 31, 2025 was 13.5%, an improvement when compared to the 16.6% for the year ended December 31, 2024. In the first quarter of 2024, we had one built-for-rent contract of 229 units that was terminated based on a strategic decision to convert the controlled lots into future retail sales. This termination contributed to the elevated cancellation rate in the Southeast segment for the year ended December 31, 2024 of 23.7%.

Financial Services

Our Financial Services segment provides mortgage banking solutions and title insurance services—inclusive of agency and underwriting services—through our wholly-owned subsidiaries Jet HomeLoans, LP (“Jet HomeLoans”), DF Title, LLC doing business as Golden Dog Title & Trust and Golden Dog Title (“DF Title”) and Alliant National Title Insurance Company, Inc. (“Alliant Title”). Additionally, the Financial Services segment offers homeowners insurance and ancillary products to homebuyers through our wholly-owned insurance broker.

The following table presents selected financial information and supplemental data for our Financial Services segment for the year ended December 31, 2025 and 2024 (dollars in thousands, unless otherwise indicated):

Year Ended December 31,

2025

2024

Change

% Change

Mortgage revenues

$

68,536 

$

34,786 

$

33,750 

97 

%

Title and other services revenues

108,965 

17,189 

91,776 

534 

%

Total financial services revenues

177,501 

51,975 

125,526 

242 

%

Financial services expense

144,727 

30,437 

114,290 

375 

%

Other income, net

(2,388)

— 

(2,388)

100 

%

Loss (income) from unconsolidated entities

139 

(9,770)

9,909 

(101)

%

Financial services income before taxes

$

35,023 

$

31,308 

$

3,715 

12 

%

Mortgage Financing Supplemental Data(1):

Total originations:

Number of loans

5,458 

4,977 

481 

10 

%

Principal (in millions)

$

2,277 

$

2,196 

$

81 

4 

%

Capture rate

79.0 

%

71.9 

%

7 

%

10 

%

Average FICO score

738 

744 

(6)

(1)

%

Funded origination breakdown:

Government (FHA, VA, USDA)

51.9 

%

39.7 

%

12 

%

30 

%

Non-agency

48.1 

%

60.3 

%

(12)

%

(20)

%

(1)Supplemental data includes the operations of Jet HomeLoans prior to its consolidation in the Company’s consolidated financial statements beginning on July 1, 2024. Refer to Note 2, Acquisitions to our consolidated financial statements for additional information.

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Mortgage Banking

Mortgage banking revenues for the year ended December 31, 2025 were $69 million, an increase of $34 million or 97%, from $35 million for the year ended December 31, 2024. Financial services income before taxes related to mortgage banking for the year ended December 31, 2025 was $28 million, an increase of $6 million from $22 million for the year ended December 31, 2024. These increases were primarily due to the consolidation of Jet HomeLoans beginning July 1, 2024. The income before taxes of Jet HomeLoans prior to July 1, 2024 was included in income from unconsolidated entities in the Consolidated Statements of Operations.

Title and Other Services

Title and other services revenues for the year ended December 31, 2025 were $109 million, an increase of $92 million from $17 million for the year ended December 31, 2024. Financial services income before taxes related to title and other services for the year ended December 31, 2025 was $8 million, a decrease of $1 million from $9 million for the year ended December 31, 2024. The changes in the results were mostly due to the April 2025 acquisition of Alliant Title.

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Non-GAAP Financial Measures

Management utilizes specific non-GAAP financial measures as supplementary tools to evaluate operating performance. These include EBITDA, adjusted homebuilding gross margin, and net homebuilding debt to net capitalization. Other companies may not calculate non-GAAP financial measures in the same manner that we do. Accordingly, these non-GAAP financial measures should be considered only as a supplement to relevant GAAP information, as reconciled for each measure below. In the future, we may incorporate additional adjustments to these non-GAAP financial measures as we find them relevant and beneficial for both management and investors.

EBITDA

EBITDA is not a measure of net income as determined by GAAP. EBITDA is a supplemental non-GAAP financial measure used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define EBITDA as net income before (i) interest income, (ii) capitalized interest charged in homebuilding cost of sales, (iii) interest expense, (iv) income tax expense and (v) depreciation and amortization. Management believes EBITDA is useful because it allows management to more effectively evaluate our operating performance and compare our results of operations from period to period without regard to our financing methods or capital structure or other items that impact the comparability of financial results from period to period. EBITDA should not be considered as an alternative to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. Our computations of EBITDA may not be comparable to EBITDA of other companies.

The following table presents a reconciliation of EBITDA to the GAAP financial measure of net income for each of the periods indicated (unaudited and in thousands, except percentages):

Year Ended December 31,

2025

2024

2023

Net income attributable to Dream Finders Homes, Inc.

$

217,197

$

335,341

$

295,900

Interest income

(3,229)

(5,501)

(4,299)

Interest charged to homebuilding cost of sales(1)

196,728

187,324

122,759

Interest expense

913

—

1

Income tax expense

66,698

97,272

96,483

Depreciation and amortization(2)

15,381

15,314

10,651

EBITDA

$

493,688

$

629,750

$

521,495

EBITDA margin %(3)

11.4%

14.2%

13.9%

(1)Includes interest charged to homebuilding cost of sales related to our Senior Notes and Credit Agreement (“homebuilding debt”), as well as lot option fees.

(2)Includes amortization of purchase accounting adjustments from our acquisitions.

(3)Calculated as a percentage of total revenues.

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Adjusted Homebuilding Gross Margin

We define adjusted homebuilding gross margin as homebuilding gross margin excluding the effects of capitalized interest, lot option fees, amortization included in homebuilding cost of sales (adjustments resulting from the application of purchase accounting in connection with acquisitions) and commission expense. Our management believes this information is meaningful as it isolates the impact that these excluded items have on homebuilding gross margin. We include internal and external commission expense in homebuilding cost of sales, not in selling, general and administrative expense, and, therefore, commission expense is taken into account in homebuilding gross margin.

As a result, in order to provide a meaningful comparison to the public company homebuilders that include commission expense below the homebuilding gross margin line in selling, general and administrative expense, we have excluded commission expense from adjusted homebuilding gross margin. However, because adjusted homebuilding gross margin information excludes capitalized interest, lot option fees, purchase accounting amortization and commission expense, which have real economic effects and could impact our results of operations, the utility of adjusted homebuilding gross margin information as a measure of our operating performance may be limited.

The following table presents a reconciliation of adjusted homebuilding gross margin to the GAAP financial measure of homebuilding gross margin for each of the periods indicated (unaudited and in thousands, except percentages):

Year Ended December 31,

2025

2024

2023

Homebuilding gross margin(1)

$

721,993 

$

806,394 

$

727,075 

Interest expense in homebuilding cost of sales(2)

196,728 

187,324 

122,759 

Amortization in homebuilding cost of sales(3)

305 

5,087 

— 

Commission expense

179,668 

187,214 

165,790 

Adjusted homebuilding gross margin

$

1,098,694 

$

1,186,019 

$

1,015,624 

Homebuilding gross margin %(4)

17.4 

%

18.3 

%

19.4 

%

Adjusted homebuilding gross margin %(4)

26.5 

%

27.0 

%

27.2 

%

(1)Homebuilding gross margin is homebuilding revenues less homebuilding cost of sales.

(2)Includes interest charged to homebuilding cost of sales related to our homebuilding debt, as well as lot option fees.

(3)Represents amortization of purchase accounting adjustments from our acquisitions.

(4)Calculated as a percentage of homebuilding revenues.

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Net Homebuilding Debt to Net Capitalization

Net homebuilding debt to net capitalization is a non-GAAP financial measure calculated as homebuilding debt, less cash and cash equivalents (“net homebuilding debt”), divided by the sum of net homebuilding debt, total mezzanine equity and total equity (“net capitalization”). Net homebuilding debt excludes borrowings under our mortgage warehouse facilities, as well as any other non-homebuilding borrowings the Company may incur from time to time. Management believes the ratio of net homebuilding debt to net capitalization is meaningful as it is used to assess the performance of our homebuilding segments and is a relevant measure of our overall leverage. The Company utilizes a similar measure—net debt to capitalization, as defined in the Credit Agreement—to establish targets for performance-based compensation.

The following table presents a reconciliation of net homebuilding debt to net capitalization to the GAAP financial measure of total debt to total capitalization as of each of the periods indicated (unaudited and in thousands, except percentages):

As of

December 31,

2025

2024

Total debt

$

1,606,193 

$

1,286,052 

Total mezzanine equity

178,039 

169,951 

Total equity

1,426,072 

1,250,409 

Total capitalization

$

3,210,304 

$

2,706,412 

Total debt to total capitalization

50.0 

%

47.5 

%

Total debt

$

1,606,193 

$

1,286,052 

Less: Mortgage warehouse facilities and other secured borrowings

217,133 

289,617 

Less: Cash and cash equivalents

234,766 

274,384 

Net homebuilding debt

1,154,294 

722,051 

Total mezzanine equity

178,039 

169,951 

Total equity

1,426,072 

1,250,409 

Net capitalization

$

2,758,405 

$

2,142,411 

Net homebuilding debt to net capitalization

41.8 

%

33.7 

%

Liquidity and Capital Resources

Overview

We generate cash from the sale of our homes and from providing ancillary financial services. We intend to re-deploy our generated net cash to acquire and control land and further grow our operations year over year. We believe that our sources of liquidity are sufficient to satisfy our current commitments. We finance our operations through a variety of sources, including cash, borrowings under a revolving credit facility (the “Credit Agreement”), net proceeds from the senior unsecured notes (“Senior Notes”) and mortgage warehouse facilities used in our mortgage banking operations.

Our principal uses of capital are for lot deposits, lot purchases just-in-time for construction, vertical home construction, operating expenses, the payment of routine liabilities, business acquisitions and the origination of mortgage loans. Total cash payments for business acquisitions for the years ended December 31, 2025 and 2024 were $184 million and $178 million, respectively. Refer to Note 2, Acquisitions to our consolidated financial statements for more information.

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Cash flows generated by our homebuilding projects can differ materially from our results of operations, as these depend upon the stage in the life cycle of each project. The majority of our projects begin at the land acquisition and development stage when we enter into finished lot option and land bank option contracts by placing a deposit with a land seller, developer or land banker. Our lot deposits are an asset on our Consolidated Balance Sheets. Early stages in our communities require material cash outflows relating to finished lot purchases from option contracts, entitlements and permitting, construction and furnishing of model homes, roads, utilities, general landscaping and other amenities, as well as ongoing association fees and property taxes. Except for furnishings of model homes, these costs are capitalized within our inventories and are not recognized as an expense until a home sale closes. As such, we incur significant cash outflows prior to the recognition of revenues and the related cost of sales.

In later stages of the life cycle of a community, cash inflows could significantly exceed our results of operations, as the cash outflows associated with land purchase and home construction and other expenses were previously incurred.

We actively enter into finished lot option contracts by placing deposits with land sellers or land bankers based on the aggregate purchase price of the finished lots. When entering into these contracts, we also agree to purchase finished lots at predetermined prices, time frames, and quantities that match our expected selling pace in the communities. We also enter into land development arrangements with land sellers, land developers and land bankers. Furthermore, to satisfy performance-related obligations in connection with certain land option agreements, we enter into surety bonds and letters of credit arrangements. Refer to “—Off-Balance Sheet Arrangements” for additional information.

Our lot deposits are generally 100% applicable to the lot purchase price. In these transactions, we also incur lot option fees on the outstanding capital balance held by the land banker, and may also incur termination fees, where applicable. The initial investment and lot option fees require us to have the ability to allocate liquidity resources to projects that will not generate cash inflows or operating income in the near term.

The above cash and land-light strategies allow us to maintain an adequate lot supply in our existing markets and support ongoing growth and profitability. We continue to operate in geographic regions with consistent increases in demand for new homes and constrained lot and inventory supply compared to population and job growth trends. We intend to continue to reinvest our earnings into our business and focus on expanding our operations. In addition, as the opportunity to purchase finished lots in desired locations becomes increasingly more limited and competitive, we are committed to allocating additional liquidity to land bank deposits on land development projects, as this strategy mitigates the risks associated with holding undeveloped land on our balance sheet, while allowing us to control adequate lot supply in our key markets to support forecasted growth. As of December 31, 2025 and 2024, our lot deposits related to finished lot option contracts and land bank option contracts were $545 million and $458 million, respectively.

As of December 31, 2025 and 2024, our total liquidity was as follows (in thousands):

As of

December 31,

2025

2024

Borrowing base(1)

$

1,475,000 

$

1,254,094 

Outstanding balance under Credit Agreement

(798,000)

(700,000)

Letters of credit outstanding(2)

(12,449)

(12,449)

Availability under Credit Agreement

664,551 

541,645 

Cash and cash equivalents(3)

234,766 

274,384 

Total liquidity

$

899,317 

$

816,029 

(1)As of December 31, 2025 and 2024, the borrowing base under the Credit Agreement is reduced by the principal amount of the Senior Notes of $600 million and $300 million, respectively. As of December 31, 2025, the borrowing base calculation included available cash and escrow receivables in excess of $25 million. Refer to Note 3, Debt to our consolidated financial statements for additional information.

(2)The availability under the Credit Agreement is reduced by outstanding letters of credit issued under the Credit Agreement, which are not cash collateralized.

(3)Represents cash and cash equivalents on the Consolidated Balance Sheets, which includes cash and cash equivalents related to financial services operations, which are not subject to restrictions and are regularly remitted to Corporate.

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On August 21, 2025, we amended the Credit Agreement to, among other things, (i) increase the aggregate commitments under the Credit Agreement to $1.5 billion, subject to a borrowing base; (ii) extend the maturity date from June 4, 2027 to August 21, 2028 for certain new and existing lenders comprising $1.2 billion of the aggregate commitments under the Credit Agreement, and; (iii) update the minimum tangible net worth covenant, which resulted in an increase to the base component of such covenant to $981 million.

On September 5, 2025, we issued $300 million in aggregate principal amount of 6.875% senior unsecured notes due September 15, 2030 (the “2030 Notes”). Interest on the 2030 Notes is payable in arrears semiannually on each March 15 and September 15, beginning March 15, 2026. The net proceeds from the 2030 Notes were used to repay a portion of the then outstanding balance under the Credit Agreement.

Certain of our subsidiaries guaranteed the Company’s obligations under the Credit Agreement and the Senior Notes. As of December 31, 2025, we were in compliance with the covenants set forth for all of our debt obligations. See below for more information on the Credit Agreement, Senior Notes and the mortgage warehouse facilities.

We continue to evaluate our overall capital structure and explore options to strengthen our balance sheet. We will remain opportunistic while assessing available capital in the debt and equity markets.

Cash Flows

The following table summarizes our cash flows for the periods indicated (in thousands):

Year Ended December 31,

2025

2024

2023

Net cash (used in) provided by operating activities

$

(100,574)

$

(256,648)

$

374,234 

Net cash used in investing activities

(225,845)

(221,672)

(4,484)

Net cash provided by (used in) financing activities

270,984 

269,689 

(216,424)

Net cash used in operating activities was $101 million for the year ended December 31, 2025, compared to $257 million of net cash used in operating activities for the year ended December 31, 2024. The change in net cash used in operating activities are positively impacted by a reduction of $98 million in mortgage loans held for sale from the beginning of the current period compared to an increase of $189 million in the prior year, as well as $129 million from reduced expenditures on lot deposits. These positive changes in net cash used in operating activities were partially offset by the decrease in net income of $123 million, a larger reduction in accounts payable and accrued expenses of $92 million and increased spend on inventories of $61 million when compared to the prior year period. The changes in net cash used in operating activities are net of the effects of the Crescent Homes, Liberty Communities, Alliant Title and Green River Builders acquisitions.

Net cash used in investing activities was $226 million for the year ended December 31, 2025, compared to $222 million of net cash used in investing activities for the year ended December 31, 2024, mostly attributable to a $9 million increase in investments in unconsolidated entities, partially offset by a $5 million decrease in acquisition related payments.

Net cash provided by financing activities was $271 million for the year ended December 31, 2025, remaining consistent with the $270 million of net cash provided by financing activities for the year ended December 31, 2024. The net cash provided by financing activities in 2025 included a net increase in homebuilding related borrowings of $313 million compared to the prior year. The increase was mostly offset by net repayments of $97 million for our mortgage warehouse facilities during the year compared to $180 million in net proceeds in the prior year, and higher common stock repurchases of $34 million relative to the comparative period.

Refer to the Form 10-K for the year ended December 31, 2024 filed on February 25, 2025 for the cash flows and related discussion for December 31, 2024 compared to year ended December 31, 2023.

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Senior Unsecured Notes

2030 Notes

The 2030 Notes in the aggregate principal amount of $300 million were issued pursuant to an indenture in September 2025. Interest on the 2030 Notes is payable in arrears semiannually on each March 15 and September 15, beginning March 15, 2026. The 2030 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of the Company’s subsidiaries. The net proceeds from the 2030 Notes were used to repay a portion of the then outstanding balance under the revolving credit facility.

The 2030 Notes are redeemable by the Company prior to September 15, 2027 by the payment of the principal amount due, which can be accomplished through the issuance of certain restricted equity offerings for specified portions of the principal balance of notes outstanding, plus specified rates and accrued and unpaid interest, and a make-whole premium in the event 100.0% of the principal amount is redeemed. On or after September 15, 2027, the 2030 Notes are redeemable at specified rates, initially equal to 103.4% of the principal balance, plus accrued and unpaid interest, which periodically decreases to 100.0% on September 15, 2029. Upon the occurrence of a Change of Control (as defined in the indenture governing the 2030 Notes), the holders of the 2030 Notes will have the right to require the Company to repurchase all or a portion of the 2030 Notes at a price equal to 101% of the aggregate principal amount of the 2030 Notes, plus any accrued and unpaid interest.

2028 Notes

On August 22, 2023, the Company issued $300 million in aggregate principal amount of 8.250% senior unsecured notes due August 15, 2028 (the “2028 Notes”) pursuant to an indenture. Commencing February 15, 2024, interest on the 2028 Notes is payable in arrears semiannually on each February 15 and August 15. The 2028 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of the Company’s subsidiaries.

The 2028 Notes are redeemable at specified rates, currently equal to 104.1% of the principal balance, plus accrued and unpaid interest, which will periodically decrease to 100.0% on August 15, 2027. Upon the occurrence of a Change of Control (as defined in the indenture governing the 2028 Notes), the holders of the 2028 Notes will have the right to require the Company to repurchase all or a portion of the 2028 Notes at a price equal to 101.0% of the aggregate principal amount of the 2028 Notes, plus any accrued and unpaid interest.

The indentures for the Senior Notes include customary events of default. Subject to specified exceptions, the indentures contain certain restrictive covenants that, among other things, limit the Company’s ability to incur or guarantee certain indebtedness, issue certain equity interests or engage in certain capital stock transactions. In addition, the indentures contain certain limitations related to mergers, consolidations, and transfers of assets.

As of December 31, 2025 and December 31, 2024, unamortized debt issuance costs were $9 million and $5 million, respectively. Unamortized debt issuance costs reduce the carrying value of the Senior Notes reported on the Consolidated Balance Sheets within senior unsecured notes, net.

Credit Agreement

The Company has a revolving credit facility with aggregate commitments of $1.5 billion, subject to a borrowing base, and a maturity date of August 21, 2028 (for lenders comprising $1.2 billion of the aggregate commitments) (the “Credit Agreement”), with the remaining aggregate commitments maturing June 4, 2027. Certain of the Company’s subsidiaries guaranteed the Company’s obligations under the Credit Agreement. The Credit Agreement includes an accordion feature that allows the aggregate commitments to increase up to $2.0 billion, subject to the borrowing base.

Under the Credit Agreement, the Company has the ability to draw “Term SOFR Rate Loans” or “Daily Simple SOFR Rate Loans.” Term SOFR Rate Loans bear interest based on Term SOFR rates for one or three-month interest periods and include a SOFR adjustment of 10 basis points (“bps”) for each interest period. Daily Simple SOFR Rate Loans bear interest based on Daily Simple SOFR rates and include a SOFR adjustment of 10 bps. Interest under Term SOFR Rate Loans and Daily Simple SOFR Rate Loans also include an “applicable rate margin” determined based on the Company’s net debt to capitalization ratio, equivalent to credit spreads of 2.00% to 2.95%.

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As of December 31, 2025 and 2024, the outstanding balance under the Credit Agreement was $798 million and $700 million, respectively. Under the Credit Agreement, the funds available are unsecured and availability under the borrowing base is calculated based on specific advance rates for each of finished lots, construction in process homes, and finished homes inventory on the Consolidated Balance Sheets, and reduced for any outstanding unsecured indebtedness permitted under the Credit Agreement, including the 2028 Notes and 2030 Notes.

The Company had unamortized debt issuance costs primarily related to the Credit Agreement of $11 million and $10 million as of December 31, 2025 and 2024, respectively. Unamortized debt issuance costs are included within other assets on the Consolidated Balance Sheets.

Amortization of debt issuance costs related to the Senior Notes and the Credit Agreement are recorded as capitalized interest within inventories on the Consolidated Balance Sheets and are expensed in cost of sales as the related homes close.

Contingent Consideration

Based on the terms of the purchase agreement, at the time of an acquisition, the Company may record a contingent consideration liability based on the expected fair value of any future earn out payments due to the acquiree for a typical period of up to four years post-acquisition. This liability is remeasured to fair value quarterly and the adjustment is recorded in contingent consideration revaluation in the Consolidated Statements of Operations. On December 15, 2025, the Company made its final earnout payment related to the MHI acquisition of $15.7 million. As of December 31, 2025, the Company did not have any contingent consideration liabilities and does not expect to have any amounts payable within 12 months for any previous acquisitions. Further information regarding our contingent consideration liability is provided in Note 1, Nature of Business and Significant Accounting Policies to our consolidated financial statements.

Leases

The Company has operating leases primarily associated with office space that is used by divisions outside of the Jacksonville area, model home sale-leasebacks and a corporate office building sale-leaseback. The Company also has finance leases for corporate office furniture. As of December 31, 2025, the future minimum lease payments required under these leases totaled $31 million, with $13 million payable within 12 months. Further information regarding our leases is provided in Note 7, Commitments and Contingencies to our consolidated financial statements.

Series B Preferred Units

On August 31, 2023, the Company redeemed all of its previously outstanding Series B preferred units. The Company made an aggregate cash payment to the Series B holders of $11 million, which included $7 million in principal plus cumulative undistributed earnings, less a negotiated discount on that date. Following the redemption, no Series B preferred units remain outstanding. Refer to Note 13, Equity to our consolidated financial statements for disclosure related to the redemption.

Redeemable Noncontrolling Interest

Based on the terms of the purchase agreement, at the time of an acquisition, we may issue redeemable noncontrolling interest. Redeemable noncontrolling interest is reported within mezzanine equity on the Company’s Consolidated Balance Sheets at the greater of the initial carrying amount (its fair value on the acquisition date) adjusted for the noncontrolling interest’s share of net income (loss) less distributions or its redemption value. After achieving the minimum earnings threshold, the amount of net income that is attributable to the redeemable noncontrolling interests will be presented within net income attributable to noncontrolling interests on the Consolidated Statements of Operations. As of December 31, 2025, the redeemable noncontrolling interests totaled $30 million, of which no amount was redeemable within 12 months. Refer to Note 2, Acquisitions to our consolidated financial statements for more information on redeemable noncontrolling interests related to our acquisitions.

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Redeemable Preferred Stock

On September 29, 2021, we sold 150,000 shares of redeemable preferred stock with an initial liquidation preference of $1,000 per share and a par value of $0.01 per share, for an aggregate purchase price of $150 million. We used the proceeds from the sale of the redeemable preferred stock to partially fund the MHI acquisition and for general corporate purposes. Pursuant to the Certificate of Designations, the redeemable preferred stock ranks senior to the Class A and B common stock with respect to dividends and distributions on liquidation, winding-up and dissolution.

Accordingly, upon liquidation, dissolution or winding up of the Company, each share of redeemable preferred stock is entitled to receive the initial liquidation preference of $1,000 per share, subject to adjustment, plus all accrued and unpaid dividends thereon.

Refer to Note 13, Equity to our consolidated financial statements for additional terms of the redeemable preferred stock.

Off-Balance Sheet Arrangements

Asset-Light Lot Acquisition Strategy

We operate an asset-light and capital-efficient lot acquisition strategy primarily through finished lot option contracts and land bank option contracts. Refer to “Item 1. Business—Land Acquisition and Development Process” for more information.

Surety Bonds, Letters of Credit and Financial Guarantees

We enter into surety bonds and letters of credit arrangements with local municipalities, government agencies and land developers. These arrangements relate to certain performance-related obligations and serve as security for certain land option agreements.

As of December 31, 2025 and 2024, we had outstanding surety bonds of $359 million and $298 million, respectively, and outstanding letters of credit of $27 million and $21 million, respectively. We believe we will fulfill our obligations under the related arrangements and do not anticipate any material losses under these surety bonds and letters of credit.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with GAAP. Our critical accounting policies are those that we believe have the most significant impact to the presentation of our financial position and results of operations and that require the most difficult, subjective or complex judgments. In many cases, the accounting treatment of a transaction is specifically dictated by GAAP without the need for the application of judgment.

In certain circumstances, however, the preparation of consolidated financial statements in conformity with GAAP requires us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

While our significant accounting policies are more fully described in Note 1, Nature of Business and Significant Accounting Policies to our consolidated financial statements, we believe the following topics reflect our critical accounting policies and our more significant judgment and estimates used in the preparation of our consolidated financial statements.

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Revenue Recognition

We recognize homebuilding revenue in two ways in accordance with Accounting Standards Codification (“ASC”) Topic 606. This includes revenues from home sales with respect to homes that we construct on homesites to which we own title that are recorded at the time each home sale is closed and title and possession are transferred to the buyer, or upon delivery of homes sold to third-party investors intending to lease the homes, as well as revenues from home sales in which the buyer or third-party investor retains title to the homesites while we build the homes that are recognized based on the percentage of completion of the home construction, which is measured on a quarterly basis. We determine the percentage of completion based on the number of days of construction completed to the total estimated number of days to construct the home.

Inventories and Homebuilding Cost of Sales

Inventories include the cost of direct land acquisition, land development, direct materials, labor, capitalized interest, lot option fees, real estate taxes and direct overhead costs incurred related to land acquisition, land development and home construction. Indirect overhead costs are charged to selling, general and administrative expense as incurred.

Land and development costs are typically allocated to individual residential lots on a pro rata basis based on the number of lots in the development, and the costs of residential lots are transferred to construction work in progress when home construction begins. The carry cost for land and development, recognized in homebuilding cost of sales as homes close, is impacted by our ability to estimate the timing to completion for land development deals and expected sales pace.

Sold units are expensed on a specific identification basis as homebuilding cost of sales. Homebuilding cost of sales for homes closed includes the specific construction costs of each home and all applicable land acquisition, land development and related costs allocated to each residential lot.

Inventories are carried at the lower of accumulated cost or net realizable value. On a quarterly basis, we review the performance and outlook of our communities to identify any indicators of potential impairment. Such indicators include gross margins or sales paces significantly below expectations, significant delays or changes in the planned development for the community, and other known qualitative factors. In addition to considering market and economic conditions, we assess current sales absorption levels, recent profitability as well as future plans including cost management initiatives and remaining life cycle of the community. We look for instances where sales prices for homes in a community or potential sales prices for the future sale of homes within a community would be at a level at which the carrying value of inventory related to that community may not be recoverable.

Business Combinations

The Company accounts for business combinations using the acquisition method. Under ASC Topic 805 a business combination occurs when an entity obtains control of a “business.” The Company determines whether or not the gross assets acquired meet the definition of a business. If they meet this criteria, the Company accounts for the transaction as a business combination. If they do not meet this criteria the transaction is accounted for as an asset acquisition. The consideration transferred in a business combination is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises in a business combination is tested annually for impairment. Any gain on a bargain purchase is recognized in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issuance of debt or equity securities.

Recent Accounting Pronouncements

Refer to Note 1, Nature of Business and Significant Accounting Policies to our consolidated financial statements.

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