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What changed in BEAZER HOMES USA INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BEAZER HOMES USA INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+292 added−294 removedSource: 10-K (2025-11-13) vs 10-K (2024-11-13)

Top changes in BEAZER HOMES USA INC's 2025 10-K

292 paragraphs added · 294 removed · 191 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeLand Acquisition and Development Generally, the land we acquire is purchased only after necessary entitlements have been obtained so that we have the right to begin development or construction as market conditions dictate. The term “entitlements” refers to subdivision approvals, development agreements, tentative maps, or recorded plats, depending on the jurisdiction in which the land is located.
Biggest changeThe term “entitlements” refers to subdivision approvals, development agreements, tentative maps, or recorded plats, depending on the jurisdiction in which the land is located. Entitlements generally give a developer the right to obtain development permits and ensure compliance with conditions that are usually within the developer's control.
Operational Overview Corporate Operations We perform the following functions at our corporate office to promote standardization and operational excellence: • evaluate and select geographic markets; • allocate capital resources for land acquisitions; 5 • maintain and develop relationships with lenders and capital markets to create and maintain access to financial resources; • maintain and develop relationships with national product vendors; • perform various centralized functions including accounting, finance, purchasing, legal, risk, planning/design, and marketing activities to support our field operations; • operate and manage information systems and technology support operations; and • monitor the operations of our divisions and trade partners.
Operational Overview Corporate Operations We perform the following functions at our corporate office to promote standardization and operational excellence: • evaluate and select geographic markets; • allocate capital resources for land acquisitions; • maintain and develop relationships with lenders and capital markets to create and maintain access to financial resources; • maintain and develop relationships with national product vendors; • perform various centralized functions including accounting, finance, purchasing, legal, risk, planning/design, and marketing activities to support our field operations; • operate and manage information systems and technology support operations; and • monitor the operations of our divisions and trade partners.
Within our operating divisions, our field teams are equipped with the skills needed to complete the functions of land acquisition, land entitlement, land development, home construction, local marketing, sales, warranty service, and certain purchasing and planning/design functions.
Within our operating divisions, our field teams are equipped with the skills needed to complete the functions of land acquisition, land entitlement, land development, home construction, local marketing, sales, warranty service, and certain purchasing and planning/design functio ns.
Ending backlog represents the number of homes in backlog from the previous period plus the number of net new orders (new orders less cancellations) generated during the current period minus the number of homes closed during the current period. The following table summarizes units and dollar value in backlog by reportable segment as of September 30, 2024, 2023 and 2022.
Ending backlog represents the number of homes in backlog from the previous period plus the number of net new orders (new orders less cancellations) generated during the current period minus the number of homes closed during the current period. 8 The following table summarizes units and dollar value in backlog by reportable segment as of September 30, 2025, 2024 and 2023.
Where required, we then undertake, or the grantor of the option then undertakes in the case of land under option, the development activities (through contractual arrangements with local developers, general contractors, and/or subcontractors), which include site planning and engineering as well as constructing roads, water, sewer, and utility infrastructures, drainage and recreatio nal facilities, and other amenities.
Where required, we then undertake, or the grantor of the land purchase option then undertakes, the development activities (through contractual arrangements with local developers, general contractors, and/or subcontractors), which include site planning and engineering as well as constructing roads, water, sewer, and utility infrastructures, drainage and recreatio nal facilities, and other amenities.
The total remaining purchase price, net of cash deposits, committed under all land option agreements was $1.46 billion as of September 30, 2024. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, substantially all of our opt ion agreements.
The total remaining purchase price, net of cash deposits, committed under all land option agreements was $1.61 billion as of September 30, 2025. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, substantially all of our opt ion agreements.
In some transactions, land bankers take title to the land at closing subject to agreements which obligate us to perform all development activities (which may be reimbursed by the land bankers) with respect to the land and provide us with an option to purchase the finished lots.
In some transactions, land bankers take title to the land at closing subject to agreements which obligate us to perform all development activities (which are typically reimbursed by the land bankers) with respect to the land and provide us with an option to purchase the finished lots.
Under option agreements, purchase of the underlying properties is contingent upon satisfaction of certain requirements by us and the sellers. Our liability under option agreements is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred, which totaled $227.8 million as of September 30, 2024.
Under option agreements, purchase of the underlying properties is contingent upon satisfaction of certain requirements by us and the sellers. Our liability under option agreements is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred, which totaled $333.4 million as of September 30, 2025.
According to the Residential Energy Services Network (RESNET), the developer of the HERS ® index, used homes typically have a HERS ® index score (on a scale in which a lower score is better) of 130 and homes built to the same standard as the HERS ® Reference Home (equivalent to the 2006 International Energy Conservation Code) have a HERS ® index score of 100.
According to the Residential Energy Services Network, used homes typically have a HERS index score (a lower score on scale is better) of 130, while homes built to the same standard as the HERS Reference Home (equivalent to the 2006 International Energy Conservation Code) have a HERS index score of 100.
We select land for purchase based upon a variety of factors, including but not limited to: • internal and external demographic and marketing studies; • suitability for development during the time period of generally one to five years from the beginning of the development process to the last closing; • financial review as to the feasibility of the proposed project, including profit margins and returns on capital employed; • the ability to secure governmental approvals and entitlements; • environmental and legal due diligence; • competition in the area; • proximity to local traffic corridors, job centers, and other amenities; and • management's judgment of the real estate market and economic trends and our experience in a particular market. 6 We generally purchase land or obtain an option to purchase land, which, in either case, requires certain site improvements prior to home construction.
We select land for purchase based upon a variety of factors, including but not limited to: • internal and external demographic and marketing studies; • suitability for development during the time period of generally one to five years from the beginning of the development process to the last closing; • financial review as to the feasibility of the proposed project, including profit margins and returns on capital employed; • the ability to secure governmental approvals and entitlements; • environmental and legal due diligence; • competition in the area; • proximity to local traffic corridors, job centers, and other amenities; and • management's judgment of the real estate market and economic trends and our experience in a particular market.
When available in certain markets, we also buy finished lots that are ready for home construction. During our fiscal 2024 and 2023, we continued to pursue land acquisition opportunities and develop our land positions, spending $507.8 million and $384.2 million, respectively, for land acquisition and $268.7 million and $188.8 million, respectively, for land development.
When available in certain markets, we also buy finished lots that are ready for home construction. During our fiscal 2025 and 2024, we continued to pursue land acquisition opportunities and develop our land positions, spending $491.9 million and $507.8 million, respectively, for land acquisition and $192.0 million and $268.7 million, respectively, for land development.
Specifically, our Audit, Finance and Development, Human Capital, and Governance Committee Charters, our Corporate Governance Guidelines and Code of Business Conduct and Ethics are available. Each of these documents is also available in print to any stockholder who requests it.
In addition, many of our corporate governance documents are available on our website at www.beazer.com. Specifically, our Audit, Finance and Development, Human Capital, Technology, and Governance Committee Charters, our Corporate Governance Guidelines and Code of Business Conduct and Ethics are available. Each of these documents is also available in print to any stockholder who requests it.
We believe that we maintain positive and productive relationships with our suppliers and subcontractors. Warranty Program We currently provide a limited warranty ranging from one to two years covering workmanship and materials per our defined standards.
We believe that we maintain positive and productive relationships with our suppliers and subcontractors. Warranty Program We currently provide a limited warranty ranging from one to two years covering workmanship and materials per our defined standards. In addition, we provide a limited warranty for up to ten years covering certain defined structural element failures.
For every Beazer community, we identify Choice Lenders, who are selected for their ability to provide a comprehensive array of products and programs, meet our high customer service standards, and willingness to compete to earn our customer’s business.
Instead, for every Beazer community, we identify Choice Lenders, who are selected for their ability to provide a comprehensive array of products and programs, ability to meet our high customer service standards, and their willingness to compete to earn our customer’s business. This helps our customers get competitive interest rates, fees, and service levels.
As of September 30, 2024 2023 2022 Units in Backlog Dollar Value in Backlog (in millions) Units in Backlog Dollar Value in Backlog (in millions) Units in Backlog Dollar Value in Backlog (in millions) West 965 $ 513.3 1,033 $ 535.3 1,257 $ 711.6 East 315 184.1 323 174.7 410 223.7 Southeast 202 99.7 355 176.3 424 209.6 Total Company 1,482 $ 797.2 1,711 $ 886.4 2,091 $ 1,144.9 Average selling price (ASP) in backlog (in thousands) $ 537.9 $ 518.0 $ 547.5 Construction We typically act as the general contractor for the construction of our new home communities.
As of September 30, 2025 2024 2023 Units in Backlog Dollar Value in Backlog (in millions) Units in Backlog Dollar Value in Backlog (in millions) Units in Backlog Dollar Value in Backlog (in millions) West 525 $ 276.4 965 $ 513.3 1,033 $ 535.3 East 228 131.1 315 184.1 323 174.7 Southeast 192 109.0 202 99.7 355 176.3 Total Company 945 $ 516.5 1,482 $ 797.2 1,711 $ 886.4 Average selling price (ASP) in backlog (in thousands) $ 546.5 $ 537.9 $ 518.0 Construction We typically act as the general contractor for the construction of our new home communities.
In order to provide homes to homebuyers qualifying for Federal Housing Administration (FHA)-insured or Veterans Affairs (VA)-guaranteed mortgages, we must construct homes in compliance with FHA and VA regulations.
In order to provide homes to homebuyers qualifying for Federal Housing Administration (FHA)-insured or Veterans Affairs (VA)-guaranteed mortgages, we must construct homes in compliance with FHA and VA regulations. These laws and regulations include provisions regarding operating procedures, investments, lending, and privacy disclosures and premiums.
In addition, we provide a limited warranty for up to ten years covering certain defined structural element failures. 8 Our homebuilding work is performed by subcontractors who typically must agree to indemnify us with regard to their work and provide certificates of insurance demonstrating that they have met our insurance requirements and have named us as an additional insured under their policies.
Our homebuilding work is performed by subcontractors who typically must agree to indemnify us with regard to their work and provide certificates of insurance demonstrating that they have met our insurance requirements and have named us as an additional insured under their policies.
Our principal executive offices are located at 2002 Summit Blvd NE, 15th Floor, Atlanta, GA 30319, and our main telephone number is (770) 829-3700. We also provide information about our company, including active communities, through our Internet website located at www.beazer.com.
Our principal executive offices are located at 2002 Summit Blvd NE, 15th Floor, Atlanta, GA 30319, and our main telephone number is (770) 829-3700. We also provide information about our company, including active communities, online at www.beazer.com. Information on our website is not a part of this Form 10-K and shall not be deemed incorporated by reference.
We also use our website as a means of disclosing additional information, including for complying with our disclosure obligations under the SEC's Regulation FD (Fair Disclosure).
We also use our website as a means of disclosing additional information, including for complying with our disclosure obligations under the SEC's Regulation FD (Fair Disclosure). The SEC maintains a website that contains reports, proxy statements, information statements and other information regarding issuers, including us, that file electronically with the SEC at www.sec.gov.
As we continue to advance in this area, we are reaching across all functional and operational areas through our bi-annual Inclusion and Diversity Learning Program and our employee-driven storytelling platform, which empowers our teams to share and learn from one another’s lived experiences.
We are also deeply committed to fostering a culture where everyone feels welcome, respected, safe, and valued. As we continue to advance in this area, we are reaching across all functional and operational areas through our employee-driven storytelling platform and engagement activities, which empower our teams to share and learn from one another’s lived experiences.
In addition, we center our employee experience on engagement and work-life balance by offering a broad range of company-paid benefits and compensation packages, such as a 12-week parental leave and an unlimited flexible time off program. We are also deeply committed to fostering an inclusive culture where everyone feels welcome, respected, safe, and valued.
To remain competitive, we continue to focus on attracting and retaining qualified employees and providing them with comprehensive training and continuous development. In addition, we center our employee experience on engagement and work-life balance by offering a broad range of company-paid benefits and compensation packages, such as a 12-week parental leave and an unlimited flexible time off program.
Also, in various states, our new home counselors are required to be licensed real estate agents and to comply with the laws and regulations applicable to real estate agents. Failure to comply with any of these laws or regulations, where applicable, could result in loss of licensing and a restriction of our business activities in the applicable jurisdiction.
In some states, we are required to be registered as a licensed contractor and comply with applicable rules and regulations. Also, in various states, our new home counselors are required to be licensed real estate agents and to comply with the laws and regulations applicable to real estate agents.
In limited circumstances, we will purchase property without all necessary entitlements where we have identified an opportunity to build on such property in a manner consistent with our strategy.
Although entitlements are ordinarily obtained prior to the purchase of land, we may still be required to obtain a variety of other governmental approvals and permits during the development process. In limited circumstances, we will purchase property without all necessary entitlements where we have identified an opportunity to build on such property in a manner consistent with our strategy.
Information on our website is not a part of this Form 10-K and shall not be deemed incorporated by reference. Long-Term Business Strategy We continue to execute against our long-term balanced growth strategy, which is characterized by growing profitability, improving balance sheet efficiency, and generating returns above our cost of capital .
Strategy We continue to execute against our long-term balanced growth strategy, which is focused on growing profitability, improving balance sheet efficiency, and generating returns above our cost of capital, while minimizing operational risk and financial leverage.
Tennessee Nashville Virginia Washington D.C. Southeast: Florida Orlando Georgia Atlanta North Carolina Raleigh/Durham South Carolina Charleston, Myrtle Beach Markets and Product Description We evaluate a number of factors in determining which geographic markets to enter and remain in as well as which consumer segments to target with our homebuilding activities.
Worth, Houston, San Antonio East: Indiana Indianapolis Maryland/Delaware Baltimore, Salisbury, Washington D.C. Tennessee Nashville Virginia Washington D.C. Southeast: Florida Orlando Georgia Atlanta North Carolina Raleigh/Durham South Carolina Charleston, Myrtle Beach We evaluate a range of factors when determining which geographic markets to enter, remain, or in some cases exit.
The selection of interio r features is also a principal component of our marketing and sales efforts. Our homes are customarily sold through commissioned new home sales counselors (who work from sales offices located in the model homes used in the community) as well as through independent brokers.
These features provide a concrete visual aid of the innovative building science incorporated into every home, allowing for a more memorable, engaging and informative experience. Our homes are customarily sold through commissioned new home sales counselors (who work from sales offices located in the model homes used in the community) as well as through independent realtors.
However, the accounting and accounts payable functions of our field operations are concentrated in our national accounting center, which we consider to be part of our corporate operations.
However, the accounting and accounts payable functions of our field operations are concentrated in our national accounting center, which we consider to be part of our corporate operations. 6 Land Acquisition and Development Generally, the land we acquire is purchased only after necessary entitlements have been obtained so that we have the right to begin development or construction as market conditions dictate.
For the year ended September 30, 2024, new Beazer homes had an average HERS ® index score of 42, a seven point improvement from 49 for the year ended September 30, 2023 .
By comparison, new Beazer homes had an average HERS index score of 32 for the fiscal year ended September 30, 2025, demonstrating the significant outperformance resulting from our construction.
Human Capital Resources As of September 30, 2024, we employed 1,158 persons, of whom 344 were sales and marketing personnel and 254 were construction personnel. Although none of our employees are covered by collective bargaining agreements, at times certain of the independent subcontractors engaged by us may be represented by labor unions or may be subject to collective bargaining arrangements.
Although none of our employees are covered by collective bargaining agreements, at times certain of the independent subcontractors engaged by us may be represented by labor unions or may be subject to collective bargaining arrangements. 10 A safe and healthy working environment for our employees at every level of our organization is our highest priority.
We then provide our customers with an industry-leading online comparison tool that helps them easily compare multiple mortgage offers from Choice Lenders and other lenders side-by-side. Choice Plans ® – Every family lives in their home differently, which is why we created Choice Plans. Choice Plans provide our buyers with more floor plan flexibility at no additional cost.
We then provide an industry-leading online comparison tool that helps customers easily compare multiple mortgage offers from Choice Lenders and other lenders side by side. This often results in cost savings versus other financing alternatives, further helping our buyers address affordability constraints.
In connection with these marketing vehicles, we have registered or applied for registration of trademarks and Internet domain names, including Beazer Homes ® , Gatherings ® , and Choice Plans ® , for use in our business.
We have also built strong brand recognition through internet domain names and the use of trademarks that are either registered or pending registration, including Beazer Homes ® , Gatherings ® , and Choice Plans ® .
A safe and healthy working environment for our employees at every level of our organization is our highest priority. This begins with our health and safety audit system, which is designed to assist our employees in locating resources tailored for their specific employment responsibilities.
This begins with our health and safety audit system, which is designed to assist our employees in locating resources tailored for their specific employment responsibilities. We also conduct various safety-related inspections and training programs, such as daily visual inspections of our job sites, weekly written safety inspections and bi-weekly “toolbox” talks with our trade partners.
We believe that our employees are critical to our continued growth and success, and competition for qualified personnel is intense across our footprint. To remain competitive, we continue to focus on attracting and retaining qualified employees and providing them with comprehensive training and continuous development.
We have also increased our focus on employee wellness by expanding our program options to include a number of webinars, online classes, and virtual support groups. We believe that our employees are critical to our continued growth and success, and competition for qualified personnel is intense across our footprint.
Reportable Business Segments Our active homebuilding operations consist of the design, sale, and construction of single-family and multi-family homes in the following geographic regions, which represent our reportable segments: Segment/State Market(s) West: Arizona Phoenix California Riverside-San Bernardino, Sacramento, San Diego Nevada Las Vegas Texas Dallas/Ft. Worth, Houston, San Antonio East: Indiana Indianapolis Maryland/Delaware Baltimore, Salisbury, Washington D.C.
Providing opportunities for employees across the country to serve the communities where they live and work is a critical part of our Company's culture. Markets Our active homebuilding operations consist of the development, design, construction, marketing, and sale of homes in the following markets: Region/State Market(s) West: Arizona Phoenix California Riverside-San Bernardino, Sacramento, San Diego Nevada Las Vegas Texas Dallas/Ft.
Notably, Beazer Homes has now certified more Zero Energy Ready homes to the DOE's Single Family National Program requirements than any other home builder. • All of our homes are also built to the latest ENERGY STAR ® standards, and we provide buyers with an energy rating (HERS ® index score) for their home, completed by a qualified third-party rating company.
We have become a leading energy-efficient homebuilder, delivering proven efficiency and lowering monthly utility costs to our customers. To quantify and convey the benefits of our construction, we provide buyers with an individual energy rating (HERS ® index score) for their home, completed by a qualified third-party rating company.
For fiscal 2025, we continue to focus on our three multi-year strategic goals as part of our balanced growth strategy: • reaching more than 200 active communities by the end of fiscal 2026, • reducing our net debt to net capitalization ratio to below 30% by the end of fiscal 2026, and • fulfilling our commitment that by the end of calendar year 2025, every home we start will be Zero Energy Ready, which is discussed further below.
For fiscal 2026, we expect continued progress on these goals, which include: • reaching more than 200 active communities by the end of fiscal 2027, • reducing our net debt to net capitalization ratio to the low 30% range by the end of fiscal 2027, and • achieving a double-digit compound annual growth rate in book value per share from the end of fiscal 2024 through fiscal 2027.
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Item 1. Business We are a geographically diversified homebuilder with active operations in 13 states within three geographic regions in the United States: the West, East, and Southeast. Our homes are designed to appeal to homeowners at different price points across various demographic segments and are generally offered for sale in advance of their construction.
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Item 1. Business Beazer Homes is a nationally recognized homebuilder committed to building homes and communities designed with the intention of inspiring sustainable and healthier living. With personalized options and expert guidance, we empower homebuyers with competitive mortgage choices and energy saving features that make homeownership more attainable.
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Our objective is to provide our customers with homes that incorporate extraordinary value and quality, at affordable prices, while seeking to maximize our investment returns over the course of a housing cycle. Beazer Homes USA, Inc. was incorporated in Delaware in 1993.
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Operating across 13 states in the West, East, and Southeast geographic regions of the United States, Beazer Homes offers a diverse portfolio of products tailored to meet the evolving needs of homebuyers that value a well-constructed and energy efficient home . Beazer Homes USA, Inc. was incorporated in Delaware in 1993.
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This strategy provides us with the flexibility to reduce leverage through debt reduction, increase return of capital to investors through stock repurchases, or increase investment in land and other operating assets in response to changing market conditions.
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In response to changing market conditions, we intend to balance decreasing leverage and returning capital to investors through stock repurchases, as we make investments to grow the business long-term . Earlier this year, we updated our Multi-Year Goals, originally introduced in fiscal 2023, which reflected objectives aligned with our balanced growth strategy.
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We remain committed to this balanced growth strategy, which is designed to increase shareholder value b y improving our return on assets while reducing operational risk and financial leverage.
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Differentiating Beazer Homes Beazer crafts homes intended to inspire sustainable and healthier living. We focus on four points of strategic differentiation that we believe deliver meaningful financial and lifestyle benefits to our buyers . Our points of differentiation are as follows: Advanced Home Performance – Every Beazer home is built to deliver measurable, industry-leading advantages in efficiency, comfort, and durability.
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Differentiating Beazer Homes We know that our buyers have many choices when purchasing a home. Beazer Homes is a builder of choice for homebuyers who recognize the built-in value of a new home.
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Our construction standards support healthier, quieter and more comfortable living environments while reducing ongoing operating costs, particularly in regard to energy efficiency and utility bills. Key performance elements include: • Energy Savings: This is one of several ways we are helping buyers address increasingly prevalent affordability concerns.
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Through our three strategic differentiators discussed below, we deliver quality homes with energy efficiency for real savings, improved indoor air quality for healthier living, and superior comfort that homebuyers will appreciate long after they move in. We take pride in offering customers unmatched value throughout the entire homebuilding experience.
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As part of our commitment to energy efficiency, substantially all of Beazer’s newly constructed homes meet the Department of Energy's Zero Energy Ready standard, meaning an appropriately sized renewable energy source (such as solar) can supply all of the home's energy needs, minimizing usage and expenses.
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Mortgage Choice – Most of our buyers need to arrange financing in order to purchase a new home. Unlike many of our major competitors, we have no ownership or other interest in a mortgage company, which allows us to partner with our customers to help them get the most competitive interest rates, fees and service levels available.
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By ensuring all homes have the proper infrastructure for solar installation (solar-ready), we are enabling customers to pursue solar investments on their own timeframe, while still providing the significant benefits of highly efficient construction.
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For example, buyers of to-be-built homes can typically choose between two different configurations in the kitchen and in the primary baths. Offering these pre-designed floor plan alternatives allows us to offer fewer plans, which improves efficiency and reduces cost w hile creating living areas that match an individual buyer's lifestyle.
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Further, we have begun introducing solar-included communities, in which every home will include a fully installed solar energy system. • Cleaner Air: Through our commitment to the U.S.
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Surprising Performance – We place an emphasis on building high-quality homes and delivering outstanding customer experience. Our team is hyper-focused on including premium materials and high-caliber construction processes designed to increase performance and efficiency.
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Environmental Protection Agency's (the EPA) Indoor AirPlus program, we are creating a healthier breathing environment for our homeowners with HVAC systems specifically designed to deliver improved indoor air quality. 3 • Quieter Home: Our enhanced building practices include added insulation that not only minimizes temperature fluctuations and improve energy efficiency, but also reduces noise, creating a more peaceful and comfortable living environment.
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All Beazer homes are designed and built to provide Surprising Performance, which means giving our homeowners more quality and more comfort from the moment they move in and saving them money every month. We deliver these benefits through our people, materials, and process.
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Curated Choices – Beazer has long been known for offering choices, and we have expanded and reframed what choice means to better meet the evolving needs of our homebuyers. • Mortgage Choice: Most of our buyers either require or opt into financing to purchase a new home.
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Some examples of these benefits are as follows: 3 • We remain dedicated to continually enhancing the energy efficiency of our homes in support of our industry-first pledge that, by the end of calendar year 2025, every new home we start will be Zero Energy Ready, which means it will meet the requirements of the U.S.
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Unlike many of our major competitors, we have no ownership or other financial interest in a mortgage company nor do we provide mortgage origination services.
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Department of Energy 's (DOE) Zero Energy Ready Home TM program and have a HERS ® index score (before any benefit of renewable energy production) of 45 or less. During fiscal 2024, we accelerated our transition to Zero Energy Ready homes with 91% of our fiscal fourth quarter new home starts being built to Zero Energy Ready standards.
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Approximately 84% of our fiscal 2025 customers elected to finance a portion of their home purchase. • Choice Plans ® : We have designed flexible layouts that adapt to the different lifestyles of each targeted buyer segment. At no additional cost, homebuyers can select variations to primary living spaces such as kitchens and bathrooms.
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We also consistently report our average HERS Index Scores as “gross” scores, setting a more rigorous standard by excluding any benefit of renewable energy technologies. • We also build Indoor AirPlus qualified homes under the EPA Indoor AirPlus program, which include features to reduce contaminants that lead to poor indoor air quality such as mold, moisture, carbon monoxide, toxic chemicals and more.
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We also have options that can make homes safer and more accessible. • Style Choice: By streamlining design selections, we help buyers feel confident in the features they choose. Style Choice reduces stress that can come with designing a home, while ensuring buyers receive high-quality and complementary finishes.
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We compete in the above listed geog raphic markets across the United States in part to reduce our exposure to any particular regional economy. Within these markets, we build homes in a variety of new home communities. We continually review our markets based on aggregate demographic information, land prices and availability, competitive dynamics, and our own operating results.
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Through carefully curated design packages with a range of aesthetics and design studio consultations, buyers can better visualize their home’s interior finishes, leading to higher satisfaction and smoother closings.
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We use the results of these reviews to re-allocate our investments generally to those markets where we believe we can maximize our profitability and return on capital. 4 We maintain the flexibility to alter our product mix within a given market, depending on market conditions.
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Elevated Experiences – We understand that buying a home is an important milestone, so we have designed a process intended to deliver an elevated experience that begins well before move-in day and continues long after. • A Trusted Team: Every Beazer employee that homebuyers interact with is trained to provide support and guidance throughout the homebuying journey.
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In determining our product mix, we consider demographic trends, demand for a particular type of product, product affordability, consumer preferences, land availability, margins, timing, and the economic strength of the market. Depending o n the market, we attempt to address one or more of the following categories of home buyers: entry-level, move-up, or 55+.
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Through our GuildQuality and Trust Builder surveys, we focus on delivering an outstanding customer experience, from the moment a potential buyer enters our system to years after closing.
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Within these buyer groups, we have developed detailed targeted buyer profiles based on demographic and psychographic data, including information about marital and family status, employment, age, affluence, special interests, media consumption, and distance moved.
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Among the nation's largest homebuilders, Beazer Homes has been ranked #1 in customer experience by Trust Builder for each of the past four years. • Easy Shopping: Clear, accessible tools allow our homebuyers to feel connected and involved during their purchasing process.
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Although we offer a selection of amenities and home customization options, we generally do not build “custom homes.” In all of our home offerings, we attempt to increase customer satisfaction by incorporating quality and energy-efficient materials, distinctive design features, convenient locations, and competitive prices.
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From an easy-to-navigate website and personalized interactions with our sales team, to consideration of how buyers prefer to tour our models, we strive to make the shopping experience feel as positive as the experience of living in one of our homes. • Continuing Care: Even after closing, our Customer Care and Customer Advocate teams work to ensure that our homeowners feel confident in their decision to own a Beazer home.
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We cater to the 55+ home buyer category through our Gatherings ® branded offerings by providing quality, lower-maintenance homes for those seeking to live in an active adult community. In 2016, Gatherings ® by Beazer Homes was officially introduced across several markets within Beazer's geographic footprint through age restricted condominiums.
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In addition, our comprehensive warranty program supports homeowners when concerns arise, as well as educate them on how to maintain their high-performance homes. Community Impact – Beazer understands that homes exist within a broader social ecosystem.
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In addition to condominiums, the Gatherings ® brand also includes villas, duets, and single-family homes.
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For today’s buyers, purchasing decisions are influenced not only by the quality or value of a product, but also by alignment with their personal values. • Charitable Giving: We established both Charity Title Agency and Charity Home Insurance Agency to make a positive impact in the communities where our customers and employees live and work.
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Marketing and Sales We make extensive use of digital and traditional marketing vehicles and other promotional activities, including our website (www.beazer.com), real estate listing sites, digital advertising (including search engine marketing and display advertising), social media, video, brochures, direct marketing, and out-of-home advertising (including billboards and signage) located in the immediate areas of our developments, as well as additional activities.
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Charity Title Agency and Charity Home Insurance Agency are both wholly-owned by Beazer Homes and donate 100% of their net profits, after normal business expenses, taxes, reserves, and mission-related costs, to the Beazer Charity Foundation (the Foundation), our philanthropic arm.
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In response to the changing needs of consumers, our sales operations continue to improve our virtual sales tools to connect with our customers online, including a 24/7 chatbot feature, self-guided tours to allow homebuyers to tour models privately and safely, outside of normal business hours, and self-service appointments to help customers schedule an appointment with ease and speed.
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The Foundation, a 501(c)(3) private foundation governed by a Board of Directors, distributes these funds to vetted national and local non-profits. This unique structure can help us make a lasting and meaningful impact in the communities we serve.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

51 edited+26 added−19 removed71 unchanged
Biggest changeNatural disasters can also lead to increased competition for subcontractors, which can delay our progress even after the event has concluded. Additionally, and as discussed above, increased competition for skilled labor can lead to cost overruns, as we may have to incentivize the impacted region’s limited trade base to work on our homes.
Biggest changeAdditionally, and as discussed below, increased competition for skilled labor can lead to cost overruns, as we may have to incentivize the impacted region’s limited trade base to work on our homes. Finally, natural disasters and other related events may also temporarily impact demand, as buyers are not as willing to shop for new homes during or after the event.
Current and future claims may arise out of events or circumstances not covered by insurance and not subject to effective indemnification agreements with our subcontractors. 15 At any given time, we may be the subject of civil litigation that could require us to pay substantial damages or could otherwise have a material adverse effect on us.
Current and future claims may arise out of events or circumstances not covered by insurance and not subject to effective indemnification agreements with our subcontractors. At any given time, we may be the subject of civil litigation that could require us to pay substantial damages or could otherwise have a material adverse effect on us.
If our sustainability practices or disclosures do not meet, or are perceived not to meet, evolving regulatory, investor and other stakeholder expectations and standards, our reputation, our ability to attract or retain employees, and our attractiveness as an investment or business partner could be negatively affected.
If our sustainability practices, commitments or disclosures do not meet, or are perceived not to meet, evolving regulatory, investor and other stakeholder expectations and standards, our reputation, our ability to attract or retain employees, and our attractiveness as an investment or business partner could be negatively affected.
Elevated mortgage rates for prolonged periods could lower demand for the homes we sell, resulting in a decrease in our revenues and earnings and adversely affect our financial condition.
Elevated mortgage rates for prolonged periods could also lower demand for the homes we sell, resulting in a decrease in our revenues and earnings and adversely affect our financial condition.
Any such actions taken with respect to us may increase our costs or harm our reputation. Further, we expect that increasingly stringent requirements will be imposed on homebuilders in the future.
Any such actions taken with respect to us may increase our costs or harm our reputation. Further, we expect that stringent requirements may be imposed on homebuilders in the future.
If we are unsuccessful in competing against our competitors, our market share could decline or our growth could be impeded and, as a result, our financial condition and results of operations could suffer. Competition in the homebuilding industry is intense, and there are relatively low barriers to entry into our business.
If we are unsuccessful in competing against other homebuilders, our market share could decline or our growth could be impeded and, as a result, our financial condition and results of operations could suffer. Competition in the homebuilding industry is intense, and there are relatively low barriers to entry into our business.
From time to time, the United States Environmental Protection Agency (EPA) and similar federal or state agencies review homebuilders’ compliance with environmental laws and may levy fines and penalties for failure to strictly comply with applicable environmental laws or impose additional requirements for future compliance as a result of past failures.
From time to time, the EPA and similar federal or state agencies review homebuilders’ compliance with environmental laws and may levy fines and penalties for failure to strictly comply with applicable environmental laws or impose additional requirements for future compliance as a result of past failures.
While we do not have any customer or direct supplier relationships in Russia, Ukraine, or the Middle East, the current military conflicts, and related sanctions, as well as export controls or actions that may be initiated by nations (e.g., potential cyberattacks, disruption of energy flows, etc.) and other potential uncertainties could adversely affect our supply chain by causing shortages or increases in costs for materials necessary to construct homes and/or increases to the price of gasoline and other fuels.
While we do not have any international operations or direct supplier relationships, current military conflicts and related sanctions, as well as export controls or actions that may be initiated by nations (e.g., potential cyberattacks, disruption of energy flows, etc.) and other potential uncertainties could adversely affect our supply chain by causing shortages or increases in costs for materials necessary to construct homes and/or increases to the price of gasoline and other fuels.
While cancellation rates during fiscal 2024 have remained in line with our normal historical range, significant cancellations have had, and could again in the future have, a material adverse effect on o ur business as a result of lost sales revenue and the accumulation of unsold housing inventory.
While cancellation rates during fi scal 2025 have remained in line with our normal historical range, significant cancellations have had, and could again in the future have, a material adverse effect on o ur business as a result of lost sales revenue and the accumulation of unsold housing inventory.
Our inability to utilize our limited pre-ownership change net operating loss carryforwards, tax credits and recognized built-in losses or deductions, or the occurrence of a future ownership change and resulting additional limitations to these tax attributes, could have a material adverse effect on our financial condition, results of operations, and cash flows.
Our inability to utilize our limited pre-ownership change NOLs, other tax credits and recognized built-in losses or deductions, or the occurrence of a future ownership change and resulting additional limitations to these tax attributes, could have a material adverse effect on our financial condition, results of operations, and cash flows.
Under this legislation, through the end of 2025, the annual deduction for real estate property taxes and state and local income or sales taxes has been limited to a combined amount of $10,000 ($5,000 in the case of a separate return filed by a married individual).
Under this legislation, through the end of 2029, the annual deduction for real estate property taxes and state and local income or sales taxes has been limited to a combined amount of $40,000 ($20,000 in the case of a separate return filed by a married individual).
Additionally, the protective provisions of our certificate of incorporation may not be enforceable against all stockholders and may not prevent all stock transfers that have the potential to cause a Section 382 ownership shift, and the rights agreement may deter, but ultimately may not block all transfers of our common stock that might result in an ownership change.
Additionally, any protective provisions approved by our stockholders may not be enforceable against all stockholders and may not prevent all stock transfers that have the potential to cause a Section 382 or Section 383 ownership shift, and the New Rights Agreement may deter, but ultimately may not block, all transfers of our common stock that might result in an ownership change.
If these or other lenders’ borrowing standards are tightened and/or the federal government were to reduce or eliminate these mortgage loan programs (including due to any failure of lawmakers to agree on a budget or appropriation legislation to fund relevant programs or operations), it would likely make it more difficult for our customers to obtain acceptable financing, which would, in turn, adversely affect our business, financial condition and results of operations.
If these or other lenders’ borrowing standards are tightened and/or the federal government were to reduce or eliminate these mortgage loan programs (including due to any failure of lawmakers to agree on a budget or appropriation legislation to fund relevant programs or operations or the continuance of the U.S. federal government shutdown which may result in these or other government agencies furloughing employees and stopping activities critical to the mortgage financing process), it would likely make it more difficult for our customers to obtain acceptable financing, which would, in turn, adversely affect our business, financial condition and results of operations.
As a homebuilder, we have been, and continue to be, subject to construction defect, product liability and home warranty claims, including moisture intrusion and related claims, arising in the ordinary course of business. These claims are common to the homebuilding industry and can be costly.
As a homebuilder, we have been, and continue to be, subject to construction defect, product liability and home warranty claims, including moisture intrusion and related claims, arising in the ordinary course of business.
Section 382 of the Internal Revenue Code contains rules that limit the ability of a company that undergoes an “ownership change,” which is generally defined as any change in ownership of more than 50% of its common stock over a three-year period, to utilize its net operating loss carryforwards, tax credits and certain built-in losses or deductions, as of the ownership change date, that are recognized during the five-year period after the ownership change.
Section 382 and Section 383 of the Internal Revenue Code contain rules that limit the ability of a company that undergoes an “ownership change,” which is generally defined as any change in ownership of more than 50% of its common stock over a three-year period, to utilize its NOLs, tax credits (including, among others, Energy-Efficiency Tax Credits) and certain built-in losses or deductions, as of the ownership change date, that are recognized during the five-year period after the ownership change.
With respect to certain general liability exposures, including construction defect claims, product liability claims and related claims, assessment of claims and the related liability and reserve estimation process is highly judgmental due to the complex nature of these exposures and unique circumstances of each claim.
These claims are common to the homebuilding industry and can be costly. 15 With respect to certain general liability exposures, including construction defect claims, product liability claims and related claims, assessment of claims and the related liability and reserve estimation process is highly judgmental due to the complex nature of these exposures and unique circumstances of each claim.
The realization of all or a portion of our deferred income tax assets (including net operating loss carryforwards and tax credits) is dependent upon the generation of future income during the statutory carryforward periods.
The realization of all or a portion of our deferred income tax assets (including NOLs and Energy-Efficiency Tax Credits) is dependent upon the generation of future income during the statutory carryforward periods.
If we are unable to generate sufficient cash flows in the future to service our debt, we may be required to refinance all or a portion of our existing debt, to sell assets or to obtain additional financing.
If we are unable to generate sufficient cash flows in the future to service our debt, we may be required to refinance all or a portion of our existing debt, to sell assets or to obtain additional financing. We may not be able to do any of the foregoing on terms acceptable to us, if at all.
If we are unable to retain our key employees or attract, train or retain other skilled personnel in the future, it could hinder our business strategy and impose additional costs of identifying and training new individuals. Competition for qualified personnel in all of our operating markets, as well as within our corporate operations, is intense.
If we are unable to retain our key employees or attract, train or retain other skilled personnel in the future, it could hinder our business strategy and impose additional costs of identifying and training new individuals.
Supply shortages and other r isks related to the demand for skilled labor and building materials could increase costs, delay deliveries and could adversely affect our financial condition and results of operations. The residential construction industry experiences price fluctuations and shortages in labor and materials from time to time.
These risks could adversely affect our business, financial condition, and results of operations. Supply shortages and other r isks related to the demand for skilled labor and building materials could increase costs, delay deliveries and could adversely affect our financial condition and results of operations.
If another ownership change were to occur, the limitations imposed by Section 382 could result in a material amount of our net operating loss carryforwards and tax credits expiring unused and, therefore, significantly impair the future value of our deferred tax assets.
We cannot predict or control the occurrence or timing of another ownership change in the future. If another ownership change were to occur, the limitations imposed by Section 382 and Section 383 could result in a material amount of our NOLs and Energy-Efficiency Tax Credits expiring unused and, therefore, significantly impair the future value of our deferred tax assets.
Inflation can adversely affect us by increasing costs of land, materials, and labor. In addition, inflation is often accompanied by higher interest rates. In an inflationary environment, depending on homebuilding industry and other economic conditions, we may be unable to raise home prices enough to keep up with the rate of inflation, which would reduce our profit margins.
In an inflationary environment, depending on homebuilding industry and other economic conditions, we may be unable to raise home prices enough to keep up with the rate of inflation, which would reduce our profit margins.
If we are not successful in obtaining sufficient capital to fund our planned capital and other expenditures, we may be unable to acquire land for our housing developments, thereby limiting our anticipated growth and community count.
If we are not successful in obtaining sufficient capital to fund our planned capital and other expenditures, we may be unable to acquire land for our housing developments, thereby limiting our anticipated growth and community count. Additionally, if we cannot obtain additional financing to fund the purchase of land under our option agreements, we may incur contractual penalties and fees.
In addition, through the end of 2025, the deduction for mortgage interest will generally only be available with respect to acquisition indebtedness that does not exceed $750,000 ($375,000 in the case of a separate return filed by a married individual). 12 Inflation may adversely affect us by increasing costs beyond what we can recover through price increases.
In addition, the deduction for mortgage interest will generally only be available with respect to acquisition indebtedness that does not exceed $750,000 ($375,000 in the case of a separate return filed by a married individual).
In recent years, we, along with many other companies, have been subject to increased focus and scrutiny from regulators, investors, employees and customers and other stakeholders regarding sustainability efforts, including compliance with evolving disclosure requirements. For example, the SEC has issued final rules that would require expanded disclosures related to climate change.
In recent years, we, along with many other companies, have been subject to focus and scrutiny from regulators, investors, employees and customers and other stakeholders regarding sustainability efforts, including compliance with evolving disclosure requirements.
Adverse developments such as terrorist attacks against the United States or any outbreak or escalation of hostilities between the United States and/or any foreign power may cause disruption to the economy, our Company, our employees and our customers, which could negatively impact our financial condition and results of operations.
Adverse developments such as terrorist attacks against the United States or any outbreak or escalation of hostilities between the United States and/or any foreign power may cause disruption to the economy, our Company, our employees and our customers, which could negatively impact our financial condition and results of operations. 17 Financial and Liquidity Risks Our access to capital and our ability to obtain additional financing could be affected by any downgrade of our credit ratings, as well as limitations in the capital markets or adverse credit market conditions.
Competitors or other entities may integrate AI into their information systems and business operations more swiftly or effectively than us, potentially impairing our competitive edge and negatively impacting our financial performance. 16 Our computer systems, including our back-up systems and portable electronic devices, and those of our third-party providers, are subject to damage or interruption from power outages, computer and telecommunication failures, computer viruses, security breaches including malware and phishing, cyberattacks, natural disasters, usage errors by our employees or contractors, and other related risks.
Our computer systems, including our back-up systems and portable electronic devices, and those of our third-party providers, are subject to damage or interruption from power outages, computer and telecommunication failures, computer viruses, security breaches including malware and phishing, cyberattacks, natural disasters, usage errors or misconduct by our employees or contractors, and other related risks.
Such measures limit our ability to control costs, which if we are not able to successfully offset such increased costs through higher sales prices, could adversely affect our margins on the homes we build.
Many of these changes may result in adverse impacts for us or our trade partners that could materially affect our operations. Such actions limit our ability to control costs, which if we are not able to successfully offset such increased costs through higher sales prices, could adversely affect our margins on the homes we build.
Global economic and political instability and conflicts could adversely affect our business, financial condition or results of operations.
Global economic and political instability and conflicts could adversely affect our business, financial condition or results of operations. Our business could be adversely affected by unstable economic and political conditions within the United States, and geopolitical conflicts around the world.
Negative changes in national and regional economic conditions, as well as local economic conditions where we conduct our operations, may result in more caution on the part of homebuyers and, consequently, fewer home purchases. Demand during the second half of fiscal 2023 remained relatively steady as homebuyers faced a higher rate environment and a lack of supply of existing homes.
Negative changes in national and regional economic conditions, as well as local economic conditions where we conduct our operations, may result in more caution on the part of homebuyers and, consequently, fewer home purchas es.
For example, the Tax Cuts and Jobs Act, which was enacted in December 2017, includes provisions that impose significant limitations with respect to these income tax deductions.
For example, in July 2025, H.R. 1, or the One Big Beautiful Bill Act ("OBBBA"), was enacted, which includes provisions that impose significant limitations with respect to these income tax deductions.
As a result of this previous “ownership change” for purposes of Section 382, our ability to use certain net operating loss carryforwards, tax credits and built-in losses or deductions in existence prior to the ownership change was limited by Section 382. We cannot predict or control the occurrence or timing of another ownership change in the future.
However, due to the “ownership change” we experienced in January 2010, for purposes of Section 382 and Section 383, our ability to use certain NOLs, tax credits and built-in losses or deductions in existence prior to the ownership change was limited by Section 382 and/or Section 383.
Although these rules are currently stayed pending judicial review, if implemented as proposed, these rules would significantly increase our climate-related disclosure obligations. The State of California has also enacted legislation that will require large U.S. companies doing business in California to make broad-based climate-related disclosures, and other states are also considering similar measures.
For example, the State of California has enacted legislation that will require large U.S. companies doing business in California to make broad-based climate-related disclosures, and other states have considered similar measures. We are assessing our obligations under these proposed and enacted rules and expect that compliance could require substantial effort in the future.
Despite the September 2024 reduction in interest rates, future increases in interest rates could directly impact mortgage rates and increase the costs of owning a home, which could adversely affect the purchasing power of consumers.
Despite modest interest rate reductions in September 2025, interest rates have remained at a heightened level for a prolonged period, and may continue to remain at a heightened level. Higher rate periods or future increases in interest rates could directly impact mortgage rates and increase the costs of owning a home, which could adversely affect the purchasing power of consumers.
Our backlog reflects the number and value of homes for which we have entered into a sales contract with a customer but have not yet delivered the home.
Operational, Legal and Regulatory Risks An increase in cancellation rates will negatively impact our business and could lead to imprecise estimates related to homes to be delivered in the future (backlog). Our backlog reflects the number and value of homes for which we have entered into a sales contract with a customer but have not yet delivered the home.
Any delay or refusal from government agencies to grant us necessary licenses, permits and approvals could have an adverse effect on our financial condition and results of operations. Our activities and disclosures related to sustainability expose us to risks.
Any delay or refusal from government agencies to grant us necessary licenses, permits and approvals could have an adverse effect on our financial condition and results of operations. Limitations on, or the elimination of, tax benefits in connection with the federal “Energy Star” or “Zero Energy” programs could be material to our business.
Net operating losses and tax credits generally may be carried forward for a 20-year period to offset future earnings and reduce our federal income tax liability. Any net operating losses created during or after our fiscal 2019 may be carried forward indefinitely; however, the loss can only be utilized to offset 80% of taxable income generated in a tax year.
NOLs, generated prior to fiscal 2019, and tax credits (including the Energy-Efficiency Tax Credits) generally may be carried forward for a 20-year period to offset future earnings and reduce our federal income tax liability.
During downturns in the homebuilding industry, housing markets across the United States may experience an oversupply of both new and resale home inventory, an increase in foreclosures, reduced levels of consumer demand for new homes, increased cancellation rates, aggressive price competition among homebuilders, and increased incentives for home sales.
A worsening of these conditions and/or further downturns in the homebuilding industry could also, among other things, result in an oversupply of both new and resale home inventory across housing markets in the U.S., an increase in foreclosures, reduced levels of consumer demand for new homes, increased cancellation rates, aggressive price competition among homebuilders, and increased incentives for home sales, any of which could result in a decrease in our revenues, earnings, or margins and adversely affect our financial condition and results of operations.
In February 2022, our stockholders approved an extension of these protective provisions in our certificate of incorporation and the rights agreement, which as a result are scheduled to expire in November 2025. Neither the protective provisions nor the rights agreement offers a complete solution, and an ownership change may still occur.
Neither the New Rights Agreement, nor any protective provisions included in our certificate of incorporation, offer a complete solution, and an ownership change may still occur.
This includes growing profitability, improving balance sheet efficiency and generating returns above our cost of capital. In addition, from time to time we may engage in bond repurchases to reduce our indebtedness and return value to our stockholders through share repurchases.
As part of our capital allocation strategy, from time to time we have, and may continue to, return value to our stockholders through share repurchases and to engage in bond repurchases to reduce our indebtedness.
In addition, such events could cause higher interest rates, inflation or general economic uncertainty, which could negatively impact our business partners, employees or customers, or otherwise adversely impact our business. Terrorist attacks or acts of war against the United States or increased domestic or international instability could have an adverse effect on our operations.
Terrorist attacks or acts of war against the United States or increased domestic or international instability could have an adverse effect on our operations.
AI programs can incur significant costs and demand substantial expertise for development, pose challenges in setup and management, and necessitate periodic updates.
We are consistently considering new ways we might further integrate AI solutions into our information systems, potentially assuming a more critical role in our operations over time. AI programs can incur significant costs and demand substantial expertise for development, pose challenges in setup and management, and necessitate periodic updates.
Pricing for labor and materials can be affected by the factors discussed above, changes in energy prices, and various other national, regional, and local economic and political factors. For example, government imposed tariffs and trade regulations on imported building supplies have, and in the future could have, significant impacts on the cost to construct our homes.
Pricing for labor and materials can be affected by the factors discussed above, changes in energy prices, and various other national, regional, and local economic and political factors. Additionally, heightened immigration guidelines and enforcement, including federal immigration provisions contained in the OBBBA, could result in labor shortages, particularly with our trade partners.
Changes to these standards could require adjustments to our accounting or operational policies, as well as updates to our existing systems to meet these reporting obligations. We will therefore likely need to be prepared to contend with overlapping, yet distinct, climate-related disclosure approaches, frameworks and requirements. Our 2023 Sustainability Report is available on our website.
Standards for tracking and reporting on sustainability matters, including climate-related matters, have also not been harmonized. Changes to these standards could require adjustments to our accounting or operational policies, as well as updates to our existing systems to meet these reporting obligations.
Information technology failures, cybersecurity breaches or data security breaches could harm our business. We use information technology and other computer resources to perform important operational and marketing activities and to maintain our business records. Certain of these resources are provided to us and/or maintained by third-party service providers pursuant to agreements that specify certain security and service level standards.
Competition for qualified personnel in all of our operating markets, as well as within our corporate operations, is intense. 16 Information technology failures, cybersecurity breaches or data security breaches could harm our business. We use information technology and other computer resources to perform important operational and marketing activities and to maintain our business records.
In fiscal 2024, the new home sales environment continued to be affordability-challenged, and demand is highly sensitive to fluctuations in mortgage rates. These economic conditions are out of our control and affect buyer sentiment and behavior and the demand for the homes we sell. These conditions also impact consumer confidence, upon which our business is highly dependent.
This continued economic uncertainty is out of our control, affects buyer sentiment and behavior and the demand for the homes we sell, and negatively impacts consumer confide nce, upon which our business is highly dependent.
Additionally, if we cannot obtain additional financing to fund the purchase of land under our option agreements, we may incur contractual penalties and fees. 19 Inefficient or ineffective allocation of capital could adversely affect our operating results and/or stockholder value. Our goal is to allocate capital to maximize our overall long-term returns.
Inefficient or ineffective allocation of capital could adversely affect our operating results and/or stockholder value. Our goal is to allocate capital to maximize our overall long-term returns. This includes growing profitability, improving balance sheet efficiency and generating returns above our cost of capital.
Furthermore, many of our competitors have substantially greater financial resources, less leverage, and lower costs of funds and operations than we do. Many of these competitors also have longstanding relationships with subcontractors and suppliers in the markets in which we operate.
Furthermore, many of our competitors have substantially greater financial resources, less leverage, and lower costs of funds and operations than we do. In addition, the homebuilding industry has been subject to increasing consolidation and mergers and acquisition activity, which could result in existing competitors increasing their market share. Such changes have the potential to increase competitive dynamics in affected markets.
We currently build in several of the top markets in the nation and, therefore, we expect to continue to face additional competition from new entrants into our markets. Operational, Legal and Regulatory Risks An increase in cancellation rates will negatively impact our business and could lead to imprecise estimates related to homes to be delivered in the future (backlog).
Many of these competitors also have longstanding relationships with subcontractors and suppliers in the markets in which we operate. We currently build in several of the top markets in the nation and, therefore, we expect to continue to face additional competition from new entrants into our markets.
Built-in losses, if and when recognized, generally will result in tax losses that may then be deducted or carried forward. However, we experienced an “ownership change” under Section 382 as of January 12, 2010.
Any NOLs created during or after fiscal 2019 may be carried forward indefinitely, but may only be utilized to offset 80% of taxable income generated in a 18 tax year. Built-in losses, if and when recognized, generally will result in tax losses that may then be deducted or carried forward.
Our certificate of incorporation currently prohibits certain transfers of our common stock that could result in an ownership change. In addition, we are currently party to a rights agreement intended to act as a deterrent to any person desiring to acquire 4.95% or more of our common stock.
Therefore, on November 12, 2025, the Company, with the unanimous approval of its Board of Directors, entered into that certain Rights Agreement for the Protection of NOLs and Energy-Efficiency Tax Credits (the "New Rights Agreement"). The New Rights Agreement is intended to act as a deterrent to any person desiring to acquire 4.95% or more of our common stock.
Removed
Adverse changes in any of these conditions could decrease demand and pricing for our homes or result in customer cancellations of pending contracts, which could adversely affect the number of home sales we make or reduce home prices, either of which could result in a decrease in our revenues and earnings and adversely affect our financial condition and results of operations.
Added
Demand softened during fiscal 2025 as homebuyers continued to face an elevated interest rate environment despite interest rate cuts by the Federal Reserve multiple times during fiscal 2025.
Removed
In the event of a downturn, we would likely experience a material reduction in revenues and margins and our financial condition as well as our results of operations could be adversely affected.
Added
In addition, any certain government actions such as continuance of the U.S. federal government shutdown or U.S. initiated tariffs on certain foreign goods, particularly raw materials, commodities, and products manufactured outside the United States that are used in our homebuilding processes, may disrupt our home closings process or cause our homebuilding costs to rise, which would have a negative impact on our business and results of operations.
Removed
In the last few years, the Federal Reserve raised interest rates multiple times in response to concerns about inflation and economic uncertainties, and it may raise them again.
Added
These changes could reduce the perceived affordability of homeownership, and therefore the demand for homes, or 12 have a moderating impact on home sales prices in areas with relatively high housing prices or high state and local income and real estate taxes. Inflation may adversely affect us by increasing costs beyond what we can recover through price increases.
Removed
Finally, natural disasters and other related events may also temporarily impact demand, as buyers are not as willing to shop for new homes during or after the event. These risks could adversely affect our business, financial condition, and results of operations.
Added
Although inflation has moderated slightly, it has remained persistent in the United States in recent years due, in part, to supply chain issues, elevated energy prices, labor shortages and trade policies, among other factors. Inflation can adversely affect us by increasing costs of land, materials, and labor. In addition, inflation is often accompanied by higher interest rates.
Removed
Additionally, in 2023, Florida enacted legislation that will impose more stringent immigrant eligibility requirements. This legislation or similar legislation if adopted in other jurisdictions in which we operate, could result in labor shortages that could materially affect our operations.
Added
Natural disasters or severe weather can also lead to increased competition for subcontractors and/or unavailability of laborers or service providers, both of which can delay our progress even after the event has concluded.
Removed
We are assessing our obligations under these proposed and enacted rules and expect that compliance could require substantial effort in the future. Standards for tracking and reporting on sustainability matters, including climate-related matters, have also not been harmonized.
Added
The residential construction industry experiences price fluctuations and shortages in labor and materials from time to time.
Removed
Similarly, our failure, or perceived failure, to pursue or fulfill any sustainability-focused goals, targets, or objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.
Added
We receive tax benefits under Internal Revenue Code Section 45L, which we have earned through our substantial investment in and commitment to energy-efficient building practices (Energy-Efficiency Tax Credits). Historically, the Energy-Efficiency Tax Credits were valued at $2,000 per single family home that met the relevant qualifications.
Removed
Presently, we employ a limited array of both traditional and generative artificial intelligence (“AI”) solutions for certain functions for our operations. It is conceivable that we might integrate further AI solutions into our information systems in the future, potentially assuming a more critical role in our operations over time.
Added
The Inflation Reduction Act of 2022 increased these credits to $2,500 or $5,000 per single family home meeting Energy Star or Zero Energy Ready qualifications, respectively.
Removed
Our business could be adversely affected by unstable economic and political conditions within the United States, including the 2024 election cycle, and foreign jurisdictions and geopolitical conflicts, such as the conflict between Russia and Ukraine, the conflict in Gaza and other conflicts in the Middle East.
Added
As we have effectively achieved our goal of building 100% Zero Energy Ready homes in fiscal 2025, we currently receive an Energy-Efficiency Tax Credit of $5,000 for each single family home certified as a Zero Energy Ready home.
Removed
Our business could be materially and adversely disrupted by an epidemic or pandemic, or similar public threat, or fear of such an event, and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it.
Added
However, pursuant to the OBBBA, the Energy-Efficiency Tax Credits for new energy-efficient homes delivered after June 30, 2026 will be disallowed and, therefore, unless the OBBBA is amended or other legislation is enacted, we will not receive any Energy-Efficiency Tax Credit benefit for any of our homes delivered after that date.
Removed
An epidemic, pandemic, or similar serious public health issue, and the measures undertaken by governmental authorities to address it, could significantly disrupt or prevent us from operating our business in the ordinary course for an extended period, and thereby, and/or along with any associated economic and/or social instability or distress, have a material adverse impact on our financial condition and results of operations.
Added
As a result, our income tax expense and effective tax rate may increase. For more information, see Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Income Taxes. Our activities and disclosures related to sustainability expose us to risks.
Removed
If a public health emergency were to emerge, we could experience material disruptions in our operating environment, impairing our ability to sell and build homes in a typical manner, or at all, due to, among other things, increased costs or decreased supply of building materials, reduced availability of subcontractors, employees, and other talent, as a result of infections or recommended self-quarantining, or governmental mandates to direct production activities to support public health efforts.
Added
We will therefore likely need to be prepared to contend with overlapping, yet distinct, climate-related disclosure approaches, frameworks and requirements. At the same time, an increasing number of stakeholders, lawmakers and regulators have expressed or pursued contrary views, policy, and investment expectations with respect to sustainability matters, which may expose us to additional legal, financial or reputational risks.
Removed
This could result in our recognizing charges in future periods, which may be material, for inventory impairments or land option agreement abandonments, or both, related to our inventory assets. 17 Should the adverse impacts described above (or others that are currently unknown) occur, whether individually or collectively, we would expect to experience, among other things, decreases in our net new orders, home closings, average selling prices, revenues, and profitability, and such impacts could be material to our financial condition and results of operations.
Added
Certain of these resources are provided to us and/or maintained by third-party service providers pursuant to agreements that specify certain security and service level standards. Presently, we employ a limited array of traditional and generative artificial intelligence (AI) solutions for certain functions for our operations.
Removed
Along with an increase in cancellations of home purchase contracts, if there are prolonged government restrictions on our business and our customers, and/or an extended economic recession, we could be unable to produce revenues and cash flows sufficient to conduct our business; or meet the terms of our covenants and other requirements under our various debt obligations including but not limited to the Senior Unsecured Revolving Credit Facility, indentures for our senior and junior notes, land contracts due to land sellers and other loans.
Added
In addition, the AI-related legal and regulatory landscape is constantly evolving and therefore remains uncertain and may be inconsistent from jurisdiction to jurisdiction. Our obligations to comply with the evolving legal and regulatory landscape could entail significant costs or limit our ability to incorporate certain AI capabilities into our operations.
Removed
Such a circumstance could, among other things, exhaust our available liquidity (and ability to access liquidity sources) and/or trigger an acceleration to pay a significant portion or all of our then-outstanding debt obligations, which we may be unable to do.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe IT Committee is responsible for advising and assisting the Board of Directors in overseeing the Company’s customer relationship management and enterprise resource planning software and technology and regularly meets with the Company’s management team with respect to these initiatives. 21 Conducting our businesses involves the collection, storage, use, disclosure, processing, transfer, and other handling of a wide variety of information, including personally identifiable information, for various purposes.
Biggest changeConducting our businesses involves the collection, storage, use, disclosure, processing, transfer, and other handling of a wide variety of information, including personally identifiable information, for various purposes.
The team works directly in consultation with internal and external advisors to execute our cybersecurity strategies. Pursuant to our cybersecurity program, potential cybersecurity threats are classified by risk levels and threat mitigation efforts are typically prioritized based on those risk classifications, while focus also remains on maintaining the resiliency of our information systems.
The team works directly in consultation with internal and external advisors to execute our cybersecurity and risk strategies. Pursuant to our cybersecurity program, potential cybersecurity threats are classified by risk levels and threat mitigation efforts are typically prioritized based on those risk classifications, while focus also remains on maintaining the resiliency of our information systems.
Additionally, in furtherance of detecting, identifying, and managing material cybersecurity and other data security threats, we also: • maintain robust information security and privacy policies that are reviewed and updated on an annual basis; • engage with a range of third-party service providers, including cybersecurity consultants, to evaluate, monitor, and test our cyber management systems and related risks; • conduct audits, penetration tests, threat and vulnerability assessments, cybersecurity risk monitoring, and security enhancement consultations, using both internal and external resources; • maintain and continue to evolve our Cybersecurity Incident Management program, which includes regular incident respon se tabletop exercises, cybersecurity-related disaster recovery and business resiliency plans, and related communications and business continuity procedures; • conduct security assessments of third-party software products and hosting providers prior to engagement; • implement ongoing monitoring procedures for third-party service providers’ hosted applications to ensure continued alignment with our cybersecurity standards and compliance requirements; • provide mandatory annual security and privacy awareness training, along with monthly phishing simulations, to all of our employees.
Additionally, in furtherance of detecting, identifying, and managing material cybersecurity and other data security threats, including such threats associated with our use of any third-party service providers, we also: • maintain robust information security and privacy policies that are reviewed and updated on an annual basis; • engage with a range of third-party service providers, includi ng cybersecurity consultants, to evaluate, monitor, and test our cyber management systems and related risks; • conduct audits, penetration tests, threat and vulnerability assessments, cybersecurity risk monitoring, and security enhancement consultations, using both internal and external resources; • maintain and continue to evolve our Cybersecurity Incident Management program, which includes regular incident respon se tabletop exercises, cybersecurity-related disaster recovery and business resiliency plans, and related communications and business continuity procedures; • conduct security assessments of third-party software products and hosting providers prior to engagement; 20 • implement ongoing monitoring procedures for third-party service providers’ hosted applications to ensure continued alignment with our cybersecurity standards and compliance requirements; • provide mandatory annual security and privacy awareness training, along with monthly phishing simulations, to all of our employees.
The foundation of our cybersecurity program is based on the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, which includes a set of controls to prevent, detect, and respond to cybersecurity and other data security threats and incidents.
The foundation of our cybersecurity program is based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework, which includes a set of controls to prevent, detect, and respond to cybersecurity and other data security threats and incidents.
While, to date, we have not had a significant cybersecurity breach or attack that has had a material impact on our business strategy, results of operations, or financial condition, there can be no assurance that our efforts to maintain the security and integrity of these types of IT networks and related systems will be effective or that attempted security breaches or disruptions would not be successful or damaging.
While, to date, we do not believe we have had a significant cybersecurity breach or attack that has had or is likely to have a material impact on our business strategy, results of operations, or financial condition, there can be no assurance that our efforts to maintain the security and integrity of these types of IT networks and related systems will be effective or that attempted security breaches or disruptions would not be successful or damaging.
Cybersecurity We maintain a cybersecurity program designed to detect, identify, classify and mitigate cybersecurity and other data security threats as part of our efforts to protect and maintain the confidentiality and security of homebuyer, customer, employee, vendor and supplier information, and non-public information about the Company, which has been strategically integrated into our enterprise risk management program to promote a company-wide culture of cyber risk awareness.
Cybersecurity We maintain a cybersecurity program designed to detect, identify, classify and mitigate cybersecurity and other data security threats as part of our efforts to protect and maintain the confidentiality and security of homebuyer, customer, employee, vendor and supplier information, and non-public information about the Company, which has been strategically integrated into our enterprise risk management program to promote a company-wide culture of cyber risk awareness and inform our decision-making proce ss.
We have a dedicated team of employees managing our cybersecurity program and initiatives, led by the Company’s Chief Information Security Officer, who reports to our Chief Information Officer and brings over 20 years of experience in senior leadership roles leading information security and technology teams across private and public companies.
We have a dedicated team of employees managing our cybersecurity program and initiatives, led by the Company’s Chief Information Security Officer (CISO), who reports to our Chief Information Officer (CIO). Both our CISO and CIO possess over 20 years of experience in senior leadership roles leading information security and technology teams across private and public companies.
Removed
We have also established an IT Committee, which is an ad hoc committee comprised of at least two members of the Board of Directors.
Added
We have also established a Technology Committee, which is a committee currently comprised of four members of the Board of Directors. The Technology Committee is responsible for advising and assisting the Board of Directors in overseeing the Company’s technology strategy and investment matters, and regularly meets with the Company’s management team with respect to these initiatives.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties As of September 30, 2024, we had under lease appro ximately 23,600 square feet of office space in Atlanta, Georgia to house our corporate headquarters. We also lease and own an aggregate of approxima tely 171,200 and 4,500 s quare feet of office space, respectively, for our divisional operations at various locations.
Biggest changeItem 2. Properties As of September 30, 2025, we had under lease appro ximately 26,000 square feet of office space in Atlanta, Georgia to house our corporate headquarters. We also lease and own an aggregate of approxima tely 171,500 and 4,500 s quare feet of office space, respectively, for our divisional operations at various locations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFurther, the legal costs associated with the lawsuits and the amount of time required to be spent by management and our Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our financial condition, results of operations, or cash flows.
Biggest changeFurther, the legal costs associated with the lawsuits and the amount of time required to be spent by management and our Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our financial condition, results of operations, or cash flows. 21 For a discussion of our legal proceedings, see Note 8 of the notes to our consolidated financial statements in this Form 10-K.
Removed
For a discussion of our legal proceedings, see Note 8 of the notes to our consolidated financial statements in this Form 10-K. Item 4. Mine Safety Disclosures Not applicable. 22 PART II
Added
Item 4. Mine Safety Disclosures Not applicable. 22 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeComparison of Five Year Cumulative Total Return Assuming $100 Investment as of September 30, 2019 September 30, 2019 2020 2021 2022 2023 2024 u Beazer Homes USA, Inc. $ 100.00 $ 88.59 $ 115.77 $ 64.90 $ 167.16 $ 229.27 g S&P 500 Index $ 100.00 $ 115.15 $ 149.70 $ 126.54 $ 153.89 $ 209.83 p S&P 500 Homebuilding Index $ 100.00 $ 134.71 $ 151.29 $ 123.59 $ 199.80 $ 351.52 Item 6. [Reserved] 24
Biggest changeComparison of Five Year Cumulative Total Return Assuming $100 Investment as of September 30, 2020 September 30, 2020 2021 2022 2023 2024 2025 u Beazer Homes USA, Inc. $ 100.00 $ 130.68 $ 73.26 $ 188.69 $ 258.80 $ 185.91 g S&P 500 Index $ 100.00 $ 130.00 $ 109.89 $ 133.65 $ 182.23 $ 214.30 p S&P 500 Homebuilding Index $ 100.00 $ 112.30 $ 91.74 $ 148.31 $ 260.93 $ 222.31 Item 6. [Reserved] 24
Dividends The indentures u nder which our senior notes were issued contain certain restrictive covenants, including limitations on the payment of dividends. There were no dividends paid during our fiscal 2024, 2023 or 2022. The Board of Directors will periodically reconsider the declaration of dividends, assuming payment of dividends is not limited under our indentures.
Dividends The indentures u nder which our senior notes were issued contain certain restrictive covenants, including limitations on the payment of dividends. There were no dividends paid during our fiscal 2025, 2024 or 2023. The Board of Directors will periodically reconsider the declaration of dividends, assuming payment of dividends is not limited under our indentures.
The graph assumes an investment of $100 at September 30, 2019 in Beazer Homes' common stock and in each of the benchmark indices specified, assumes that all dividends were reinvested, and accounts for the impact of any stock splits, where applicable.
The graph assumes an investment of $100 at September 30, 2020 in Beazer Homes' common stock and in each of the benchmark indices specified, assumes that all dividends were reinvested, and accounts for the impact of any stock splits, where applicable.
Securities Authorized for Issuance under Equity Compensation Plans The following table provides information about the Company's shares of common stock that may be issued under our existing equity compensation plans as of September 30, 2024, all of which have been approved by our stockholders: Plan Category Number of Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Common Shares Remaining Available for Future Issuance Under Equity Compensation Plans Equity compensation plans approved by stockholders 11,150 $10.04 2,945,076 Issuer Purchases of Equity Securities We did not repurchase any shares of our common stock in the fourth quarter ended September 30, 2024. 23 Performance Graph The following graph illustrates the cumulative total stockholder return on Beazer Homes' common stock for the last five fiscal years through September 30, 2024 as compared to the S&P 500 Index and the S&P 500 Homebuilding Index.
Securities Authorized for Issuance under Equity Compensation Plans The following table provides information about the Company's shares of common stock that may be issued under our existing equity compensation plans as of September 30, 2025, all of which have been approved by our stockholders: Plan Category Number of Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Common Shares Remaining Available for Future Issuance Under Equity Compensation Plans Equity compensation plans approved by stockholders 1,642 $23.14 2,652,283 Issuer Purchases of Equity Securities We did not repurchase any shares of our common stock in the fourth quarter ended September 30, 2025. 23 Performance Graph The following graph illustrates the cumulative total stockholder return on Beazer Homes' common stock for the last five fiscal years through September 30, 2025 as compared to the S&P 500 Index and the S&P 500 Homebuilding Index.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Company lists its common stock on the New York Stock Exchange (NYSE) under the symbol “BZH.” On November 8, 2024, the last reported sales price of the Company's common stock on the NYSE was $33.48, and we had approximately 187 stockholders of record and 31,050,227 shares of common stock outstanding.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Company lists its common stock on the New York Stock Exchange (NYSE) under the symbol “BZH.” On November 10, 2025, the last reported sales price of the Company's common stock on the NYSE was $21.79, and we had approximately 184 stockholders of record and 29,759,950 shares of common stock outstanding.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThese non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP. $ in thousands Fiscal Year Ended September 30, 2024 HB Gross Profit (GAAP) HB Gross Margin (GAAP) Impairments & Abandonments (I&A) HB Gross Profit excluding I&A (Non-GAAP) HB Gross Margin excluding I&A (Non-GAAP) Interest Amortized to COS (Interest) HB Gross Profit excluding I&A and Interest (Non-GAAP) HB Gross Margin excluding I&A and Interest (Non-GAAP) West $ 306,366 21.1 % $ 1,805 $ 308,171 21.3 % $ — $ 308,171 21.3 % East 87,481 18.1 % 91 87,572 18.1 % — 87,572 18.1 % Southeast 79,174 21.9 % 100 79,274 22.0 % — 79,274 22.0 % Corporate & unallocated (a) (59,410) — (59,410) 67,658 8,248 Total homebuilding $ 413,611 18.0 % $ 1,996 $ 415,607 18.1 % $ 67,658 $ 483,265 21.1 % $ in thousands Fiscal Year Ended September 30, 2023 HB Gross Profit (GAAP) HB Gross Margin (GAAP) Impairments & Abandonments (I&A) HB Gross Profit excluding I&A (Non-GAAP) HB Gross Margin excluding I&A (Non-GAAP) Interest Amortized to COS (Interest) HB Gross Profit excluding I&A and Interest (Non-GAAP) HB Gross Margin excluding I&A and Interest (Non-GAAP) West $ 307,240 23.8 % $ 487 $ 307,727 23.8 % $ — $ 307,727 23.8 % East 103,102 20.5 % 154 103,256 20.5 % — 103,256 20.5 % Southeast 92,212 22.9 % — 92,212 22.9 % — 92,212 22.9 % Corporate & unallocated (a) (64,434) — (64,434) 68,489 4,055 Total homebuilding $ 438,120 19.9 % $ 641 $ 438,761 20.0 % $ 68,489 $ 507,250 23.1 % $ in thousands Fiscal Year Ended September 30, 2022 HB Gross Profit (GAAP) HB Gross Margin (GAAP) Impairments & Abandonments (I&A) HB Gross Profit excluding I&A (Non-GAAP) HB Gross Margin excluding I&A (Non-GAAP) Interest Amortized to COS (Interest) HB Gross Profit excluding I&A and Interest (Non-GAAP) HB Gross Margin excluding I&A and Interest (Non-GAAP) West $ 353,370 26.6 % $ 289 $ 353,659 26.6 % $ — $ 353,659 26.6 % East 137,937 24.8 % 143 138,080 24.9 % — 138,080 24.9 % Southeast 104,341 24.9 % 663 105,004 25.1 % — 105,004 25.1 % Corporate & unallocated (a) (63,499) — (63,499) 71,619 8,120 Total homebuilding $ 532,149 23.1 % $ 1,095 $ 533,244 23.2 % $ 71,619 $ 604,863 26.3 % (a) Corporate and unallocated includes amortization of capitalized interest, capitalization and amortization of indirect costs related to homebuilding activities, as well as capitalized interest and capitalized indirect costs impaired in order to reflect projects in progress assets at fair value, when applicable. 33 Our homebuilding gross profit decreased by $24.5 million to $413.6 million for the fiscal year ended September 30, 2024, compared to $438.1 million in the prior year.
Biggest changeThese non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP. $ in thousands Fiscal Year Ended September 30, 2025 HB Gross Profit (GAAP) HB Gross Margin (GAAP) Impairments & Abandonments (I&A) HB Gross Profit excluding I&A (Non-GAAP) HB Gross Margin excluding I&A (Non-GAAP) Interest Amortized to COS (Interest) HB Gross Profit excluding I&A and Interest (Non-GAAP) HB Gross Margin excluding I&A and Interest (Non-GAAP) West $ 255,332 18.0 % $ 3,157 $ 258,489 18.2 % $ — $ 258,489 18.2 % East 98,132 17.1 % 215 98,347 17.1 % — 98,347 17.1 % Southeast 46,790 15.3 % 5,852 52,642 17.3 % — 52,642 17.3 % Corporate & unallocated (a) (70,878) 1,002 (69,876) 73,743 3,867 Total homebuilding $ 329,376 14.3 % $ 10,226 $ 339,602 14.7 % $ 73,743 $ 413,345 18.0 % $ in thousands Fiscal Year Ended September 30, 2024 HB Gross Profit (GAAP) HB Gross Margin (GAAP) Impairments & Abandonments (I&A) HB Gross Profit excluding I&A (Non-GAAP) HB Gross Margin excluding I&A (Non-GAAP) Interest Amortized to COS (Interest) HB Gross Profit excluding I&A and Interest (Non-GAAP) HB Gross Margin excluding I&A and Interest (Non-GAAP) West $ 306,366 21.1 % $ 1,805 $ 308,171 21.3 % $ — $ 308,171 21.3 % East 87,481 18.1 % 91 87,572 18.1 % — 87,572 18.1 % Southeast 79,174 21.9 % 100 79,274 22.0 % — 79,274 22.0 % Corporate & unallocated (a) (59,410) — (59,410) 67,658 8,248 Total homebuilding $ 413,611 18.0 % $ 1,996 $ 415,607 18.1 % $ 67,658 $ 483,265 21.1 % $ in thousands Fiscal Year Ended September 30, 2023 HB Gross Profit (GAAP) HB Gross Margin (GAAP) Impairments & Abandonments (I&A) HB Gross Profit excluding I&A (Non-GAAP) HB Gross Margin excluding I&A (Non-GAAP) Interest Amortized to COS (Interest) HB Gross Profit excluding I&A and Interest (Non-GAAP) HB Gross Margin excluding I&A and Interest (Non-GAAP) West $ 307,240 23.8 % $ 487 $ 307,727 23.8 % $ — $ 307,727 23.8 % East 103,102 20.5 % 154 103,256 20.5 % — 103,256 20.5 % Southeast 92,212 22.9 % — 92,212 22.9 % — 92,212 22.9 % Corporate & unallocated (a) (64,434) — (64,434) 68,489 4,055 Total homebuilding $ 438,120 19.9 % $ 641 $ 438,761 20.0 % $ 68,489 $ 507,250 23.1 % (a) Corporate and unallocated includes amortization of capitalized interest, capitalization and amo rtization of indirect costs related to homebuilding activities, as well as capitalized interest and capitalized indirect costs impaired in order to reflect projects in progress assets at fair value, when applicable. 33 Our homebuilding gross profit decreased by $84.2 million to $329.4 million for the fiscal year ended September 30, 2025, compared to $413.6 million in the prior year.
This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
In addition, such amounts are presented excluding inventory impairments and abandonments and interest amortized to cost of sales (COS). Homebuilding gross profit is defined as homebuilding revenue less home cost of sales (which includes land and land development costs, home construction costs, capitalized interest, indirect costs of construction, estimated warranty costs, closing costs, and inventory impairments and abandonment charges).
In addition, such amounts are presented excluding inventory impairments and abandonments and interest amortized to cost of sales (COS). Homebuilding gross profit is defined as homebuilding revenue less home cost of sales (which includes land and land development costs, home construction costs, capitalized interest, indirect costs of construction, estimated warranty costs, closing costs, and inventory impairment and abandonment charges).
Finally, we also ensure that the pace of sales and closings used in our undiscounted cash flow analyses are reasonable by considering seasonal variations in sales and closings, our development schedules and what we have achieved historically, and by comparing to those achieved by our competitors for comparable communities.
Finally, we also ensure that the pace of sales and closings used in our undiscounted cash flow analyses are reasonable by considering seasonal variations in sales and closings, our development schedules and what we have achieved historically, and by comparing them to those achieved by our competitors for comparable communities.
(b) Interest on variable rate obligations is based on rates effective as of September 30, 2024. (c) Based on its current inventory of uncertain tax positions and tax carryforward attributes, the Company does not expect a cash settlement of unrecognized tax benefits related to uncertain tax positions in future years.
(b) Interest on variable rate obligations is based on rates effective as of September 30, 2025. (c) Based on its current inventory of uncertain tax positions and tax carryforward attributes, the Company does not expect a cash settlement of unrecognized tax benefits related to uncertain tax positions in future years.
Debt We generally fulfill our short-term cash requirements with cash generated from our operations and available borrowings. Additionally, our Unsecured Facility provides working capital and letter of credit capacity of $300.0 million, which includes a letter of credit capacity of $100.0 million.
Debt We generally fulfill our short-term cash requirements with cash generated from our operations and available borrowings. Additionally, our Unsecured Facility provides working capital and letter of credit capacity of $365.0 million, which includes a letter of credit capacity of $100.0 million.
The indentures under which our Senior Notes were issued contain certain restrictive covenants, including limitations on our payment of dividends. There were no dividends paid during our fiscal years ended September 30, 2024, 2023 or 2022.
The indentures under which our Senior Notes were issued contain certain restrictive covenants, including limitations on our payment of dividends. There were no dividends paid during our fiscal years ended September 30, 2025, 2024 or 2023.
See Note 12 of the notes to the consolidated financial statements in this Form 10-K for additional information regarding the Company's unrecognized tax benefits related to uncertain tax positions as of September 30, 2024.
See Note 12 of the notes to the consolidated financial statements in this Form 10-K for additional information regarding the Company's unrecognized tax benefits related to uncertain tax positions as of September 30, 2025.
Financing Activities Net cash provided by financing activities was $23.9 million for the fiscal year ended September 30, 2024, primarily driven by inflows from the issuance of the 2031 Notes, partially offset by outflows from redemption of our 2025 Notes, debt issuance costs related to the 2031 Notes and extension of the term of our Unsecured Facility (see Note 7), repurchases of common stock, and tax payments for stock-based compensation awards vesting.
Financing Activities Net cash used in financing activities was $36.4 million for the fiscal year ended September 30, 2025, primarily driven by repurchases of common stock and tax payments for stock-based compensation awards vesting. 37 Net cash provided by financing activities was $23.9 million for the fiscal year ended September 30, 2024, primarily driven by inflows from the issuance of the 2031 Notes, partially offset by outflows from redemption of our 2025 Notes, debt issuance costs related to the 2031 Notes and extension of the term of our Unsecured Facility (see Note 7), repurchases of common stock, and tax payments for stock-based compensation awards vesting.
However, as shown in the tables above, the comparability of our gross profit and gross margin was modestly impacted by impairments and abandonment charges which increased by $1.4 million and interest amortized to homebuilding cost of sales which decreased by $0.8 million year-over-year (refer to Note 4 and Note 5 of the notes to the consolidated financial statements in this Form 10-K for additional details).
However, as shown in the tables above, the comparability of our gross profit and gross margin was impacted by impairments and abandonment charges which increased by $8.2 million and interest amortized to homebuilding cost of sales which increased by $6.1 million year-over-year (refer to Note 4 and Note 5 of the notes to the consolidated financial statements in this Form 10-K for additional details).
The total remaining purchase price, net of cash deposits, committed under all options was $1.46 billion as of September 30, 2024. Subject to market conditions and our liquidity, we may further expand our use of option agreements to supplement our owned inventory supply.
The total remaining purchase price, net of cash deposits, committed under all options was $1.61 billion as of September 30, 2025. Subject to market conditions and our liquidity, we may further expand our use of option agreements to supplement our owned inventory supply.
A ten basis point increase in our warranty reserve rate would have increased our accrual and corresponding cost of sales by $2.5 million as of September 30, 2024. There were no material changes in assumptions in calculating our reserve balance for the year ended September 30, 2024 .
A ten basis point increase in our warranty reserve rate would have increased our accrual and corresponding cost of sales by $2.6 million as of September 30, 2025. There were no material changes in assumptions in calculating our reserve balance for the year ended September 30, 2025 .
In particular, a weakening of our financial condition, including any further increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, could result in a credit rating downgrade or change in outlook, or could otherwise increase our cost of borrowing. 38 Stock Repurchases and Dividends Paid In May 2022, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $50.0 million of its outstanding common stock.
In particular, a weakening of our financial condition, including any further increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, could result in a credit rating downgrade or change in outlook, or could otherwise increase our cost of borrowing. 38 Stock Repurchases and Dividends Paid In April 2025, the Company's Board of Directors approved a new share repurchase program that authorizes the Company to repurchase up to $100.0 million of its outstanding common stock.
The increase in net new orders was driven primarily by an increase in average active community count from 125 in the prior year to 144, partially offset by a decrease in sales pace from 2.6 orders per community per month in the prior year to 2.4.
The decrease in net new orders was driven primarily by a decrease in sales pace from 2.4 orders per community per month in the prior year to 2.0, partially offset by an increase in average active community count from 144 in the prior year to 164.
(b) Calculated as land sales and other gross profit divided by land sales and other revenue. ( c) Calculated as tax expense for the period divided by income from continuing operations.
(b) Calculated as land sales and other gross profit divided by land sales and other revenue. (c) Calculated as tax (benefit) expense for the period divided by income from continuing operations before income taxes.
This assessment considers, among other matters, (1) the nature, frequency and severity of any current and cumulative losses; (2) forecasts of future profitability; (3) the duration of statutory carryforward periods; (4) our experience with operating loss and tax credit carryforwards not expiring unused; (5) the Section 382 limitation on our ability to carryforward pre-ownership change net operating losses; (6) recognized built-in losses or deductions; and (7) tax planning alternatives. 41 Our assessment of the need for the valuation of deferred tax assets includes assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns.
This assessment considers, among other matters, the nature, frequency and severity of any current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with operating loss and tax credit carryforwards not expiring unused, the Section 382 and Section 383 limitation on our ability to carryforward pre-ownership change net operating losses, tax credits and certain built-in losses or deductions, and tax planning alternatives. 41 Our assessment of the need for the valuation of deferred tax assets includes assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns.
Under option agreements, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers, and our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred, which totaled $227.8 million as of September 30, 2024.
Under option agreements, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers, and our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred, which totaled $333.4 million as of September 30, 2025.
The decrease in backlog units was due to closings exceeding net new orders for the year ended September 30, 2024 .
The decrease in backlog units was primarily due to closings exceeding net new orders for the year ended September 30, 2025.
In fiscal 2024, our conclusions about our ability to more likely than not realize all of our federal and certain state tax attributes remain consistent with our prior determinations. We considered positive factors including our recent earnings levels, interest savings from our debt reduction strategies, shortage in housing supply, and our backlog.
In fiscal 2025, our conclusions about our ability to more likely than not realize all of our federal and certain state tax attributes remain consistent with our prior determinations. We considered positive factors including our sustained tax profitability, interest savings from our debt reduction strategies, shortage in housing supply, and our backlog.
Our income tax expenses are not always directly correlated to the amount of pre-tax income for the associated period due to a variety of factors, including, but not limited to, the impact of tax credits and permanent differences.
Our income tax (benefit) expense is not always directly correlated to the amount of pre-tax income for the associated period due to a variety of factors, including, but not limited to, the impact of tax credits and permanent differences.
Investing Activities Net cash used in investing activities for the fiscal year ended September 30, 2024 was $30.0 million, primarily driven by capital expenditures for model homes and information systems infrastructure, and investments in securities.
Net cash used in investing activities fo r the fiscal year ended September 30, 2024 was $30.0 million, primarily driven by capital expenditures for model homes and information systems infrastructure and purchases of investment securities.
Income tax expense in our fiscal 2024, 2023 and 2022 primarily resulted from income generated in the fiscal year and permanent book/tax differences, partially offset by the generation of additional federal tax credits.
Income tax benefit in our fiscal 2025 primarily resulted from the generation of additional federal tax credits, partially offset by the tax expense from income generated in the fiscal year and permanent book/tax differences.
As of September 30, 2024, no borrowings and no letters of credit were outstanding under the Unsecured Facility , resulting in a remaining borrowing capacity of $300.0 million. See Note 7 of the notes to the consolidated financial statements in this Form 10-K for further discussion.
As of September 30, 2025, no borrowings and $41.4 million letters of credit were outstanding under the Unsecured Facility , resulting in a remaining borrowing capacity of $323.6 million. See Note 7 of the notes to the consolidated financial statements in this Form 10-K for further discussion.
The following table reconciles our net income (GAAP) to Adjusted EBITDA (non-GAAP) for the periods presented: Fiscal Year Ended September 30, in thousands 2024 2023 2022 2021 2020 Net income (GAAP) $ 140,175 $ 158,611 $ 220,704 $ 122,021 $ 52,226 Expense from income taxes 18,910 23,936 53,267 21,501 17,664 Interest amortized to home construction and land sales expenses and capitalized interest impaired 68,233 68,489 72,058 87,290 95,662 Interest expense not qualified for capitalization — — — 2,781 8,468 EBIT (Non-GAAP) 227,318 251,036 346,029 233,593 174,020 Depreciation and amortization 14,867 12,198 13,360 13,976 15,640 EBITDA (Non-GAAP) 242,185 263,234 359,389 247,569 189,660 Stock-based compensation expense 7,391 7,275 8,478 12,167 10,036 Loss (gain) on extinguishment of debt 437 546 (309) 2,025 — Inventory impairments and abandonments (a) 1,996 641 2,524 853 2,111 Gain on sale of investment (b) (8,591) — — — — Litigation settlement in discontinued operations — — — 120 1,260 Restructuring and severance expenses — 335 — (10) 1,317 Adjusted EBITDA (Non-GAAP) $ 243,418 $ 272,031 $ 370,082 $ 262,724 $ 204,384 (a) In periods during which we impaired certain of our inventory assets, capitalized interest that is impaired is included in the line above titled "Interest amortized to home construction and land sales expenses and capitalized interest impaired." (b) We previously held a minority interest in a technology company specializing in digital marketing for new home communities, which was sold during the quarter ended March 31, 2024.
The following table reconciles our net income (GAAP) to Adjusted EBITDA (non-GAAP) for the periods presented: Fiscal Year Ended September 30, in thousands 2025 2024 2023 2022 2021 Net income (GAAP) $ 45,588 $ 140,175 $ 158,611 $ 220,704 $ 122,021 (Benefit) expense from income taxes (4,738) 18,910 23,936 53,267 21,501 Interest amortized to home construction and land sales expenses and capitalized interest impaired 78,866 68,233 68,489 72,058 87,290 Interest expense not qualified for capitalization — — — — 2,781 EBIT (Non-GAAP) 119,716 227,318 251,036 346,029 233,593 Depreciation and amortization 19,168 14,867 12,198 13,360 13,976 EBITDA (Non-GAAP) 138,884 242,185 263,234 359,389 247,569 Stock-based compensation expense 7,338 7,391 7,275 8,478 12,167 Loss (gain) on extinguishment of debt — 437 546 (309) 2,025 Inventory impairments and abandonments (a) 11,497 1,996 641 2,524 853 Gain on sale of investment (b) — (8,591) — — — Litigation settlement in discontinued operations — — — — 120 Restructuring and severance expenses — — 335 — (10) Adjusted EBITDA (Non-GAAP) $ 157,719 $ 243,418 $ 272,031 $ 370,082 $ 262,724 (a) In periods during which we impaired certain of our inventory assets, capitalized interest that is impaired is included in the line above titled "Interest amortized to home construction and land sales expenses and capitalized interest impaired." (b) We previously held a minority interest in a technology company specializing in digital marketing for new home communities, which was sold during the quarter ended March 31, 2024.
Financial Position As of September 30, 2024, our liquidity position consisted of $203.9 million in cash and cash equivalents and $300.0 million of remaining capacity under the Unsecured Facility, compared to $345.6 million in cash and cash equivalents and $265.0 million of remaining capacity under the Unsecured Facility as of September 30, 2023.
Financial Position As of September 30, 2025, our liquidity position consisted of $214.7 million in cash and cash equivalents and $323.6 million of remaining capacity under the Unsecured Facility, compared to $203.9 million in cash and cash equivalents and $300.0 million of remaining capacity under the Unsecured Facility as of September 30, 2024.
At September 30, 2024, our warranty reserve was $12.7 million, reflecting an accrual range of 0.3% to 1.1% of total revenue recognized for each home closed depending on our loss history in the division in which the home was built.
At September 30, 2025, our warranty reserve was $13.6 million, reflecting an accrual range of 0.3% to 0.9% of total revenue recognized for each home closed depending on our loss history in the division in which the home was built.
When excluding the impact of impairments and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $24.0 million compared to the prior year while homebuilding gross margin decreased by 200 basis points to 21.1%.
When excluding the impact of impairments and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $69.9 million compared to the prior year while homebuilding gross margin decreased by 310 basis points to 18.0%.
The increase in net new orders compared to the prior year was driven by a 25.0% increase in average active community count from 24 in the prior year to 30, partially offset by a 16.7% decrease in sales pace from 3.0 orders per community per month in the prior year to 2.5.
The increase in net new orders compared to the prior year was driven by a 20.6% increase in average active community count from 30 in the prior year to 36, partially offset by a 15.0% decrease in sales pace from 2.5 orders per community per month in the prior year to 2.2.
West Segment: The $16.1 million decrease in operating income compared to the prior year was primarily due to higher commissions on higher homebuilding revenue, higher sales and marketing expenses, and higher other G&A expenses, partially offset by an increase in g ross profit in the segment.
West Segment: The $47.2 million decrease in operating income compared to the prior year was primarily due to the decrease in g ross profit and higher sales and marketing expenses, partially offset by lower commissions on lower homebuilding revenue in the segment.
In recent years, we have focused on increasing our lot option agreement usage to minimize risk as we grow our land position. As of September 30, 2024, we controlled 28,538 lots, which includes 272 lots of land held for future development and 362 lots of land held for sale.
In recent years, we have focused on increasing our lot option agreement usage to minimize risk as we grow our land position. As of September 30, 2025, we controlled 25,660 lots, which includes 251 lots of land held for future development and 651 lots of land held for sale.
Future land and lot sales will depend on a variety of factors, including local market conditions, individual community performance, and changing strategic plans. 35 Operating Income The table below summarizes operating income by reportable segment for the periods presented: Fiscal Year Ended September 30, in thousands 2024 2023 2022 24 v 23 23 v 22 West $ 189,739 $ 205,850 $ 253,961 $ (16,111) $ (48,111) East 52,898 65,021 102,146 (12,123) (37,125) Southeast 45,666 57,326 68,726 (11,660) (11,400) Corporate and Unallocated (a) (145,277) (150,944) (152,342) 5,667 1,398 Operating income $ 143,026 $ 177,253 $ 272,491 $ (34,227) $ (95,238) (a) Includes amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, when applicable, expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments.
Future land and lot sales will depend on a variety of factors, including local market conditions, individual community performance, and changing strategic plans. 35 Operating Income The table below summarizes operating income by reportable segment and Corporate and unallocated for the periods presented: Fiscal Year Ended September 30, in thousands 2025 2024 2023 25 v 24 24 v 23 West $ 142,514 $ 189,739 $ 205,850 $ (47,225) $ (16,111) East 54,655 52,898 65,021 1,757 (12,123) Southeast 15,183 45,666 57,326 (30,483) (11,660) Corporate and Unallocated (a) (175,747) (145,277) (150,944) (30,470) 5,667 Operating income $ 36,605 $ 143,026 $ 177,253 $ (106,421) $ (34,227) (a) Includes amortization of capitalized inter est, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, when applicable, expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments.
Year-over-year fluctuations on land sales and other revenue are primarily driven by the timing and volume of land and lot sales closings. Land sales and other gross profit are primarily impacted by the profitability of individual land and lot sale transactions as well as the volume of our title examinations operations.
Land sales and other gross profit are primarily impacted by the profitability of individual land and lot sale transactions as well as the volume of our title examinations operations.
The following ta bles present new order and closings data for the periods presented: New Orders (Net of Cancellations) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total 2024 823 1,299 1,070 1,029 4,221 2023 482 1,181 1,200 1,003 3,866 2022 1,141 1,291 925 704 4,061 Closings 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total 2024 743 1,044 1,167 1,496 4,450 2023 833 1,063 1,117 1,233 4,246 2022 1,019 1,078 1,043 1,616 4,756 27 RESULTS OF CONTINUING OPERATIONS The following table summarizes certain key income statement metrics for the periods presented: Fiscal Year Ended September 30, $ in thousands 2024 2023 2022 Revenue: Homebuilding $ 2,292,984 $ 2,198,400 $ 2,302,520 Land sales and other 37,213 8,385 14,468 Total $ 2,330,197 $ 2,206,785 $ 2,316,988 Gross profit: Homebuilding $ 413,611 $ 438,120 $ 532,149 Land sales and other 10,683 4,575 5,358 Total $ 424,294 $ 442,695 $ 537,507 Gross margin: Homebuilding (a) 18.0 % 19.9 % 23.1 % Land sales and other (b) 28.7 % 54.6 % 37.0 % Total 18.2 % 20.1 % 23.2 % Commissions $ 80,056 $ 73,450 $ 74,336 General and administrative expenses (G&A) $ 186,345 $ 179,794 $ 177,320 SG&A (commissions plus G&A) as a percentage of total revenue 11.4 % 11.5 % 10.9 % G&A as a percentage of total revenue 8.0 % 8.1 % 7.7 % Depreciation and amortization $ 14,867 $ 12,198 $ 13,360 Operating income $ 143,026 $ 177,253 $ 272,491 Operating income as a percentage of total revenue 6.1 % 8.0 % 11.8 % Effective tax rate (c) 11.9 % 13.1 % 19.4 % Inventory impairments and abandonments $ 1,996 $ 641 $ 2,963 (Loss) gain on extinguishment of debt, net $ (437) $ (546) $ 309 (a) Excludi ng impairments, abandonments, and interest amortized to cost of sales, homebuilding gross margin was 21.1%, 23.1% and 26.3% for the fiscal years ended September 30, 2024, 2023 and 2022, respectively.
The following ta bles present new order and closings data for the periods presented: New Orders (Net of Cancellations) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total 2025 932 1,098 861 999 3,890 2024 823 1,299 1,070 1,029 4,221 2023 482 1,181 1,200 1,003 3,866 Closings 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total 2025 907 1,079 1,035 1,406 4,427 2024 743 1,044 1,167 1,496 4,450 2023 833 1,063 1,117 1,233 4,246 27 RESULTS OF CONTINUING OPERATIONS The following table summarizes certain key income statement metrics for the periods presented: Fiscal Year Ended September 30, $ in thousands 2025 2024 2023 Revenue: Homebuilding $ 2,302,630 $ 2,292,984 $ 2,198,400 Land sales and other 68,925 37,213 8,385 Total $ 2,371,555 $ 2,330,197 $ 2,206,785 Gross profit: Homebuilding $ 329,376 $ 413,611 $ 438,120 Land sales and other 8,138 10,683 4,575 Total $ 337,514 $ 424,294 $ 442,695 Gross margin: Homebuilding (a) 14.3 % 18.0 % 19.9 % Land sales and other (b) 11.8 % 28.7 % 54.6 % Total 14.2 % 18.2 % 20.1 % Commissions $ 76,911 $ 80,056 $ 73,450 General and administrative expenses (G&A) $ 204,830 $ 186,345 $ 179,794 SG&A (commissions plus G&A) as a percentage of total revenue 11.9 % 11.4 % 11.5 % G&A as a percentage of total revenue 8.6 % 8.0 % 8.1 % Depreciation and amortization $ 19,168 $ 14,867 $ 12,198 Operating income $ 36,605 $ 143,026 $ 177,253 Operating income as a percentage of total revenue 1.5 % 6.1 % 8.0 % Effective tax rate (c) (11.6) % 11.9 % 13.1 % Inventory impairments and abandonments $ 12,959 $ 1,996 $ 641 Loss on extinguishment of debt, net $ — $ (437) $ (546) (a) Excludi ng impairments, abandonments, and interest amortized to cost of sales, homebuilding gross margin was 18.0%, 21.1% and 23.1% for the fiscal years ended September 30, 2025, 2024 and 2023, respectively.
The decrease in homebuilding gross profit was primarily driven by a decrease in gross margin of 190 basis points to 18.0%, partially offset by an increase in homebuilding revenue of $94.6 million.
The decrease in homebuilding gross profit was primarily driven by a decrease in gross margin of 370 basis points to 14.3%, partially offset by an increase in homebuilding revenue of $9.6 million.
The table below summarizes backlog units by reportable segment as well as the aggregate dollar value and ASP of homes in backlog as of September 30, 2024, 2023 and 2022: As of September 30, 2024 2023 2022 24 v 23 23 v 22 Backlog Units: West 965 1,033 1,257 (6.6) % (17.8) % East 315 323 410 (2.5) % (21.2) % Southeast 202 355 424 (43.1) % (16.3) % Total 1,482 1,711 2,091 (13.4) % (18.2) % Aggregate dollar value of homes in backlog (in millions) $ 797.2 $ 886.4 $ 1,144.9 (10.1) % (22.6) % ASP in backlog (in thousands) $ 537.9 $ 518.0 $ 547.5 3.8 % (5.4) % Backlog reflects the number of homes for which the Company has entered into a sales contract with a customer but has not yet deli vered the home.
The table below summarizes backlog units by reportable segment as well as the aggregate dollar value and ASP of homes in backlog as of September 30, 2025, 2024 and 2023: As of September 30, 2025 2024 2023 25 v 24 24 v 23 Backlog Units: West 525 965 1,033 (45.6) % (6.6) % East 228 315 323 (27.6) % (2.5) % Southeast 192 202 355 (5.0) % (43.1) % Total 945 1,482 1,711 (36.2) % (13.4) % Aggregate dollar value of homes in backlog (in millions) $ 516.5 $ 797.2 $ 886.4 (35.2) % (10.1) % ASP in backlog (in thousands) $ 546.5 $ 537.9 $ 518.0 1.6 % 3.8 % Backlog reflects the number of homes for which the Company has entered into a sales contract with a customer but has not yet delivered the home.
East Segment: Net new orders for the year ended September 30, 2024 was 912, up 6.2% from the year ended September 30, 2023.
East Segment: Net new orders for the year ended September 30, 2025 was 935, up 2.5% from the year ended September 30, 2024.
Southeast Segment: Th e $11.7 million decrease in operating income compared to the prior year was primarily due to the decrease in gross profit previously discussed, partially offset by lower other G&A expenses in the segment.
Southeast Segment: Th e $30.5 million decrease in operating income compared to the prior year was primarily due to the decrease in gross profit previously discussed and higher other G&A expenses, partially offset by lower commissions expense on lower homebuilding revenue in the segment .
The increase in backlog ASP was primarily due to changes in product and community mix as well as price appreciation in certain communities. 31 Homebuilding Revenue, Average Selling Price, and Closings The table below summarizes homebuilding revenue, ASP of our homes closed, and closings by reportable segment for the periods presented: Homebuilding Revenue Average Selling Price $ in thousands 2024 2023 2022 24 v 23 23 v 22 2024 2023 2022 24 v 23 23 v 22 West $ 1,448,607 $ 1,292,060 $ 1,327,770 12.1 % (2.7) % $ 513.5 $ 523.5 $ 468.7 (1.9) % 11.7 % East 483,611 503,479 555,598 (3.9) % (9.4) % 525.7 532.2 514.4 (1.2) % 3.5 % Southeast 360,766 402,861 419,152 (10.4) % (3.9) % 508.8 484.2 497.2 5.1 % (2.6) % Total $ 2,292,984 $ 2,198,400 $ 2,302,520 4.3 % (4.5) % $ 515.3 $ 517.8 $ 484.1 (0.5) % 7.0 % Closings 2024 2023 2022 24 v 23 23 v 22 West 2,821 2,468 2,833 14.3 % (12.9) % East 920 946 1,080 (2.7) % (12.4) % Southeast 709 832 843 (14.8) % (1.3) % Total 4,450 4,246 4,756 4.8 % (10.7) % West Segment: Homebuilding revenue increased by 12.1% for the fiscal year ended September 30, 2024 compared to the prior fiscal year due to a 14.3% increase in closings, partially offset by a 1.9% decrease in ASP.
The increase in backlog ASP was primarily due to changes in product and community mix. 31 Homebuilding Revenue, Average Selling Price, and Closings The table below summarizes homebuilding revenue, ASP of our homes closed, and closings by reportable segment for the periods presented: Homebuilding Revenue Average Selling Price $ in thousands 2025 2024 2023 25 v 24 24 v 23 2025 2024 2023 25 v 24 24 v 23 West $ 1,422,260 $ 1,448,607 $ 1,292,060 (1.8) % 12.1 % $ 507.0 $ 513.5 $ 523.5 (1.3) % (1.9) % East 575,533 483,611 503,479 19.0 % (3.9) % 563.1 525.7 532.2 7.1 % (1.2) % Southeast 304,837 360,766 402,861 (15.5) % (10.4) % 508.1 508.8 484.2 (0.1) % 5.1 % Total $ 2,302,630 $ 2,292,984 $ 2,198,400 0.4 % 4.3 % $ 520.1 $ 515.3 $ 517.8 0.9 % (0.5) % Closings 2025 2024 2023 25 v 24 24 v 23 West 2,805 2,821 2,468 (0.6) % 14.3 % East 1,022 920 946 11.1 % (2.7) % Southeast 600 709 832 (15.4) % (14.8) % Total 4,427 4,450 4,246 (0.5) % 4.8 % West Segment: Homebuilding revenue decreased by 1.8% for the fiscal year ended September 30, 2025 compared to the prior fiscal year due to a 1.3% decrease in ASP and a 0.6% decrease in closings.
Credit Ratings Our credit ratings are periodically reviewed by rating agencies. In June 2024, S&P reaffirmed the Company’s corporate credit rating of B+ and reaffirmed the Company's outlook of stable. In October 2024, Moody's reaffirmed the Company's issuer corporate family rating of B1 and reaffirmed the Company's outlook of stable.
Credit Ratings Our credit ratings are periodically reviewed by rating agencies. In November 2025, S&P revised the Company’s corporate credit rating from B+ to B and revised the Company's outlook from negative to stable. In September 2025, Moody's reaffirmed the Company's issuer corporate family rating of B1 and reaffirmed the Company's outlook of stable.
The aggregate dollar value of homes in backlog as of September 30, 2024 decreased 10.1% compared to the prior year due to a 13.4% decrease in backlog units, partially offset by a 3.8% increase in the ASP of homes in backlog.
The aggregate dollar value of homes in backlog as of September 30, 2025 decreased 35.2% compared to the prior year due to a 36.2% decrease in backlog units, partially offset by a 1.6% increase in the ASP of homes in backlog.
The year-over-year increase in closings in the West segment was primarily due to higher community count, higher volume of spec homes that sold and closed within the current year, and improved construction cycle times for fiscal 2024 compared to fiscal 2023.
The year-over-year increase in closings in the East segment was primarily due to higher volume of spec homes that sold and closed within the current year period and improved construction cycle times, partially offset by lower beginning backlog, for fiscal 2025 compared to fiscal 2024.
Net changes in cash, cash equivalents, and restricted cash are as follows for the periods presented: in thousands 2024 2023 2022 Net cash (used in) provided by operating activities $ (137,545) $ 178,057 $ 81,074 Net cash used in investing activities (30,012) (29,670) (14,709) Net cash provided by (used in) financing activities 23,878 (13,926) (88,680) Net (decrease) increase in cash, cash equivalents, and restricted cash $ (143,679) $ 134,461 $ (22,315) Operating Activities Net cash used in operating activities was $137.5 million for the fiscal year ended September 30, 2024.
Net changes in cash, cash equivalents, and restricted cash are as follows for the periods presented: in thousands 2025 2024 2023 Net cash provided by (used in) operating activities $ 31,981 $ (137,545) $ 178,057 Net cash used in investing activities (19,659) (30,012) (29,670) Net cash (used in) provided by financing activities (36,361) 23,878 (13,926) Net (decrease) increase in cash, cash equivalents, and restricted cash $ (24,039) $ (143,679) $ 134,461 Operating Activities Net cash provided by operating activities was $32.0 million for the fiscal year ended September 30, 2025.
We had outstanding letters of credit and surety bonds of $36.4 million an d $332.2 million , respectivel y, as of September 30, 2024, primarily related to our obligations to local governments to construct roads and other improvements in various developments.
We had outstanding letters of credit and surety bon ds of $41.4 million and $321.9 million, respectivel y, as of September 30, 2025, primarily related to our obligations to local governments to construct roads and other improvements in various developments.
(b) n/m - indicates the percentage is "not meaningful." For the fiscal year ended September 30, 2024 , land sales and other revenue increased by 343.8% to $37.2 million, and land sales and other gross profit increased by 133.5% to $10.7 million compared to the prior year.
(b) n/m - indicates the percentage is "not meaningful." For the fiscal year ended September 30, 2025 , land sales and other revenue increased by 85.2% to $68.9 million, and land sales and other gross profit decreased by 23.8% to $8.1 million compared to the prior year.
Fiscal Year Ended September 30, in thousands 2024 2023 Total debt (GAAP) $ 1,025,349 $ 978,028 Stockholders' equity (GAAP) 1,232,111 1,102,819 Total capitalization (GAAP) $ 2,257,460 $ 2,080,847 Total debt to total capitalization ratio (GAAP) 45.4 % 47.0 % Total debt (GAAP) $ 1,025,349 $ 978,028 Less: cash and cash equivalents (GAAP) 203,907 345,590 Net debt (Non-GAAP) 821,442 632,438 Stockholders' equity (GAAP) 1,232,111 1,102,819 Net capitalization (Non-GAAP) $ 2,053,553 $ 1,735,257 Net debt to net capitalization ratio (Non-GAAP) 40.0 % 36.4 % 30 Homebuilding Operations Data The following table summarizes new orders and cancellation rates by reportable segment for the periods presented: New Orders, net Cancellation Rates 2024 2023 2022 24 v 23 23 v 22 2024 2023 2022 West 2,753 2,244 2,437 22.7 % (7.9) % 17.3 % 22.2 % 18.4 % East 912 859 879 6.2 % (2.3) % 19.5 % 18.8 % 16.2 % Southeast 556 763 745 (27.1) % 2.4 % 16.8 % 15.9 % 16.3 % Total 4,221 3,866 4,061 9.2 % (4.8) % 17.7 % 20.3 % 17.6 % Net new orders for the y ear ended September 30, 2024 increased to 4,221, up 9.2% from the year ended September 30, 2023.
Fiscal Year Ended September 30, in thousands 2025 2024 Total debt (GAAP) $ 1,029,114 $ 1,025,349 Stockholders' equity (GAAP) 1,248,906 1,232,111 Total capitalization (GAAP) $ 2,278,020 $ 2,257,460 Total debt to total capitalization ratio (GAAP) 45.2 % 45.4 % Total debt (GAAP) $ 1,029,114 $ 1,025,349 Less: cash and cash equivalents (GAAP) 214,705 203,907 Net debt (Non-GAAP) 814,409 821,442 Stockholders' equity (GAAP) 1,248,906 1,232,111 Net capitalization (Non-GAAP) $ 2,063,315 $ 2,053,553 Net debt to net capitalization ratio (Non-GAAP) 39.5 % 40.0 % 30 Homebuilding Operations Data The following table summarizes net new orders and cancellation rates by reportable segment for the periods presented: New Orders, net Cancellation Rates 2025 2024 2023 25 v 24 24 v 23 2025 2024 2023 West 2,365 2,753 2,244 (14.1) % 22.7 % 19.3 % 17.3 % 22.2 % East 935 912 859 2.5 % 6.2 % 15.7 % 19.5 % 18.8 % Southeast 590 556 763 6.1 % (27.1) % 14.1 % 16.8 % 15.9 % Total 3,890 4,221 3,866 (7.8) % 9.2 % 17.7 % 17.7 % 20.3 % Net new orders for the year ended September 30, 2025 decreased to 3,890, down 7.8% from the year ended September 30, 2024.
The following tables summarize our land sales and other revenue and related gross profit by reportable segment for the periods presented: $ in thousands Land Sales and Other Revenue 2024 2023 2022 24 v 23 23 v 22 West $ 18,680 $ 4,945 $ 3,783 277.8 % 30.7 % East 17,595 2,365 5,149 644.0 % (54.1) % Southeast 938 1,075 5,536 (12.7) % (80.6) % Total $ 37,213 $ 8,385 $ 14,468 343.8 % (42.0) % $ in thousands Land Sales and Other Gross Profit (Loss) 2024 2023 2022 24 v 23 23 v 22 West $ 4,438 $ 2,989 $ 734 48.5 % 307.2 % East 6,391 736 4,206 768.3 % (82.5) % Southeast 688 850 984 (19.1) % (13.6) % Corporate and unallocated (a) (834) — (566) n/m (b) 100.0 % Total $ 10,683 $ 4,575 $ 5,358 133.5 % (14.6) % (a) Includes capitalized interest and capitalized indirect costs expensed to land cost of sale related to land sold, as well as capitalized interest and capitalized indirect costs impaired in order to reflect land held for sale assets at net realizable value.
The following tables summarize our land sales and other revenue and related gross profit by reportable segment and Corporate and unallocated for the periods presented: $ in thousands Land Sales and Other Revenue 2025 2024 2023 25 v 24 24 v 23 West $ 54,051 $ 18,680 $ 4,945 189.4 % 277.8 % East 9,804 17,595 2,365 (44.3) % 644.0 % Southeast 5,070 938 1,075 440.5 % (12.7) % Total $ 68,925 $ 37,213 $ 8,385 85.2 % 343.8 % $ in thousands Land Sales and Other Gross Profit (Loss) 2025 2024 2023 25 v 24 24 v 23 West $ 9,953 $ 4,438 $ 2,989 124.3 % 48.5 % East 2,469 6,391 736 (61.4) % 768.3 % Southeast 2,346 688 850 241.0 % (19.1) % Corporate and unallocated (a) (6,630) (834) — (695.0) % n/m (b) Total $ 8,138 $ 10,683 $ 4,575 (23.8) % 133.5 % (a) Corporate and unallocated includes capitalized interest and capitalized indirect costs expensed to land cost of sales related to land and lots sold, as well as capitalized interest and capitalized indirect costs impaired in order to reflect land held for sale assets at fair value less cost to sell.
As of September 30, 2024, our ending active community count was 162, up 20.9% from 134 in the prior year. Our fiscal fourth quarter marks the tenth consecutive quarter of year-over-year growth in community count as we work towards our goal of reaching more than 200 active communities by the end of fiscal 2026.
As of September 30, 2025, our ending active community count was 169, up 4.3% from 162 in the prior year. This marks the third consecutive year of growth in community count as we work towards our goal of reaching more than 200 active communities by the end of fiscal 2027.
East Segment: Compared to the prior fiscal year, homebuilding gross profit decreased by $15.6 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 18.1%, down from 20.5% in the prior year.
West Segment: Compared to the prior fiscal year, homebuilding gross profit decreased by $51.0 million due to lower gross margin and a decrease in homebuilding revenue. Ho mebuilding gross margin, excluding impairments and abandonments, decreased to 18.2%, down from 21.3% in the prior year.
East Segment: Homebuilding revenue decreased by 3.9% for the fiscal year ended September 30, 2024 compared to the prior fiscal year due to a 2.7% decrease in closings as well as a 1.2% decrease in ASP.
East Segment: Homebuilding revenue increased by 19.0% for the fiscal year ended September 30, 2025 compared to the prior fiscal year due to an 11.1% increase in closings as well as a 7.1% increase in ASP.
Southeast Segment: Homebuilding revenue decreased by 10.4% for the fiscal year ended September 30, 2024 compared to the prior fiscal year due to a 14.8% decrease in closings, partially offset by a 5.1% increase in ASP.
Southeast Segment: Homebuilding revenue decrease d by 15.5% for the fiscal year ended September 30, 2025 compared to the prior fiscal year due to a 15.4% decrease in closings, and a 0.1% decrease in ASP.
The majority of the growth in controlled lots was through the usage of lot option agreements, which allow us to position for future growth while providing the flexibility to respond to market conditions.
We remain focused on the expanded usage of lot option agreements, which allow us to position for future growth while providing the flexibility to respond to market conditions.
Refer to Note 1 2 of the notes to the consolidated financial statements in this Form 10-K for a further discussion of our income taxes. 36 Liquidity and Capital Resources Our sources of liquidity include, but are not limited to, cash from operations, proceeds from Senior Notes, our Senior Unsecured Revolving Credit Facility (the Unsecured Facility), and other bank borrowings, the issuance of equity and equity-linked securities, and other external sources of funds.
Liquidity and Capital Resources Our sources of liquidity include, but are not limited to, cash from operations, proceeds from Senior Notes, our Senior Unsecured Revolving Credit Facility (the Unsecured Facility), and other bank borrowings, the issuance of equity and equity-linked securities, and other external sources of funds.
The repurchase program has no expiration date. During the fiscal year ended September 30, 2024, the Company repurchased 455 thousand shares of its common stock for $12.9 million at an average price per share of $28.41 through open market transactions. All shares have been retired upon repurchase.
During the fiscal year ended September 30, 2024, the Company repurchased 455 thousand shares of its common stock for $12.9 million at an average price per share of $28.41 through open market transactions. The aggregate reduction to stockholders’ equity related to share repurchases during the fiscal year ended September 30, 2024 was $12.9 million.
The year-over-year decrease in closings in the Southeast segment is primarily due to lower beginning backlog, partially offset by improved construction cycle times for fiscal 2024 compared to fiscal 2023. 32 Homebuilding Gross Profit and Gross Margin The following tables present our homebuilding (HB) gross profit and gross margin by reportable segment and in total.
The year-over-year decrease in closings in the Southeast segment is primarily due to lower beginning backlog, partially offset by higher volume of spec homes that sold and closed within the current year period for fiscal 2025 compared to fiscal 2024. 32 Homebuilding Gross Profit and Gross Margin The following tables present our homebuilding (HB) gross profit and gross margin by reportable segment and Corporate and unallocated.
Net cash used in investing activities for the fiscal year ended September 30, 2023 was $29.7 million, primarily driven by capital expenditures for model homes and information systems infrastructure, and investments in securities.
Investing Activities Net cash used in investing activities for the fiscal year ended September 30, 2025 was $19.7 million, primarily driven by capital expenditures for model homes and information systems infrast ructure and purchase of investment securities, partially offset primarily by proceeds from maturities of investment securities.
The decrease in net new orders compared to the prior year was driven by a 16.0% decrease in average active co mmunity count from 25 in the prior year to 21, and a 12.0% decrease in sales pace from 2.5 orders per community per month in the prior year to 2.2.
The increase in net new orders compared to the prior year was driven by a 20.2% increase in average active community count from 21 in the prior year to 25, partially offset by an 11.7% decrease in sales pace from 2.2 orders per community per month in the prior year to 1.9.
Measures of homebuilding gross profit and gross margin after excluding inventory impairments and abandonments, interest amortized to cost of sales, and other non-recurring items are non-GAAP financial measures. These measures should not be considered alternatives to homebuilding gross profit and gross margin determined in accordance with GAAP as an indicator of operating performance.
Measures of homebuilding gross profit and gross margin after excluding inventory impairments and abandonments, interest amortized to cost of sales, and other non-recurring items are non-GAAP financial measures.
East Segment: The $12.1 million decrease in operating income compared to the prior year was primarily due to the decrease in gross profit previously discussed and higher sales and marketing expenses in the segment.
East Segment: The $1.8 million increase in operating income compared to the prior year was primarily due to the increase in gross profit previously discussed, partially offset by higher commissions expense on higher homebuilding revenue, higher other G&A expenses, and higher sales and marketing expenses in the segment.
Of the 27,904 total active lots, we controlled 16,125 of these lots, or 57.8%, through option agreements, as compared to 14,490 active lots controlled, or 56.7% of our total active lots, through option agreements as of September 30, 2023.
Of the 24,758 total active lots, we controlled 15,373 of these lots, or 62.1%, through option agreements, as compared to 16,125 active lots controlled, or 57.8% of our total active lots, through option agreements as of September 30, 2024.
West Segment: Net new orders for the year ended September 30, 2024 was 2,753, up 22.7% from the year ended September 30, 2023.
West Segment: Net new orders for the year ended September 30, 2025 was 2,365, down 14.1% from the year ended September 30, 2024.
Specifically, within other income, net, (1) we recognized a gain on sale of investment of $8.6 million during the year ended September 30, 2024 compared to no such transaction in the prior year period (See the "Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)" section above for further discussion on this transaction), and (2) we recognized higher investment income year-over year due to changes in fair value of our deferred compensation plan assets and higher distributions of income from unconsolidated entities during the year-ended September 30, 2024 compared to the prior year.
Specifically, (1) within, other income, net, we recognized a gain on sale of investment of $8.6 million during the year ended September 30, 2024 compared to no such transaction in the current year (See the "Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)" section above for further discussion on this transaction), (2) within other income, net, we experienced lower interest income year-over-year driven by lower interest rates on lower operating cash balances, and (3) we recorded a loss on extinguishment of debt of $0.4 million during the year ended September 30, 2024 compared to no such loss in the current period.
The year-over-year decrease in closings in the East segment was primarily due to lower beginning backlog, partially offset by improved construction cycle times for fiscal 2024 compared to fiscal 2023 .
The year-over-year slight decrease in closings in the West segment was primarily due to lower beginning backlog, partially offset by higher volume of spec homes that sold and closed within the current year per iod and improved construction cycle times for fiscal 2025 compared to fiscal 2024.
The increase in net new orders compared to the prior year was driven by a 24.0% increase in average active community count from 75 in the prior year to 93, while sales pace remained flat year-over-year at 2.5 orders per community.
The decrease in net new orders compared to the prior year was driven by a 22.4% decrease in sales pace from 2.5 orders per community per month in the prior year to 1.9, partially offset by a 10.7% increase in average active community count from 93 in the prior year to 103.
Income Taxes We recognized income tax expense from continuing operations of $18.9 million for the fiscal year ended September 30, 2024, compared to income tax expense from continuing operations of $24.0 million and $53.3 million for our fiscal years ended September 30, 2023 and 2022, respectively.
See Note 7 of the notes to our consolidated financial statements in this Form 10-K for a further discussion of debt. 36 Income Taxes We recognized income tax benefit from continuing operations of $4.7 million for the fiscal year ended September 30, 2025, compared to income tax expense from continuing operations of $18.9 million and $24.0 million for our fiscal years ended September 30, 2024 and 2023, respectively.
Net cash provided by operating activities was $178.1 million for the fiscal year ended September 30, 2023.
Net cash used in operating activities was $137.5 million for the fiscal year ended September 30, 2024.
As of September 30, 2024, we had 16,125 lots, or 57.8% of our total active lots, under option agreements as compared to 14,490 lots, or 56.7% of our total active lots, under option agreements as of September 30, 2023. • During the fiscal year ended September 30, 2024, our average active community count of 144 was up 15.7% from 125 in the prior year.
As of September 30, 2025, we had 15,373 lots, or 62.1% of our total active lots, under option agreements as compared to 16,125 lots, or 57.8% of our total active lots, under option agreements as of September 30, 2024. • During the fiscal year ended September 30, 2025, orders per community per month were 2.0 compared to 2.4 in the prior year, and our net new orders were 3,890, down 7.8% from 4,221 in the prior year.
Meanwhile, we invested $776.5 million and $573.1 million in land acquisition and land development during the fiscal years ended September 30, 2024 and September 30, 2023, respectively. 37 While we believe we possess sufficient liquidity, we are mindful of potential short-term or seasonal requirements for enhanced liquidity that may arise to operate and grow our business.
While we believe we possess sufficient liquidity, we are mindful of potential short-term or seasonal requirements for enhanced liquidity that may arise to operate and grow our business.
Homebuilding gross margin excluding impairments, abandonments, and interest for the fiscal year ended September 30, 2024 was 21.1%, down fr om 23.1% in the prior year . The year-over-year decrease in gross margin for the fiscal year ended September 30, 2024 was primarily driven by changes in product and community mix and an increase in closing cost incentives.
Homebuilding gross margin, excluding impairments, abandonments and interest amortization, for the fiscal year ended September 30, 2025 was 18.0%, down fr om 21.1% in the prior year .
Net cash provided by operating activities during the period was primarily driven by income before income taxes of $182.5 million, which included $21.8 million of non-cash charges, partially offset by a net increase in non-inventory working capital of $11.5 million and an increase in inventory of $14.7 million resulting from land acquisition, land development, and house construction spending to support continued growth.
Net cash provided by operating activities during the period was primarily driven by income before income taxes of $40.9 million, which included $30.4 million of non-cash charges and a decrease in inventory of $2.8 million, partially offset by a net increase in non-inventory working capital of $42.0 million.
We had outstanding letters of credit and surety bonds of $36.4 million and $332.2 million, respectively, as of September 30, 2024, primarily related to our obligations to local governments to construct roads and other improvements in various developments. 39 Contractual Commitments The following table summarizes our aggregate contractual commitments as of September 30, 2024: Payments Due by Period in thousands Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Senior notes and junior subordinated notes (a) $ 1,058,028 $ — $ — $ 357,255 $ 700,773 Interest commitments under senior notes and junior subordinated notes (b) 410,089 72,989 145,979 105,751 85,370 Obligations related to lots under option 1,458,679 563,709 631,509 191,595 71,866 Operating leases 24,875 4,572 7,332 5,887 7,084 Uncertain tax positions (c) — — — — — Total $ 2,951,671 $ 641,270 $ 784,820 $ 660,488 $ 865,093 (a) For a listing of our borrowings, refer to Note 7 of the notes to the consolidated financial statements in this Form 10-K.
We had outstanding letters of credit and surety bonds of $41.4 million and $321.9 million, respectively, as of September 30, 2025, primarily related to our obligations to local governments to construct roads and other imp rovements in various developments. 39 Contractual Commitments The following table summarizes our aggregate contractual commitments as of September 30, 2025: Payments Due by Period in thousands Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Senior notes and junior subordinated notes (a) $ 1,058,028 $ — $ 357,255 $ 350,000 $ 350,773 Interest commitments under senior notes and junior subordinated notes (b) 397,845 72,989 135,485 104,002 85,369 Obligations related to lots under option 1,610,171 639,196 726,167 225,199 19,609 Operating leases 32,924 8,738 11,707 6,926 5,553 Uncertain tax positions (c) — — — — — Total $ 3,098,968 $ 720,923 $ 1,230,614 $ 686,127 $ 461,304 (a) For a listing of our borrowings, refer to Note 7 of the notes to the consolidated financial statements in this Form 10-K.
We invested $776.5 million in land acquisition and land development during the year ended September 30, 2024, representing an increase of 35.5% compared to $573.1 million in land spend during the year ended September 30, 2023. • During the fiscal year ended September 30, 2024, sales per community per month was 2.4 compared to 2.6 in the prior year, and our net new orders were 4,221, up 9.2% from 3,866 in the prior year.
As of September 30, 2025, our ending active community count was 169, up 4.3% from 162 in the prior year. We invested $684.0 million in land acquisition and land development during the year ended September 30, 2025, down 11.9% compared to $776.5 million in land spend during the year ended September 30, 2024.
Land Sales and Other Revenue and Gross Profit Land sales relate to land and lots sold that do not fit within our homebuilding programs or strategic plans. We also have other revenue related to title examinations provided for our homebuyers in certain markets.
We also have other revenue related to title examinations provided for our homebuyers in certain markets.
For the fiscal year ended September 30, 2024, corporate and unallocated net expenses decreased by $5.7 million from the prior fiscal year, primarily due to lower amortization of capitalized indirect costs to cost of sales. Below operating income, we had the following noteworthy year-over-year fluctuations for the fiscal year ended September 30, 2024 compared to the prior year.
For the fiscal year ended September 30, 2025, corporate and unallocated net expenses increased by $30.5 million from the prior fiscal year, primarily due to higher G&A expenses, higher amortization of capitalized interest and capitalized indirect costs to homebuilding and land sales cost of sales, higher depreciation and amortization expenses, and an impairment of capitalized interest and capitalized indirect costs of $2.2 million recognized during the current year compared to no such charge in the prior year.
The decrease in gross margin was primarily driven by changes in product and community mix, an increase in price concessions, and an increase in closing cost incentives. Southeast Segment: Compared to the prior fiscal year, homebuilding gross profit decreased by $13.0 million due to a decrease in homebuilding revenue and lower gross margin.
Southeast Segment: Compared to the prior fiscal year, homebuilding gross profit decreased by $32.4 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 17.3%, down from 22.0% in the pr ior year.
As of September 30, 2024, the remaining availability of the share repurchase program was $28.9 million. No share repurchases were made during fiscal year 2023. During the fiscal year ended September 30, 2022, the Company repurchased 570 thousand shares of its common stock for $8.2 million at an average price per share of $14.33 through open market transactions.
Under our share repurchase programs, t he Company repurchased 1.5 million shares of its common stock for $33.1 million at an average price per share of $22.20 during the fiscal year ended September 30, 2025 through open market transactions. All shares have been retired upon repurchase.
Our actual results may differ materially from those contained in or implied by any forward-looking statements. Executive Overview and Outlook Market Conditions At the outset of fiscal 2024, mortgage rates fluctuated at high levels with a notable peak in October 2023, which led to subdued housing market activity.
Our actual results may differ materially from those contained in or implied by any forward-looking statements. Executive Overview and Outlook Market Conditions Fiscal 2025 present ed a challenging operating environment, driven by persistent affordability concerns, elevated mortgage rates, weak consumer sentiment, and continued uncertainties in the macroeconomic environment.
Our operating income decreased by $34.2 million to $143.0 million for the year ended September 30, 2024, compared to operating income of $177.3 million for year ended September 30, 2023 , primarily driven by the previously discussed decrease in gross profit, higher comm issions expense on higher homebuilding revenue, and higher sales and marketing costs, partially offset by lower other G&A expenses.
Our operating income decreased by $106.4 million to $36.6 million for the year ended September 30, 2025, compared to operating income of $143.0 million for year ended September 30, 2024 , primarily driven by the previously discussed decrease in gross profit, including the impact of $13.0 million inventory impairments and abandonments recognized.
Overview of Results for Our Fiscal 2024 The following is a summary of our performance against certain key operating and financial metrics during fiscal 2024, as compared to fis cal 2023. • As of September 30, 2024, our land position included 28,538 controlled lots, up 9.0% from 26,189 as of September 30, 2023.
We believe these operational and strategic initiatives will enhance our differentiated market position and support significant value creation for our stockholders. 25 Overview of Results for Our Fiscal 2025 The following is a summary of our performance against certain key operating and financial metrics during fiscal 2025, as compared to fis cal 2024. • During the fiscal year ended September 30, 2025, our average active community count of 164 was up 14.2% from 144 in the prior year.
Our tax credits are predominantly due to the energy efficiency of our homes and, historically, were valued at $2,000 per single family home. The Inflation Reduction Act increased these credits to $2,500 or $5,000 per single family home meeting Energy Star or Zero Energy Ready qualifications, respectively.
Our tax credits are predominantly due to the energy efficiency of our homes, with credits valued between $2,000 and $5,000 per single family home. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law.
The decrease in sales pace was due to a softening in demand in various sub-markets due to affordability challenges. Southeast Segment: Net new orders for the year ended September 30, 2024 was 556, down 27.1% from the year ended September 30, 2023.
Southeast Segment: Net new orders for the year ended September 30, 2025 was 590, up 6.1% from the year ended September 30, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe effect of a hypothetical one-percentage point decrease in our estimated discount rates would increase the estimated fair value of the fixed rate debt instruments from $976.5 million to $1.02 billion as of September 30, 2024. 42
Biggest changeThe effect of a hypothetical one-percentage point decrease in our estimated discount rates would increase the estimated fair value of the fixed rate debt instruments from $968.6 million to $999.7 million as of September 30, 2025. 42
As of September 30, 2024, we had variable rate debt outstanding, totaling $76.4 million. A one percent increase in the interest rate for these notes would result in an increase in our interest expense of approximately $1.0 million over the next twelve-month period.
As of September 30, 2025, we had variable rate debt outstanding, totaling $78.5 million. A one percent increase in the interest rate for these notes would result in an increase in our interest expense of approximately $1.0 million over the next twelve-month period.
The estimated fair value of our fixed rate debt as of September 30, 2024 was $976.5 million, compared to a carrying amount of $948.9 million.
The estimated fair value of our fixed rate debt as of September 30, 2025 was $968.6 million, compared to a carrying amount of $950.6 million.

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