CCS

• Overall Financial Performance • Delivered strong Q2 2026 results despite macro headwinds and weak consumer sentiment: diluted EPS of $1.26, up 11% YoY and 50% sequentially • Book value per share reached a company record of $90.24, with total stockholders' equity of $2.6 billion and $802 million in total liquidity at quarter end • Maintained a quarterly cash dividend of 32 cents per share • Net debt to net capital ratio for home building was 31.9%, consistent with the prior year

• Sales and Demand Trends • Net orders of 2,615 homes increased 3% YoY and 10% sequentially, driven primarily by improved absorption rates that rose 6% QoQ, against a 7% average QoQ decline over the past 5 years • Cancellation rate fell YoY to 13.2%, demonstrating strong buyer commitment to purchases • Buyer traffic was 9% higher than Q1 2026, with June traffic up 18% from April, indicating solid underlying demand for new homes • Adjustable rate mortgages (ARMs) accounted for 35% of originated mortgage volume by principal, up from 30% in Q1 2026 and less than 5% in Q1 2025, helping partially address housing affordability challenges

• Operations and Cost Management • Average sales community count hit 321 in Q2, ending the quarter at a record 330 communities, up 4% sequentially; 2026 full-year average community count is expected to grow low to mid single digits YoY • Average incentives on closed homes fell 50 basis points sequentially to 1,200 basis points, down 100 basis points from Q4 2025 • Direct construction costs on delivered homes declined 5% sequentially; average construction cycle times hit a company record 112 calendar days, down both YoY and sequentially • Finished lot costs were flat sequentially, with full-year 2026 average finished lot costs expected to be only 2% to 3% higher than Q4 2025 levels • Ended the quarter with ~3 finished spec homes per community, maintaining disciplined inventory management

• Land and Capital Allocation • Ended Q2 with just over 60,000 owned and controlled lots: owned lots down 2% sequentially, total lot count up 3% as the company proactively manages its land position • Full-year 2026 land acquisition and development spend is guided to $1 billion to $1.2 billion, with flexibility to increase or decrease spending based on market conditions, supported by a strong balance sheet • Repurchased 1% of outstanding shares in Q2 at a 38% discount to book value; year-to-date repurchases total 3% of outstanding shares at a 32% average discount to book value • Current land investment supports 10% annual delivery growth over the next several years once market conditions improve

• Full-year 2026 home delivery guidance was revised upward, with the low end and midpoint raised to a new range of 9,750 to 10,500 homes
• Full-year 2026 home sales revenue is guided to a range of $3.5 billion to $3.8 billion
• Q3 2026 deliveries are expected to range from 2,500 to 2,700 homes, with a further sequential delivery increase projected for Q4 2026
• Incentives on closed homes in Q3 2026 are expected to remain consistent with levels seen in the first half of 2026
• Full-year 2026 SG&A as a percentage of home sales revenue is expected to be roughly 14%, with 13.5% projected for Q3 2026
• The 2026 full-year effective tax rate is expected to fall in the range of 26% to 27%
• Excluding fair value adjustments, financial services segment contribution margin in the second half of 2026 is expected to return to 2025 full-year levels
• Average 2026 full-year community count is projected to increase low to mid single digits year-over-year, with further sequential growth in community count above the Q2 end level of 330 expected through the second half of the year

1. Home Building Segment: Q2 2026 home sales revenue was $898 million, accounting for 97.3% of total company revenue. The segment delivered 2,506 homes, with an average sales price of $358,000. GAAP home building gross margin was 18.1%, and adjusted gross margin was 20%, both up 30 basis points sequentially. SG&A as a percentage of home sales revenue was 14.2% for the quarter.
2. Financial Services Segment: Q2 2026 revenues were $25 million, accounting for 2.7% of total company revenue. The segment generated $10 million in pre-tax income, with strong performance driven by lower operating costs and a positive fair value adjustment.

• Macro economic challenges and continued weak consumer sentiment create uncertainty for housing demand and margin trajectories
• Construction costs are facing potential upward pressure from vendor price increase requests tied to higher fuel and commodity (including lumber) prices, which could impact future margins if the company cannot offset these increases
• Affordability challenges in high-priced markets (such as Colorado) continue to weigh on performance, and the recovery of these markets remains uneven
• Mortgage rate increases can impact buyer traffic and demand, with sensitivity to future interest rate movements
• Margin performance remains heavily dependent on incentive levels, which can shift based on competitive and market conditions

Q: What are the key drivers that could push adjusted gross margins higher in the back half of 2026, and what is the outlook for the Texas market after the recent notable increase in selling communities?

A: Incentive levels are the single largest driver of future margin movement, and the company has successfully pulled back incentives in recent quarters partially due to wider ARM adoption. Direct construction costs and finished lot costs are well controlled, with little expected unexpected movement in the back half. For Texas, the market is recovering from earlier lows, with strong performance in Houston (dominant entry-level position), San Antonio, and Austin. Dallas is still being scaled up, and the company remains bullish on Texas' long-term growth prospects, as reflected by its recent investments in the market.

Q: Has the company started seeing vendor pressure for construction price increases driven by higher fuel and commodity costs, and how will this impact margins?

A: The company achieved a 5% sequential reduction in direct construction costs in Q2 from a company-wide cost reduction initiative launched earlier this year. While vendors have submitted price increase requests for land development work, the company is currently pushing back on these requests and has successfully muted any increases so far. Lumber prices, which have been a tailwind in recent quarters, are now flat to up, but the change is not meaningfully large at this point, and the company is monitoring price movements closely.

Q: Is industry M&A opening up new opportunities to acquire land and expand in existing geographies, and what is the company seeing from competitors on starts and discounting in the entry-level segment?

A: The company maintains its long-standing approach to M&A, continuing to actively evaluate potential transactions that add value to its platform, consistent with its strong track record of 9 acquisitions since 2013. Overall industry inventory levels are currently in normal ranges, and most competitors are being judicious with new starts. Discounting and incentives appear to have moderated from levels seen last year and early this year, with no unusual discounting activity observed recently, though the trajectory remains dependent on macro factors including interest rates. The company is comfortable with its current finished spec inventory level of ~3 units per community, which aligns with current buyer demand.

Q: How has buyer traffic held up in July following recent rate increases, how much higher can ARM adoption go, and what is the cadence of community count growth in the back half?

A: July is a historically slow month, so it is too early to draw definitive conclusions, though traffic has built week-over-week as expected in line with typical seasonality. Management believes ARM penetration can continue to rise from the current 35% level, as ARMs are an affordable option for entry-level buyers who typically stay in their homes for the product's initial duration. The projected low to mid single-digit YoY increase in 2026 average community count refers to full-year average, not end-of-period count, and management expects community count to grow sequentially above the current 330 level through the back half of the year.