HOVNP

• Fourth quarter results met or beat guidance across key metrics. - Strategic focus on housing market with use of mortgage rate incentives to support sales. - QMI sales comprised 73% of total sales in Q4, with 36% of deliveries contracted and delivered in the same quarter, resulting in a 102% backlog conversion ratio. - Land position: ended Q4 with 35,883 controlled lots (6.5-year supply), lot count decreased 14% year over year, with 62% of land initially controlled in 2024 or 2025. - Refinancing completed, making all debt except revolving credit facility unsecured, strengthening balance sheet. - Inventory turnover rate is second highest among peers, indicating efficient capital use.

• First quarter fiscal 2026 guidance: Total revenues between $550,000,000 and $650,000,000. Adjusted gross margin expected to be 13% - 14%. SG&A as percentage of total revenues between 14.5%. Income from joint ventures between breakeven and $10,000,000. Adjusted EBITDA between $35,000,000 and $45,000,000. Adjusted pretax income between $10,000,000 and $20,000,000. - Gross margin expected to bottom in Q1 fiscal 2026 and gradually improve in subsequent quarters.

In the fourth quarter, revenues reached $818 million, surpassing the midpoint of guidance. Adjusted gross margin was 16.3%, near the high end of guidance. SG&A was 11.2%, near the lower end. Income from unconsolidated joint ventures totaled $13 million, slightly above expectations. Adjusted EBITDA was $89 million, exceeding guidance range, and adjusted pretax income was $49 million, close to the midpoint of guidance.

• Persistent political and economic uncertainty at home and abroad. - Mortgage rate impacts affecting gross margins. - Market conditions challenging sales pace and pricing. - Land acquisition challenges with disciplined approach to less attractive lots.

Q: Are you doing anything to offset some of the pressure from gross margins? Have you seen any cost improvements, maybe cost improvements? Have you been able to negotiate anything lower with your vendors?

A: We have consistently gone back in existing communities and new communities to rebid with suppliers, trade partners, etc. We've had success controlling costs and reducing costs in some places. Down pretty significantly in costs on a per square foot basis from two years ago. Over this year, basically holding steady. Any increases are being caused by tariffs or other things have been offset by savings elsewhere. We'll continue to pursue ways to reduce costs. Also, we'll begin advertising and promoting buying down a seven-year arm versus a thirty-year fixed to help margins.

Q: When you expect gross margin to take higher year, is that driven by a mix impact, or is it because you think you will be done selling to underperforming assets at that point?

A: It's a mix because you're working through the older stuff. As we continue to work through the older, more challenging property and bring on deals identified in 2024 and 2025, that mix shift to newer land will help our margins improve.