Meritage Homes CorporationNYSE: MTH

4th Quarter 2025 Conference Call - Slides

· Issued by Meritage Homes Corporation
FOURTH QUARTER 2025 ANALYST CONFERENCE CALL

JANUARY 29, 2026



Speakers



Steven J. Hilton - Executive Chairman Phillippe Lord - Chief Executive Officer Hilla Sferruzza - EVP & Chief Financial Officer Emily Tadano - VP of Investor Relations and External Communications

3



Ending & Average Community Count

334

335.0

323.0

312

292 285.0

291.0

301.0

4Q24

1Q25

2Q25

3Q25

4Q25

Ending Average

290

336

Net Sales Orders Down 2% Year-over-year

  • Grew ending community count

    15% year-over-year to 336 communities at December 31, 2025

  • 4Q25 backlog conversion rate was 221% with 63% of deliveries from intra-quarter orders, reflecting the benefit of our 60-day closing ready guarantee

  • 4Q25 net orders were down 2% year-over-year in a tougher selling environment

4Q25 Takeaways

Net Orders & Y/Y %

-3%

3%

4%

14%

3,876

3,914

-2%

3,636

3,304

3,224

4Q24

1Q25

2Q25

3Q25

4Q25

Average Absorption Pace & Y/Y %

-10%

4.4

-4%

4.3

8%

-7%

3.9

3.8

-18%

3.2

4Q24

1Q25

2Q25

3Q25

4Q25

Backlog Conversion Rate

221%

221%

208%

211%

177%

4Q24

1Q25

2Q25

3Q25

4Q25

4



Diversity in Performance Across the Regions in Today's Operating Environment

West Region Central Region* East Region

Total

Average Communities

84.0

104.5

146.5

335.0

Average Communities Y/Y(%)

(5)%

21%

33%

18%

Absorption per month

2.4

4.1

3.0

3.2

Absorption per month Y/Y(%)

(27)%

(13)%

(19)%

(18)%

Orders

610

1,288

1,326

3,224

Orders Y/Y(%)

(29)%

7%

8%

(2)%

ASP on Orders

$497K

$345K

$346K

$374K

ASP on Orders Y/Y(%)

1%

(5)%

(7)%

(6)%

Order Value Y/Y(%)

(29)%

2%

0%

(9)%

* As of January 1, 2025, the Central Region includes Nashville

The data above relates to our three reportable homebuilding segments which include:

West: Arizona, California, Colorado, and Utah

Central: Tennessee and Texas

East: Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina 5



Spec Starts

Total Specs and Ending Backlog & % of Specs Completed

Our Available Supply of Quick Turning Move-In Ready Homes Is Our Competitive Advantage

4,083

3,565

3,601

3,072

2,694

1,544

8,573

1,748

8,762 8,671

2,004

8,054

6,355

47%

1,699

7,029

7,006

5,838

50%

1,168

6,923

6,758

Ending Backlog Total Specs

40%

39%

38%

4Q24 1Q25 2Q25 3Q25 4Q25 4Q24 1Q25 2Q25 3Q25 4Q25

Average Specs Per Community

24.1 23.3

22.2

19.0 17.4

Takeaways

  • 17.4 specs per community for 4Q25 is our lowest level since mid-2023 and translates to 5 months' supply, in line with our target of 4-6 months supply of specs on the ground

  • Our completed specs comprised 50% of total spec count at 12/31/25. We intend to bring down this ratio during the spring selling season

4Q24 1Q25 2Q25 3Q25 4Q25

6



4Q25 Financial Performance

($ Millions

except EPS & ASP)

4Q25

4Q24

% Chg

FY2025

FY2024

% Chg

Home closings

3,755

4,044

(7)%

15,026

15,611

(4)%

ASP (closings)

$375K

$395K

(5)%

$384K

$406K

(5)%

Home closing revenue

$1,406

$1,596

(12)%

$5,764

$6,341

(9)%

Home closing gross profit

$232

$370

(37)%

$1,136

$1,580

(28)%

Home closing gross margin

16.5%

23.2%

(670) bps

19.7%

24.9%

(520) bps

Adjusted home closing gross margin2

19.3%

23.3%

(400) bps

20.8%

25.0%

(420) bps

SG&A expenses

$149

$173

(14)%

$616

$640

(4)%

SG&A % of home closing revenue

10.6%

10.8%

(20) bps

10.7%

10.1%

60 bps

Earnings before taxes

$103

$222

(53)%

$585

$1,003

(42)%

Effective tax rate

18.5%

22.1%

(360) bps

22.5%

21.6%

90 bps

Net earnings

$84

$173

(51)%

$453

$786

(42)%

Diluted EPS1

$1.20

$2.36

(49)%

$6.35

$10.72

(41)%

Adjusted Diluted EPS1,3

$1.67

$2.39

(30)%

$7.05

$10.79

(35)%

4Q25 Highlights:
  • Decline in ASPs from greater incentive use and geographic mix

  • Adjusted gross margin impacted by greater incentive use and lot costs, as well as lost leverage

  • Lower SG&A % mainly from lower performance-based compensation

  • 2025 tax rate primarily reflects acquired below-market 2025 transferable clean fuel production tax credits

  1. 2024 adjusted for the two-for-one stock split completed on January 2, 2025

  2. Excluded non-recurring charges totaling $38.9M in 4Q25 and $2.8M in 4Q24; totaling $60.2M in FY25 and $6.7M in FY24. See 4Q25 Earnings Release for Non-GAAP Reconciliation

  3. Excluded non-recurring charges totaling $42.9M in 4Q25 and $2.8M in 4Q24; totaling $66.4M in FY25 and $6.7M in FY24. See 4Q25 Earnings Release for Non-GAAP Reconciliation

    7



    4Q25 Capital Structure and Capital Spend Activities

    Capital Structure - Non-GAAP Reconciliation

4Q25 Capital Allocation Spend

($ Millions)

Dec. 31, 2025

Dec. 31, 2024

Notes payable & other borrowings

$1,829

$1,336

Stockholders' equity

$5,196

$5,142

Total capital

$7,025

$6,478

Debt-to-capital

26.0%

20.6%

Less: cash & cash equivalents

$(775)

$(652)

Net debt

$1,053

$684

Total net capital

$6,250

$5,826

Net debt-to-capital

16.9%

11.7%

Book value per share1

$76.22

$71.49

Cash Dividends 5%

Strong financial position supported by a healthy balance sheet and

ample liquidity

  1. 2024 adjusted for the two-for-one stock split completed on January 2, 2025

    Share Repurchase 25%

    $595 million total spend

    Land Spend 70%

    Returned $179M of cash to shareholders in 4Q25 and $416M for the

    full year 2025

    8



    4Q25 Land & Development Investment

    Lots Detail

    Land Acquisition & Development Spend* ($ Millions)

    4Q25

    4Q24

    Total lots controlled

    77,625

    85,613

    Supply of lots (years)

    5.2

    5.5

    - Owned

    72%

    62%

    - Optioned

    28%

    38%

    $688

    $405

$310

$148

$234

$222

$264

$268

$243

$264

$275

$307

$283

$617

$465 $509 $528

$416

3Q24 4Q24 1Q25 2Q25 3Q25 4Q25

Column1

Development Acqusition

Takeaways

  • Intentional slowdown of net new lot acquisition, given

    current market conditions

    • Walked away from over 3,400 lots in 4Q25

  • Positioned well with 5.2 years supply of lots, in line with our target of 4-5 years

* Land acquisition and development spend is net of land development reimbursements. 2024 metrics have been adjusted to the current presentation

Net Newly Controlled Lots

14,359

7,795

2,188

1,795

1,996

-517

3Q24 4Q24 1Q25 2Q25 3Q25 4Q25*

* Includes 3,177 gross new lots acquired 9



Guidance

First Quarter 2026

Home closings

3,000-3,300 units

Home closing revenue

$1.13-1.24 billion

Home closing gross margin

18-19%

Effective tax rate

About 24.0%

Diluted earnings per common share

$0.87-1.13

Full Year 2026:
  • Home closing volume and revenue consistent with full year 2025

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