APRIL 23, 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
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334
345 340.5
312
323.0
301.0
Ending Average
1Q26
4Q25
3Q25
2Q25
1Q25
291.0
335.0
Ending & Average Community Count
290
336
Net Sales Orders Down 5% Year-over-year
Grew ending community count
19% year-over-year to a
company record 345
communities at March 31, 2026
1Q26 backlog conversion rate was 254% with nearly 70% of deliveries from intra-quarter orders, reflecting the benefit of our 60-day closing ready guarantee
1Q26 net orders were down 5% year-over-year in a tougher selling environment
1Q26 Takeaways
Net Orders & Y/Y % | ||||
-3% 3,876 | 3% 3,914 | 4% 3,636 | -2% | -5% 3,664 |
3,224 | ||||
1Q25 | 2Q25 | 3Q25 | 4Q25 | 1Q26 |
Average Absorption Pace & Y/Y % | ||||
-10% 4.4 | -4% 4.3 | |||
-7% | ||||
3.8 | -18% | |||
-18% | 3.6 | |||
3.2 | ||||
1Q25 | 2Q25 | 3Q25 | 4Q25 | 1Q26 |
Backlog Conversion Rate | ||||
254% | ||||
221% | 208% | 211% | 221% | |
1Q25 | 2Q25 | 3Q25 | 4Q25 | 1Q26 |
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Diversity in Performance Across the Regions in Today's
Operating Environment
West Region Central Region East Region | Total | |||
Average Communities | 85.5 | 109.5 | 145.5 | 340.5 |
Average Communities Y/Y(%) | (3)% | 27% | 24% | 17% |
Absorption per month | 3.5 | 4.0 | 3.3 | 3.6 |
Absorption per month Y/Y(%) | (15)% | (25)% | (18)% | (18)% |
Orders | 898 | 1,316 | 1,450 | 3,664 |
Orders Y/Y(%) | (18)% | (4)% | 2% | (5)% |
ASP on Orders | $495K | $348K | $344K | $382K |
ASP on Orders Y/Y(%) | 0% | (3)% | (8)% | (5)% |
Order Value Y/Y(%) | (18)% | (7)% | (6)% | (10)% |
The data above relates to our three reportable homebuilding segments which include: West: Arizona, California, Colorado, and Utah
Central: Tennessee and Texas
East: Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina
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Our Available Supply of Quick Turning Move-In Ready Homes Is Our Competitive Advantage
Spec Starts | Total Specs and Ending Backlog & % of Specs Completed |
4,083
3,601
3,072
2,694
2,524
6,758
39%
2,004
8,762
8,671
1,748
8,054
4,734
46%
1,865
6,355
47%
1,699
7,006 6,599
1,168
Ending Backlog Total Specs
5,838
50%
6,923
38%
1Q25 2Q25 3Q25 4Q25 1Q26 1Q25 2Q25 3Q25 4Q25 1Q26
Average Specs Per Community
23.3 22.2
19.0 17.4
13.7
Takeaways
13.7 specs per community for 1Q26 is our lowest level since 2022 and aligns with the accelerated cycle times and slower sales environment
Our completed specs comprised 46% of total spec count at March 31, 2026. We will continue to focus on bringing down this ratio in Q2
1Q25 2Q25 3Q25 4Q25 1Q26
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1Q26 Financial Performance
($ Millions except EPS & ASP) 1Q26 1Q25 % Chg | |||
Home closings | 2,967 | 3,416 | (13)% |
ASP (closings) | $373K | $393K | (5)% |
Home closing revenue | $1,108 | $1,342 | (17)% |
Home closing gross profit | $194 | $296 | (34)% |
Home closing gross margin | 17.5% | 22.0% | (450) bps |
SG&A expenses | $131 | $152 | (14)% |
SG&A % of home closing revenue | 11.8% | 11.3% | 50 bps |
Earnings before taxes | $73 | $160 | (55)% |
Effective tax rate | 23.7% | 23.3% | 40 bps |
Net earnings | $55 | $123 | (55)% |
Diluted EPS | $0.82 | $1.69 | (51)% |
Decline in ASPs from greater incentive use and geographic mix
Gross margin impacted by greater incentive use, higher lot costs, and lost leverage, which were partially offset by savings in direct costs, decreased compensation expense and faster cycle times
SG&A % reflected lost leverage and higher technology costs, which were partially offset by decreased compensation expense and an intentional reduction in discretionary expenses
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1Q26 Capital Structure and Capital Spend Activities
Capital Structure - Non-GAAP Reconciliation
1Q26 Capital Allocation Spend
($ Millions) | Mar. 31, 2026 | Dec. 31, 2025 |
Notes payable & other borrowings | $1,841 | $1,829 |
Stockholders' equity | $5,094 | $5,196 |
Total capital | $6,935 | $7,025 |
Debt-to-capital | 26.6% | 26.0% |
Less: cash & cash equivalents | $(767) | $(775) |
Net debt | $1,075 | $1,053 |
Total net capital | $6,168 | $6,250 |
Net debt-to-capital | 17.4% | 16.9% |
Book value per share | $76.37 | $76.22 |
Cash Dividends 6%
Share Repurchase 27%
Strong financial position supported by a healthy balance sheet and
ample liquidity
$488 million total spend
Land Spend 67%
Returned $162M of cash to shareholders, totaling 295% of quarterly
earnings in 1Q26
Returned $416M in FY25, totaling 92% of FY25 earnings, via $295M in share buybacks (reduced 6% of the outstanding shares at the start of 2025) and $121M in cash dividends
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1Q26 Land & Development Investment
Lots Detail
Land Acquisition & Development Spend* ($ Millions)
1Q26 | 1Q25 | |
Total lots controlled | 75,481 | 84,200 |
Supply of lots (years) | 5.2 | 5.4 |
- Owned | 70% | 62% |
- Optioned | 30% | 38% |
$688
$405
$141
$148
$234
$222
$264
$185
$268
$243
$264
$275
$283
$465 $509 $528
$416
$326
4Q24 1Q25 2Q25 3Q25 4Q25 1Q26
Column1
Development AcqusitionTakeaways
Intentional slowdown of land acquisition and development
spend, given current market conditions
Positioned well with 5.2 years supply of lots, in line with our target of 4-5 years and our growth plans
* 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
2,188
1,795
1,996
380
-517
4Q24 1Q25 2Q25 3Q25 4Q25* 1Q26
* 4Q25 included 3,434 lots we terminated
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Guidance
Second Quarter 2026 | |
Home closings | 3,650-3,900 units |
Home closing revenue | $1.37-1.47 billion |
Home closing gross margin | Around 18% |
Effective tax rate | 24.5-25.0% |
Diluted earnings per common share | $1.18-1.46 |
Home closing volume and revenue at or within 5% of full year 2025
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Top 5 builder focused on spec building
Differentiated ability to compete against resale, given our 60-day closing guarantee and realtor engagement
1Q26 Key Takeaways
Prioritized balance sheet strength and disciplined capital allocation in 1Q26 under current market conditions
Community count growth and faster cycle times paired with our strategy position us well to capture incremental market share as demand conditions improve
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ABOUT MERITAGE
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Meritage Company Overview
Affordable spec builder specializing in entry-level and first move-up homes |
Top five U.S. public homebuilder |
Delivered over 210,000 homes in its 41-year history |
Diversified geographic footprint with 25 markets in 12 states |
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Meritage Key Strategies
Spec strategy
Go-to market strategy
Start all homes prior to releasing
them for sale • 60-day closing ready guarantee
Move-in ready inventory
Realtor engagement
Streamlined operations
Focused on affordability
Cost savings from national vendors derived from reduced number of house plans and SKUs, lack of design center and a simplified sale to close process
Deliver affordable entry-level and first move-up homes
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