Meritage Homes : Earnings Presentation Q3 2025

About this update from Meritage Homes Corporation

THIRD QUARTER 2025 ANALYST CONFERENCE CALL OCTOBER 29, 2025 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 3 334 323.0 312 301.0 278 282.5 292 285.0 Ending Average 3Q25 2Q25 1Q25 4Q24 3Q24 291.0 Ending & Average Community Count 290 Net Sales Orders Up 4% Year-over-year Ending community count at September 30, 2025 of 334 was the highest in company history 3Q25 backlog conversion rate was 211% with 60% of deliveries from intra-quarter orders 3Q25 net orders were up 4% year-over-year in a tougher selling environment 3Q25 Takeaways Net Orders & Y/Y % 1% 3,512 14% 3,304 -3% 3,876 3% 3,914 4% 3,636 3Q24 4Q24 1Q25 2Q25 3Q25 Average Absorption Pace & Y/Y % -10% 4.4 -4% 0% 4.3 4.1 8% 3.9 -7% 3.8 3Q24 4Q24 1Q25 2Q25 3Q25 Backlog Conversion Rate 221% 208% 211% 177% 145% 3Q24 4Q24 1Q25 2Q25 3Q25 4 Diversity in Performance Across the Regions in Today's Operating Environment West Region Central Region * East Region Total Average Communities 85.0 91.0 147.0 323.0 Average Communities Y/Y(%) (1)% 5% 33% 14% Absorption per month 3.4 4.7 3.4 3.8 Absorption per month Y/Y(%) (19)% 2% (11)% (7)% Orders 867 1,289 1,480 3,636 Orders Y/Y(%) (19)% 9% 17% 4% ASP on Orders $492K $364K $351K $389K ASP on Orders Y/Y(%) 1% 1% (7)% (4)% Order Value Y/Y(%) (18)% 9% 9% (1)% * As of January 1, 2025, the Central Region includes Nashville The data above relates to our three reportable homebuilding segments which include: West: Arizona, California, Colorado, and Utah Central: Tennessee and Texas East: Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina 5 Spec Starts Total Specs and Ending Backlog & % of Specs Completed Our Available Supply of Quick Turning Move-In Ready Homes Is Our Competitive Advantage 9,067 8,573 8,762 8,671 8,054 2,284 2,004 1,748 3,798 4,083 3,565 3,601 3,072 6,355 47% 1,699 7,029 40% 1,544 6,923 6,758 6,783 Ending Backlog Total Specs 33% 39% 38% 3Q24 4Q24 1Q25 2Q25 3Q25 3Q24 4Q24 1Q25 2Q25 3Q25 Average Specs Per Community Takeaways 24.4 24.1 23.3 22.2 19.0 19 specs per community translates to 5 months supply for 3Q25, compared to 24 specs per store and 6 months for 3Q24 3Q24 4Q24 1Q25 2Q25 3Q25 6 3Q25 Financial Performance ($ Millions except EPS & ASP) 3Q25 3Q24 % Chg YTD2025 YTD2024 % Chg Home closings 3,685 3,942 (7)% 11,271 11,567 (3)% ASP (closings) $380K $402K (5)% $387K $410K (6)% Home closing revenue $1,399 $1,586 (12)% $4,357 $4,746 (8)% Home closing gross profit $267 $393 (32)% $904 $1,210 (25)% Home closing gross margin 19.1% 24.8% (570) bps 20.7% 25.5% (480) bps Adjusted home closing gross margin 2 20.1% 24.9% (480) bps 21.2% 25.6% (440) bps SG&A expenses $152 $157 (4)% $467 $467 0% SG&A % of home closing revenue 10.8% 9.9% 90 bps 10.7% 9.8% 90 bps Earnings before taxes $128 $250 (49)% $481 $781 (38)% Effective tax rate 22.6% 21.6% 100 bps 23.4% 21.5% 190 bps Net earnings $99 $196 (49)% $369 $614 (40)% Diluted EPS 1 $1.39 $2.67 (48)% $5.13 $8.36 (39)% Adjusted Diluted EPS 1,2 $1.55 $2.69 (42)% $5.35 $8.40 (36)% 3Q25 Highlights: Decline in ASPs from greater incentive use Adjusted gross margin impacted by greater incentive use and lot costs, and lost leverage Lower SG&A % from higher commission rates and tech costs, and lost leverage 2025 tax rate reflects fewer homes meeting greater energy tax credit thresholds 2024 historical data is adjusted for the two-for-one stock split completed on January 2, 2025 Adjusted to exclude real estate inventory impairments and terminated land deal walk away charges totaling $14.5M in 3Q25 and $2.0M in 3Q24; totaling $20.1M in YTD2025 and $3.9M in YTD2024 7 3Q25 Capital Structure and Capital Spend Activities Capital Structure - Non-GAAP Reconciliation 3Q25 Capital Allocation Spend ($ Millions) Sept. 30, 2025 Dec. 31, 2024 Notes payable & other borrowings $1,829 $1,336 Stockholders' equity $5,288 $5,142 Total capital $7,117 $6,478 Debt-to-capital 25.7% 20.6% Less: cash & cash equivalents $(729) $(652) Net debt $1,100 $684 Total net capital $6,388 $5,826 Net debt-to-capital 17.2% 11.7% Book value per share 1 $75.10 $71.49 Cash Dividends 5% Share Repurchase 9% Strong financial position supported by a healthy balance sheet and ample liquidity 1 2024 historical data is adjusted for the two-for-one stock split completed on January 2, 2025 $613 million total spend Land Spend 86% Returned $85M of cash to shareholders in 3Q25 and $237M year to date through September 30, 2025 8 3Q25 Land & Development Investment Lots Detail Land Acquisition & Development Spend* ($ Millions) 3Q25 3Q24 Total lots controlled 80,836 74,819 Supply of lots (years) 5.3 4.8 - Owned 69% 64% - Optioned 31% 36% $576 $688 $234 $222 $264 $310 $315 $405 $243 $264 $275 $261 $307 $283 $617 $465 $509 $528 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 Column1 Development Acqusition Takeaways Intentional slowdown in net new lot acquisition, given current market conditions Continue to have the right amount of lots under control for multiyear community growth, in line with our target of 4-5 year supply of lots * Land acquisition and development spend is net of land development reimbursements. 2Q24 to 3Q25 have been adjusted to the current presentation Net Newly Controlled Lots 14,359 8,707 7,795 2,188 1,795 1,996 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 9 4Q25 Guidance Fourth Quarter 2025 Home closings 3,800-4,000 units Home closing revenue $1.46-1.54 billion Home closing gross margin 19-20% Effective tax rate About 24.5% Diluted earnings per common share $1.51-1.70 10 Led by our flexible operations and capital allocation strategy, we are focused on maximizing returns throughout periods of economic transition 3Q25 Key Takeaways 3Q25 community count expansion and improved cycle times prepare us for future growth opportunities Reduced our land spend to $528M and increased our return of cash to shareholders to $85M 11 ABOUT MERITAGE 12 Meritage Company Overview Affordable spec builder specializing in entry-level and first move-up homes Top five U.S. public homebuilder Delivered over 200,000 homes in its 40-year history Diversified geographic footprint with 25 markets in 12 states 13 Meritage Key Strategies Spec strategy Go-to market strategy Start all homes prior to releasing them for sale • 60-day closing commitment 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 14 Attention : This is an excerpt of the original content. 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