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 margin2 | 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 EPS1 | $1.39 | $2.67 | (48)% | $5.13 | $8.36 | (39)% |
Adjusted Diluted EPS1,2 | $1.55 | $2.69 | (42)% | $5.35 | $8.40 | (36)% |
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 share1 | $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
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. To continue reading it, access the original document here. |