Meritage Homes : Earnings Presentation Q4 & FY 2025

About this update from 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 margin 2 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 EPS 1 $1.20 $2.36 (49)% $6.35 $10.72 (41)% Adjusted Diluted EPS 1,3 $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 2024 adjusted for the two-for-one stock split completed on January 2, 2025 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 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 share 1 $76.22 $71.49 Cash Dividends 5% Strong financial position supported by a healthy balance sheet and ample liquidity 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 10 Top 5 builder focused on spec building 4Q25 Key Takeaways Move-in ready inventory, streamlined operations, a diverse geographic footprint Differentiated ability to compete against resale, given our 60-day closing guarantee and realtor engagement 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 210,000 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 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 14 Attention : This is an excerpt of the original content. 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