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
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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 |
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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 | $374K |
ASP on Orders Y/Y(%) | 1% | (5)% | (7)% | (6)% |
Order Value Y/Y(%) | (29)% | 2% | 0% | (9)% |
* As of January 1, 2025, the Central Region includes Nashville
The data above relates to our three reportable homebuilding segments which include:
West: Arizona, California, Colorado, and Utah
Central: Tennessee and Texas
East: Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina 5
Spec Starts | Total Specs and Ending Backlog & % of Specs Completed |
Our Available Supply of Quick Turning Move-In Ready Homes Is Our Competitive Advantage
4,083
3,565
3,601
3,072
2,694
1,544
8,573
1,748
8,762 8,671
2,004
8,054
6,355
47%
1,699
7,029
7,006
5,838
50%
1,168
6,923
6,758
Ending Backlog Total Specs
40%
39%
38%
4Q24 1Q25 2Q25 3Q25 4Q25 4Q24 1Q25 2Q25 3Q25 4Q25
Average Specs Per Community
24.1 23.3
22.2
19.0 17.4
Takeaways
17.4 specs per community for 4Q25 is our lowest level since mid-2023 and translates to 5 months' supply, in line with our target of 4-6 months supply of specs on the ground
Our completed specs comprised 50% of total spec count at 12/31/25. We intend to bring down this ratio during the spring selling season
4Q24 1Q25 2Q25 3Q25 4Q25
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4Q25 Financial Performance
($ 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)% |
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 $6.7M in FY24. See 4Q25 Earnings Release for Non-GAAP Reconciliation
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4Q25 Capital Structure and Capital Spend Activities
Capital Structure - Non-GAAP Reconciliation
4Q25 Capital Allocation Spend
($ 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
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 $416M for the
full year 2025
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4Q25 Land & Development Investment
Lots Detail
Land Acquisition & Development Spend* ($ 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 AcqusitionTakeaways
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 |
Home closing volume and revenue consistent with full year 2025
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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
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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 40-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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