LGI Homes, Inc.

Welcome to the LGI Homes fourth quarter 2025 conference call. Today's call is being recorded and a replay will be available on the company's website at www.lgihomes.com. After management's prepared comments, there will be an opportunity to ask questions. At this time, I'll turn the call over to Joshua Fatter, Executive Vice President of Investor Relations and Capital Markets.

Thanks and good afternoon. I'll remind listeners that this call contains forward-looking statements, including management's views on the company's business strategy, outlook plans, objectives, and guidance for future periods. Such statements reflect management's current expectations and involve assumptions and estimates that are subject to risks and uncertainties that could cause those expectations to prove to be incorrect. You should review our filings with the SEC for a discussion of the risks, uncertainties, and other factors that could cause actual results to differ from those presented today. All forward-looking statements must be considered in light of those related risks, and you shouldn't place undue reliance on such statements, which reflect management's current viewpoints and are not guarantees of future performance. On this call, we'll discuss non-GAAP financial measures that are not intended to be considered in isolation or as substitutes for financial information presented in accordance with GAAP. Reconciliations of non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP It can be found in the press release we issued this morning and in our annual report on Form 10-K for the period ended December 31, 2025, that will be filed with the SEC. This filing will be accessible on the SEC's website and in the Investor Relations section of our website. I'm joined today by Eric Liefer, LGI Homes Chief Executive Officer and Chairman of the Board, and Charles Vordian, Chief Financial Officer and Treasurer. I'll now turn the call over to Eric.

Thanks, Josh. Good afternoon, and thanks for joining us to discuss our fourth quarter and full year results. This marks our 50th earnings call, and on reflection, I'm proud to say that the same principles that guided us and drove our success over the years were once again on display in 2025. Throughout the year, our team successfully navigated a dynamic and challenging market environment. Affordability remained the primary pressure point, and rate volatility added uncertainty across the market. Even so, our teams executed with discipline, generating leads, managing inventory, supporting our customers, and delivering homes with the exceptional service that sets LGI apart. That discipline is evident in our fourth quarter results. During the quarter, we delivered 1,362 homes. Of this total, 1,301 homes contributed directly to our reported revenue of $474 million. The remaining 61 were currently or previously leased homes, the profits of which were reflected in other income. Notably, during December, we closed our 80,000th home, another significant milestone that highlights our growing scale and longevity of our business model. Our margins continue to demonstrate resilience relative to industry expectations supported by our approach to pricing, incentives, and inventory management. During the quarter, we delivered a gross margin before inventory-related charges of over 19% and adjusted gross margin of over 22%. These results were below the guidance ranges provided, primarily due to the outsized impact of buy-downs and price discounts on older inventory. However, even with this targeted activity to right-size our inventory, our margins continue to reflect the strength of our operating model and the deliberate choices we make to enhance affordability while supporting profitability. We ended the year with 144 active communities and averaged 3.1 closings per community per month in the fourth quarter, our highest pace of the year, driven by solid execution and our strong finish in December. During the fourth quarter, our top markets on a closings per community basis were Charlotte with six, Northern California with 5.8, Las Vegas with 4.6, and Atlanta with 4.2 closings per community per month. For the full year, our top markets were Charlotte with 5.2, Atlanta with 4.4, and Las Vegas with 4 closings per community per month. Congratulations to the teams in these markets on their performance. We continue to write contracts in a market where many buyers need additional time to save for a down payment, strengthen their credit, or finalize the sale of an existing home. As a result, the time between contract and close remains extended, and we expect this trend to persist for the foreseeable future. As a result, our cancellation rate increased to 43.3 percent with affordability pressures and broader economic uncertainty amplifying the typical factors that drive cancellations. Further, we expect this dynamic to continue for the foreseeable future. It's important to remember that a gross sale simply reflects a buyer placing a deposit on a home, the start of the home purchasing process, and some of those early commitments naturally don't progress through the qualification process. However, while some won't reach the finish line, writing those additional deals enables us to close an incremental number of qualified buyers. During the quarter, our net orders increased 39% year-over-year, Our backlog grew 133% to 1,394 homes, and the value of our backlog exceeded $501 million, up 112% compared to the same period last year. Included in these results was an agreement with a wholesale buyer to acquire 480 homes that will deliver throughout 2026. Excluding that agreement, our backlog was still up 53% from the end of 2024. January leads and retail net orders were up slightly, admittedly compared to a softer comp last year. Nevertheless, we expect results in the first quarter to be similar to last year as we continue to monitor the pull-through on our backlog and the ongoing evolution in cancellation rates. Stepping back, 2025 was a year defined by disciplined execution. We remained focused on what we can control, managing costs, offering competitive financing options, supporting our margins, and delivering affordable, move-in-ready homes to first-time buyers. We continue to invest in people, land, and operating platforms to support our long-term strategy, even as we adapted to near-term market conditions. Before turning the call over to Charles, I want to reiterate that our long-term outlook for the housing market remains positive. The supply-demand imbalance, favorable demographic trends, and essential need for attainable homeownership I'll reinforce the strength of our strategy. As we move into 2026, we do so with resilience, focus, and a deep commitment to navigating the market with the same determination that has guided us throughout our history. With that, I'll invite Charles to provide additional details on our financial results.