Table of Contents

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For purposes of this "Management's Discussion and Analysis of Financial Condition and Results of Operations," the terms "the Company," "we," "us," or "our" refer to Taylor Morrison Home Corporation ("TMHC") and its subsidiaries. This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited Condensed consolidated financial statements included elsewhere in this quarterly report.

Forward-Looking Statements

This quarterly report includes certain forward-looking statements within the meaning of the federal securities laws regarding, among other things, our intentions, plans, beliefs, expectations or predictions of future events, which are considered forward-looking statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business and operations strategy. These statements often include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate," "can," "could," "might," "project" or similar expressions. These statements are based upon assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances. As you read this quarterly report, you should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions, including those described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "Annual Report") and in our subsequent filings with the U.S. Securities and Exchange Commission (the "SEC"). Although we believe that these forward-looking statements are based upon reasonable assumptions and currently available information, you should be aware that many factors, including those described under the heading "Risk Factors" in the Annual Report and in our subsequent filings with the SEC, could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements.

Our forward-looking statements made herein are made only as of the date of this quarterly report. We expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, except as required by applicable law.

TAYLOR MORRISON HOME CORPORATION 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview

Our principal business is residential homebuilding and the development of lifestyle communities with operations across 12 states. We provide an assortment of homes across a wide range of price points to appeal to an array of consumer groups. We design, build and sell single and multi-family detached and attached homes in traditionally high growth markets for entry level, move-up, and resort-lifestyle buyers. We operate under various brand names including Taylor Morrison, Darling Homes Collection by Taylor Morrison, and Esplanade. We also have a "Build-to-Rent" homebuilding business which operates under the Yardly brand name. In addition, we develop and construct multi-use properties consisting of commercial space, retail, and multi-family properties under the Urban Form brand name. We also have operations which provide financial services to customers through our wholly owned mortgage subsidiary, TMHF, title services through our wholly owned title services subsidiary, Inspired Title, and homeowner's insurance policies through our wholly owned insurance agency, TMIS. Our business is organized into multiple homebuilding operating components, and a financial services component, all of which are organized as four reportable segments: East, Central, West and Financial Services, as follows:

EastAtlanta, Charlotte, Jacksonville, Naples, Orlando, Raleigh, Sarasota, and Tampa

CentralAustin, Dallas, Denver, Houston, and Indianapolis

WestBay Area, Las Vegas, Phoenix, Portland, Sacramento, Seattle, and Southern California

Financial ServicesTaylor Morrison Home Funding, Inspired Title & Escrow Services, and Taylor Morrison Insurance Services

As of June 30, 2025, we employed approximately 3,000 full-time equivalent persons. Of these, approximately 2,600 were engaged in corporate and homebuilding operations, and the remaining approximately 400 were engaged in financial services.

Factors Affecting Comparability of Results

For the three and six months ended June 30, 2025, we recognized $6.8 million and $21.6 million in inventory impairment charges, respectively. For the three and six months ended June 30, 2024, we recognized $2.3 million in inventory impairment charges, respectively. Inventory impairment charges are recorded to Cost of home closings on the unaudited Condensed consolidated statements of operations.

For the three and six months ended June 30, 2025, we recognized an incremental $6.9 million and $7.7 million warranty charge, respectively, for a specific repair issue in our East region. We did not incur or recognize such warranty charge in the same periods in the prior year. Warranty charges are recorded to Cost of home closings on the unaudited Condensed consolidated statement of operations. Although we believe we have identified substantially all homes impacted by the repair issue, it is reasonably possible that the estimated liability will change as a result of our evaluation of potential changes in the estimated repair costs and the number of homes impacted.

TAYLOR MORRISON HOME CORPORATION 10-Q

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Second Quarter 2025 Highlights (all comparisons are of the current quarter to the prior year quarter, unless otherwise indicated):

•Home closings revenue of $2.0 billion, up 2%

◦3,340 closings, up 4%, at an average price of $589,000, down 2%

•Home closings gross margin of 22.3% and adjusted home closings gross margin of 23.0%

•90 basis points of SG&A expense leverage to 9.3% of home closings revenue

•Net sales orders of 2,733, down 12%

◦Monthly absorption pace of 2.6 per community, down from 3.0

◦Ending active selling communities of 345, down 1%

•85,051 homebuilding lots owned and controlled

◦60% controlled off balance sheet, up from 57% a year ago

•Total homebuilding land spend of $612 million, of which 43% was development related

•Repurchased 1.7 million common shares for $100 million

•Total liquidity of $1.1 billion

Results of Operations

The following table sets forth our results of operations for the periods presented:

Three Months EndedJune 30,Six Months EndedJune 30,

(Dollars in thousands)2025202420252024

Statements of Operations Data:

Home closings revenue, net$1,966,100 $1,920,127 $3,796,168 $3,556,382

Land closings revenue421 13,234 4,682 20,459

Financial services revenue, net52,929 48,916 104,122 95,875

Amenity and other revenue10,620 8,776 21,117 18,089

Total revenue2,030,070 1,991,053 3,926,089 3,690,805

Cost of home closings1,526,900 1,462,706 2,918,260 2,705,915

Cost of land closings207 18,703 3,696 23,905

Financial services expenses25,876 28,106 54,197 53,249

Amenity and other expenses9,599 9,250 19,174 18,603

Total cost of revenue1,562,582 1,518,765 2,995,327 2,801,672

Gross margin467,488 472,288 930,762 889,133

Sales, commissions and other marketing costs116,389 113,956 225,465 216,556

General and administrative expenses66,655 82,779 134,203 150,343

Net income from unconsolidated entities(326)(2,628)(2,301)(5,379)

Interest expense, net13,819 4,087 22,318 4,044

Other expense, net7,688 6,877 9,245 7,472

Income before income taxes263,263 267,217 541,832 516,097

Income tax provision67,278 67,303 132,116 125,022

Net income before allocation to non-controlling interests195,985 199,914 409,716 391,075

Net income attributable to non-controlling interests(2,408)(454)(2,673)(1,345)

Net income$193,577 $199,460 $407,043 $389,730

Home closings gross margin22.3 %23.8 %23.1 %23.9 %

Sales, commissions and other marketing costs as a percentage of home closings revenue, net

5.9 %5.9 %5.9 %6.1 %

General and administrative expenses as a percentage of home closings revenue, net

3.4 %4.3 %3.5 %4.2 %

TAYLOR MORRISON HOME CORPORATION 10-Q

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Non-GAAP Measures

In addition to the results reported in accordance with GAAP, we have provided information in this quarterly report relating to: (i) adjusted net income and adjusted earnings per common share, (ii) adjusted income before income taxes and related margin, (iii) adjusted home closings gross margin, (iv) EBITDA and Adjusted EBITDA and (v) net homebuilding debt to capitalization ratio.

Adjusted net income, adjusted earnings per common share and adjusted income before income taxes and related margin are non-GAAP financial measures that reflect the net income/(loss) available to the Company excluding, to the extent applicable in a given period, the impact of real estate impairment charges inclusive of inventory impairment charges, impairment of investments in unconsolidated entities, pre-acquisition abandonment charges, certain warranty charges, gains/losses on land transfers to joint ventures, extinguishment of debt, net, and legal reserves or settlements that the Company deems not to be in the ordinary course of business and in the case of adjusted net income and adjusted earnings per common share, the tax impact due to such items.

EBITDA and Adjusted EBITDA are non-GAAP financial measures that measure performance by adjusting net income before allocation to non-controlling interests to exclude interest expense/(income), net, amortization of capitalized interest, income tax provision, depreciation and amortization to calculate EBITDA. Adjusted EBITDA further excludes non-cash compensation expense, if any, real estate impairment charges inclusive of inventory impairment charges, impairment of investments in unconsolidated entities, pre-acquisition abandonment charges, certain warranty charges, gains/losses on land transfers to joint ventures, extinguishment of debt, net and legal reserves or settlements that the Company deems not to be in the ordinary course of business.

Net homebuilding debt to capitalization ratio is a non-GAAP financial measure we calculate by dividing (i) total debt, plus unamortized debt issuance cost/(premium), net, and less mortgage warehouse facilities borrowings, net of unrestricted cash and cash equivalents ("net homebuilding debt"), by (ii) total capitalization (the sum of net homebuilding debt and total stockholders' equity).

Adjusted home closings gross margin is a non-GAAP financial measure based on GAAP home closings gross margin (which is inclusive of capitalized interest), excluding inventory impairment charges and certain warranty charges.

Management uses these non-GAAP financial measures to evaluate our performance on a consolidated basis, as well as the performance of our segments, and to set targets for performance-based compensation. We also use the net homebuilding debt to capitalization ratio as an indicator of overall financial leverage and to evaluate our performance against other companies in the homebuilding industry. In the future, we may include additional adjustments in the above-described non-GAAP financial measures to the extent we deem them appropriate and useful to management and investors.

We believe that adjusted net income, adjusted earnings per common share, adjusted income before income taxes and related margin, as well as EBITDA and Adjusted EBITDA, are useful for investors in order to allow them to evaluate our operations without the effects of various items we do not believe are characteristic of our ongoing operations or performance and also because such metrics assist both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted EBITDA also provides an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization, or unusual items. Because we use the net homebuilding debt to capitalization ratio to evaluate our performance against other companies in the homebuilding industry, we believe this measure is also relevant and useful to investors for that reason. We believe that adjusted home closings gross margin is useful to investors because it allows investors to evaluate the performance of our homebuilding operations without the varying effects of items or transactions we do not believe are characteristic of our ongoing operations or performance.

These non-GAAP financial measures should be considered in addition to, rather than as a substitute for, the comparable U.S. GAAP financial measures of our operating performance or liquidity. Although other companies in the homebuilding industry may report similar information, their definitions may differ. We urge investors to understand the methods used by other companies to calculate similarly-titled non-GAAP financial measures before comparing their measures to ours.

A reconciliation of adjusted net income, adjusted earnings per common share, adjusted income before income taxes and related margin, adjusted home closings gross margin, EBITDA, Adjusted EBITDA, and net homebuilding debt to capitalization ratio to the comparable GAAP measures follows.

TAYLOR MORRISON HOME CORPORATION 10-Q

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Adjusted Net Income and Adjusted Earnings Per Common Share

Three Months Ended June 30,

(Dollars in thousands, except per share data)20252024

Net income $193,577 $199,460

Real estate impairment charges6,754 9,107

Warranty charge6,868 -

Legal reserves and/or settlements

• 6,290

Tax impact of non-GAAP reconciling items(3,481)(3,878)

Adjusted net income$203,718 $210,979

Basic weighted average number of shares99,537 105,500

Adjusted earnings per common share - Basic$2.05 $2.00

Diluted weighted average number of shares100,923 107,249

Adjusted earnings per common share - Diluted$2.02 $1.97

Adjusted Income Before Income Taxes and Related Margin

Three Months Ended June 30,

(Dollars in thousands)20252024

Income before income taxes$263,263 $267,217

Real estate impairment charges6,754 9,107

Warranty charge

6,868 -

Legal reserves and/or settlements- 6,290

Adjusted income before income taxes$276,885 $282,614

Total revenue$2,030,070 $1,991,053

Income before income taxes margin13.0 %13.4 %

Adjusted income before income taxes margin13.6 %14.2 %

Adjusted Home Closings Gross Margin

Three Months Ended June 30,

(Dollars in thousands)20252024

Home closings revenue, net$1,966,100 $1,920,127

Cost of home closings1,526,900 1,462,706

Home closings gross margin$439,200 $457,421

Inventory impairment charges6,754 2,325

Warranty charge

6,868 -

Adjusted home closings gross margin$452,822 $459,746

Home closings gross margin as a percentage of home closings revenue22.3 %23.8 %

Adjusted home closings gross margin as a percentage of home closings revenue23.0 %23.9 %

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EBITDA and Adjusted EBITDA Reconciliation

Three Months Ended June 30,

(Dollars in thousands)20252024

Net income before allocation to non-controlling interests$195,985 $199,914

Interest expense, net13,819 4,087

Amortization of capitalized interest25,773 28,303

Income tax provision67,278 67,303

Depreciation and amortization1,905 3,450

EBITDA$304,760 $303,057

Non-cash compensation expense8,015 6,072

Real estate impairment charges6,754 9,107

Warranty charge

6,868 -

Legal reserves and/or settlements

• 6,290

Adjusted EBITDA$326,397 $324,526

Total revenue$2,030,070 $1,991,053

Net income before allocation to non-controlling interests as a percentage of total revenue9.7 %10.0 %

EBITDA as a percentage of total revenue15.0 %15.2 %

Adjusted EBITDA as a percentage of total revenue16.1 %16.3 %

Net Homebuilding Debt to Capitalization Ratio Reconciliation

(Dollars in thousands)As of June 30, 2025As of March 31, 2025As of June 30, 2024

Total debt$2,099,377 $2,083,599 $2,150,021

Plus: unamortized debt issuance cost, net5,737 6,177 7,496

Less: mortgage warehouse facilities borrowings(171,319)(175,741)(276,205)

Total homebuilding debt$1,933,795 $1,914,035 $1,881,312

Total stockholders' equity

6,057,862 5,957,524 5,526,542

Total capitalization$7,991,657 $7,871,559 $7,407,854

Total homebuilding debt to capitalization ratio24.2 %24.3 %25.4 %

Total homebuilding debt1,933,795 1,914,035 1,881,312

Less: cash and cash equivalents(130,174)(377,815)(246,845)

Net homebuilding debt$1,803,621 $1,536,220 $1,634,467

Total stockholders' equity

$6,057,862 $5,957,524 $5,526,542

Total capitalization$7,861,483 $7,493,744 $7,161,009

Net homebuilding debt to capitalization ratio22.9 %20.5 %22.8 %

TAYLOR MORRISON HOME CORPORATION 10-Q

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Three and six months ended June 30, 2025 compared to three and six months ended June 30, 2024

Ending Active Selling Communities

As of June 30,

Change

20252024

East135 122 10.7 %

Central95 106 (10.4 %)

West115 119 (3.4 %)

Total345 347 (0.6 %)

The total ending active selling communities remained relatively consistent at June 30, 2025 compared to June 30, 2024. The East segment had multiple community openings, including master planned communities which resulted in an increase in outlets that was offset by the West and Central regions which closed-out several higher paced communities in certain markets.

Net Sales Orders

Three Months Ended June 30,

Net Sales Orders (1)

Sales Value (1)

Average Selling Price

(Dollars in thousands)20252024Change 20252024Change 20252024Change

East1,1471,160(1.1 %)$588,529 $616,846 (4.6 %)$513 $532 (3.6 %)

Central731815(10.3 %)355,673 485,036 (26.7 %)487 595 (18.2 %)

West8551,136(24.7 %)599,036 767,925 (22.0 %)701 676 3.7 %

Total2,7333,111(12.2 %)$1,543,238 $1,869,807 (17.5 %)$565 $601 (6.0 %)

Six Months Ended June 30,

Net Sales Orders (1)

Sales Value (1)

Average Selling Price

(Dollars in thousands)20252024Change 20252024Change 20252024Change

East2,5382,4553.4 %$1,309,556 $1,393,707 (6.0 %)$516 $568 (9.2 %)

Central1,5981,719(7.0 %)805,035 963,455 (16.4 %)504 560 (10.0 %)

West1,9712,623(24.9 %)1,427,941 1,752,408 (18.5 %)724 668 8.4 %

Total6,1076,797(10.2 %)$3,542,532 $4,109,570 (13.8 %)$580 $605 (4.1 %)

(1) Net sales orders and sales value represent the number and dollar value, respectively, of new sales contracts executed with customers, net of cancellations.

Net sales orders decreased 12.2% and 10.2% for the three and six months ended June 30, 2025, compared to the same periods in the prior year. The decrease in the Central region was primarily due to community close-outs and the decrease in the West region was primarily due to an increase in cancellations. We continue to offer our buyers various incentives, discounts, and financing programs to drive sales orders, however economic conditions such as mortgage interest rates that remain high, contributed to the overall decrease in net sales orders. In addition, incentives and discounts as well a net sales orders mix led to the decrease in the average selling price for the three and six months ended June 30, 2025, compared to the same periods in the prior year.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Sales Order Cancellations

Cancellation Rate(1)

Three Months EndedJune 30,Six Months EndedJune 30,

2025202420252024

East14.3 %9.5 %12.2 %7.6 %

Central11.8 %9.1 %10.4 %8.9 %

West17.2 %9.5 %14.9 %8.1 %

Total Company14.6 %9.4 %12.6 %8.1 %

(1) Cancellation rate represents the number of canceled sales orders divided by gross sales orders.

The total company cancellation rate increased for the three and six months ended June 30, 2025, compared to the same periods in the prior year. We believe the higher cancellation rate for the three and six months ended June 30, 2025 was driven by general market conditions, including the ability of homeowners to sell their current home prior to closing on a new home. In addition, we have reduced required customer deposits as means of stimulating new sales orders which can further contribute to higher cancellation rates.

As of June 30,

Sold Homes in Backlog (1)

Sales ValueAverage Selling Price

(Dollars in thousands)20252024Change 20252024Change 20252024Change

East1,8402,356(21.9 %)$1,179,529 $1,641,116 (28.1 %)$641 $697 (8.0 %)

Central8881,423(37.6 %)514,330 875,064 (41.2 %)579 615 (5.9 %)

West1,7332,477(30.0 %)1,244,653 1,681,639 (26.0 %)718 679 5.7 %

Total4,4616,256(28.7 %)$2,938,512 $4,197,819 (30.0 %)$659 $671 (1.8 %)

(1) Sales order backlog represents homes under contract for which revenue has not yet been recognized at the end of the period (including homes sold but not

yet started). Some of the contracts in our sales order backlog are subject to contingencies including mortgage loan approval and buyers selling their existing

homes, which can result in cancellations.

Total sold homes in backlog and total sales value decreased by 28.7% and 30.0% at June 30, 2025 compared to June 30, 2024, respectively. The decrease in units is primarily due to fewer net sales orders in the current period compared to the same period in the prior year, as well as improved construction cycle times and more quick-move-in homes which sold and closed during the six months ended June 30, 2025 compared to the same period in the prior year. Incentives and discounts as well as net sales orders mix led to the decrease in the average selling price.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Home Closings Revenue

Three Months Ended June 30,

Homes ClosedHome Closings Revenue, NetAverage Selling Price

(Dollars in thousands)20252024Change 20252024Change 20252024Change

East1,3251,2377.1 %$695,198 $691,129 0.6 %$525 $559 (6.1 %)

Central9258647.1 %481,786 480,522 0.3 %521 556 (6.3 %)

West1,0901,099(0.8 %)789,116 748,476 5.4 %724 681 6.3 %

Total3,3403,2004.4 %$1,966,100 $1,920,127 2.4 %$589 $600 (1.8 %)

Six Months Ended June 30,

Homes ClosedHome Closings Revenue, NetAverage Selling Price

(Dollars in thousands)20252024Change 20252024Change 20252024Change

East2,435 2,170 12.2 %$1,320,911 $1,232,859 7.1 %$542 $568 (4.6 %)

Central1,808 1,696 6.6 %959,280 952,554 0.7 %531 562 (5.5 %)

West2,145 2,065 3.9 %1,515,977 1,370,969 10.6 %707 664 6.5 %

Total6,3885,9317.7 %$3,796,168 $3,556,382 6.7 %$594 $600 (1.0 %)

The number of homes closed increased by 4.4% and 7.7% for the three and six months ended June 30, 2025, compared to the same periods in the prior year. The increases are generally due to improved cycle times across various markets and the higher number of quick-move-in homes which sold and closed within the three and six months ended June 30, 2025 as compared to the same periods in the prior year. In addition, the East region had several master plan communities that began closing homes during the current year periods. Incentives and discounts as well as net sales orders mix led to the decrease in the average selling price for the three and six months ended June 30, 2025, compared to the same periods in the prior year.

Segment Home Closings Gross Margins

Three Months Ended June 30,

East Central West Consolidated

(Dollars in thousands)20252024202520242025202420252024

Home closings revenue, net$695,198 $691,129 $481,786 $480,522 $789,116 $748,476 $1,966,100 $1,920,127

Cost of home closings541,132 511,400 376,069 358,877 609,699 592,429 1,526,900 1,462,706

Home closings gross margin$154,066 $179,729 $105,717 $121,645 $179,417 $156,047 $439,200 $457,421

Inventory impairments

3,784 2,325 - - 2,970 - 6,754 2,325

Warranty charge

6,868 - - - - - 6,868 -

Adjusted home closings gross margin$164,718 $182,054 $105,717 $121,645 $182,387 $156,047 $452,822 $459,746

Home closings gross margin %22.2 %26.0 %21.9 %25.3 %22.7 %20.8 %22.3 %23.8 %

Adjusted home closings gross margin %23.7 %26.3 %21.9 %25.3 %23.1 %20.8 %23.0 %23.9 %

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Six Months Ended June 30,

East Central West Consolidated

(Dollars in thousands)20252024202520242025202420252024

Home closings revenue, net$1,320,911 $1,232,859 $959,280 $952,554 $1,515,977 $1,370,969 $3,796,168 $3,556,382

Cost of home closings1,014,685 906,727 737,726 708,038 1,165,849 1,091,150 2,918,260 2,705,915

Home closings gross margin$306,226 $326,132 $221,554 $244,516 $350,128 $279,819 $877,908 $850,467

Inventory impairments

18,662 2,325 - - 2,970 - 21,632 2,325

Warranty charge

7,662 - - - - - 7,662 -

Adjusted home closings gross margin

$332,550 $328,457 $221,554 $244,516 $353,098 $279,819 $907,202 $852,792

Home closings gross margin %23.2 %26.5 %23.1 %25.7 %23.1 %20.4 %23.1 %23.9 %

Adjusted home closings gross margin %25.2 %26.6 %23.1 %25.7 %23.3 %20.4 %23.9 %24.0 %

Consolidated home closings gross margin decreased to 22.3% from 23.8% for the three months ended June 30, 2025, compared to the same period in the prior year and to 23.1% from 23.9% for the six months ended June 30, 2025, compared to the same period in the prior year. The increases in the West region for both three and six months ended June 30, 2025 is primarily due to closing product mix which also contributed to an increase in lot premiums and margin on option revenues. The West also experienced a decrease in home discounts and incentives on a per unit basis during the three and six months ended June 30, 2025 compared to the same periods in the prior year. The changes in the East and Central regions are due to decreases in lot premium and option revenues as well as an increase in finance incentives. In addition, for the three and six months ended June 30, 2025, the East and West regions were negatively impacted by inventory impairment charges across certain communities as a result of recent pricing decreases. The East was also negatively impacted by a warranty charge related to a specific repair issue in the three and six months ended June 30, 2025.

Financial Services

The following is a summary for the periods presented of our financial services income before income taxes as well as supplemental data:

Three Months EndedJune 30,Six Months EndedJune 30,

(Dollars in thousands)20252024Change 20252024Change

Mortgage services revenue$41,398 $37,867 9.3 %$81,756 $75,139 8.8 %

Title services and other revenue

11,531 11,049 4.4 %22,366 20,736 7.9 %

Total financial services revenue52,929 48,916 8.2 %104,122 95,875 8.6 %

Financial services net income from unconsolidated entities4,029 3,001 34.3 %7,125 5,898 20.8 %

Total revenue56,958 51,917 9.7 %111,247 101,773 9.3 %

Financial services expenses25,876 28,106 (7.9 %)54,197 53,249 1.8 %

Financial services income before income taxes$31,082 $23,811 30.5 %$57,050 $48,524 17.6 %

Total originations:

Number of Loans2,242 2,210 1.4 %4,363 4,106 6.3 %

Principal$1,023,172 $1,007,753 1.5 %$2,015,471 $1,884,325 7.0 %

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Three Months EndedJune 30,Six Months EndedJune 30,

2025202420252024

Supplemental data:

Average FICO score751751751751

Funded origination breakdown:

Government (FHA,VA,USDA)25.3 %23.4 %24.5 %22.7 %

Other agency71.6 %74.0 %72.5 %74.6 %

Total agency96.9 %97.4 %97.0 %97.3 %

Non-agency3.1 %2.6 %3.0 %2.7 %

Total funded originations100.0 %100.0 %100.0 %100.0 %

Total financial services revenue increased by 8.2% to $52.9 million and by 8.6% to $104.1 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year. These increases are a result of increased revenue earned on the sale of loans, increased title production, and to a lesser extent, an increase in loan originations.

Sales, Commissions and Other Marketing Costs

Sales, commissions and other marketing costs, as a percentage of home closings revenue, net, remained consistent at 5.9% for the three months ended June 30, 2025 compared to the same period in the prior year and decreased to 5.9% from 6.1% for the six months ended June 30, 2025 compared to the same period in the prior year. The relatively consistent results are primarily driven by an increase in home closings revenue, net as well as leverage in controllable sales and marketing costs.

General and Administrative Expenses

General and administrative expenses as a percentage of home closings revenue, net, decreased to 3.4% from 4.3% and to 3.5% from 4.2% for the three and six months ended June 30, 2025 compared to the same periods in the prior year. The decreases were primarily due to a decrease in variable payroll-related expenses as well as an increase in home closings revenue, net.

Net Income from Unconsolidated Entities

Net income from unconsolidated entities was $0.3 million and $2.3 million for the three and six months ended June 30, 2025, respectively, and $2.6 million and $5.4 million for the three and six months ended June 30, 2024, respectively. The decreases were primarily due to losses experienced by our joint venture relating to our build-to-rent operations which has projects that have been placed into service, incurring depreciation, while still in the lease ramp-up phase. We also had a joint venture with losses related to a construction defect. These decreases were partially offset by increases in income from our joint ventures related to our financial services segment.

Interest Expense, Net

Interest expense, net was $13.8 million and $22.3 million for the three and six months ended June 30, 2025, respectively, and $4.1 million and $4.0 million for the three and six months ended June 30, 2024, respectively. The increase in interest expense, net was primarily due an increase in the amount of non-capitalizable interest expense relating to land banking arrangements as well as a decrease in interest income earned on our outstanding cash balances.

Income Tax Provision

The effective tax rate for the three and six months ended June 30, 2025 was 25.6% and 24.4%, respectively, compared to 25.2% and 24.2% for the same periods in 2024. For the three months ended June 30, 2025, the effective tax rate differed from the U.S. federal statutory income tax rate primarily due to state income taxes, non-deductible executive compensation, and excess tax benefits from share-based compensation.

Our income tax rate for the second quarter of 2025 was higher than the same period last year primarily due to a decrease in credits related to homebuilding activities.

Net Income

Net income and diluted earnings per share for the three months ended June 30, 2025 was $193.6 million and $1.92, respectively. Net income and diluted earnings per share for the three months ended June 30, 2024 was $199.5 million and $1.86, respectively. The decrease in net income from the prior year was primarily attributable to a decrease in home closings

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

gross margin and an increase in interest expense, net. The increase in diluted earnings per share from the prior year was primarily attributable to lower diluted weighted average shares of common stock as a result of our stock repurchases.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

Liquidity

We finance our operations through the following:

•Cash generated from operations;

•Borrowings under our $1 Billion Revolving Credit Facility;

•Our various series of senior notes;

•Mortgage warehouse facilities;

•Project-level real estate financing (including non-recourse loans, land banking, and joint ventures); and

•Performance, payment and completion surety bonds, and letters of credit.

Cash flows for each of our communities depend on the status of the development cycle and can differ substantially from reported earnings. Early stages of development or expansion require significant cash expenditures for land acquisitions, on and off-site development, construction of homes, general landscaping and other amenities. Because these costs are a component of our inventory and are not recognized in our unaudited Condensed consolidated statement of operations until a home closes, we incur significant cash outflows prior to recognition of earnings.

The table below summarizes our total cash and liquidity as of the dates indicated (in thousands):

As of

(Dollars in thousands)June 30, 2025December 31, 2024

Total cash, excluding restricted cash$130,174 $487,151

$1 Billion Revolving Credit Facility availability(1)

1,000,000 1,000,000

Letters of credit outstanding(48,017)(52,914)

Revolving Credit Facility availability951,983 947,086

Total liquidity$1,082,157 $1,434,237

(1)Subsequent to June 30, 2025, we borrowed $100 million under our $1 Billion Revolving Credit Facility.

We believe we have adequate capital resources from cash generated from operations and sufficient access to external financing sources from borrowings under our $1 Billion Revolving Credit Facility to conduct our operations for the next twelve months. Beyond the next twelve months, our primary demand for funds will be for payments of our long-term debt as it becomes due, land purchases, lot development, home and amenity construction, long-term capital investments, investments in our joint ventures, payments of ongoing operating expenses, and repurchases of our common stock. We believe we will generate sufficient cash from our operations to meet the demands for such funds, however we may also access the capital markets to obtain additional liquidity through debt and equity offerings or refinance debt to secure capital for such long-term demands. As part of our operations, we may also from time to time purchase our outstanding debt or equity through open market purchases, privately negotiated transactions or otherwise. Purchases or retirements of debt and/or purchases of equity, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Cash Flow Activities

Operating Cash Flow Activities

Our net cash used in operating activities was $48.7 million for the six months ended June 30, 2025, compared to net cash used in operating activities of $364.1 million for the six months ended June 30, 2024. The decrease in cash used in operating activities is primarily due to a decrease in spend on real estate inventory and land deposits and a smaller increase in our mortgage loans held for sale.

Investing Cash Flow Activities

Net cash used in investing activities was $56.1 million for the six months ended June 30, 2025, compared to $57.3 million for the six months ended June 30, 2024. The decrease in cash used in investing activities was due to an increase in distributions of capital from unconsolidated entities offset by an increase in investments of capital into unconsolidated entities for newly formed joint ventures.

Financing Cash Flow Activities

Net cash used in financing activities was $248.1 million for the six months ended June 30, 2025, compared to $137.0 million for the six months ended June 30, 2024. The increase in cash used in financing activities was primarily due to an increase in the repurchase of common stock and a decrease in the net borrowings on our mortgage warehouse facilities.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Debt Instruments

For information regarding our debt instruments, including the terms governing our senior notes and our $1 Billion Revolving Credit Facility, see Note 7 - Debt in the Notes to the unaudited Condensed consolidated financial statements included in this quarterly report.

Off-Balance Sheet Arrangements as of June 30, 2025

Investments in Land Development and Homebuilding Joint Ventures or Unconsolidated Entities

We participate in strategic land development and homebuilding joint ventures with related and unrelated third parties. Our participation with these entities, in some instances, enables us to acquire land to which we could not otherwise obtain access, or could not obtain access on terms that are as favorable. Our partners in these joint ventures historically have been land owners/developers, other homebuilders and financial or strategic partners. Joint ventures with land owners/developers have given us access to sites owned or controlled by our partners. Joint ventures with other homebuilders have provided us with the ability to bid jointly with our partners for large or expensive land parcels. Joint ventures with financial or strategic partners have allowed us to combine our homebuilding expertise with access to our partners' capital.

For the six months ended June 30, 2025 and 2024, total cash investments of capital into unconsolidated joint ventures were $48.5 million and $45.0 million, respectively.

Land Option Contracts and Land Banking Agreements

We are subject to the usual obligations associated with entering into contracts (including land option contracts and land banking arrangements) for the purchase, development, and sale of real estate in our routine business. We have a number of land purchase option contracts and land banking agreements, generally through cash deposits, for the right to purchase land or lots at a future point in time with predetermined terms. We do not have title to the property and the creditors of the property owner generally have no recourse to the Company. Our obligations with respect to such contracts are generally limited to the forfeiture of the related non-refundable cash deposits and/or letters of credit provided to obtain the options. The aggregate purchase price for land under these contracts was $2.1 billion and $1.9 billion at June 30, 2025 and December 31, 2024, respectively.

Seasonality

Our business is seasonal. We have historically experienced, and in the future expect to continue to experience, variability in our results on a quarterly basis. We generally have more homes under construction, close more homes and have greater revenue and operating income in the third and fourth quarters of the year. Therefore, although new home contracts are obtained throughout the year, a higher portion of our home closings occur during the third and fourth calendar quarters. Our revenue therefore may fluctuate significantly on a quarterly basis, and we must maintain sufficient liquidity to meet short-term operating requirements. Factors expected to contribute to these fluctuations include, but are not limited to:

•the timing of the introduction and start of construction of new projects;

•the timing of sales;

•the timing of closings of homes, lots and parcels;

•the condition of the real estate market and general economic conditions in the areas in which we operate;

•mix of homes closed;

•construction timetables;

•the timing of receipt of regulatory approvals for development and construction;

•the cost and availability of materials and labor; and

•weather conditions in the markets in which we build.

As a result of seasonal activity, our quarterly results of operations and financial position are not necessarily representative of the results we expect for the full year.

Inflation

We and the homebuilding industry in general may be adversely affected during periods of high inflation, primarily because of higher land, financing, labor and construction material costs. In addition, higher mortgage interest rates can significantly affect the affordability of mortgage financing to prospective homebuyers. We attempt to pass through to our buyers increases in our costs through increased sales prices. However, during periods of soft housing market conditions, we may not be able to offset our cost increases with higher selling prices.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates during the six months ended June 30, 2025 compared to those disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report.

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