LGI Homes (LGIH) Q1 2026 earnings summary

Executive summary

• Delivered 916 homes in Q1 2026, with 881 closings contributing to $319.7M in revenue and 35 leased homes recognized in other income; average sales price per home closed rose 2.9% to $362,924, reflecting pricing discipline and affordability strategies.

• Net income dropped 45.9% year-over-year to $2.2M ($0.09/share), with adjusted net income at $5.6M ($0.24/share); gross margin declined to 18.7% from 21.0% due to inventory impairment and higher costs.

• Backlog increased 63.4% year-over-year to 1,699 homes, with a 45.6% cancellation rate driven by buyer financing challenges.

• Ended quarter with 142 active communities, maintaining a steady pace of 2.2 closings per community per month; top markets included Charlotte, Las Vegas, Phoenix, Northern California, and Seattle.

• Recognized as a Top Workplaces USA employer for the sixth consecutive year.

Financial highlights

• Q1 2026 revenue was $319.7M, down 9% year-over-year due to an 11.5% decline in closings, partially offset by a 2.9% increase in ASP.

• Gross margin was 18.7%; excluding impairment charges, gross margin was 20.2%; adjusted gross margin was 23.4%, up 110 bps sequentially.

• Adjusted EBITDA rose 30% to $24.4M (7.6% of revenue); EBITDA margin improved to 4.8%.

• SG&A expenses improved to 18.9% of revenue, down 200 bps year-over-year; selling expenses were 10.2% and G&A 8.7% of revenue.

• Total liquidity at quarter end was $355M, including $60.9M in cash and $294.2M available under revolving credit.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: 4,600–5,400 closings, 150–160 active communities by year-end, ASP $355,000–$365,000, SG&A 15–16% of revenue.

• Raised full-year gross margin guidance to 18.5–20.5% and adjusted gross margin to 22–24% based on Q1 performance and backlog visibility.

• Effective tax rate expected at 26.5% for the year, despite a Q1 spike due to share-based compensation timing.

• Management expects continued affordability challenges and elevated mortgage rates to impact demand; strategies include offering financial incentives and targeted discounts.

• Liquidity is expected to be sufficient for at least the next twelve months.