Q4 2025 LGI Homes Inc Earnings Call Transcript
Key Points
- LGI Homes Inc (LGIH) delivered 1,362 homes in the fourth quarter, contributing to a reported revenue of $474 million.
- The company achieved a significant milestone by closing its 80,000th home, highlighting its growing scale and longevity.
- Net orders increased by 39% year-over-year, and the backlog grew by 133% to 1,394 homes, with a value exceeding $501 million.
- The company ended the year with 144 active communities, with a strong closing pace of 3.1 closings per community per month in the fourth quarter.
- LGI Homes Inc (LGIH) maintained a strong balance sheet with $335 million in liquidity, including $61 million in cash and $274 million in revolver availability.
- The gross margin for the fourth quarter declined to 19.2% from 22.9% in the same period last year, primarily due to financing incentives and discounts on older inventory.
- The cancellation rate increased to 43.3%, driven by affordability pressures and broader economic uncertainty.
- The average selling price of homes decreased slightly due to geographic mix and a higher percentage of wholesale closings.
- The company took an inventory impairment charge of $6.7 million related to underperforming communities.
- The effective tax rate was higher than expected at 27.9%, reflecting higher state income tax rates and the impact of impairments.
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 Fattor, 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,
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