Q1 2026 LGI Homes Inc Earnings Call Transcript
Key Points
- LGI Homes Inc (LGIH) reported a 63% year-over-year increase in backlog, marking the highest number of units since the first quarter of 2022.
- The average selling price increased nearly 3% to approximately $363,000, demonstrating pricing power.
- Gross margin before inventory-related charges was 20.2%, and adjusted gross margin was 23.4%, both above the high end of the full-year outlook.
- The company ended the quarter with 142 active communities, maintaining a consistent pace of 2.2 closings per community per month.
- Adjusted EBITDA increased 30% to $24.4 million, representing 7.6% of revenue compared to 5.3% in the first quarter of last year.
- Revenue decreased by 9% year-over-year due to an 11.5% decline in closings.
- The cancellation rate was high at 45.6%, driven by buyers unable to qualify for financing.
- The effective tax rate in the first quarter was 50%, above the outlook, due to share-based compensation expenses.
- The company experienced a 12.9% year-over-year decrease in owned and controlled lots.
- Debt-to-capital ratio increased slightly to 44.8%, reflecting typical first-quarter investment in vertical construction.
Welcome to LGI Homes first quarter 2026 conference call. Today's call is being recorded and a replay will be available on the company's website at www.lgihomes.com. (Operator Instructions)
At this time, I'll turn the call over to Joshua Fattor, Executive Vice President of Investor Relations and Capital Markets. Please go ahead.
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 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
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