10-Q · August 4, 2026
LGI Homes posted Q2 total revenue of $516.048 million, up 5.7% year over year, and diluted EPS of $1.16, but earnings declined from $1.36 as homebuilding gross margin contracted to 19.8% from 22.9%. Growth in the West,…
Earnings analysis · 10-Q
LGIH earnings analysis
Filed November 3, 2026 · Our reading of the company's report
The latest report
LGI Homes reported $437.507 million of revenue and $1.05 diluted EPS, with year-over-year growth supported by a 10.4% increase in closings. Homebuilding gross margin improved to 20.2% sequentially from 19.7%, but…
Read full summary
LGI Homes reported $437.507 million of revenue and $1.05 diluted EPS, with year-over-year growth supported by a 10.4% increase in closings. Homebuilding gross margin improved to 20.2% sequentially from 19.7%, but remained below 21.5% a year earlier, while weaker sales activity and a 48.9% cancellation rate led the company to narrow 2026 closings guidance to 4,600-4,800 homes. The balance-sheet risk center is the $411.2 million of variable-rate debt, although management disclosed that a 100-basis-point SOFR move would affect annual interest cost by approximately $4.1 million.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.05
- Gross margin
- 20.2%
What stood out
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Revenue and EPS grew year over year
Revenue was $437.507 million and diluted EPS was $1.05. Revenue increased from $397 million in Q3 2025, while EPS rose from $0.85 year over year.
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Gross margin improved sequentially
Homebuilding gross margin was 20.2%, above 19.7% in Q2 2026 but below 21.5% in Q3 2025, indicating sequential improvement but year-over-year pressure.
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Closings drove revenue growth
Total closings increased 10.4%, supporting the year-over-year revenue growth despite affordability-related demand pressure.
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Liquidity remains supported by credit access
The company had $411.2 million of variable-rate indebtedness outstanding at September 30, 2026, with borrowings priced at SOFR plus 1.75%.
What to watch
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Affordability is pressuring demand
Full-year 2026 home closings guidance was narrowed to 4,600-4,800 homes, reflecting slower sales activity and affordability pressures. The company also reported a 48.9% cancellation rate, highlighting demand volatility.
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Variable-rate debt creates interest risk
A 100-basis-point change in SOFR would change annual interest cost by approximately $4.1 million. The exposure relates to $411.2 million of variable-rate indebtedness outstanding at September 30, 2026.
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Higher rates could weaken housing demand
At September 30, 2026, SOFR was 3.90% and the applicable variable borrowing rate was SOFR plus 1.75%, or 1.85% including the 0.10% credit spread adjustment. Higher rates could reduce homebuyer financing capacity, revenue, gross margin, and net income.
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No new formal risk-factor changes
The filing states that there were no material changes to the risk factors disclosed in the 2025 Form 10-K; therefore, no new risk-factor category was identified in this quarter.
Management's outlook
Full-year 2026 home closings guidance was narrowed to 4,600-4,800 homes because of slower sales activity and affordability pressures. The company maintained its other outlook items, including 150-160 active communities, $360,000-$370,000 average selling price, 19.0%-21.0% homebuilding gross margin, and 15.0%-16.0% SG&A as a percentage of revenue. No quantitative revenue or EPS guidance was provided.
Earlier filings 2
10-Q · April 28, 2026
LGI Homes reported Q1 home sales revenue of $319.736 million, down 9.0% from $351.420 million a year earlier, with diluted EPS of $0.09 versus $0.17 in Q1 2025. Gross margin as a percentage of home sales fell to 18.7%…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.