Good afternoon. My name is John, and I will be your conference operator today. I would like to welcome everyone to the KB Home 2025 Third Quarter Earnings Conference Call. All participant lines are in a listen-only mode. Following the company's opening remarks, we will open the lines for questions. This conference call is being recorded, and a replay will be accessible on the KB Home website until October 24, 2025. I will now turn the call over to Jill Peters, Senior Vice President, Investor Relations. Thank you, Jill. You may now begin. Thank you, John. Good afternoon, everyone, and thank you for joining us today to review our results for the Third Quarter of Fiscal 2025. On the call are Jeff Mezger, Chairman and Chief Executive Officer; Rob McGibney, President and Chief Operating Officer; Rob Dillard, Executive Vice President and Chief Financial Officer; Bill Hollinger, Senior Vice President and Chief Accounting Officer; and Thad Johnson, Senior Vice President and Treasurer. During this call, items will be discussed that are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results, and the company does not undertake any obligation to update them. Due to various factors, including those detailed in today's press release and in our filings with the Securities and Exchange Commission, actual results could be materially different from those stated or implied in the forward-looking statements. In addition, an explanation and/or reconciliation of the non-GAAP measure of adjusted housing gross profit margin, which excludes inventory-related charges, and any other non-GAAP measure referenced during today's discussion to its most directly comparable GAAP measure can be found in today's press release and/or on the Investor Relations page of our website at KBHome.com. With that, here's Jeff Mezger. Thank you, Jill. Good afternoon, everyone. We are pleased with the solid financial results that we achieved in our third quarter, meeting or exceeding our guidance ranges across our key metrics as we continue to navigate the current environment. With a healthy balance sheet and significant cash flow, our flexibility remains strong. While we continue to invest in new communities to position ourselves for future growth, we are also returning a significant amount of cash to our shareholders. We repurchased more than $188 million of our shares in the third quarter, near the high end of our guided range, contributing to total repurchases of roughly $440 million year to date. This total represents approximately 11% of our outstanding share count at the beginning of the fiscal year, which was repurchased at an average price that is below our current book value. We believe this is an excellent use of our cash and highly accretive to both our earnings and book value per share. Including dividends, we have now returned more than $490 million in capital to our shareholders this year. From an operational standpoint, we had some critical achievements in terms of materially reducing our build times, which helped to generate closings that were slightly above our expectations, and also continuing to lower our direct costs. These accomplishments were realized while maintaining outstanding customer satisfaction levels. As for the details of our results, we produced total revenues of over $1.6 billion and diluted earnings per share of $1.61. We delivered higher profitability on our revenues than we had projected, with a gross margin of 18.9%, excluding inventory-related charges, above the high end of our guided range. With a continued focus on prudently managing our costs and aligning our overhead structure with our delivery volume, we held SG&A expenses at 10% of our housing revenues. The outperformance of these two metrics relative to guidance drove an adjusted operating income margin of 8.8%. We grew our book value per share to over $60, an 11% year-over-year increase. Moving on to market conditions, the longer-term outlook for the housing market remains favorable, driven by demographics and the ongoing undersupply of homes. With respect to current conditions, we are pleased to see stability in demand in June, which continued as our third quarter progressed. We are encouraged by the decline in mortgage interest rates, which should support greater demand for homeownership. We produced 2,950 net orders in the third quarter, maintaining the pricing approach we implemented earlier this year. Our focus is on offering the most compelling value at a transparent price while limiting the use of incentives. When we discuss with buyers the alternative of the lower sales price we offer versus a much higher price that can be offset by incentives, buyers recognize that they have a better opportunity for building wealth through equity over time with our home that has the lower starting price point. We continue to focus on optimizing our assets to generate the highest returns, balancing pace and price on a community-by-community basis relative to local market conditions. We exceeded our community count guidance, which, together with a stable cancellation rate, contributed to a monthly absorption pace per community of 3.8 net orders. This pace was lower than our third quarter pace of the past couple of years, and as a result, our net orders were below our internal sales goal. Our fourth quarter sales approach will emphasize our built-to-order homes while continuing to sell through our inventory. As we discussed on our last earnings call, our goal is to steer our business back to our historical range of built-to-order homes, which has averaged close to 70% over more than a decade, from around 50% currently. It is our core competency and a key competitive differentiator. With the significant reduction in our build times, it has become a more compelling selling proposition. We offer buyers an attractive home at an affordable price with features we know they value based on our survey data. Our buyers can then meaningfully influence their final sales price in selecting their lot, floor plan, and exterior elevation, as well as personalized design studio selections, aligning their monthly payment with their budget. This choice model contributes to our high customer satisfaction scores as buyers draw value from our process and is a key driver of our monthly absorption pace, which is among the highest in our industry. As our built-to-order mix grows, we believe it will support a higher gross margin as these homes currently generate a gross margin that is 250 basis points- 500 basis points higher than our inventory homes. In addition, increasing our built-to-order mix will help us establish a larger backlog, which provides greater visibility into future closing projections. As we have shared in past years, our fourth quarter is typically one in which we elect not to take aggressive steps to capture inventory sales, as it is a seasonally slower period, and discounting by the speculative home builders pursuing year-end deliveries tends to be elevated in the final months of their fiscal years. Our land positions are valuable, and there is merit to exhibiting discipline when incremental volume gains are low. We do not intend to sell at any price to make up for the shortfall in net orders in our third quarter. Taking this into consideration, we are projecting $1.65 billion in housing revenues in our 2025 fourth quarter and $6.15 billion in housing revenues for our 2025 fiscal year, both at the midpoints of our guidance ranges. Let me pause here for a moment and ask Rob McGibney to provide more details on market conditions, as well as an operational update. Rob. Thank you, Jeff. One of the key operational themes of our third quarter was our strong execution. Our divisions continued to perform well on the fundamentals of our business, maintaining high customer satisfaction levels, consistently improving build times, further lowering direct cost, and balancing pace and price to optimize each asset. In addition, we successfully opened 32 new communities during the quarter. The significant progress we made in continually reducing build times during the third quarter helped to drive better financial performance from capturing slightly more deliveries than we had planned. Traffic in our communities was steady, and our cancellation rate was stable at 17%, supporting net orders at an average absorption pace of 3.8/ month per community. We continued to utilize a simplified approach to sales, focused more on offering a transparent price rather than incentives to provide the most compelling value that is competitive with resale pricing. By advertising the true base price on our website, we let buyers know exactly what to expect before they ever visit a community, without the need for back-and-forth negotiations to uncover the real deal. It is a clear, upfront way of doing business that makes the home buying process easier and more straightforward. As a result, we believe we draw more traffic to our communities than we might otherwise attract if our pricing was dependent on incentives. In the third quarter, pricing in our communities was as stable as we've seen this fiscal year, with 70% of our communities experiencing steady or increased prices and the other 30% price reductions, as we continue to balance pace and price to optimize our assets. We are encouraged by this stabilization and believe our communities are well positioned in the current market. In terms of affordability, it has improved compared to the start of our third quarter, driven by the decrease in mortgage interest rates, which have fallen roughly 60 basis points. This equates to approximately $30,000 of additional purchasing power at our average sales price, a significant boost for a first-time or first-time move-up buyer, which comprise about 70% of our home buyers. I will add to Jeff's comments on our fourth quarter sales approach by reiterating our focus on optimizing our assets as we maintain an appropriate selling cadence in our communities, including sales of inventory homes. We do not need to chase incremental volume in a seasonally inelastic demand period where speculative builders are discounting heavily to close out their fiscal years. In those conditions, the additional sales produced tend to be limited, and they come at a great cost to our margins. We have approximately 3,000 homes in backlog that can be delivered in our 2025 fourth quarter, leaving just over 500 same quarter sales and closings needed to achieve our implied fourth quarter delivery guidance. This is less than the number of homes that we sold and delivered in the fourth quarter of last year and equates to less than one sale per community per month. At quarter end, we had 264 active communities, up 4% year- over- year, contributing to an average of 259, an increase of 3% as compared to the prior year period. The third quarter marked our best performance in several years in opening communities, and the number of communities we opened was the highest in any quarter in more than a year. We typically see an above-average sales pace in new communities, and the sales performance of our third quarter openings was strong, with an absorption pace that outperformed our overall average pace for the quarter. We expect to end our 2025 fiscal year with 260 active selling communities, with a projected ramp-up in early 2026, in time for the spring selling season. We moderated our starts in the third quarter with 2,761 homes started as part of our effort to rotate our business back to a higher mix of built-to-order homes over time. We ended the quarter with 6,550 homes in production, including models of which 52% were sold. Further improving our build times was another area of strong execution by our divisions in the third quarter, with a 10-day reduction sequentially to 130 calendar days. Compared to our annual build times going back a decade, we are building homes at some of our best levels today. Although continuous improvement becomes more difficult as we move further away from the peak, our divisions have been producing results each quarter with a focus on returning to a company-wide average of 120 days or better from start to home completion. We are quickly approaching this point at 122 days for built-to-order homes, and some of our divisions are already below our target level. The benefits of lower build times are numerous, including a more compelling selling proposition for our customers purchasing a built-to-order home relative to the 60 days it typically takes to complete an existing or speculative home purchase, better inventory turns, and monetizing our assets quicker. The focus from our divisions, together with our national purchasing team to drive lower cost, as well as our value engineering and studio simplification efforts, collectively contributed to direct costs that were about 2% lower sequentially and 3% lower year- over- year on our homes started during the third quarter, helping to offset the impact of higher land costs. Before I wrap up, I will review the credit profile of our buyers who financed their mortgages through our joint venture, KBHS Home Loans. We maintained a high capture rate with 83% of buyers who financed their homes in the third quarter using KBHS. Higher capture rates help us manage our backlog more effectively and provide more certainty in closing dates, which benefits our company as well as our buyers. In addition, we see higher customer satisfaction levels from buyers who use our joint venture versus other lenders. The average cash down payment was stable both sequentially and year over year at 16%, equating to over $76,000. On average, the household income of customers who use KBHS was more than $130,000, and they had a FICO score of 740. Even with one half of our customers purchasing their first home, we are still attracting buyers with strong credit profiles who can qualify for their mortgage while making a significant down payment or pay in cash. 11% of our deliveries in the third quarter were to all cash buyers. In conclusion, we are focused on delivering results, and our third quarter performance reflected strong operational execution across multiple dimensions. We believe our communities are well positioned in their submarkets, and we are approaching sales in a simple and transparent way, which we feel best serves our buyer. Our divisions are committed to achieving our projected fourth quarter results for a solid finish to fiscal 2025. With that, I'll turn the call back over to Jeff. Thanks, Rob. With respect to our lot position, we own or control over 65,000 lots, 42% of which are controlled. Our footprint is focused on markets that we believe are positioned for long-term economic and demographic growth, and we've been selective with our land positions in these markets. Our lot pipeline is healthy and at a sufficient level to support our community count growth targets. We regularly review the land deals in our pipeline to ensure that the rationale for each deal is still sound. During the third quarter, we canceled contracts to purchase approximately 6,800 lots, representing about 45 communities that no longer meet our underwriting criteria. We feel we have ample opportunity in our served markets to add to our controlled lot count with lots that have better economics and terms. With our lot position at quarter end, we can wait until we find better prospects. One of the key benefits of our built-to-order approach is that it provides visibility into the need and timing for replacement communities based on each community's pace and expected sellout date, which is beneficial in our effort to be capital efficient. We are also developing lots in smaller phases wherever possible and balancing development with our starts pace to manage our inventory of finished lots. We remain consistent in our balanced approach toward allocating the healthy cash flow that our business generates. We are achieving our priorities of positioning our business for future growth, managing our leverage within our targeted range, and rewarding our shareholders through share repurchases and our quarterly cash dividend. We are maintaining our land investments at a level that will support our current growth projections and invested $514 million in land acquisition and development in the third quarter, with almost 80% going toward development and fees on the land we already own. We are beginning to see a more constructive land market as prices have softened somewhat, and we were able to obtain more favorable terms. As I mentioned earlier, we continue to view the long-term outlook for the housing market favorably and have the flexibility to resume a higher level of investment at any time. With the earnings that we have generated to date in fiscal 2025, land acquisition and development spend at a 7% lower year- over- year, and the improvement in our build times unlocking cash, we have returned more than $490 million in capital to our shareholders in the first nine months of fiscal 2025. This includes approximately $440 million in share repurchases at an average price of $56.30/ share, which, as I noted earlier, is below our current book value. At these levels, the repurchases are an excellent use of capital and will enhance both our future earnings per share and our return on equity. In closing, I want to thank the entire KB Home team for their commitment to serving our home buyers and driving the best possible performance from our business in the current market. We believe we have the most talented operators in the industry, and we were honored to be the only home builder named to Time Magazine's 2025 list of world's best companies. One of the three dimensions that defined the companies recognized on this list was employee satisfaction based on anonymous survey data of a large sample of employees. For this reason, the recognition is particularly meaningful to us. Our divisions are executing well and producing results across some of the most impactful operational areas of our business by reducing build times and direct costs and opening new communities on time. We continue to approach our land opportunities through a thoughtful and selective lens with a healthy lot position that has our business primed for growth. Year to date, we've returned the highest level of capital to our shareholders for a nine-month period in our company's history. Over the past four years, our cumulative return of cash for share repurchase and dividends as a percent of market cap leads the industry. We plan to continue our share repurchase program in both our 2025 fourth quarter and in fiscal 2026. Our balance sheet is strong. We have significant financial flexibility and an experienced team that is committed to producing results going forward. Now I'll turn the call over to Rob Dillard for the financial review. Thanks, Jeff. I'm pleased to report on the third quarter 2025 results. As Jeff and Rob stated, we're managing the business with discipline in an effort to drive employee engagement, customer satisfaction, and long-term shareholder value. We believe that we are well positioned to deliver solid results in the present operating environment with our dedicated customer focus, leading brand, transparent pricing strategy, and differentiated built-to-order product. In the third quarter of 2025, we generated total revenues of $1.62 billion. Housing revenues exceeded the midpoint of our guidance range at $1.61 billion, an 8% decrease from the prior year. We delivered 3,393 homes in the quarter, which exceeded the midpoint of our implied guidance, largely due to reduced build times. While we experienced consistent traffic at our communities, net orders totaled 2,950, a 4% decline. Lower orders and improved build times, which reduced backlog more quickly and efficiently, contributed to a 24% reduction in our ending backlog to about 4,300 homes. In the third quarter, our overall average selling price was relatively consistent on a year-over-year basis and decreased 1% to $475,700. This was a factor as lower average selling prices in the central and southeast regions were largely offset by increases in our west coast and southwest regions. Housing gross profit margin was 18.2%, and adjusted housing gross profit margin, which excludes inventory-related charges, was 18.9%. This strong margin performance exceeded the high end of our guidance range, mainly due to our continued success at managing costs. Adjusted housing gross profit margin was 180 basis points lower than a year earlier due to pricing pressure, higher relative land costs, and geographic mix, partially offset by lower construction costs. SG&A expenses as a percent of housing revenues were 10%, a 20 basis point increase from a year ago, primarily due to decreased operating leverage. We are actively managing SG&A for the current market environment and have reduced our headcount to align with volume levels. This focus led to a favorable result relative to our guidance range. Home building operating income for the third quarter decreased to $131 million, or 8.1% of home building revenues, and home building operating income, excluding inventory-related charges, was $143 million, or 8.8% of home building revenues. Total pre-tax income was $143 million, or 8.8% of total revenues. We reported net income of $110 million, or $1.61/ diluted share, benefiting from solid operating performance and a 12% reduction in our weighted average diluted shares outstanding from the prior year. Consistent with our strategy to optimize every asset, we are maintaining discipline on price and pace and have adjusted our guidance for 2025 to reflect this priority. In the fourth quarter of 2025, we expect to generate housing revenues between $1.6 billion and $1.7 billion. For the full year, we now expect housing revenues between $6.1 billion and $6.2 billion. We expect a fourth quarter average selling price between $465,000 and $475,000 and a full year 2025 average selling price of approximately $483,000. This variation in projected average selling price is primarily due to regional mix. Housing gross profit margin, assuming no inventory-related charges, is expected to be between 18% and 18.4% for the fourth quarter and between 19.2% and 19.3% for the full year. This expected year-over-year margin reduction is due to market conditions, higher land costs, including development and fees, as well as mix variation, which we expect to be partially offset by lower construction costs. The fourth quarter SG&A ratio is expected to be between 9.3% and 9.7%, and the full year SG&A ratio is expected to be between 10.2% and 10.3%. We expect the fourth quarter home building operating income margin of between 8.5% and 8.9%, and we expect the full year operating income margin of approximately 8.9%. This projection is assuming no inventory-related charges. Our effective tax rate for the fourth quarter and the full year is expected to be slightly above 23%, as energy tax credits and other adjustments are expected to remain approximately at their current levels. Turning now to the balance sheet. Our balanced capital strategy is focused on minimizing the cost of capital, maximizing flexibility, optimizing returns from investment in land, and returning capital to reward shareholders. We believe that we are well capitalized for the current market. We continue to invest in land to drive future growth with a continued focus on the highest return opportunities, while also returning more capital to shareholders in the form of share repurchases. We had inventories consisting of land in various stages of development, and homes completed or under construction totaling $5.8 billion at the end of the third quarter. We invested over $514 million in land development and fees during the third quarter, compared to $845 million in the third quarter of 2024. In the first nine months of 2025, we invested over $1.9 billion in land development and fees, compared to $210 million in the corresponding period of 2024. With our inventory position, we own or control over 65,000 lots, including 27,000 lots that we have the option to purchase. We believe that we are well positioned to benefit from improving market conditions. At quarter end, we had total liquidity of $1.2 billion, or $331 million of cash and $832 million available under our revolving credit facility. The current $250 million outstanding on the revolving credit facility is associated with seasonal working capital investment. Our strategy is to maintain our strong double B positive credit profile, as we believe it facilitates reliable access to capital at low cost and significant flexibility. We will continue to target a total debt to capital ratio in the neighborhood of 30% to support this rating, and we are comfortable with our current 33.2% ratio. This strong balance sheet enables us to provide shareholders with a healthy dividend, which currently has an approximately 1.6% yield, as well as return capital to shareholders in the form of share repurchases. In the third quarter, we repurchased 3.3 million shares at an average price of $57.12 for a return of capital of more than $188 million, which combined with dividends resulted in a total return of capital of $205 million. Over the first nine months of 2025, we have repurchased approximately 7.8 million shares, or approximately 11% of outstanding shares at the beginning of the year. With this strategy and our solid earnings, we have increased our earning book value per share to $60.25, an 11% increase over the prior year. Over the past four years, we've returned over $1.8 billion in share to shareholders in the form of dividends and share repurchases. We've now repurchased over 34% of our outstanding common stock since implementing our share repurchase program in late 2021. We believe that this is the highest percentage of shares repurchased based on market capitalization among our homebuilder peers over this period and is an indication of our shareholder-focused strategy. We expect to repurchase between $50 million and $150 million of common stock in the fourth quarter, subject to our outlook for operating environment, capital market conditions, and land investment opportunities, among other factors. In conclusion, we're pleased with our solid results and disciplined operating strategy, and we expect to optimize shareholder value over the long term by augmenting these results with shareholder-focused capital strategy that balances investing for growth, optimizing returns, and increasing returns to shareholders. With that, we'll now take your questions. John, would you please open the line? Yes, thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question and one follow-up. Thank you. One moment, please, while we pull for questions. The first question comes from the line of Stephen Kim with Evercore ISI. Please proceed with your question. Thanks very much, guys. Appreciate all the commentary and guidance. Yeah, and good results here in a tough environment. I did want to ask you a little bit about the order ASP, if I could. It's kind of been down pretty significantly sequentially. I know you've talked about the simple, more straight, transparent pricing model, but I was curious. I think you gave a comment that 70% of your communities had stable to increasing prices, and I wanted to square that with the 4% sequential decline in the order ASP. Maybe help us understand sort of maybe how we can reconcile that and what your outlook is for the order ASP as we get into the fourth quarter and into next year. Is this level of ASP a level you're generally comfortable with, or do you still think it has downward movement? A lot of where it's going to head is going to depend on market conditions and where things are headed. We talked in our prepared remarks about optimizing each asset. We're going to continue to do that. We've also had success on moving cost down as well, as some of this has been shifting down. I think a lot of what you're seeing in the ASP is just mix-driven. If you look at year over year, we've got more deliveries coming out of the Southeast and a lower percentage coming out of California. There's mix, or, sorry, out of the West. There's even mix within the West too, where we've got ramp-up in deliveries coming out of Boise and Seattle that have some lower ASPs generally than the rest of California. Steve, I think a lot of what you're seeing there is mix. As far as comfort with the ASP, obviously we're focused on the margin piece of that. To the extent we can continue to drive costs down and offset any decreases that we've had to do, we'll be happy with that. Yeah, that's helpful. I mean, I guess what I'm hearing you say, Rob, is that nobody should read into the sequential order price decline as a leading indicator of a step down in the margins. There's really more mix effects going on. I appreciate that. Speaking about the demand, we've kind of had a number of weeks here where the mortgage rate has sort of moved down pretty meaningfully. I was wondering if you could comment on what you've seen. We've heard that there's been a pickup in traffic pretty much across a lot of builders we speak to, and people are kind of waiting for the conversion into sales. I was wondering if you could comment on what you are seeing with respect to the conversion of traffic and whether or not you would be more inclined at this point to push price if demand comes in stronger, or if you would be more inclined at this point to maybe push volume, given the fact that you've pulled your volume down a lot most recently. I guess the way that we would react to it really depends on the community. If it's a community that we've got a lot of runway in front of us and we see an opportunity to get higher volumes with more demand, we'll probably be less aggressive on price and get a little more volume. If I contrast that with some of the, we call them jewel box communities we've got in California that are infill type communities that are difficult to replace, we're going to continue leaning on price and margin. As far as the way the buyers have reacted, I mentioned in my prepared remarks, it's a huge impact to the buyer in terms of affordability. I mean, $30,000 of purchasing power at our ASP is big. We've seen traffic stay steady. Orders have been good, but I wouldn't say that we've seen a big uptick yet or maybe the uptick that we would expect to see from such a change in mortgage rates. I think to some extent, buyers are in maybe a bit of a wait-and-see mode, maybe waiting for rates to come down further. Maybe they were waiting around for the actual Fed event, expecting that to have some immediate impact on rates. The thing that we're focused on is really our messaging and the way that we're approaching this in the sales offices. With our built-to-order model, we're really talking to all of our customers about their ability to buy a built-to-order home. If they believe rates are coming down in the future, then it's perfect because we've got a one-time float-down option for them. If that happens, they can take advantage of that. I think that's something that is unique to our approach, and we're leveraging that everywhere we can. Thank you. Our next question comes from the line of John Lovallo with UBS. Please proceed with your question. Good evening, guys. Thanks for taking my question as well. The first one is, if we think about sort of the third quarter gross margin beat versus expectations at about 20 basis points on the high end and maybe a slightly lower than anticipated fourth quarter gross margin, I'm curious if there was some toggle on delivery timing or mix between the quarters relative to internal expectations, given the fact that the full year gross margin is maybe up a touch from where you had thought before. Yeah, John, that's a good question. That's something we think about a lot, but it actually wasn't really in play there. I mean, the real drivers there were, you know, there was some mix there, but it was really, really strong performance on the construction side and getting the right product. We feel really good about how the third quarter ended from a margin perspective, and we're being really thoughtful about what fourth quarter is going to do with what we're still working through inventory and transitioning to more BTO. Understood. Maybe, you know, with that in mind, how should we sort of think about the year-over-year and sequential movement in stick and brick costs in land into the fourth quarter? To the extent that you can comment on what you're expecting in 2026, that would be helpful. Yeah, in fourth quarter, we're not expecting a trend shift from the third quarter in terms of the year-over-year impact of land or sticks and bricks. I think that we've been able to offset most of that with construction productivity, but you're seeing that kind of having an impact on the margins for sure. I think going forward, we think that there's still opportunity to continue to offset that. As Rob said, from a community-by-community perspective, there's a lot of play in price there as well. Thank you. Our next question comes from the line of Rafe Jadrosich with Bank of America. Please proceed with your question. Hi, good afternoon. Thanks for taking my question. If we move back historically on this third quarter call, you've sort of given an outlook on the out-year revenue, at least like a preliminary view. I understand that that's a pretty volatile environment, so it might be a little bit tougher right now. Can you maybe just help us and maybe put some takes like kind of going into next year as you shift back to the built-to-order (BTO) model, just how we might think about the revenue outlook for next year, or if you're still providing that? Rafe, we're not going to give guidance on this call for next year, but directionally, we shared we're going to have an uptick in community count in time for the spring selling season. With rates coming down and improving affordability at some point in time, that has to have a favorable impact. We just don't know when or how strong it will be. Our expectation is that as we look ahead to next year, affordability improves, community count is up, we'll be setting up a solid year again. As we shift to more built-to-order and work through the last of the inventory, we expect that our margins will improve over time. That's helpful. Just on the fourth quarter, the guidance implies, I think, pretty good leverage on SG&A, or at least better than normal seasonality. Can you talk about, one, do I have that right? Maybe what's driving some of that improvement sequentially as you go into the fourth quarter? Yeah, it's not really leveraged as much as it is actually the gross numbers expected to be down 15% on a year-over-year basis quarterly. A lot of that is just kind of the fixed costs we've taken out of the business and how the yearly kind of total compensation scheme is going to play through that SG&A profile. Thank you. Our next question comes from the line of Alan Ratner with Zelman & Associates. Please proceed with your question. Hey guys, good afternoon. Thanks for all the details so far and nice performance in a tough market. We'd love to chat a little bit about the goal or the target to get back to your more historical BTO share. I think this is a market where a lot of builders that have historically been more heavy on BTO have seen that share decline, and there's a lot of spec inventory out there that you're competing with. I'm just curious, as you move towards that pivot, have you made any headway there yet, either throughout this quarter or maybe even thus far in September in terms of the mix of your orders that skewed a little bit more towards BTO? I guess from a profitability perspective, can you talk about the current margin differentials between your BTO business and spec today? I'd like to make a few comments, Alan, and then I'll pass it to Rob McGibney. We were 70% or more sold as recently as 2022. If you look at what the industry's dealt with, starting in 2022, that's when the supply crunch hit, build times really extended. We got as high as 11 months to build in many cities. It's hard to have a compelling build-to-order story when it's 11 months out. The buyer can't even lock a rate that long. You can't tell them what their rate or their payment will be, and they're not going to hang around 11 months to get their personalized home. We had to do something, and we opted to introduce more inventory into our whip. Frankly, over the last couple of years, that's been the hardest houses for us to sell because our culture and our wiring as a sales team is to focus on the values of build-to-order. Past that, rates start to run up, and it compounded the problem a little bit more for us. Rates have come back down. Our build times have come right back down to historical. It's a far more compelling value. We're just not going to introduce a lot of inventory into the ground. We're going to focus on the build-to-order side. We've seen some incremental improvement in the build-to-order mix. We expect to see a lot more as we get into 2026. Margin-wise, Rob, do you want to add any more comments or do you want to get into the margin difference? Yeah, we mentioned in our prepared remarks that the margin difference is some, depending on the community and the plan, it can be from 250 basis points- 400 basis points. It is a significant difference. You know, today, as Jeff mentioned, we're in an environment where we have the inventory because we started it, and we've got to take a balanced approach to moving through that. As we look forward, especially as we bring on new communities, we're focused solely on BTO. I think, you know, it's not going to be an overnight change, but over time, and I think we'll make really good progress towards that as we get into the early part of 2026. We expect to shift back to that 70/30 or better ratio at higher margins. Got it. That's really helpful, Rob. In terms of the 4Q margin guide, I think if I'm doing the math, it's down about 70 basis points sequentially. Given your comments about pricing being pretty stable through the quarter in the majority of your communities, should I interpret that sequential decline as more kind of flushing through some of the remaining spec you have and that mixed headwind, and then hopefully as you get into 2026, that reverses? A couple of things, Alan. There's a lag effect from sale to when everything runs through into revenue. A lot of the deliveries were on houses that were sold in the spring selling season when it got pretty competitive out there. There is a lag, and you're seeing more of that than you are an assumption that we're going to go deeper on inventory. In fact, we stated in our prepared comments, we're not going to chase the units by, quote, dumping inventory with a heavy discount. We'd rather be prudent with it and strategic and take our time and cover the inventory in the better selling season, January, February, and March. I can't remember what the other part of his question was. I was going to kick it to you. The margin difference? Yeah, it is, you know, a fair amount of it is still mix, Alan. You're totally right. Some of it is like market conditions, but really a lot of it is just the mix. Thank you. Our next question comes from the line of Matthew Bouley with Barclays. Please proceed with your question. Hello, you have Elizabeth Langan on for Matt today. I was wondering if you could touch, you mentioned that you've had success in lowering direct costs. I was wondering if you could touch on what those direct costs are and if there are any categories that you would call out where you're having a little bit more success with that. It's really across the board. You know, clearly lumber costs have come down, so that's been a tailwind for us. Lumber is a pretty large component of the overall construction cost, but it's certainly not just limited to the commodity side of it. Across, you know, many, I'd say probably most of our markets, we've seen starts come down pretty significantly over the last several months, and we're using that as an opportunity to work with our trade partners, and they're hungry for work, which gives us an opportunity to drive down costs lower as we feed starts into the system. On the cost side, whether it's, you know, really we're looking at all of the direct costs. When sales prices get pressured, we're looking for any opportunity we can to lower costs, whether that's directs or SG&A. I'd say overall, it's pretty broad-based across all of the direct cost components that go into our homes. There's part of it that's just renegotiating because market conditions have changed and starts have come down, and part of it is true value engineering and changing the product that we build. I'd say it's probably a pretty even split between those components of the improvement that we've seen. Thank you. Just to kind of follow up on the general dynamics of those negotiations, is that something that would carry on into 2026 in terms of seeing those benefits, or is it something where it's more real-time and you might see depending on the demand and, you know, if there's a recovery in starts next year? Yeah, the more recent reductions we've seen in lumber, that's going to show up in our deliveries in early next year. The rest of it, I'd say we're, it's not ever something that we stopped focusing on, but the market isn't always willing to accept that. A few years ago we were going through labor and supply chain crunches, we were still trying to fight the lower direct costs, just weren't making much headway. We've been able to have more success with that now. It is somewhat dependent on market conditions. While starts and volumes are down, we're going to keep working to leverage that into lower costs. If there's a really healthy spring selling season, I would expect that we're going to have less success. At the same time, our house prices are going to be going up. That's how I view it. Thank you. Our next question comes from the line of Michael Dahl with RBC Capital Markets. Please proceed with your question. Hi, that's my question for the callers so far. Just first, a follow-up on the recent demand dynamics. Just to kind of put a finer point on it, this is normally a time of year where you see some seasonal ebb in your absorption pace. When you say that demand was steady through the quarter, you haven't necessarily seen an uptick in 4Q to date. Can you be more specific about what your, maybe what your monthly sales pace cadence has been, including how you're tracking in September? Yeah. Mike, as we shared in the comments and you look back through the third quarter, it was pretty consistent for us. June was the best month, but July and August were close. We would, depending on timing of openings and sellouts and all that, orders were pretty consistent. I would say it was stable for us through the quarter. We haven't seen much of a shift yet in September. It's only two weeks for us. I don't want to make any comments on September, but it's more of the same. Okay. Got it. Jeff, I guess bigger picture, when you think about the timing of this shift in, say, let's get back to the built-to-order and coupled with your comments around, we don't know when the inflection will be, but we do think there's one out there. It seems like that strategy, when you're going into next year with a backlog that in unit and dollar terms looks like it'll be down pretty meaningful, it seems like that strategy is really reliant on there being some reasonably good inflection in demand next year. Otherwise, you might have kind of a pretty big gap out year in your revenue. I don't know if you want to address that a little bit more, but also then a specific question would be if mortgage rates don't come down, because we have seen an uptick over the past week or so. If you don't get a relief, would, as you go into next year, do you pivot back or how do you think about that strategy if we don't actually get the type of relief you're looking for? Yeah. There are a few components to your question, Mike, and it's a good one. Our backlog will be down at the end of the year. Fourth quarter sales and fourth quarter deliveries obviously influence that, but it'll be down a similar range to how much our build time's down. It actually positions us for similar pull-throughs based on the backlog heading into 2026. Every year as we go into the year, the spring selling season dictates how good or how poor your results may be for the year. Part of it's not like we just flip a switch and say we want to be built to order. With the inventory that we put out there, you create competition among yourself with the consumer and your sales teams when you're trying to sell inventory and built to order. With the margin erosion to cover the inventory, it gets in the way of selling built to order. We're already seeing communities where you rotate out of the aged inventory. You're just focused on your core value and your best value to the customer, and it works just fine. We're really not expecting a trough, as you called it. I think you'll see pretty consistent performance, and depending on the spring, we'll share that with you in the springtime. That's really what'll drive the second half of next year. Thank you. Our next question comes from the line of Michael Rehaut with JPMorgan. Please proceed with your question. Hi, everyone. This is Andrew Aldion for Michael Rehaut. I appreciate you taking my questions. I just wanted to drill down a little bit in terms of the inventory charges and such. If you could comment on the land environment and your ability to find new lots for future growth, especially as the industry is developing a stronger appetite for the land-light model. As we shared, the land markets are rolling over a little bit. We're seeing some cities where prices have come down a little. You definitely can get more terms, meaning you can close with a better entitlement in place. You can get to turning the dirt and developing the lots quicker, which is a good thing. That's helping us on the land market. Relative to what we shared in the quarter on the abandonments, we walked on deals that we've had tied up. With the shifts in the market, they don't hit our underwriting hurdles. We elected to abandon them and write off the entitlement and pursuit costs that we had incurred. We know that in some cases, we could go back in and buy the same asset with better price and better terms. We've seen some of that already, but that's a future move. It's our expectation with starts being way down and what went on in the market this year, we think that the land market will be a little friendlier as we look ahead. That makes a lot of sense. I appreciate that. Are there any kind of markets where you're seeing, I'd love to kind of drill down to see how things are progressing by markets, if you can make a few callouts, and if you're seeing specifically any increased competition from resale or anything like that? Yeah, it's a pretty broad question, but I'll do my best to give you a quick overview here. I'd say just in general, demand across the whole footprint of our business remains somewhat mixed. There's clear areas of strength, some that have remained softer, and other markets that seem to be improving or stabilizing faster. It's difficult to paint any one metro or region with a broad brush in terms of demand as it's just nuanced based on the submarkets within that metro. Then there's even another layer of nuance within those submarkets themselves. In the quarter, from a demand or sales perspective, some of our stronger markets were Inland Empire, Riverside, and San Bernardino. North Bay and the Central Valley in California were strong. Las Vegas, Houston, Charlotte, all posted pretty solid demand during the quarter. A couple of the more challenged ones were some of our higher-priced communities, I would say, in coastal California. Seattle was a pretty difficult market for us in Q3, but that tends to follow a little different seasonal pattern, and we've seen demand improve there more recently. Denver is one of the markets that's more challenged. You just had home prices that surged big time after COVID, and the incomes didn't keep up, and you've got supply there meaningfully up. I think the good news there, and in other markets like that, we're seeing starts come down significantly, you know, 15%- 20%. I view that as positive, as the industry in general is showing some discipline by not adding further supply to some of those weaker markets. You mentioned resale inventory in Florida and Texas, I think, were the first ones, just the states where we saw resale and new home inventory increase. We responded to that with targeted price adjustments and then cost reductions that supported better absorption. You look at Florida, I think our orders in Q3 were actually higher than in Q2. Seeing some signs, I think, of stabilization there, and the work that we've done has resulted in better absorption. Now we're focused on lifting price where we can. We've actually found in some cases we've gone above what we needed to. In order to optimize those assets, we're now increasing price. Texas is pretty similar, but again, it's different by metro. Houston remained relatively strong, really didn't have the run-up that we saw in San Antonio and Austin where prices moved up and we've got more resale. The resale was building higher there, but I think Texas and Florida in general, I would say, are stabilizing markets, and that's a good sign for us. We're seeing that as a result in our communities as well. Thank you. Our next question comes from the line of Trevor Allinson with Wolfe Research. Please proceed with your question. Hi, good afternoon. Thank you for taking my questions. I want to ask a question about the Southeast region specifically. Order prices were down almost 6% sequentially, but volumes were actually quite good. They were up about 7% quarter- over- quarter. Rob, I think you were just referring to some of that in Florida. That's quite a bit better than normal seasonality. You've talked about not chasing volume, was the strategy different in the Southeast in the quarter just to liquidate some inventory or what drove the order ramp there, but a pretty big ASP decline sequentially? It wasn't really chasing the inventory. I think that was a market that we saw the resale inventory and new home inventory start to accumulate, and sales had really slowed for us in Q2, which was normally our best time of year. We took action and we reduced price. I think that's what's showing up in the numbers that you're seeing. The good news for us is that worked, which now you're seeing the orders come back up as a result of that. It's also, as I mentioned earlier, one of the markets where we've seen the biggest decline in starts. We've had some of our best results in cost reductions there too. Now, as I'm calling that, it's starting to stabilize. We've got that combination. I think we found that, we found the market. We've driven costs down, and now we're starting to take it back the other way. I'm not necessarily calling it an inflection point for the whole state of Florida, but we've been encouraged by what we've seen recently. Okay, makes a lot of sense. Jeff, I wanted to follow up on your comment about starting to see land prices soften. Can you just talk about how widespread that is, any specific geographies where that's most common, and can you help us with some sort of number on the magnitude of declines that you're seeing in the markets where you are seeing it? There is a slight easing. We're not seeing rapid drops, but we are seeing some easing. The power of no is working. We've had deals tied up where we've said no and walked, and lo and behold, they come back at a lower price. It tells you that the land sellers are recognizing it's a little less strong than it was for them, and they need to move their inventory too. I'd say we're seeing that pretty much across the system. None of them are big magnitudes. They're not market movers, but they are incrementally starting to ease. We're encouraged with that. Thank you. Our final question will come from the line of Susan Maklari with Goldman Sachs. Please proceed with your question. Thank you. Good afternoon, everyone. My first question is on the design studios. As you think about the shift back to more BTO, can you talk about how you can position the design studios? Is there anything that you're focused on from that element of the business in order to help drive that shift and attract the consumer back to that side of the business relative to the specs that are out there? Yeah, it's a good question. I don't think we need to change anything as far as our approach to the studio. It's just leveraging what we've always done. We really use the studio as a tool to help us sell homes. We want to start by offering the best base price we can with a quality home that's designed based on our market survey and the data that we have as kind of a starting point. We really use the studio to let people personalize their home there if they choose to. I think that there's a lot of personalization options and choices that we offer, and we're always kind of rotating through that to make sure that they stay current and they're up to date with what people want. I don't really see it as a shift in the way that we're approaching that business. We just want to drive more of the business to built-to-order and leveraging the studio. Okay. That's helpful. Maybe turning to capital allocation, you mentioned the continued focus on shareholder returns, especially the share repurchases. Just any thoughts on how we should be thinking about the magnitude and what we can expect there as we finish up this year and look to the next year and how you're balancing that relative to the budget that you've put out for land development and acquisitions? Yeah, Susan, that's a good question. We're very thoughtful about kind of how we're allocating capital. You can see this year we've been really thoughtful and responsive to, you know, ensuring that we can continue to fund growth, but do it in a smart way and ensure that we're rewarding shareholders as well. The capital return and the cash flow that we're generating right now is really healthy. We feel like in the future we'll be able to continue to reward shareholders at a similar rate, but we haven't quite yet figured out the magnitude. I think that there's also a component of that, which is market-driven by how attractive the land market is. We feel really good about our land position going into next year and feel really good about how it's set us up for the next three to four years. I think that that's going to give us a lot of flexibility in terms of returning capital. Ladies and gentlemen, this concludes today's teleconference. Thank you for your participation. You may now disconnect your lines.