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, uncertainties, and other factors that could cause actual results to differ from those presented today. All forward-looking statements must be considered in light of those related risks, and you shouldn't place undue reliance on such statements, which reflect management's current viewpoints that are not guarantees of future performance. On this call, we'll discuss non-GAAP financial measures that are not intended to be considered in isolation or as substitutes for financial information presented in accordance with GAAP. Reconciliations of non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be found in the press release we issued this morning and in our annual report on Form 10-K for the period ended December 31, 2025, that'll be filed with the SEC. This filing will be accessible on the SEC's website and in the investor relations section of our website. I'm joined today by Eric Lipar, LGI Homes' Chief Executive Officer and Chairman of the Board, and Charles Merdian, Chief Financial Officer and Treasurer. I'll now turn the call over to Eric. Thanks, Josh. Good afternoon, and thanks for joining us to discuss our fourth quarter and full year results. This marks our 50th earnings call, and on reflection, I'm proud to say that the same principles that guided us and drove our success over the years were once again on display in 2025. Throughout the year, our team successfully navigated a dynamic and challenging market environment. Affordability remained the primary pressure point, and rate volatility added uncertainty across the market. Even so, our teams executed with discipline, generating leads, managing inventory, supporting our customers, and delivering homes with the exceptional service that sets LGI apart. That discipline is evident in our fourth quarter results. During the quarter, we delivered 1,362 homes. Of this total, 1,301 homes contributed directly to our reported revenue of $474 million. The remaining 61 were currently or previously leased homes, the profits of which were reflected in other income. Notably, during December, we closed our 80,000th home, another significant milestone that highlights our growing scale and longevity of our business model. Our margins continue to demonstrate resilience relative to industry expectations, supported by our approach to pricing, incentives, and inventory management. During the quarter, we delivered a gross margin before inventory-related charges of over 19% and adjusted gross margin of over 22%. These results were below the guidance ranges provided, primarily due to the outsized impact of buydowns and price discounts on older inventory. However, even with this targeted activity to rightsize our inventory, our margins continue to reflect the strength of our operating model and the deliberate choices we make to enhance affordability while supporting profitability. We ended the year with 144 active communities and averaged 3.1 closings per community per month in the fourth quarter, our highest pace of the year, driven by solid execution and our strong finish in December. During the fourth quarter, our top markets on a closings per community basis were Charlotte with 6, Northern California with 5.8, Las Vegas with 4.6, and Atlanta with 4.2 closings per community per month. For the full year, our top markets were Charlotte with 5.2, Atlanta with 4.4, and Las Vegas with 4 closings per community per month. Congratulations to the teams in these markets on their performance. We continue to write contracts in a market where many buyers need additional time to save for a down payment, strengthen their credit, or finalize the sale of an existing home. As a result, the time between contract and close remains extended, and we expect this trend to persist for the foreseeable future. As a result, our cancellation rate increased to 43.3%, with affordability pressures and broader economic uncertainty amplifying the typical factors that drive cancellations. Further, we expect this dynamic to continue for the foreseeable future. It's important to remember that a gross sale simply reflects a buyer placing a deposit on a home, the start of the home purchasing process, and some of those early commitments naturally don't progress through the qualification process. However, while some won't reach the finish line, writing those additional deals enables us to close an incremental number of qualified buyers. During the quarter, our net orders increased 39% year-over-year. Our backlog grew 133% to 1,394 homes, and the value of our backlog exceeded $501 million, up 112% compared to the same period last year. Including these results was an agreement with a wholesale buyer to acquire 480 homes that will deliver throughout 2026. Excluding that agreement, our backlog was still up 53% from the end of 2024. January leads and retail net orders were up slightly, admittedly compared to a softer comp last year. Nevertheless, we expect results in the first quarter to be similar to last year as we continue to monitor the pull-through on our backlog and the ongoing evolution in cancellation rates. Stepping back, 2025 was a year defined by disciplined execution. We remained focused on what we can control, managing costs, offering competitive financing options, supporting our margins, and delivering affordable, move-in-ready homes to first-time buyers. We continue to invest in people, land, and operating platforms to support our long-term strategy, even as we adapted to near-term market conditions. Before turning the call over to Charles, I want to reiterate that our long-term outlook for the housing market remains positive. The supply-demand imbalance, favorable demographic trends, and essential need for attainable homeownership all reinforce the strength of our strategy. As we move into 2026, we do so with resilience, focus, and a deep commitment to navigating the market with the same determination that has guided us throughout our history. With that, I'll invite Charles to provide additional details on our financial results. Thanks, Eric. Revenue in the fourth quarter was $474 million, a 19.5% sequential increase, driven primarily by the elevated sales activity generated through our targeted sales initiatives in the back half of the year. Of the 1,301 homes we closed during the fourth quarter, 158, or 12.1%, were through our wholesale business, compared to 173, or 11.3%, during the same period last year. The average selling price of fourth quarter closings was $364,000, down slightly compared to last year, primarily driven by geographic mix, a higher percentage of wholesale closings, and financing incentives. Additionally, targeted discounts on selected aged inventory were reflected in roughly one-third of our closings. Our fourth quarter gross margin, excluding inventory-related charges, was 19.2%, compared to 22.9% in the same period last year. The year-over-year decline was primarily attributable to financing incentives, discounts on older inventory, a higher percentage of wholesale closings, and higher borrowing costs. These dynamics were partially offset by the structural margin benefit of our self-developed lot positions. Adjusted gross margin was 22.3%, which excluded $14.4 million of capitalized interest and $609,000 related to purchase accounting. During the quarter, we took an inventory impairment charge of $6.7 million related to 4 underperforming communities impacted by lower than modeled pace, financing incentives, and price discounts on aged inventory. We regularly review our inventory positions and will continue to monitor conditions closely. However, at this time, nothing in our analysis points to future impairments meaningfully different from the amount recognized in the fourth quarter. Combined Selling, General & A dministrative expenses totaled $65.6 million, or 13.8% of revenue, down 90 basis points year-over-year. Selling expenses were $42.5 million, or 9% of revenue, similar to the same period last year. General & A dministrative expenses were $23.1 million, a decrease of $8.1 million, or 26% from the prior year, and were down 70 basis points as a percentage of revenue. The year-over-year improvement was driven primarily by compensation-related adjustments. Other income was $5.5 million, driven by the gain on sale of leased homes, finished lots, and income from our ongoing leasing operations. Pre-tax net income was $24 million, or 5.1% of revenue. Our effective tax rate was 27.9% above our outlook, reflecting the impact of higher state income tax rates and the impact of impairments. Fourth quarter net income was $17.3 million, or $0.75 per basic and diluted share. Excluding impairment-related charges, net income was $22.4 million, or $0.97 per basic and diluted share. For the full year, we delivered a total of 4,788 homes, including 103 currently or previously leased homes. Of this total, 4,685 homes contributed to our full-year reported revenue of $1.7 billion. During the year, we closed 737 homes through our wholesale business, representing 15.7% of total closings and generating over $230 million in revenue, compared to 9.2% of closings or $164 million in revenue in 2024. Our full-year average selling price was $364,000, roughly in line with the prior year. Our full-year gross margin, excluding inventory-related charges, was 21.1%, and adjusted gross margin was 24%. Combined Selling, General & Administrative expenses totaled $273.8 million, or 16.1% of revenue, a 150 basis point increase compared to 2024, driven primarily by fewer closings and a higher average community count this year compared to last. During the year, we generated $18.7 million in other income, driven by the sale of nearly 550 lots, 103 currently or previously leased homes, and commercial property, along with income from our joint ventures. Pre-tax net income for the year was $98.5 million. Net income was $72.6 million, representing $3.13 per basic share and $3.12 per diluted share. Excluding impairment-related charges, full-year net income was $77.6 million, or $3.35 per basic share and $3.34 per diluted share. Turning to our lot position. Our on-balance sheet land portfolio remains a key strategic advantage. Self-development allows significantly more operational flexibility while supporting profitability in a challenging market. Across the lots we currently control, the average finished lot cost is approximately $70,000, and lot cost last year represented about 21% of our ASP, underscoring the structural benefit of our land strategy. At year-end, we owned and controlled 60,842 lots, a decrease of 14.2% year- over- year and 2.8% sequentially. The decline reflects ongoing discipline in capital allocation and a continued focus on evaluating future land investment with the current pace of sales. Of our total lots, 51,890, or 85.3%, were owned, and 8,952 lots, or 14.7%, were controlled. Of our owned lots, 35,416 were raw land or land under development, of which approximately 22% were in active development and 36% were in engineering. Of the remaining 16,474 owned lots, 13,109 were vacant finished lots, and the remaining 3,365 were completed homes or homes under construction, down 9% compared to the third quarter and 16.8% compared to the same time last year. I'll now turn the call over to Josh for a discussion of our capital position. Thank you, Charles. We ended the year with $1.7 billion of debt outstanding, including $528 million drawn on our revolver. In the fourth quarter, we reduced our net debt to capital ratio 160 basis points to 43.2%. Throughout 2026, we expect to continue to work through older inventory, selectively monetize certain lot positions, and use the proceeds to reduce debt as we make progress toward the midpoint of our 35%-45% target leverage range. Total liquidity at year-end was $335 million, including over $61 million of cash on hand and $274 million of revolver availability. With nearly $2.1 billion of equity at year-end, our balance sheet remains well positioned to navigate the current operating environment, support our long-term growth, and continue executing our strategy in 2026. At this point, I'll turn the call back to Eric. To conclude, I'll share our outlook for 2026. Our guidance reflects our current view of demand trends, our elevated starting backlog, and what we believe is attainable if market conditions remain generally consistent with our most recent experience. For the full year, we expect to close between 4,600 and 5,400 homes and to end the year with 150-160 active selling communities. We expect selling prices to be relatively stable as we balance affordability with margin discipline. Based on product and geographic mix, backlog composition, and expected community openings, we are guiding to a full year average sales price between $355,000 and $365,000. To support affordability, we will continue to lean into incentives, including closing costs, interest rate buydowns, discounts to older inventory, and selective price adjustments by community. Based on our most recent results, we are guiding to a full year gross margin between 18% and 20% and adjusted gross margin between 21% and 23%. Finally, we expect SG&A to range between 15% and 16%, and our full year tax rate to be approximately 26.5%. In closing, I want to thank our team members for their continued dedication and the strong execution they delivered in 2025. We remain focused on operational excellence, maintaining profitability, and positioning LGI Homes for sustainable long-term growth. I'm confident in the strength of our model, the experience of our team, and believe we are well positioned to navigate the year ahead. We'll now open the call for questions. Certainly. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Our first question will be coming from Michael Rehaut of J.P. Morgan. Your line is open, Michael. Thanks. Good afternoon, everyone. Thanks for taking my questions. I wanted to start off with, you know, the gross margin outlook, and kind of a two-parter on this one, if you don't mind. First, to lay out the drivers of the sequential decline in the fourth quarter. Obviously, I know you talked about kind of working through aged inventory, and if it was purely through, you know, greater than expected incentives and discounts. And, you know, looking towards 2026, you know, what could drive the upside to the 20% range, as opposed to staying at the lower end? Just trying to understand the rationale behind the range and if there's anything, you know, that could push you towards the higher end. Yeah, thanks, Michael. This is Eric. I can start. Yeah, I think the sequential decline in Q4's, like we talked about in our prepared remarks, is we leaned into incentives in Q4, you know, had a really solid December, cleared out some aged inventory through buydowns, forward commitments, aged inventory discounts, pricing adjustments. You know, a lot of things that other builders are doing in the market is also influencing that, to keep up with everyone, if you said. You know, certainly appraisals come into that as well. So keeping in line with market pricing and all of what our competitors are doing is really the sequential decline. Then our outlook for 2026 on gross margin is just taking that gross margin in Q4 and expecting everything to be similar. We expect 2026 to be another year we're leaning into incentives, discounts, mortgage buy downs. We need to be, you know, take appraisals into consideration what our competitors are doing. So those factors, we thought it was prudent for our gross margin guidance for 2026 to be similar to Q4 of 2025. Okay. And then I guess, secondly, you know, when you think about the closings outlook, you know, it seems like you're looking for maybe a similar pace, closings pace in 2026 versus 2025. I just wanted to make sure I have that right. And, you know, if there's a portion of closings that are expected from wholesale, I'm sorry, from your wholesale business, just wanted to kind of understand your level of confidence there, and if the recent, you know, talk around limiting, you know, institutional buyers of single-family homes, if you feel like that is a risk to whatever portion of closings that you might expect would come from that channel. Yeah, Mike, again, it's Eric. You know, really good question. On the institutional investor side and the wholesale, we expect wholesale closings to be 10%-15% of our closings this year for LGI. We feel really good about the 10%, because that's kind of orders are already created, and that's our backlog, and we feel confident that those will close this year. New orders, you know, we'll see. New orders right now are somewhat on pause until we get more clarification on the policy. And I think for guidance for 2026 and closings, you're right on. You know, we are expecting a similar closings per community guidance for 2026. That makes sense. Similar to our gross margin discussion, we think 2026 is going to be very similar to 2025 as far as guidance goes. Great. Thank you. You're welcome. Our next question will be coming from Paul Przybylski of Wolfe. Your line is open, Paul. Yeah, good morning. Going back to, I guess, the wholesale, the 480 orders you have now. How should we think about, you know, profitability on those, both, both gross margin and op margin? And the, will all those flow through the, other income line? This is Eric. I could start. From a profitability standpoint, you can expect, you know, those from an operating margin standpoint are similar to operating margin from the retail standpoint, as we've always said from a wholesale business standpoint. Our gross margin is less when we sell to any wholesale operator, but operating margin is similar. And then for the overall, you know, year, the percentage of wholesale business could influence gross margin in either direction. You know, our guidance for this year on the wholesale business is 10%-15% of our closings. Last year was 15.7%, so we're expecting it to be slightly down as a percentage of our closings this year. Paul, this is Charles. I'll just add, these units would be expected to come through the top line, so our wholesale business goes through... Home sales revenue is just the previously or currently leased units that run through other income, which we had 103 last year. Okay. Okay, thanks for clarifying that. And then, I guess on your, your community count growth expectations for 2026, are those gonna be, you know, pretty even throughout the year? And then how should we think about, I guess, new community openings relative to that net growth, and are you seeing higher absorptions on your new communities relative to some of your legacy projects? I would say not necessarily, you know, higher absorptions. I think the new communities will be spread out or more weighted to the back half. You can see our January community count was down. We are expecting to add a few in February, and then the rest of the year, more, I'd do more back half weighted, but we do plan on opening a number of communities and feel confident in our 150-160 end-of-year community count guidance. Great. I'll pass it on. Thank you. Appreciate it. Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone and wait for your name to be announced. Our next question is coming from Alex Rygiel of Texas Capital Securities. Your line is open, Alex. Again, our next question will be coming from Alex of Texas Capital Securities. Your line is open. Thank you. Can you provide some additional color on the older inventory and the land that may be sold in 2026? Yeah, I can start, and Charles can add to it. You know, I think the land is primarily finished lots that we've been selling. You know, we have certain land positions across the country, we have more finished lots on the ground than is needed for the current absorption pace, and that's really where the market is for other builders buying lots from us. And we're, I've described as very opportunistic. If we see a price or have a bid on some finished lots where we have excess inventory, we're engaging in that, and it's a good opportunity for us to drive some other income and pay down our debt. Yeah, so I'd just add on the older inventory, so we just have a number of communities scattered throughout the country that, where we had starts that were outsized, if you will, from what the actual absorption pace was. So we're just taking a look at what we've got those priced at, how they age in our inventory, and then just making great decisions as leads come in and evaluate whether we should move those or work through maybe any other issues that may be relevant to moving those inventory units. And then kind of a question about cancellations. Obviously, the numbers kind of been walking up a little bit here. Generally speaking, how long are these homes kind of off the market before they're canceled? Is that a few days, or is it weeks or months? And then, has the reason for canceling changed much over the last couple of quarters? Yeah, I can start on this one as well, Alex. Great question. Our cancellation rate is elevated. The reason for cancellation has not changed at all. The reason for cancellation is strictly the ability to get financing. What has happened is, you know, we're in a more challenging market environment right now for closings and sales and affordability, so our customers are staying on the house longer. You know, after a couple of weeks is really the time we measure cancellation rate as far as giving them time to do the loan application. But in a lot of cases, after a couple of weeks, the customer needs more time, whether it's paying off debt, saving up for a down payment, potentially working on their credit score. When we have enough inventory in select communities, it's likely worth it to keep that customer engaged and keep them working on that down payment funds, if you will, because there is a chance that they'll have that and be able to close in a timely manner. We think that's the best strategy in this market. In a more challenging market, we're spending more time with customers. They're taking longer to get across the finish line, but we think that's the right strategy, although it is going to lead to a higher cancellation rate. Net-net, we think it's accretive to our closings. Helpful. Thank you. You're welcome. Our next question will be from Jay McCanless of Citizens Bank. Your line is open, Jay. Hey, everyone. Thanks for taking my question. I did want to dig down on that a little more, Eric, 'cause I don't remember, and apologies if I missed this, but when you guys talked about contingency issues of buyers selling their homes, I guess, where is your mix now of first time versus move-up buyers, and how has that changed over the last couple of years? Yeah, I think it's growing. The amount of move-up buyers is growing, one, because of, you know, our Terrata brand, it continues to expand, then also just the price point. You know, the entry-level price point now at, you know, $360,000 plus is just an elevated price point. So the income needed for a customer to qualify or the household to qualify is elevated, and the odds of that customer being in a ownership situation is higher than it used to be. Still predominantly, you know, first-time home buyers, but certainly it's elevated. Okay. And can you just remind us what percentage of your communities are Terrata? I'd say 10%. Yeah, I would say 10 to 10 to 15%. Yeah. Okay. Okay. And then I guess my next one is, could you just talk about current conditions? I mean, it sounds like it's still pretty aggressive discounting at the entry level, maybe. Are you seeing any relief there, or are the larger competitors still leaning in from that perspective? Yeah, I think all of us are leaning into incentives, Jay. We're still battling affordability. You know, rates have come down somewhat over the last couple of months, 10-year down, you know, closer to 4.05% now, as high as 4.25%. So that's helping the mortgage rates, spreads are compressed. Now, I go to affordability, in general, is rates, but also, you know, the sales price of the house, it's the insurance, it's property taxes, it's all the other bills the consumer is facing outside of their new mortgage payment as well, I think is weighing on affordability pressures for our consumer. So what we are doing as much as we can, I think that's probably the sentiment of the entire industry to help assist and work with our buyers as much as possible on the affordability and creating that first-time home buyer, which we think is a good, good win-win for everybody involved. And then, the other question I had, just on the year-over-year decline in G&A, I guess, Charles, could you maybe give us an idea of what run rate G&A is gonna be for this year? Is it gonna be similar to Q4 or a little higher than that? Yeah, the year for the year, we came in, you know, just over 110 total in G&A. So I would say the answer is very similar to what we're saying on most of the other categories, is 26 is gonna look a lot like 25, so somewhere around that number for a full year, and then may bounce around quarter to quarter, depending on how expenses come in. Okay. That's great. Thank you. Our next question is a follow-up from Michael Rehaut of JP Morgan. Your line is open, Michael. ... Hi, thanks for taking my follow-up. I just wanted to circle back to the question I had earlier around the gross margin range that you laid out for 2026. You know, what do you think would be the drivers to get you towards that higher end of the range, or even the midpoint of the range? Let's start at the baseline. Perhaps that's a more appropriate question. To hit like that 19%, would you need incentives to come down a little bit, or would that be with incentives kind of staying where they are, but maybe other factors driving improvement, like lower labor costs or, you know, better land cost basis? Yeah, it's a great question, Michael. And I think I would look at it as the midpoint, if you will, from our gross margin is expecting similar to 2026 Q4, or similar to 2025, excuse me. So I think your example is correct. You know, the higher gross margin would result from lower incentives. You know, our cost, whether it's in land development cost or impact fee cost or house construction cost, labor, and materials, if costs come down, obviously that would be helpful in gross margin. The wholesale business, the greater percentage of wholesale business above last year, would result in a factor of either up or down on gross margin. We don't hope we have less wholesale business, but that would certainly help the overall gross margin. It's all those categories of improvements that would lead to a higher gross margin than modeled. All right. Thank you. You're welcome. Our next question is a follow-up from Paul Przybylski of Wolfe. Your line is open. Yeah. Thank you. Regarding your SG&A, you mentioned, you know, the cap reduction. Was that more permanent change to your overhead, or was that more bonus driven? And then the high end of your closing guide, I think, is right around three absorptions. You know, if you were to achieve that sales pace, do you let volumes continue to run, or do you start taking some price? Yeah, I can start on the SG&A question. Certainly, the fourth quarter was more bonus driven, but we think the annual run rate should be similar for the year. Yeah, and I think at three a month, we continue to lean into that pace and see if we can't push that even higher once we get to the three-a-month pace. Okay, great. Thank you. Appreciate it. You're welcome. You bet. I would now like to turn the call back to Eric for closing remarks. Yeah. Thanks, everyone, for participating and listening on today's call and your continued interest in LGI Homes. Have a great day. This concludes today's conference. Thank you for participating. You may now disconnect.