Executive Overview and Outlook Market Conditions and Strategy During the third quarter of fiscal 2026, consumer sentiment remained near all-time lows, reflecting ongoing uncertainties around geopolitical events and economic conditions. While financial market volatility caused by the start of the military conflict in the Middle East has since subsided, energy prices have continued to fluctuate and mortgage rates remain elevated near 52-week highs. We believe these macro factors contributed to sales pace remaining relatively soft versus historical levels. Despite the impact of these trends on homebuyers, the Company continued to execute on several margin-enhancing cost and mix initiatives that were realized in the quarter. In response to persistent affordability concerns and overall economic uncertainty, we have maintained a disciplined approach to operations and capital allocation. We continue to focus on our differentiated product strategy, increasing margins, selling non-strategic assets, and improving the efficiency of our land spend to support community count growth and facilitate share repurchases. Further, we are utilizing capital-efficient option agreements, when possible, to finance land spending, while keeping a prudent balance between optioned lots and on-balance sheet inventory. With our common stock trading below book value, we continued our share buyback program in the third quarter, repurchasing another 1.0 million shares of our common stock, or approximately 3.5% of our outstanding shares at the end of our fiscal second quarter, for an aggregate $21.0 million. This brings our year-to-date share repurchases to $66.2 million, or 2.9 million shares, representing approximately 9.7% of our outstanding shares at fiscal year end 2025. We believe the Company is uniquely positioned to address affordability concerns of today’s buyers and deliver a superior product and buying experience. Our differentiated strategy focuses on: •Advanced Home Performance, which provides energy savings and lower utility bills, cleaner air, and a quieter and more durable home, •Curated Choices, which include competitive mortgage pricing to drive customer savings, and a range of floorplan and interior design styles, •Elevated Experiences, highlighting our easy shopping process and trusted homebuyer support teams to drive high customer satisfaction, and •Community Impact, featuring the Beazer Charity Foundation and our commitment to make a positive impact in the communities where we build. Together, these lower the total ongoing costs of homeownership and deliver meaningful financial and lifestyle benefits that make buying a Beazer home more attainable and rewarding. Overview of Results for Our Fiscal Third Quarter The following is a summary of our performance against certain key operating and financial metrics during the quarter ended June 30, 2026 and a comparison to the quarter ended June 30, 2025: •During the quarter ended June 30, 2026, orders per community per month were 1.8 compared to 1.7 in the prior year quarter, and our net new orders were 900, up 4.5% from 861 in the prior year quarter. The year-over-year increase was primarily attributed to softer sales performance in the prior year quarter. However, the sales environment remains challenging due to affordability constraints, weaker consumer sentiment, and broader macroeconomic uncertainty. We continue to adjust prices, features and incentives to align with the current competitive market conditions. •During the quarter ended June 30, 2026, our average active community count of 169 was up 0.8% from 167 in the prior year quarter. We ended the quarter with 170 active communities, up 1.8% from 167 a year ago, as we continue to work toward reaching 200 active communities by the end of fiscal 2027. 30 Table of Contents •As of June 30, 2026, our land position included 24,489 controlled lots, down 11.9% from 27,794 as of June 30, 2025. We invested $199.6 million in land acquisition and land development during the quarter ended June 30, 2026, up from $153.8 million during the quarter ended June 30, 2025. We continued to manage our land spend and lot position to improve our capital efficiency and support future community count growth. As part of these efforts, we have realigned the portfolio, divested non-strategic assets, and sustained the efficiency of our land spend by using lot option agreements. As of June 30, 2026, we had 13,841 lots, or 60.0% of our total active lots, under option agreements as compared to 16,195 lots, or 60.1% of our total active lots, under option agreements as of June 30, 2025. •Our Average Selling Price (ASP) for homes closed during the quarter ended June 30, 2026 was $547.8 thousand, up 5.9% from $517.3 thousand in the prior year quarter. Our backlog ASP as of June 30, 2026 was $582.1 thousand, up 6.0% from $549.2 thousand in the prior year quarter. The increase in closing and backlog ASP compared to the prior year quarter was primarily due to changes in product and community mix. •Homebuilding gross margin for the quarter ended June 30, 2026 was 13.6%, up from 13.5% compared to the prior year quarter. Homebuilding gross margin, excluding impairments, abandonments, and interest amortization, for the quarter ended June 30, 2026 was 16.9%, down from 18.4% in the prior year quarter. The decrease in homebuilding gross margin compared to the prior year quarter was primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin was up by 160 basis points sequentially from 12.0% in the prior fiscal quarter, and up 130 basis points from 15.6% sequentially when excluding impairments, abandonments, and interest amortization, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities. •SG&A for the quarter ended June 30, 2026 was 14.1% of total revenue, up from 13.2% in the prior year quarter. The increase in SG&A as a percentage of total revenue compared to the prior year quarter was primarily due to lower homebuilding revenue. SG&A expense was relatively flat compared to the prior year quarter, as we remain focused on prudently managing overhead costs. Seasonal and Quarterly Variability Our homebuilding operating cycle historically has reflected escalating new order activity in the second and third fiscal quarters and increased closings in the third and fourth fiscal quarters. However, these seasonal patterns may be impacted by a variety of factors, including periods of market volatility and changes in mortgage interest rates, which may result in increased or decreased new orders and/or revenues and closings that are outside of the normal ranges typically realized on account of seasonality. Accordingly, our financial results for the three and nine months ended June 30, 2026 may not be indicative of our full year results. 31 Table of Contents RESULTS OF OPERATIONS: The following table summarizes certain key income statement metrics for the periods presented: Three Months Ended Nine Months Ended June 30, June 30, $ in thousands 2026 2025 2026 2025 Revenue: Homebuilding $ 490,870 $ 535,390 $ 1,248,360 $ 1,551,844 Land sales and other 25,436 9,977 41,283 27,815 Total $ 516,306 $ 545,367 $ 1,289,643 $ 1,579,659 Gross profit: Homebuilding $ 66,623 $ 72,474 $ 151,678 $ 226,581 Land sales and other (522) 106 327 4,075 Total $ 66,101 $ 72,580 $ 152,005 $ 230,656 Gross margin: Homebuilding(a) 13.6 % 13.5 % 12.2 % 14.6 % Land sales and other(b) (2.1) % 1.1 % 0.8 % 14.7 % Total 12.8 % 13.3 % 11.8 % 14.6 % Commissions $ 17,156 $ 18,615 $ 42,562 $ 53,511 General and administrative expenses (G&A) $ 55,386 $ 53,104 $ 158,569 $ 152,075 SG&A (commissions plus G&A) as a percentage of total revenue 14.1 % 13.2 % 15.6 % 13.0 % G&A as a percentage of total revenue 10.7 % 9.7 % 12.3 % 9.6 % Depreciation and amortization $ 4,924 $ 4,571 $ 13,050 $ 13,273 Operating (loss) income $ (11,365) $ (3,710) $ (62,176) $ 11,797 Operating (loss) income as a percentage of total revenue (2.2) % (0.7) % (4.8) % 0.7 % Effective tax rate(c) 59.7 % 87.1 % 37.2 % (5.1) % Inventory impairments and abandonments $ 2,342 $ 10,339 $ 6,007 $ 10,867 (a) Excluding impairments, abandonments, and interest amortized to cost of sales, homebuilding gross margin was 16.9% and 18.4% for the three months ended June 30, 2026 and 2025, respectively, and 15.6% and 18.3% for the nine months ended June 30, 2026 and 2025, respectively. During the nine months ended June 30, 2026, homebuilding gross margin was impacted by a litigation-related charge associated with a confidential settlement agreement with a homeowners' association. This charge reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.5%. Please see the "Homebuilding Gross Profit and Gross Margin" section below for a reconciliation of homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized to cost of sales (non-GAAP measures) to homebuilding gross profit and gross margin, the most directly comparable GAAP measure. (b) Calculated as land sales and other gross profit divided by land sales and other revenue. (c) Calculated as tax (benefit) expense for the period divided by (loss) income before income taxes. Our income tax (benefit) expense is not always directly correlated to the amount of pre-tax (loss) income for the associated period due to a variety of factors, including, but not limited to, the impact of tax credits and permanent differences. Our tax credits are predominantly due to the energy efficiency of our homes, with credits valued between $2,000 and $5,000 per single family home. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA repeals many of the energy efficiency credits enacted under the Inflation Reduction Act, including our ability to claim energy efficient new home tax credits for homes that close after June 30, 2026. For the three and nine months ended June 30, 2026, the Company's effective tax rates were also affected by a change in the approach used to calculate the interim income tax provision, reducing comparability with the prior year periods. Refer to Note 10 to the condensed consolidated financial statements included in this Form 10-Q for additional details. 32 Table of Contents Reconciliation of Net (Loss) Income (GAAP) to Adjusted EBITDA (Non-GAAP) Reconciliation of Net (Loss) Income (GAAP measure) to Adjusted EBITDA (Non-GAAP measure) is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing core operating results and underlying business trends by eliminating many of the differences in companies' respective capitalization, tax position, level of impairments, and other non-recurring items. This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP. The following table reconciles our net (loss) income (GAAP) to Adjusted EBITDA (non-GAAP) for the periods presented: Three Months Ended June 30, Nine Months Ended June 30, LTM Ended June 30,(a) in thousands 2026 2025 26 vs 25 2026 2025 26 vs 25 2026 2025 26 vs 25 Net (loss) income (GAAP) $ (4,227) $ (324) $ (3,903) $ (37,728) $ 15,584 $ (53,312) $ (7,724) $ 67,650 $ (75,374) (Benefit) expense from income taxes (6,274) (2,182) (4,092) (22,373) (756) (21,617) (26,355) 7,781 (34,136) Interest amortized to home construction and land sales expenses and capitalized interest impaired 16,690 18,974 (2,284) 42,505 50,642 (8,137) 70,729 74,347 (3,618) EBIT (Non-GAAP) 6,189 16,468 (10,279) (17,596) 65,470 (83,066) 36,650 149,778 (113,128) Depreciation and amortization 4,924 4,571 353 13,050 13,273 (223) 18,945 18,442 503 EBITDA (Non-GAAP) 11,113 21,039 (9,926) (4,546) 78,743 (83,289) 55,595 168,220 (112,625) Stock-based compensation expense 1,711 1,817 (106) 5,141 5,442 (301) 7,037 7,297 (260) Loss on extinguishment of debt, net 668 — 668 668 — 668 668 — 668 Inventory impairments and abandonments(b) 2,150 9,243 (7,093) 5,714 9,771 (4,057) 7,440 11,567 (4,127) Adjusted EBITDA (Non-GAAP) $ 15,642 $ 32,099 $ (16,457) $ 6,977 $ 93,956 $ (86,979) $ 70,740 $ 187,084 $ (116,344) (a) "LTM" indicates amounts for the trailing 12 months. (b) In periods during which we impaired certain of our inventory assets, capitalized interest that is impaired is included in the line above titled "Interest amortized to home construction and land sales expenses and capitalized interest impaired." 33 Table of Contents Reconciliation of Total Debt to Total Capitalization Ratio (GAAP) to Net Debt to Net Capitalization Ratio (Non-GAAP) Reconciliation of total debt to total capitalization ratio (GAAP measure) to net debt to net capitalization ratio (non-GAAP measure) is provided for each period below. Management believes that net debt to net capitalization ratio is useful in understanding the leverage employed in our operations and as an indicator of our ability to obtain financing. This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP. in thousands As of June 30, 2026 As of June 30, 2025 Total debt (GAAP) $ 1,409,132 $ 1,143,173 Stockholders' equity (GAAP) 1,146,990 1,217,031 Total capitalization (GAAP) $ 2,556,122 $ 2,360,204 Total debt to total capitalization ratio (GAAP) 55.1 % 48.4 % Total debt (GAAP) $ 1,409,132 $ 1,143,173 Less: cash and cash equivalents (GAAP) 124,641 82,932 Net debt (Non-GAAP) 1,284,491 1,060,241 Stockholders' equity (GAAP) 1,146,990 1,217,031 Net capitalization (Non-GAAP) $ 2,431,481 $ 2,277,272 Net debt to net capitalization ratio (Non-GAAP) 52.8 % 46.6 % 34 Table of Contents Homebuilding Operations Data The following table summarizes net new orders and cancellation rates by reportable segment for the periods presented: Three Months Ended June 30, New Orders, net Cancellation Rates 2026 2025 26 vs 25 2026 2025 West 520 482 7.9 % 16.9 % 23.9 % East 220 224 (1.8) % 14.4 % 14.8 % Southeast 160 155 3.2 % 14.4 % 12.9 % Total 900 861 4.5 % 15.9 % 19.8 % Nine Months Ended June 30, New Orders, net Cancellation Rates 2026 2025 26 vs 25 2026 2025 West 1,577 1,736 (9.2) % 17.4 % 19.6 % East 645 708 (8.9) % 14.9 % 15.1 % Southeast 489 447 9.4 % 10.6 % 13.9 % Total 2,711 2,891 (6.2) % 15.7 % 17.7 % Net new orders for the quarter ended June 30, 2026 increased to 900, up 4.5% from the quarter ended June 30, 2025. The increase in net new orders compared to the prior year quarter was driven by a 3.7% increase in sales pace from 1.7 orders per community per month in the prior year quarter to 1.8 and a 0.8% increase in average active community count from 167 in the prior year quarter to 169. Net new orders for the nine months ended June 30, 2026 decreased to 2,711, down 6.2% from the nine months ended June 30, 2025. The decrease in net new orders compared to the prior year period was driven by an 8.5% decrease in sales pace from 2.0 orders per community per month in the prior year period to 1.8, partially offset by a 2.4% increase in average active community count from 164 in the prior year period to 168. Three Months Ended June 30, 2026 as compared to 2025 West Segment: Net new orders for the quarter ended June 30, 2026 increased to 520, up 7.9% from the quarter ended June 30, 2025. The increase in net new orders compared to the prior year quarter was driven by a 4.5% increase in average active community count from 103 in the prior year quarter to 107 and a 3.2% increase in sales pace from 1.57 orders per community per month in the prior year quarter to 1.62. East Segment: Net new orders for the quarter ended June 30, 2026 decreased to 220, down 1.8% from the quarter ended June 30, 2025. The decrease in net new orders compared to the prior year quarter was driven by a 24.3% decrease in average active community count from 38 in the prior year quarter to 29, partially offset by a 29.8% increase in sales pace from 1.9 orders per community per month in the prior year quarter to 2.5. Southeast Segment: Net new orders for the quarter ended June 30, 2026 increased to 160, up 3.2% from the quarter ended June 30, 2025. The increase in net new orders compared to the prior year quarter was driven by a 22.8% increase in average active community count from 26 in the prior year quarter to 32, partially offset by a 16.0% decrease in sales pace from 2.0 orders per community per month in the prior year quarter to 1.6. Nine Months Ended June 30, 2026 as compared to 2025 West Segment: Net new orders for the nine months ended June 30, 2026 decreased to 1,577, down 9.2% from the nine months ended June 30, 2025. The decrease in net new orders was driven by a 12.7% decrease in sales pace from 1.9 orders per community per month to 1.7, partially offset by a 4.0% increase in average active community count from 102 to 106. East Segment: Net new orders for the nine months ended June 30, 2026 decreased to 645, down 8.9% from the nine months ended June 30, 2025. The decrease in net new orders was driven by a 15.2% decrease in average active community count from 36 to 31, partially offset by a 7.5% increase in sales pace from 2.2 orders per community per month to 2.3. Southeast Segment: Net new orders for the nine months ended June 30, 2026 increased to 489, up 9.4% from the nine months ended June 30, 2025. The increase in net new orders was driven by a 21.5% increase in average active community count from 25 to 31, partially offset by a 10.0% decrease in sales pace from 2.0 orders per community per month to 1.8. 35 Table of Contents The table below summarizes backlog units by reportable segment as well as the aggregate dollar value and ASP of homes in backlog as of June 30, 2026 and 2025: As of June 30, 2026 2025 26 vs 25 Backlog Units: West 680 766 (11.2) % East 348 336 3.6 % Southeast 275 250 10.0 % Total 1,303 1,352 (3.6) % Aggregate dollar value of homes in backlog (in millions) $ 758.5 $ 742.5 2.2 % ASP in backlog (in thousands) $ 582.1 $ 549.2 6.0 % Backlog reflects the number of homes for which the Company has entered into a sales contract with a customer but has not yet delivered the home. The decrease in backlog units was primarily due to beginning the fiscal quarter with fewer backlog units for the quarter ended June 30, 2026. The aggregate dollar value of homes in backlog as of June 30, 2026 increased 2.2% compared to June 30, 2025 due to a 6.0% increase in the ASP of homes in backlog, partially offset by a 3.6% decrease in backlog units. The increase in backlog ASP compared to the prior year quarter was primarily due to changes in product and community mix. 36 Table of Contents Homebuilding Revenue, Average Selling Price, and Closings The table below summarizes homebuilding revenue, ASP of our homes closed, and closings by reportable segment for the periods presented: Three Months Ended June 30, Homebuilding Revenue Average Selling Price Closings $ in thousands 2026 2025 26 vs 25 2026 2025 26 vs 25 2026 2025 26 vs 25 West $ 277,527 $ 322,935 (14.1) % $ 526.6 $ 499.1 5.5 % 527 647 (18.5) % East 106,190 145,587 (27.1) % 567.9 568.7 (0.1) % 187 256 (27.0) % Southeast 107,153 66,868 60.2 % 588.8 506.6 16.2 % 182 132 37.9 % Total $ 490,870 $ 535,390 (8.3) % $ 547.8 $ 517.3 5.9 % 896 1,035 (13.4) % Nine Months Ended June 30, Homebuilding Revenue Average Selling Price Closings $ in thousands 2026 2025 26 vs 25 2026 2025 26 vs 25 2026 2025 26 vs 25 West $ 729,021 $ 979,939 (25.6) % $ 512.7 $ 506.4 1.2 % 1,422 1,935 (26.5) % East 290,097 374,571 (22.6) % 552.6 545.2 1.4 % 525 687 (23.6) % Southeast 229,242 197,334 16.2 % 564.6 494.6 14.2 % 406 399 1.8 % Total $ 1,248,360 $ 1,551,844 (19.6) % $ 530.5 $ 513.7 3.3 % 2,353 3,021 (22.1) % Three Months Ended June 30, 2026 as compared to 2025 West Segment: Homebuilding revenue decreased by 14.1% for the three months ended June 30, 2026 compared to the prior year quarter due to an 18.5% decrease in closings, partially offset by a 5.5% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year quarter. East Segment: Homebuilding revenue decreased by 27.1% for the three months ended June 30, 2026 compared to the prior year quarter due to a 27.0% decrease in closings and a 0.1% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year quarter. Southeast Segment: Homebuilding revenue increased by 60.2% for the three months ended June 30, 2026 compared to the prior year quarter due to a 37.9% increase in closings and a 16.2% increase in ASP. The increase in closings was primarily due to higher beginning backlog and improved construction cycle times compared to the prior year quarter. Nine Months Ended June 30, 2026 as compared to 2025 West Segment: Homebuilding revenue decreased by 25.6% for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025 due to a 26.5% decrease in closings, partially offset by a 1.2% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year period. East Segment: Homebuilding revenue decreased by 22.6% for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025 due to a 23.6% decrease in closings, partially offset by a 1.4% increase in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by improved construction cycle times compared to the prior year period. Southeast Segment: Homebuilding revenue increased by 16.2% for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025 due to a 14.2% increase in ASP and a 1.8% increase in closings. The increase in closings was primarily due to higher beginning backlog and improved construction cycle times compared to the prior year period. 37 Table of Contents Homebuilding Gross Profit and Gross Margin The following tables present our homebuilding (HB) gross profit and gross margin by reportable segment and Corporate and unallocated. In addition, such amounts are presented excluding inventory impairments and abandonments and interest amortized to cost of sales (COS). Homebuilding gross profit is defined as homebuilding revenue less home cost of sales (which includes land and land development costs, home construction costs, capitalized interest, indirect costs of construction, estimated warranty costs, closing costs, and inventory impairment and abandonment charges). Reconciliation of homebuilding gross profit and homebuilding gross margin (GAAP measures) to homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized to cost of sales (non-GAAP measures) is provided for each period discussed below. Management believes that this information assists investors in comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective level of impairments and level of debt. These non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP. Three Months Ended June 30, 2026 $ in thousands HB Gross Profit (GAAP) HB Gross Margin (GAAP) Impairments & Abandonments (I&A) HB Gross Profit excluding I&A (Non-GAAP) HB Gross Margin excluding I&A (Non-GAAP) Interest Amortized to COS (Interest) HB Gross Profit excluding I&A and Interest (Non-GAAP) HB Gross Margin excluding I&A and Interest (Non-GAAP) West $ 44,220 15.9 % $ — $ 44,220 15.9 % $ — $ 44,220 15.9 % East 16,283 15.3 % — 16,283 15.3 % — 16,283 15.3 % Southeast 20,970 19.6 % — 20,970 19.6 % — 20,970 19.6 % Corporate & unallocated(a) (14,850) — (14,850) 16,103 1,253 Total homebuilding $ 66,623 13.6 % $ — $ 66,623 13.6 % $ 16,103 $ 82,726 16.9 % Three Months Ended June 30, 2025 $ in thousands HB Gross Profit (GAAP) HB Gross Margin (GAAP) Impairments & Abandonments (I&A) HB Gross Profit excluding I&A (Non-GAAP) HB Gross Margin excluding I&A (Non-GAAP) Interest Amortized to COS (Interest) HB Gross Profit excluding I&A and Interest (Non-GAAP) HB Gross Margin excluding I&A and Interest (Non-GAAP) West $ 56,256 17.4 % $ 2,236 $ 58,492 18.1 % $ — $ 58,492 18.1 % East 25,975 17.8 % — 25,975 17.8 % — 25,975 17.8 % Southeast 6,180 9.2 % 5,635 11,815 17.7 % — 11,815 17.7 % Corporate & unallocated(a) (15,937) 1,002 (14,935) 17,383 2,448 Total homebuilding $ 72,474 13.5 % $ 8,873 $ 81,347 15.2 % $ 17,383 $ 98,730 18.4 % 38 Table of Contents Nine Months Ended June 30, 2026 $ in thousands HB Gross Profit (GAAP) HB Gross Margin (GAAP) Impairments & Abandonments (I&A) HB Gross Profit excluding I&A (Non-GAAP) HB Gross Margin excluding I&A (Non-GAAP) Interest Amortized to COS (Interest) HB Gross Profit excluding I&A and Interest (Non-GAAP) HB Gross Margin excluding I&A and Interest (Non-GAAP) West $ 106,096 14.6 % $ 2,478 $ 108,574 14.9 % $ — $ 108,574 14.9 % East 43,235 14.9 % 21 43,256 14.9 % — 43,256 14.9 % Southeast 40,629 17.7 % — 40,629 17.7 % — 40,629 17.7 % Corporate & unallocated (a) (38,282) 121 (38,161) 40,944 2,783 Total homebuilding $ 151,678 12.2 % $ 2,620 $ 154,298 12.4 % $ 40,944 $ 195,242 15.6 % Nine Months Ended June 30, 2025 $ in thousands HB Gross Profit (GAAP) HB Gross Margin (GAAP) Impairments & Abandonments (I&A) HB Gross Profit excluding I&A (Non-GAAP) HB Gross Margin excluding I&A (Non-GAAP) Interest Amortized to COS (Interest) HB Gross Profit excluding I&A and Interest (Non-GAAP) HB Gross Margin excluding I&A and Interest (Non-GAAP) West $ 178,769 18.2 % $ 2,764 $ 181,533 18.5 % $ — $ 181,533 18.5 % East 60,025 16.0 % — 60,025 16.0 % — 60,025 16.0 % Southeast 27,319 13.8 % 5,635 32,954 16.7 % — 32,954 16.7 % Corporate & unallocated (a) (39,532) 1,002 (38,530) 48,519 9,989 Total homebuilding $ 226,581 14.6 % $ 9,401 $ 235,982 15.2 % $ 48,519 $ 284,501 18.3 % (a) Corporate and unallocated includes amortization of capitalized interest, capitalization and amortization of indirect costs related to homebuilding activities, as well as capitalized interest and capitalized indirect costs impaired in order to reflect projects in progress assets at fair value, when applicable. For the nine months ended June 30, 2026, Corporate and unallocated also included a litigation-related charge that reduced total homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.5%. Three Months Ended June 30, 2026 as compared to 2025 Our homebuilding gross profit decreased by $5.9 million to $66.6 million for the three months ended June 30, 2026, compared to $72.5 million in the prior year quarter. The decrease in homebuilding gross profit compared to the prior year quarter was primarily due to a decrease in homebuilding revenue of $44.5 million, partially offset by an increase in gross margin of 10 basis points to 13.6%. As shown in the tables above, the comparability of our gross profit and gross margin was impacted by impairment and abandonment charges, which decreased by $8.9 million, and interest amortized to homebuilding cost of sales, which decreased by $1.3 million compared to the prior year quarter (refer to Note 4 and Note 5 to the condensed consolidated financial statements in this Form 10-Q for additional details). When excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $16.0 million compared to the prior year quarter, while homebuilding gross margin decreased by 150 basis points to 16.9%. The decrease in gross margin for the three months ended June 30, 2026 compared to the prior year quarter was primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin was up by 160 basis points sequentially from 12.0% in the prior fiscal quarter, and up 130 basis points from 15.6% sequentially when excluding impairments, abandonments, and interest amortization, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities. West Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $12.0 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 15.9%, down from 18.1% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales was up by 130 basis points sequentially from 14.6% in the prior fiscal quarter, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities. 39 Table of Contents East Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $9.7 million due to a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 15.3%, down from 17.8% in the prior year quarter, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Although down year-over-year, homebuilding gross margin excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales was up by 70 basis points sequentially from 14.6% in the prior fiscal quarter, primarily driven by a decrease in price concessions. Southeast Segment: Compared to the prior year quarter, homebuilding gross profit increased by $14.8 million due to an increase in homebuilding revenue and higher gross margin. Homebuilding gross margin, excluding impairments and abandonments, increased to 19.6%, up from 17.7% in the prior year quarter, primarily due to a reduction in direct construction costs, partially offset by an increase in land costs and price concessions. Although down year-over-year, homebuilding gross margin excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales was up by 250 basis points sequentially from 17.1% in the prior fiscal quarter, primarily driven by reductions in direct construction costs and a larger share of closings from newer, higher-margin communities. Nine Months Ended June 30, 2026 as compared to 2025 Our homebuilding gross profit decreased by $74.9 million to $151.7 million for the nine months ended June 30, 2026, from $226.6 million in the prior year period. The decrease in homebuilding gross profit was primarily due to a decrease in homebuilding revenue of $303.5 million and a decrease in gross margin of 240 basis points to 12.2%. Similar to the three-month period discussed above, the comparability of our gross profit and gross margin for the nine-month period was impacted by impairment and abandonment charges, which decreased by $6.8 million, and interest amortized to homebuilding cost of sales, which decreased by $7.6 million year-over-year (refer to Note 4 and Note 5 to the condensed consolidated financial statements in this Form 10-Q for additional details). When excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $89.3 million compared to the prior year period, while homebuilding gross margin decreased by 270 basis points to 15.6%. The decrease in gross margin for the nine months ended June 30, 2026 compared to the prior year period was primarily due to an increase in price concessions and closing cost incentives, changes in existing product and community mix, and a litigation-related charge recognized in Corporate and unallocated during the quarter ended December 31, 2025. The litigation-related charge reduced homebuilding gross margin, excluding impairments, abandonments, and interest, by 0.5%. West Segment: Compared to the prior year period, homebuilding gross profit decreased by $72.7 million due to a decrease in homebuilding revenue and lower gross margin. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.9%, down from 18.5% in the prior year period, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. East Segment: Compared to the prior year period, homebuilding gross profit decreased by $16.8 million due to a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 14.9%, down from 16.0% in the prior year period, primarily due to an increase in price concessions and closing cost incentives and changes in existing product and community mix. Southeast Segment: Compared to the prior year period, homebuilding gross profit increased by $13.3 million due to an increase in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, increased to 17.7%, up from 16.7% in the prior year period, primarily due to a reduction in direct construction costs, partially offset by an increase in land costs and price concessions. Measures of homebuilding gross profit and gross margin after excluding inventory impairments and abandonments, interest amortized to cost of sales, and other non-recurring items are non-GAAP financial measures. These measures should not be considered alternatives to homebuilding gross profit and gross margin determined in accordance with GAAP as an indicator of operating performance. 40 Table of Contents Land Sales and Other Revenue and Gross Profit Land sales relate to land and lots sold that do not fit within our homebuilding programs or strategic plans. We also have other revenue related to title examinations provided for our homebuyers in certain markets. The following tables summarize our land sales and other revenue and related gross profit by reportable segment and Corporate and unallocated for the periods presented: Land Sales and Other Revenue Land Sales and Other Gross Profit Three Months Ended June 30, Three Months Ended June 30, in thousands 2026 2025 26 vs 25 2026 2025 26 vs 25 West $ 9,797 $ 6,214 $ 3,583 $ (37) $ 614 $ (651) East 15,343 3,573 11,770 192 690 (498) Southeast 296 190 106 225 131 94 Corporate and unallocated(a) — — — (902) (1,329) 427 Total $ 25,436 $ 9,977 $ 15,459 $ (522) $ 106 $ (628) Land Sales and Other Revenues Land Sales and Other Gross Profit Nine Months Ended June 30, Nine Months Ended June 30, in thousands 2026 2025 26 vs 25 2026 2025 26 vs 25 West $ 18,663 $ 21,982 $ (3,319) $ 2,035 $ 4,547 $ (2,512) East 22,020 5,327 16,693 353 1,278 (925) Southeast 600 506 94 429 345 84 Corporate and unallocated(a) — — — (2,490) (2,095) (395) Total $ 41,283 $ 27,815 $ 13,468 $ 327 $ 4,075 $ (3,748) (a) Corporate and unallocated includes capitalized interest and capitalized indirect costs expensed to land cost of sales related to land and lots sold, as well as capitalized interest and capitalized indirect costs impaired in order to reflect land held for sale assets at fair value less cost to sell. For the three months ended June 30, 2026, land sales and other revenue increased by $15.5 million to $25.4 million, and land sales and other gross profit decreased by $0.6 million to a loss of $0.5 million compared to the prior year quarter. For the nine months ended June 30, 2026, land sales and other revenue increased by $13.5 million to $41.3 million, and land sales and other gross profit decreased by $3.7 million to $0.3 million compared to the prior year period. Also, during the nine months ended June 30, 2026, we recognized $3.4 million in land held for sale impairment charges related to six held for sale communities in our West and East segments. Period-over-period fluctuations on land sales and other revenue are primarily driven by the timing and volume of land and lot sales closings. As we continue to proactively manage our land position and divest land assets that no longer align with our strategic priorities, the dollar value of land sales and other revenue may grow. Land sales and other gross profit are primarily impacted by the profitability of individual land and lot sale transactions as well as the volume of our title examinations operations. Future land and lot sales will depend on a variety of factors, including local market conditions, individual community performance, and changing strategic plans. 41 Table of Contents Operating Income The table below summarizes operating income by reportable segment and Corporate and unallocated for the periods presented: Three Months Ended June 30, Nine Months Ended June 30, in thousands 2026 2025 26 vs 25 2026 2025 26 vs 25 West $ 14,864 $ 27,402 $ (12,538) $ 25,120 $ 94,291 (69,171) East 5,518 14,473 (8,955) 13,378 28,702 (15,324) Southeast 9,953 (2,561) 12,514 14,504 3,797 10,707 Corporate and unallocated(a) (41,700) (43,024) 1,324 (115,178) (114,993) (185) Operating (loss) income $ (11,365) $ (3,710) $ (7,655) $ (62,176) $ 11,797 $ (73,973) (a) Includes amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, when applicable, expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments. Our operating income decreased by $7.7 million to a loss of $11.4 million for the three months ended June 30, 2026, compared to operating loss of $3.7 million for the three months ended June 30, 2025. This decrease compared to the prior year quarter was primarily due to the previously discussed decrease in gross profit and gross margin. SG&A as a percentage of total revenue increased by 90 basis points compared to the prior year quarter, from 13.2% to 14.1%, primarily due to lower homebuilding revenue. Our operating income decreased by $74.0 million to a loss of $62.2 million for the nine months ended June 30, 2026, compared to operating income of $11.8 million for the nine months ended June 30, 2025. This decrease compared to the prior year period was primarily due to the previously discussed decrease in gross profit and gross margin. SG&A as a percentage of total revenue increased by 260 basis points compared to the prior year period, from 13.0% to 15.6%, primarily due to lower homebuilding revenue. Three Months Ended June 30, 2026 as compared to 2025 West Segment: The $12.5 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed and higher sales and marketing costs, partially offset by lower commissions expense on lower homebuilding revenue. East Segment: The $9.0 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed and higher sales and marketing costs, partially offset by lower commissions expense on lower homebuilding revenue. Southeast Segment: The $12.5 million increase in operating income compared to the prior year quarter was primarily due to the higher gross profit previously discussed, partially offset by higher commissions expense on higher homebuilding revenue and higher sales and marketing costs. Corporate and Unallocated: Our corporate and unallocated results include amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, expenses for various shared services functions that benefit all segments but are not allocated, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments. For the three months ended June 30, 2026, corporate and unallocated net expenses decreased by $1.3 million from the prior year quarter primarily due to lower impairment of capitalized interest and capitalized indirect costs recognized in the current quarter compared to the prior year quarter. Nine Months Ended June 30, 2026 as compared to 2025 West Segment: The $69.2 million decrease in operating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed and higher sales and marketing costs, partially offset by lower commissions expense on lower homebuilding revenue. East Segment: The $15.3 million decrease in operating income compared to the prior year period was primarily due to the decrease in gross profit previously discussed and higher sales and marketing costs, partially offset by lower commissions expense on lower homebuilding revenue. 42 Table of Contents Southeast Segment: The $10.7 million increase in operating income compared to the prior year period was primarily due to the increase in gross profit previously discussed and a decrease in other G&A costs, partially offset by higher sales and marketing costs and higher commissions expense on higher homebuilding revenue. Corporate and Unallocated: For the nine months ended June 30, 2026, corporate and unallocated net expenses increased by $0.2 million from the prior year period primarily due to a litigation-related charge, partially offset by lower amortization of capitalized interest costs expensed to homebuilding cost of sales on lower closings and homebuilding revenue. Below operating income, for the three and nine months ended June 30, 2026 compared to the prior period, we experienced a year-over-year decrease within other income, net primarily due to a loss on extinguishment of debt of $0.7 million during the current year as compared to no such loss in the prior year period. Income Taxes Our income tax expense or benefit and related effective tax rate are affected by a variety of factors, including, but not limited to, tax credits, permanent differences and other discrete items. A comparison of our effective tax rates should also consider the changes in valuation allowance in periods when a change occurs. As such, our income tax expense or benefit is not always directly correlated to the amount of pre-tax income or loss for the associated periods. For the three and nine months ended June 30, 2026, the Company's effective tax rates were also affected by a change in the approach used to calculate the interim income tax provision, reducing comparability with the prior year periods. Refer to Note 10 to the condensed consolidated financial statements included in this Form 10-Q for additional details. We recognized income tax benefit of $6.3 million and $22.4 million for the three and nine months ended June 30, 2026, compared to income tax benefit of $2.2 million and $0.8 million for the three and nine months ended June 30, 2025. Income tax benefit for the nine months ended June 30, 2026 was primarily driven by income tax benefit on loss from operations and energy efficiency tax credits generated from closings during the current fiscal year, partially offset by permanent differences and stock-based compensation activity in the period. Income tax benefit for the nine months ended June 30, 2025 was primarily driven by energy efficiency tax credits generated from expected closings during the current fiscal year and stock-based compensation activity in the period, partially offset by income tax expense on earnings from continuing operations and permanent differences. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA repeals many of the energy efficiency credits enacted under the Inflation Reduction Act, including our ability to claim energy efficient new home tax credits for homes that close after June 30, 2026. Liquidity and Capital Resources Our sources of liquidity include, but are not limited to, cash from operations, proceeds from Senior Notes, our Senior Unsecured Revolving Credit Facility and other bank borrowings, the issuance of equity and equity-linked securities, and other external sources of funds. Our short-term and long-term liquidity depends primarily upon our level of net income, working capital management (cash, accounts receivable, accounts payable and other liabilities), and available credit facilities. Net changes in cash, cash equivalents, and restricted cash are as follows for the periods presented: Nine Months Ended June 30, in thousands 2026 2025 Net cash used in operating activities $ (375,674) $ (218,196) Net cash used in investing activities (21,619) (12,656) Net cash provided by financing activities 306,781 78,664 Net decrease in cash, cash equivalents, and restricted cash $ (90,512) $ (152,188) Operating Activities Net cash used in operating activities was $375.7 million for the nine months ended June 30, 2026. The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development spending. Net cash used in operating activities during the period was primarily driven by an increase in inventory of $342.6 million resulting from land acquisition, land development and house construction spending and loss before income taxes of $60.1 million, which included $24.7 million of non-cash charges. This was partially offset by cash inflows from a net decrease in non-inventory working capital balances of $2.3 million. 43 Table of Contents Net cash used in operating activities was $218.2 million for the nine months ended June 30, 2025. Net cash used in operating activities during the period was primarily driven by an increase in inventory of $258.9 million resulting from land acquisition, land development and house construction spending and a net increase in non-inventory working capital balances of $3.5 million. This was partially offset by cash inflows from income before income taxes of $14.8 million, which included $29.4 million of non-cash charges. Investing Activities Net cash used in investing activities was $21.6 million for the nine months ended June 30, 2026, primarily driven by capital expenditures for model homes and information systems infrastructure and purchases of investment securities. Net cash used in investing activities was $12.7 million for the nine months ended June 30, 2025, primarily driven by capital expenditures for model homes and information systems infrastructure and purchase of investment securities, partially offset by proceeds from maturities in investment securities. Financing Activities Net cash provided by financing activities was $306.8 million for the nine months ended June 30, 2026, primarily driven by inflows from the issuance of the 2032 Notes and net borrowings from our Unsecured Facility, partially offset by redemption of our 2027 Notes, common stock repurchases under our share repurchase program, debt issuance costs incurred in connection with the 2032 Notes and the amendment of our Unsecured Facility to increase borrowing capacity and extend its maturity (refer to Note 6 to the condensed consolidated financial statements included in this Form 10-Q for further discussion), and tax payments for stock-based compensation awards vesting. Net cash provided by financing activities was $78.7 million for the nine months ended June 30, 2025, primarily driven by net borrowings from our Unsecured Facility, partially offset by common stock repurchases under our share repurchase program and tax payments for stock-based compensation awards vesting. Financial Position As of June 30, 2026, our liquidity position consisted of $124.6 million in cash and cash equivalents and $139.2 million of remaining capacity under the Unsecured Facility, compared to $82.9 million in cash and cash equivalents and $209.4 million of remaining capacity under the Unsecured Facility as of June 30, 2025. While we believe we possess sufficient liquidity, we are mindful of potential short-term or seasonal requirements for enhanced liquidity that may arise to operate and grow our business. As of the date of this report, we believe we have adequate capital resources and sufficient access to external financing sources to satisfy our current and long-term liquidity needs for funds to conduct our operations and meet other needs in the ordinary course of our business, however, we are continually reviewing our capital resources to determine whether we can meet our short- and long-term goals, and we may require additional capital to do so. At times, we may also engage in capital markets, bank loans, project debt or other financial transactions, including the repurchase of debt or potential new issuances of debt or equity securities to support our business needs. The amounts involved in these transactions, if any, may be material. In addition, as necessary or desirable, we may adjust or amend the terms of and/or expand the capacity of the Unsecured Facility, or enter into additional letter of credit facilities, or other similar facility arrangements, in each case with the same or other financial institutions, or allow any such facilities to mature or expire. Debt We generally fulfill our short-term cash requirements with cash generated from our operations and available borrowings. Additionally, our Unsecured Facility provides working capital and letter of credit capacity of $525.0 million, which includes a letter of credit facility of up to $100.0 million. As of June 30, 2026, we had $340.0 million in borrowings and $45.8 million in letters of credit outstanding under the Unsecured Facility, resulting in a remaining borrowing capacity of $139.2 million. In the future, we may from time to time seek to continue to retire or purchase our outstanding debt through cash repurchases or in exchange for other debt securities, in open market purchases, privately negotiated transactions, or otherwise. In addition, any material variance from our projected operating results could require us to obtain additional equity or debt financing. There can be no assurance that we will be able to complete any of these transactions in the future on favorable terms or at all. See Note 6 of the notes to the condensed consolidated financial statements in this Form 10-Q for additional details related to our borrowings. 44 Table of Contents Supplemental Guarantor Information As discussed in Note 6 of the notes to the condensed consolidated financial statements in this Form 10-Q, the Company's obligations to pay principal and interest under certain debt agreements are guaranteed on a joint and several basis by substantially all of the Company's subsidiaries. Some of the immaterial subsidiaries do not guarantee the Senior Notes. The guarantees are full and unconditional. Summarized financial information is not presented for Beazer Homes USA, Inc. and the guarantor subsidiaries on a combined basis as the assets, liabilities and results of operations of the combined issuer and guarantors of the guaranteed security are not materially different than corresponding amounts presented in the condensed consolidated financial statements of the parent company. Credit Ratings Our credit ratings are periodically reviewed by rating agencies. In June 2026, upon the issuance of our 2032 Notes, S&P revised the Company's Senior Notes' rating from B to B-, revised the Company’s corporate credit rating from B to B-, and reaffirmed the Company's outlook of negative. Also in June 2026, Moody's reaffirmed the Company's Senior Notes rating of B2, reaffirmed the issuer corporate family rating of B2, and reaffirmed the Company's outlook of stable. These ratings and our current credit condition affect, among other things, our ability to access new capital. These ratings are not recommendations to buy, sell or hold debt securities. Negative changes to these ratings may result in more stringent covenants and higher interest rates under the terms of any new debt. Our credit ratings could be lowered, or rating agencies could issue adverse commentaries in the future, which could have a material adverse effect on our business, financial condition, results of operations, and liquidity. In particular, a weakening of our financial condition, including any further increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, could result in a credit rating downgrade or change in outlook, or could otherwise increase our cost of borrowing. Share Repurchases and Dividends Paid In April 2025, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $100.0 million of its outstanding common stock. The repurchase program has no expiration date and repurchases may be conducted through open market purchases, 10b5-1 plans, accelerated share repurchases, or private transactions. The Company repurchased 1.0 million shares of its common stock for an aggregate $21.0 million (inclusive of commissions and exclusive of accrued excise tax) at an average price per share of $21.01 during the three months ended June 30, 2026. This brings the total repurchases for the nine months ended June 30, 2026 to 2.9 million shares of common stock for $66.2 million (inclusive of commissions and exclusive of accrued excise tax) at an average price per share of $23.04. During the three months ended June 30, 2025, 586 thousand shares were repurchased for $12.5 million at an average price per share of $21.38. During the nine months ended June 30, 2025, 1.5 million shares were repurchased for $33.1 million at an average price per share of $22.20. Since the authorization of the share repurchase program in April 2025, we have repurchase an aggregated 3.5 million shares of common stock for $78.7 million at an average price per share of $22.75. All shares have been retired upon repurchase. As of June 30, 2026, the remaining availability of the share repurchase program was $21.3 million. The indentures under which our Senior Notes were issued contain certain restrictive covenants, including limitations on the payment of dividends. There were no dividends paid during the three and nine months ended June 30, 2026 or 2025. Off-Balance Sheet Arrangements and Aggregate Contractual Commitments Lot Option Agreements In addition to purchasing land directly, we control a portion of our land supply through lot option agreements with land developers and land bankers, which generally require the payment of cash or issuance of an irrevocable letter of credit or surety bond for the right to acquire lots during a specified period of time at a specified price. In recent years, we have focused on increasing our lot option agreement usage to minimize risk as we grow our land position. As of June 30, 2026, we controlled 24,489 lots, which includes 251 lots of land held for future development and 1,155 lots of land held for sale. Of the 23,083 active lots, we controlled 13,841 of these lots, or 60.0%, through option agreements, as compared to 16,195 active lots controlled, or 60.1% of our total active lots, through option agreements as of June 30, 2025. Lot option agreements allow us to position for future growth while providing the flexibility to respond to market conditions by renegotiating the terms of the options prior to exercise or terminating the agreement. 45 Table of Contents Under option agreements, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers, and our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred, which totaled $387.4 million as of June 30, 2026. The total remaining purchase price, net of cash deposits, committed under all options was $1.63 billion as of June 30, 2026. Subject to market conditions and our liquidity, we may further expand our use of option agreements to supplement our inventory supply. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our option agreements. Various factors, some of which are beyond our control, such as market conditions, weather conditions, and the timing of the completion of development activities, will have a significant impact on the timing of option exercises or whether lot options will be exercised at all. We have historically funded the exercise of lot options with operating cash flows. We expect these sources to continue to be adequate to fund anticipated future option exercises. Therefore, we do not anticipate that the exercise of our lot options will have a material adverse effect on our liquidity. Letters of Credit and Surety Bonds In connection with the development of our communities, we are frequently required to provide performance, maintenance, and other bonds and letters of credit in support of our related obligations with respect to such developments. The amount of such obligations outstanding at any time varies in accordance with our pending development activities. In the event any such bonds or letters of credit are drawn upon, we would be obligated to reimburse the issuer of such bonds or letters of credit. We had outstanding letters of credit, surety bonds, and surety-backed letters of credit of $45.8 million, $361.3 million, and $4.6 million respectively, as of June 30, 2026, primarily related to our obligations to local governments to construct roads and other improvements in various developments. Critical Accounting Estimates Our critical accounting policies require the use of judgment in their application and in certain cases require estimates of inherently uncertain matters. Although our accounting policies are in compliance with accounting principles generally accepted in the United States of America (GAAP), a change in the facts and circumstances of the underlying transactions could significantly change the application of the accounting policies and the resulting financial statement impact. It is also possible that other professionals applying reasonable judgment to the same set of facts and circumstances could reach a different conclusion. As disclosed in our 2025 Annual Report, our most critical accounting policies relate to inventory valuation of projects in progress, warranty reserves, and income tax valuation allowances. There have been no significant changes to our critical accounting policies and estimates during the nine months ended June 30, 2026 as compared to those described in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Annual Report on Form 10-K.