Financial Analysis

COMMITMENTS AND CONTINGENCIES Contingencies In the ordinary course of doing business, we are subject to claims or proceedings from time to time relating to the purchase, development and sale of real estate and homes and other aspects of our homebuilding operations. Management believes that these claims include usual obligations incurred by real estate developers and residential home builders in the normal course of business. In the opinion of management, these matters will not have a material effect on our consolidated financial position, results of operations or cash flows. We have provided unsecured environmental indemnities to certain lenders and other counterparties. In each case, we have performed due diligence on the potential environmental risks including obtaining an independent environmental review from outside environmental consultants. These indemnities obligate us to reimburse the guaranteed parties for damages related to environmental matters. There is no term or damage limitation on these indemnities; however, if an environmental matter arises, we may have recourse against other previous owners. In the ordinary course of doing business, we are subject to regulatory proceedings from time to time related to environmental and other matters. In the opinion of management, these matters will not have a material effect on our consolidated financial position, results of operations or cash flows. LGI Living Loan Agreement On July 23, 2025, the Companys indirect, wholly o …

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NOTES PAYABLE Revolving Credit Agreement We are a party to the Fifth Amended and Restated Credit Agreement, dated as of April 28, 2021, with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent (as amended to date, the Credit Agreement). The Credit Agreement provides for a $1.1825 billion revolving credit facility, which can be increased at the request of the Company by up to $95.0 million, subject to the terms and conditions of the Credit Agreement. The Credit Agreement matures on April 28, 2029 with respect to $972.5 million, or 82.2%, of the $1.1825 billion of commitments thereunder and on April 28, 2028 with respect to 17.8% of the commitments thereunder. Before each anniversary of the Credit Agreement, we may request a one-year extension of its maturity date. The Credit Agreement is guaranteed by, among others, each of our subsidiaries that have gross assets of at least $0.5 million, other than subsidiaries whose sole purpose is to own and operate single-family rental homes. The borrowings and letters of credit outstanding under the Credit Agreement, together with the outstanding principal balance of our 8.750% Senior Notes due 2028 (the 2028 Senior Notes), our 4.000% Senior Notes due 2029 (the 2029 Senior Notes) and our 7.000% Senior Notes due 2032 (the 2032 Senior Notes), may not exceed the borrowing base under the Credit Agreement. The borrowing base primarily consists of a percentage of commercial land, land held for dev …

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STOCK-BASED COMPENSATION Non-performance Based Restricted Stock Units The following table summarizes the activity of our time-vested restricted stock units (RSUs) for the three months ended March 31, 2026: Three Months Ended March 31, 2026 Shares Weighted Average Grant Date Fair Value Beginning balance 222,828 $ 86.51 Granted 110,997 $ 42.61 Vested (2,995) $ 71.97 Forfeited (30,882) $ 104.36 Ending balance 299,948 $ 68.63 We recognized $1.5 million and $1.7 million of stock-based compensation expense related to outstanding RSUs for the three months ended March 31, 2026 and 2025, respectively. Generally, the RSUs cliff vest on the third anniversary of the grant date and can only be settled in shares of our common stock. At March 31, 2026, we had unrecognized compensation cost of $11.6 million related to unvested RSUs, which is expected to be recognized over a weighted average period of 2.1 years. Performance-Based Restricted Stock Units The Compensation Committee of the Board has granted awards of performance-based RSUs (PSUs) under the Amended and Restated LGI Homes, Inc. 2013 Equity Incentive Plan to certain members of senior management based on three-year performance cycles. The PSUs provide for shares of our common stock to be issued based on the attainment of certain performance metrics over the applicable three-year periods. The number of shares of our common stock that may be issued to the recipients for the PSUs range from 0% to 200% of the target amount depending on a …

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FAIR VALUE DISCLOSURES Accounting Standards Codification (ASC) 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is determined based on the principal market for the asset or liability, or, in the absence of a principal market, the most advantageous market. The principal market is the market with the greatest volume and level of activity for the assets or liability, regardless of whether the Company ultimately transacts in that market. As a result, a fair value determined under this exit price concept may differ from the transaction price or quoted market price for the asset or liability. ASC 820 establishes a framework for measuring fair value under GAAP, expands disclosure requirements for fair value measurements, and establishes a three-level fair value hierarchy that prioritizes the inputs used in valuation techniques. The hierarchy requires the use of observable inputs when available and the minimization of unobservable inputs. The three levels of the fair value hierarchy are as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 - Significant unobservable inputs that reflec …

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INCOME TAXES We file U.S. and state income tax returns in jurisdictions with varying statutes of limitations. The statute of limitations with regards to our federal income tax filings is three years. The statute of limitations for our state tax jurisdictions is three to four years depending on the jurisdiction. In the normal course of business, we are subject to tax audits in various jurisdictions, and such jurisdictions may assess additional income taxes. We do not expect the outcome of any audit to have a material effect on our consolidated financial statements; however, audit outcomes and the timing of audit adjustments are subject to significant uncertainty. For the three months ended March 31, 2026, our effective tax rate of 50.0% is higher than the Federal statutory rate primarily as a result of a 23.84% increase for a discrete item related to the compensation cost in excess of deductions for share-based payments, the compensation limitation under Section 162(m) of the Internal Revenue Code, as amended, and state income taxes, net of the federal benefit. Income taxes paid were $0.2 million and $38.6 million for the three months ended March 31, 2026 and 2025, respectively.

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Recently Issued Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. The amendments in this update are to be applied on a prospective basis, with the option for retrospective application. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that this standard will have on our disclosures. …

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REVENUES Home Sales Revenues We generate revenues primarily by delivering move-in ready entry-level and move-up spec homes sold under our LGI Homes brand and our move-up and luxury series spec homes sold under our Terrata Homes brand. The following table presents our home sales revenues disaggregated by revenue stream (in thousands): Three Months Ended March 31, 2026 2025 Retail home sales revenues $ 289,975 $ 296,939 Wholesale home sales revenues 29,761 54,481 Total home sales revenues $ 319,736 $ 351,420 Our home sales revenues are disaggregated by geography, based on our determined reportable segments.

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SEGMENT INFORMATION We operate one principal homebuilding business that is organized and reports by division. We have seven operating segments (our Central, Midwest, Southeast, Mid-Atlantic, Northwest, West and Florida divisions) that we aggregate into five qualifying reportable segments at March 31, 2026: our Central, Southeast, Northwest, West, and Florida divisions. These segments reflect the way we evaluate our business performance and manage our operations. For reporting purposes, our homebuilding operations are aggregated into five reportable segments as follows: Central: Texas, Oklahoma, Minnesota Southeast: Georgia, Alabama, Tennessee, North Carolina, South Carolina, West Virginia, Maryland, Pennsylvania, Virginia Northwest: Colorado, Washington, Oregon West: Arizona, New Mexico, Nevada, California, Utah Florida: Florida In determining the most appropriate reportable segments, we consider operating segments economic and other characteristics, including home floor plans, average selling prices, gross margin percentage, geographical proximity, production construction processes, suppliers, subcontractors, regulatory environments, customer type and underlying demand and supply. Each operating segment follows the same accounting policies and is managed by our management team. We have no inter-segment sales, as all sales are to external customers. Operating results for each segment may not be indicative of the results for such segment had it been an independent, stand-alone …

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EQUITY Stock Repurchase Program In February 2022, our Board of Directors (the Board) approved a $200.0 million increase to our previously authorized stock repurchase program, pursuant to which we may purchase up to $550.0 million of shares of our common stock through open market transactions, privately negotiated transactions or otherwise in accordance with applicable laws. During the three months ended March 31, 2026, we did not repurchase any shares of our common stock. During the three months ended March 31, 2025, we repurchased 41,685 shares of our common stock at a total cost, including commissions and excise taxes, of $3.1 million, to be held as treasury stock. A total of 3,656,592 shares of our common stock has been repurchased since our stock repurchase program commenced in 2018. As of March 31, 2026, we may purchase up to $157.3 million of shares of our common stock under our stock repurchase program. Three Months Ended March 31, 2026 2025 Numerator (in thousands): Net income (Numerator for basic and diluted earnings per share) $ 2,160 $ 3,994 Denominator: Basic weighted average shares outstanding 23,149,912 23,396,470 Effect of dilutive securities: Stock-based compensation units 69,312 70,276 Diluted weighted average shares outstanding 23,219,224 23,466,746 Basic earnings per share $ 0.09 $ 0.17 Diluted earnings per share $ 0.09 $ 0.17 Antidilutive non-vested restricted stock units excluded from calculations of diluted earnings per share 76,194 50,771 …

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