Dream Finders Homes, Inc 8-K, filed Oct 20, 2026
Dream Finders Homes, Inc. (DFH)
8-K
2026-10-20
For: 2026-10-20
View Original
Added on
October 20, 2026
About this 8-K
Dream Finders Homes, Inc filed this 8-K on October 20, 2026.
Dream Finders Homes completed its acquisition of Beazer Homes USA on October 20, 2026 for aggregate consideration of approximately $878.4 million. Beazer shareholders received $33.50 cash per share, and Beazer became a wholly owned subsidiary. AI summary
Items reported
- Item 2.01: Completed an acquisition or sale of assets
- Item 3.02: Unregistered sale of equity
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): October 20, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code: (904 ) 644-7670
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.01 Completion of Acquisition or Disposition of Assets.
Merger
On October 20, 2026 (the “Effective Time”), Dream Finders Homes, Inc., a Texas corporation (the “Company”), completed its previously announced acquisition of Beazer Homes USA, Inc., a Delaware corporation (“Beazer”), pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of August 6, 2026, by and among the Company, Bulldogs Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), and Beazer. Pursuant to the Merger Agreement, at the Effective Time, Merger Sub was merged with and into Beazer (the “Merger”), with Beazer surviving the Merger as a wholly owned subsidiary of the Company.
At the Effective Time:
•each issued and outstanding share of Beazer’s common stock, par value $0.001 per share (other than shares cancelled or converted pursuant to Section 2.1(b) of the Merger Agreement, immediately prior to the Effective Time), was converted into the right to receive $33.50 in cash, without interest (the “Merger Consideration”) and subject to any required withholding taxes;
•each option to purchase shares granted under Beazer’s equity plans (each, a “Beazer Option”) that was outstanding and unexercised, whether vested or unvested, as of immediately prior to the Effective Time was fully vested, cancelled and converted into the right to receive an amount in cash (without interest), if any, equal to the product of (A) the total number of shares subject to such Beazer Option, multiplied by (B) the excess, if any, of the Merger Consideration over the exercise price per share under such Beazer Option, less applicable taxes required to be withheld with respect to such payment; provided, however, that any Beazer Option which had a per share exercise price that was greater than or equal to the Merger Consideration was cancelled at the Effective Time for no consideration or payment;
•each restricted stock award granted under Beazer’s equity plans (each, a “Beazer RSA”), whether vested or unvested, that was outstanding as of immediately prior to the Effective Time was cancelled and converted into the right to receive an amount in cash (without interest) equal to the product of (A) the aggregate number of shares subject to such Beazer RSA, multiplied by (B) the Merger Consideration, less applicable taxes required to be withheld with respect to such payment;
•each performance-based restricted stock award granted under Beazer’s equity plans (each, a “Beazer Performance-Based RSA”), whether vested or unvested, that was outstanding as of immediately prior to the Effective Time was cancelled and converted into the right to receive an amount in cash (without interest) equal to the product of (A) the total number of shares subject to such Beazer Performance-Based RSA (with the performance conditions for any uncompleted periods deemed achieved at target level), multiplied by (B) the Merger Consideration, less applicable taxes required to be withheld with respect to such payment;
•each performance-based cash award granted under Beazer’s equity plans (each, a “Beazer Performance-Based Cash Award”) that was outstanding as of immediately prior to the Effective Time was cancelled and converted into the right to receive (without interest) an amount in cash (less applicable taxes required to be withheld) equal to the value of such Beazer Performance-Based Cash Award (with the performance conditions for any uncompleted periods deemed achieved at target level); and
•each share held by Beazer as treasury stock or held directly by the Company or Merger Sub immediately prior to the Effective Time was automatically cancelled and ceased to exist, and no consideration or payment was delivered in exchange therefor or in respect thereof.
The aggregate consideration paid in connection with the Merger was approximately $878.4 million.
The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (“SEC”) on August 7, 2026, and is incorporated by reference into this Item 2.01.
Financing
The Company obtained financing from the sources described below, the aggregate proceeds of which, together with the Company’s available cash and other sources of funds, were used to consummate the Merger.
Preferred Equity Investment
As previously disclosed, the Company entered into Subscription Agreements (the “Subscription Agreements”) with certain institutional investors (collectively, the “Purchasers”), pursuant to which the Company sold an aggregate of 225,000 shares of newly-created Series B Convertible Preferred Stock at a first closing on September 14, 2026, for an aggregate purchase price of $225.0 million and filed a Certificate of Designations with respect to the Series B Convertible Preferred Stock.
In connection with the closing of the Merger, the Company sold an additional 450,000 shares of Series B Convertible Preferred Stock (the “Additional Shares”) at a second closing for an aggregate purchase price of $450.0 million (the “Second Closing”). The Company used the proceeds from the sale of the Additional Shares to fund a portion of the Merger Consideration paid to equity holders of Beazer in connection with the closing of the Merger.
The Subscription Agreements and Certificate of Designations were previously described in the Company’s Current Report on Form 8-K filed with the SEC on September 15, 2026 and such description is incorporated herein by reference; the summary of the Subscription Agreements and Certificate of Designations does not purport to be complete and is subject to, and qualified in its entirety by, the full text of such agreements or forms of such agreements, as applicable, which are included as Exhibits 10.1 and 3.1, respectively, to the Company’s Current Report on Form 8-K filed with the SEC on September 15, 2026 and are incorporated by reference into this Item 2.01.
Land Bank Facility
In connection with the closing of the Merger and as previously announced, on October 20, 2026, the Company received aggregate proceeds of $572.1 million from the funding of the previously announced land bank facility (the “Land Bank Facility”) committed by Millrose Properties and/or its affiliates (which includes Kennedy Lewis Investment Management, LLC and its affiliates) (“Millrose”). The Company used the proceeds from the Land Bank Facility to redeem in full Beazer’s $350 million aggregate principal amount of 7.250% Senior Notes due 2029 (the “Beazer 2029 Notes”) issued pursuant to that certain Indenture, dated as of September 24, 2019, and to repay Beazer’s unsecured credit facility and certain non-Merger Consideration related fees and expenses incurred in connection with the Merger and the related financing transactions.
Item 3.02 Unregistered Sales of Equity Securities.
As described in Item 2.01 above, pursuant to the Subscription Agreements, on October 20, 2026, the Company sold the Additional Shares to the Purchasers at the Second Closing for an aggregate purchase price of $450.0 million. The offer and sale of the shares of Series B Convertible Preferred Stock through the Subscription Agreements were made in reliance on an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 4(a)(2) thereof. The information in Item 2.01 of this Current Report on Form 8-K under the heading “Preferred Equity Investment” is incorporated by reference into this Item 3.02.
Item 7.01 Regulation FD Disclosure.
On October 20, 2026, the Company issued a press release announcing the successful completion of the Merger. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated by reference into this Item 7.01.
The information contained in this Item 7.01 and Exhibit 99.1 hereto shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor will such information be deemed to be incorporated by reference in any filing under the Securities Act, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
On September 22, 2026, the Company entered into the Ninth Amendment (the “Amendment”) to its Amended and Restated Credit Agreement, dated as of June 2, 2022, among the Company, Bank of America, N.A., as administrative agent and the lenders party thereto. The Amendment, among other things, set the letter of credit sublimit at $100,000,000 and modified the covenants governing asset dispositions and burdensome agreements.
The foregoing description of the Amendment is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 8.01.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The audited consolidated financial statements and accompanying notes of Beazer as of September 30, 2025 and 2024 and for the fiscal years ended September 30, 2025, 2024 and 2023 are filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference. The consent of Beazer’s independent registered public accounting firm is filed as Exhibit 23.1 hereto.
The unaudited financial statements and accompanying notes of Beazer as of June 30, 2026 and September 30, 2025 and for the three and nine months ended June 30, 2026 and 2025 are filed as Exhibit 99.3 to this Current Report on Form 8-K and incorporated herein by reference.
(b)Pro Forma Financial Information.
The unaudited pro forma condensed consolidated financial information of the Company after giving effect to the Merger is filed as Exhibit 99.4 to this Current Report on Form 8-K and incorporated herein by reference.
(d) Exhibits.
| Number | Description | |||||||
| Agreement and Plan of Merger, dated as of August 6, 2026, among Dream Finders Homes, Inc., Bulldogs Merger Sub, Inc. and Beazer Homes USA, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed August 7, 2026). | ||||||||
| Certificate of Designations of Series B Convertible Preferred Stock of Dream Finders Homes, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed September 15, 2026). | ||||||||
| Ninth Amendment to Amended and Restated Credit Agreement, dated as of September 22, 2026, among Dream Finders Homes, Inc., Bank of America, N.A., as administrative agent and the lenders named therein as parties thereto. | ||||||||
| Form of Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed September 15, 2026). | ||||||||
| Consent of Deloitte & Touche LLP, independent registered public accounting firm of Beazer Homes USA, Inc. | ||||||||
| Press Release of Dream Finders Homes, Inc., dated as of October 20, 2026. | ||||||||
| Audited Financial Statements of Beazer Homes USA, Inc. as of September 30, 2025 and 2024 and for the years ended September 30, 2025, 2024 and 2023. | ||||||||
| Unaudited Financial Statements of Beazer Homes USA, Inc. as of June 30, 2026 and September 30, 2025 and for the three and nine months then ended June 30, 2026 and 2025. | ||||||||
| Unaudited Pro Forma Condensed Consolidated Financial Information of Dream Finders Homes, Inc. | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) | |||||||
Cautionary Statement Regarding Forward-Looking Information
The information presented herein may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could” or “may,” or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. Forward-looking statements speak only as of the date they are made. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements. These risks, uncertainties and assumptions are discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and other filings with the SEC. In addition to factors previously disclosed in the Company’s reports filed with the SEC, the following factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the outcome of any legal proceedings relating to the acquisition that may be instituted against the Company or Beazer; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the acquisition; the Company’s ability to complete the integration of Beazer successfully or fully realize cost savings and other benefits and other consequences associated with mergers, acquisitions and divestitures; and the potential impact of the acquisition on relationships, including with employees, customers and competitors. The Company undertakes no obligation to update or revise any forward-looking statement except as may be required by applicable law.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DREAM FINDERS HOMES, INC. | ||||||||
| Date: October 20, 2026 | By: | /s/ Robert E. Riva | ||||||
| Robert E. Riva | ||||||||
| Vice President, General Counsel and Corporate Secretary | ||||||||
| Exhibit 10.1 | ||
NINTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 22, 2026
among
DREAM FINDERS HOMES, INC.,
as Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent
and
an L/C Issuer,
The Other L/C Issuers Party Hereto,
and
The Other Lenders Party Hereto
WESTERN ALLIANCE BANK,
and
CITIZENS BANK, N.A.,
as
Co-Syndication Agents
AMERIS BANK,
BMO BANK N.A.,
U.S. BANK NATIONAL ASSOCIATION,
and
GOLDMAN SACHS LENDING PARTNERS LLC,
as
Co-Documentation Agents
BOFA SECURITIES, INC.,
as
Sole Bookrunner
BOFA SECURITIES, INC.,
WESTERN ALLIANCE BANK,
and
CITIZENS BANK, N.A.,
as
Joint Lead Arrangers
NINTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS NINTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is dated as of September 22, 2026 (the “Effective Date”), by and among DREAM FINDERS HOMES, INC., a Texas corporation (“Borrower”), BANK OF AMERICA, N.A., as administrative agent for the lenders (in such capacity, “Administrative Agent”), and the Required Lenders.
W I T N E S S E T H
A.Reference is made to that certain Amended and Restated Credit Agreement dated as of June 2, 2022, by and among Borrower, each of the Lenders defined therein (“Lenders”), Administrative Agent and the other parties thereto (as renewed, extended, modified, and amended from time to time prior to the date hereof, the “Credit Agreement”). Terms defined in the Credit Agreement and not otherwise defined herein are used herein as therein defined.
B.The parties hereto have agreed to amend certain terms and provisions of the Credit Agreement as more particularly described herein.
NOW, THEREFORE, the parties hereto agree as follows:
1.Amendments. On and after the Effective Date,
(a)The following new definition of “Letter of Credit Report” is hereby added to Section 1.01 of the Credit Agreement in the correct alphabetic order:
“Letter of Credit Report” means a certificate substantially the form of Exhibit K or any other form approved by Administrative Agent.
(b)The definitions of “L/C Commitment”, “L/C Issuer” and “Letter of Credit Sublimit” in Section 1.01 of the Credit Agreement are hereby deleted in their entirety and replaced with the following:
“L/C Commitment” means, with respect to each L/C Issuer, the commitment of such L/C Issuer to issue Letters of Credit hereunder. The initial amount of each L/C Issuer’s L/C Commitment is set forth on Schedule 2.01B, or if an L/C Issuer has entered into an Assignment and Assumption or has otherwise assumed a L/C Commitment after the Closing Date, the amount set forth for such L/C Issuer as its L/C Commitment in the Register maintained by Administrative Agent. If a Lender agrees to become an L/C Issuer after the Closing Date, then such L/C Issuer’s L/C Commitment shall be the amount agreed to in writing by Borrower, Administrative Agent and such L/C Issuer. The L/C Commitment of an L/C Issuer may be modified from time to time by agreement between such L/C Issuer and Borrower, and notified to Administrative Agent.
“L/C Issuer” means each of Bank of America, Western Alliance Bank, Flagstar Bank, N.A., and each other Lender (if any) as Borrower may from time to time select as an L/C Issuer hereunder pursuant to Section 2.03; provided that such Lender has agreed to be an L/C Issuer in its capacity as issuer of Letters of Credit hereunder. Any L/C Issuer may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such L/C Issuer, in which case the term “L/C Issuer” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. Each reference herein to the “L/C Issuer” in connection with a Letter of Credit or other matter shall be deemed to be a reference to the relevant L/C Issuer with respect thereto.
“Letter of Credit Sublimit” means an amount equal to $100,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.
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(c)A new clause (q) is hereby added to Section 2.03 of the Credit Agreement as follows:
(q) L/C Issuer Reports to Administrative Agent. Unless otherwise agreed by Administrative Agent, each L/C Issuer shall, in addition to its notification obligations set forth elsewhere in this Section 2.03, provide Administrative Agent a Letter of Credit Report, as set forth below:
(i) reasonably prior to the time that such L/C Issuer issues, amends, renews, increases or extends a Letter of Credit, the date of such issuance, amendment, renewal, increase or extension and the stated amount of the applicable Letters of Credit after giving effect to such issuance, amendment, renewal or extension (and whether the amounts thereof shall have changed);
(ii) on each Business Day on which such L/C Issuer makes a payment pursuant to a Letter of Credit, the date and amount of such payment;
(iii) on any Business Day on which Borrower fails to reimburse a payment made pursuant to a Letter of Credit required to be reimbursed to such L/C Issuer on such day, the date of such failure and the amount of such payment;
(iv) on any other Business Day, such other information as Administrative Agent shall reasonably request as to the Letters of Credit issued by such L/C Issuer; and
(v) for so long as any Letter of Credit issued by an L/C Issuer is outstanding, such L/C Issuer shall deliver to Administrative Agent (A) on the last Business Day of each calendar month, (B) at all other times a Letter of Credit Report is required to be delivered pursuant to this Agreement, and (C) on each date that (1) an L/C Credit Extension occurs or (2) there is any expiration, cancellation and/or disbursement, in each case, with respect to any such Letter of Credit, a Letter of Credit Report appropriately completed with the information for every outstanding Letter of Credit issued by such L/C Issuer.
(d)Section 7.05 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
7.05 Dispositions. Make any Disposition or enter into any agreement to make any Disposition, except:
(a)Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;
(b)Dispositions of Housing Units and Finished Lots in the ordinary course of business;
(c)Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;
(d)Dispositions of property by any Subsidiary to Borrower or to a Wholly-Owned Subsidiary; provided that if the transferor of such property is a Guarantor, the transferee thereof must either be Borrower or a Guarantor;
(e)Dispositions permitted by Section 7.04;
(f)Dispositions in connection with land bank transactions; and
(g)Other Dispositions, so long as no Default or Event of Default exists and Borrower is compliance with Section 7.13, in each case before and after giving pro forma effect thereto.
provided, however, that any Disposition pursuant to subsections (a) through (g) shall be for fair market value.
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(e)Section 7.09 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to Borrower or any Guarantor or to otherwise transfer property to Borrower or any Guarantor, (ii) of any Guarantor to Guarantee the Indebtedness of Borrower or (iii) of Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that this clause (iii) shall not prohibit any Negative Pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 7.03(e) solely to the extent any such Negative Pledge relates to the property financed by or the subject of such Indebtedness; or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person. For the avoidance of doubt, this Section 7.09 shall not prohibit any Contractual Obligation assumed by Borrower or any Subsidiary or binding on any Person at the time they become a Subsidiary in connection with an Acquisition otherwise permitted hereunder.
(f)The Credit Agreement is hereby amended to add a new Exhibit K thereto as set forth on Annex I attached hereto.
2.Amendments to other Loan Documents.
(a)All references in the Loan Documents to the Credit Agreement shall henceforth include references to the Credit Agreement, as modified and amended hereby, and as may, from time to time, be further amended, modified, extended, renewed, and/or increased.
(b)Any and all of the terms and provisions of the Loan Documents are hereby amended and modified wherever necessary, even though not specifically addressed herein, so as to conform to the amendments and modifications set forth herein.
3.Representations and Warranties. Borrower hereby represents and warrants that as of the Effective Date:
(a)Borrower has the power to execute and deliver this Amendment and to perform its obligations hereunder; and Borrower has duly authorized such execution, delivery and performance.
(b)This Amendment constitutes a legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as limited by Debtor Relief Laws and the applicable of general principles of equity (regardless of whether such enforceability is considered in proceedings in equity or at law).
(c)The representations and warranties of Borrower in the representations and warranties contained in Article V of the Credit Agreement and the other Loan Documents are true and correct on and as of the Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date and except that for purposes of this paragraph, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01 of the Credit Agreement.
(d)No Default has occurred and is continuing or would result from giving effect to this Amendment.
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4.Conditions Precedent. The effectiveness of this Amendment is subject to satisfaction of the following conditions precedent on or before the Effective Date:
(a)Administrative Agent shall have received this Amendment, duly executed and delivered by the Required Lenders, Administrative Agent, and Borrower;
(b)the representations and warranties set forth herein shall be true and correct;
(c)no Default shall have occurred and be continuing or would result from giving effect to this Amendment; and
(d)payment by Borrower of all fees and other amounts due and payable on or prior to the date hereof and reimbursement or payment of all costs and expenses required to be reimbursed or paid by Borrower hereunder, including all fees, charges and disbursements of counsel to Administrative Agent (directly to such counsel if requested by Administrative Agent).
5.Ratifications. Each Loan Party (a) ratifies and confirms all provisions of the Loan Documents as amended by this Amendment, (b) ratifies and confirms that all guaranties and assurances, granted, conveyed, or assigned to the Credit Parties under the Loan Documents are not released, reduced, or otherwise adversely affected by this Amendment and continue to guarantee and assure full payment and performance of all present and future Obligations, and (c) agrees to perform such acts and duly authorize, execute, acknowledge, deliver, file, and record such additional documents, and certificates as Administrative Agent may reasonably request in order to create, perfect, preserve, and protect those guaranties, assurances, and liens.
6.Miscellaneous.
(a)This Amendment shall constitute one of the Loan Documents.
(b)This Amendment shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York. This Amendment, together with the Credit Agreement and the other Loan Documents, embodies the entire agreement and understanding relating to the subject matter hereof.
(c)Unless stated otherwise (i) the singular number includes the plural and vice versa and words of any gender include each other gender, in each case, as appropriate, (ii) headings and captions may not be construed in interpreting provisions, and (iii) if any part of this Amendment is for any reason found to be unenforceable, all other portions of it nevertheless remain enforceable.
(d)The amendments set forth herein are limited precisely as written and shall not be deemed: (i) to be a consent under or waiver of any other term or condition in the Credit Agreement or any of the other Loan Documents; or (ii) to prejudice any right or rights which Administrative Agent and Lenders now have or may have in the future under, or in connection with the Credit Agreement, as amended hereby, the other Loan Documents or any of the other documents referred to herein or therein.
(e)This Amendment may be in the form of an Electronic Record (and may be delivered by e-mail or facsimile) and may be executed using Electronic Signatures (including, without limitation, facsimile and .pdf) and shall be considered an original, and shall have the same legal effect, validity and enforceability as a paper record. This Amendment may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same letter agreement. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by Bank of America, N.A. of a manually signed paper Communication which has been converted into electronic form (such as scanned into pdf format), or an electronically signed Communication converted into another format, for transmission, delivery and/or retention. For purposes hereof, (i) “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time and (ii) “Communication” shall mean this Amendment and any document, amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to this Amendment.
[Signature Pages Follow.]
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IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first stated above.
BORROWER:
DREAM FINDERS HOMES, INC. | ||||||||
| By: | /s/ Rob Riva | |||||||
| Name: | Rob Riva | |||||||
| Title: | General Counsel and VP | |||||||
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ Carolyn LaBatte-Leavitt
Name: Carolyn LaBatte-Leavitt
Title: Vice President
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
LENDERS:
BANK OF AMERICA, N.A., as a Lender and an L/C Issuer
By: /s/ William Campano
Name: William Campano
Title: Senior Vice President
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
WESTERN ALLIANCE BANK, as a Lender and an L/C Issuer
By: /s/ Jenna White
Name: Jenna White
Title: Sr. Vice President
Name: Jenna White
Title: Sr. Vice President
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
FLAGSTAR BANK, N.A., as a Lender and an L/C Issuer
By: /s/ Daniel Blazei
Name: Daniel Blazei
Title: Vice President
Name: Daniel Blazei
Title: Vice President
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By: /s/ David Prouse
Name: David Prouse
Title: SVP
Name: David Prouse
Title: SVP
AMERIS BANK, as a Lender
By: /s/ Chad Bennett
Name: Chad Bennett
Title: EVP
Name: Chad Bennett
Title: EVP
ZIONS BANCORPORATION, N.A. DBA VECTRA BANK COLORADO, as a Lender
By: /s/ Shane Fraizer
Name: Shane Fraizer
Title: SVP
Name: Shane Fraizer
Title: SVP
UNITED BANK, as a Lender
By: /s/ Thomas J. VanLierde
Name: Thomas J. VanLierde
Title: SVP
Name: Thomas J. VanLierde
Title: SVP
BMO BANK N.A., as a Lender
By: /s/ Lisa Smith Boyer
Name: Lisa Smith Boyer
Title: Director
Name: Lisa Smith Boyer
Title: Director
PINNACLE BANK, as a Lender
By: /s/ Anne Howe
Name: Anne Howe
Title: SVP
Name: Anne Howe
Title: SVP
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
PINNACLE BANK, A TENNESSEE BANK, D/B/A SYNOVUS BANK, AS SUCCESSOR BY MERGER WITH SYNOVUS BANK, as a Lender
By: /s/ Tejas Patel
Name: Tejas Patel
Title: Senior Credit Officer, SVP
Name: Tejas Patel
Title: Senior Credit Officer, SVP
THE HUNTINGTON BANK, as successor by merger with CADENCE BANK, as a Lender
By: /s/ Joe White
Name: Joe White
Title: Senior Vice President
Name: Joe White
Title: Senior Vice President
TEXAS CAPITAL BANK, A TEXAS STATE BANK, f/k/a TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, as a Lender
By: /s/ Jason Williams
Name: Jason Williams
Title: Executive Director
Name: Jason Williams
Title: Executive Director
FIRST NATIONAL BANK OF PENNSYLVANIA, as a Lender
By: /s/ Jay Hall
Name: Jay Hall
Title: SVP
Name: Jay Hall
Title: SVP
HOMETRUST BANK, as a Lender
By: /s/ Justin Dunn
Name: Justin Dunn
Title: Senior Vice President
Name: Justin Dunn
Title: Senior Vice President
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
GOLDMAN SACHS LENDING PARTNERS LLC, as a Lender
By: /s/ Elizabeth Tosin
Name: Elizabeth Tosin
Title: Authorized Signatory
Name: Elizabeth Tosin
Title: Authorized Signatory
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
CITIZENS BANK, N.A., as a Lender
By: /s/ Kenneth D. Stover
Name: Kenneth D. Stover
Title: Vice President
Name: Kenneth D. Stover
Title: Vice President
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
REGIONS BANK, as a Lender
By: /s/ Justin Smith
Name: Justin Smith
Title: Vice President
Name: Justin Smith
Title: Vice President
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
To induce Administrative Agent, Lenders, and L/C Issuers to enter into this Amendment, each of the undersigned hereby (a) consents and agrees to its execution and delivery and the terms and conditions thereof, (b) agrees that this document in no way releases, diminishes, impairs, reduces, or otherwise adversely affects any guaranties, assurances, or other obligations or undertakings of any of the undersigned under any Loan Documents, (c) confirms and ratifies its continuing unconditional obligations as a Guarantor under the Guaranty, as it may be amended or otherwise modified hereby, with respect to all of the Guaranteed Obligations (as defined therein), and (d) waives notice of acceptance of this Amendment, which Amendment binds each of the undersigned and their respective successors and permitted assigns and inures to the benefit of Administrative Agent, the L/C Issuers and Lenders and their respective successors and permitted assigns.
GUARANTORS: DREAM FINDERS HOMES, LLC H&H CONSTRUCTORS OF FAYETTEVILLE, LLC VILLAGE PARK HOMES, LLC DFH LAND, LLC DFH WILDWOOD, LLC DFH MANDARIN, LLC CENTURY HOMES FLORIDA, LLC | ||||||||
| By: | /s/ Rob Riva | |||||||
| Name: | Rob Riva | |||||||
| Title: | General Counsel and VP | |||||||
DREAM FINDERS HOLDINGS LLC | ||||||||
| By: | /s/ Rob Riva | |||||||
| Name: | Rob Riva | |||||||
| Title: | General Counsel and VP | |||||||
DFH COVENTRY, LLC | ||||||||
| By: | /s/ Rob Riva | |||||||
| Name: | Rob Riva | |||||||
| Title: | General Counsel and VP | |||||||
DFH CRESCENT, LLC | ||||||||
| By: | /s/ Rob Riva | |||||||
| Name: | Rob Riva | |||||||
| Title: | General Counsel and VP | |||||||
DFH LIBERTY, LLC DFH PANELS SOUTHEAST, LLC DFH GREENVILLE LIBERTY ASSETS, LLC DREAM FINDERS HOMES ARIZONA, LLC | ||||||||
| By: | /s/ Rob Riva | |||||||
| Name: | Rob Riva | |||||||
| Title: | General Counsel and VP | |||||||
Signature Page to
Ninth Amendment to Amended and Restated Credit Agreement
ANNEX I
EXHIBIT K
FORM OF LETTER OF CREDIT REPORT
The undersigned duly appointed officer of L/C Issuer caused this Letter of Credit Report to be executed as of the date first above written.
[L/C ISSUER], as an L/C Issuer | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
Signature Page to
Letter of Credit Report
| Exhibit 23.1 | ||
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-252525 and 333-270234 on Form S-8 of Dream Finders Homes, Inc. of our report dated November 13, 2025, relating to the consolidated financial statements of Beazer Homes USA, Inc. included in this Current Report on Form 8-K dated October 20, 2026.
/s/ Deloitte & Touche LLP
Atlanta, Georgia
October 20, 2026
Exhibit 99.1 | ||
Dream Finders Homes Completes Acquisition of Beazer Homes
Combination Creates Sixth-Largest U.S. Homebuilder
JACKSONVILLE, Fla. — October 20, 2026 — Dream Finders Homes, Inc. (NYSE: DFH) ("Dream Finders") today announced the completion of its acquisition of Beazer Homes USA, Inc. ("Beazer") in an all-cash transaction with an enterprise value of approximately $2.2 billion. Beazer shareholders received $33.50 in cash for each share of Beazer common stock. As a result of the completion of the acquisition, Beazer’s common stock ceased trading on and was delisted from the New York Stock Exchange.
Patrick Zalupski, Founder, CEO, and Co-Chairman of Dream Finders, said, “Today, Beazer’s teams officially join ours, and the real work begins. We are closing this transaction in a challenging housing environment, and we are clear-eyed about that. But we believe this acquisition is transformative for Dream Finders. It makes us the nation’s sixth-largest homebuilder and brings us into new markets where Beazer was already proficient. We have been thoughtful in our approach, we are confident this is the right path, and the scale we gain is critical to our long-term growth. We will stay focused on execution rather than outside noise, and on our core priority — creating long-term value for our shareholders.
This is our ninth acquisition since our IPO in 2021 and by far our largest, and we are approaching it as we have every integration: with a clear plan and the understanding that success is earned one community and one homebuyer at a time. Our priority now is to transition the homes we build in Beazer’s communities to Dream Finders’ floor plans that better match what today’s buyers can afford, while leveraging our increased scale to lower construction costs and shorten build times. To our new colleagues from Beazer, welcome to Dream Finders. We are glad you are here.”
Rick Beckwitt, Co-Chairman of Dream Finders, said, “With the acquisition completed, the Board’s focus now turns to disciplined execution. This combination is built to perform throughout the housing market cycle. We continue to expect over $100 million of annual run-rate cost synergies and double-digit percentage EPS accretion in year one, while expanding our financial services platform and preserving the asset-light model that underpins our returns. We also remain committed to returning to and improving our current leverage metrics within 18 to 24 months, and the Board will work closely with management to ensure we deliver on that commitment.”
Dream Finders is now the nation’s sixth-largest homebuilder,1 with complementary geographic footprints spanning 26 of the top 50 MSAs2 and product strategies across entry-level and move-up positions. The acquisition expands Dream Finders’ footprint into California, Nevada, Indiana and Delaware, while broadening its presence in the Washington, D.C. metropolitan area, including Maryland, and adding scale in shared markets across Texas, Florida, South Carolina, North Carolina, Georgia and Arizona. Dream Finders expects to continue to enhance the homebuying experience through lower unit costs and expanded financial services, utilizing its in-house title insurance and mortgage banking capabilities to deliver greater value and convenience to customers.
1 Based on CY2025A revenue within U.S. headquartered homebuilders.
2 Metropolitan Statistical Areas defined by The U.S. Office of Management and Budget, which are ranked by population size
Advisors
Goldman Sachs & Co. LLC, BofA Securities, Zelman Partners and Vestra Advisors acted as financial advisors to Dream Finders. Foley & Lardner LLP acted as legal counsel to Dream Finders.
J. P. Morgan Securities LLC and Moelis & Company LLC acted as financial advisors to Beazer. King & Spalding LLP acted as legal counsel to Beazer.
About Dream Finders Homes
Dream Finders Homes (NYSE: DFH), headquartered in Jacksonville, Florida, was recognized as the 2025 National Builder of the Year by Builder magazine. Dream Finders builds single-family homes throughout the Southeast, Mid-Atlantic, Midwest, Southwest and West, including Florida, Texas, Tennessee, North Carolina, South Carolina, Georgia, Colorado, Arizona, California, Nevada, Indiana, Delaware and the Washington, D.C. metropolitan area, which comprises Washington, D.C., Northern Virginia and Maryland. As the Official Home Builder of the PGA TOUR, the Jacksonville Jaguars and the Tampa Bay Rays, Dream Finders is deeply committed to excellence beyond homebuilding and into the communities it serves. Through its wholly owned subsidiaries, Dream Finders also provides mortgage financing as well as title agency and underwriting services to homebuyers. Dream Finders achieves its growth and returns by maintaining an asset-light homebuilding model. For more information, please visit www.dreamfindershomes.com.
Cautionary Statement Regarding Forward-Looking Information
The information presented herein may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could” or “may,” or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. Forward-looking statements speak only as of the date they are made. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
These risks, uncertainties and assumptions are discussed in Dream Finders’ Annual Report on Form 10-K for the year ended December 31, 2025 and other filings with the U.S. Securities and Exchange Commission. In addition to factors previously disclosed in Dream Finders’ reports filed with the SEC, the following factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the outcome of any legal proceedings relating to the acquisition that may be instituted against Dream Finders or Beazer; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the acquisition; Dream Finders’ ability to complete the integration of Beazer successfully or fully realize cost savings and other benefits and other consequences associated with mergers, acquisitions and divestitures; the level of indebtedness incurred in connection with the acquisition and Dream Finders’ ability to reduce leverage within anticipated timeframes or to access capital on acceptable terms; the effects of the completion of the acquisition on the market price of Dream Finders’ common stock, credit ratings or operating results; the potential impact of the acquisition on relationships, including with employees, customers and competitors; housing market conditions, including homebuyer affordability and demand; and changes in mortgage interest rates and mortgage availability. Dream Finders undertakes no obligation to update or revise any forward-looking statement except as may be required by applicable law.
Contacts:
Investor Contact: investors@dreamfindershomes.com
Media Contact: mediainquiries@dreamfindershomes.com
Media Contact: mediainquiries@dreamfindershomes.com
| Exhibit 99.2 | ||
BEAZER HOMES USA, INC.
CONSOLIDATED BALANCE SHEETS
September 30, | September 30, | ||||||||||
in thousands (except share and per share data) | 2025 | 2024 | |||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 214,705 | $ | 203,907 | |||||||
Restricted cash | 3,866 | 38,703 | |||||||||
Accounts receivable (net of allowance of $266 and $284, respectively) | 78,145 | 65,423 | |||||||||
Owned inventory | 2,029,433 | 2,040,640 | |||||||||
Deferred tax assets, net | 142,647 | 128,525 | |||||||||
Property and equipment, net | 47,945 | 38,628 | |||||||||
Operating lease right-of-use assets | 34,987 | 18,356 | |||||||||
Goodwill | 11,376 | 11,376 | |||||||||
Other assets | 46,604 | 45,969 | |||||||||
Total assets | $ | 2,609,708 | $ | 2,591,527 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Trade accounts payable | $ | 143,481 | $ | 164,389 | |||||||
Operating lease liabilities | 27,762 | 19,778 | |||||||||
Other liabilities | 160,445 | 149,900 | |||||||||
Total debt (net of debt issuance costs of $6,611 and $8,310, respectively) | 1,029,114 | 1,025,349 | |||||||||
Total liabilities | 1,360,802 | 1,359,416 | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, no shares issued) | — | — | |||||||||
Common stock (par value $0.001 per share, 63,000,000 shares authorized, 29,762,293 issued and outstanding and 31,047,510 issued and outstanding, respectively) | 30 | 31 | |||||||||
Paid-in capital | 825,103 | 853,895 | |||||||||
Retained earnings | 423,773 | 378,185 | |||||||||
Total stockholders’ equity | 1,248,906 | 1,232,111 | |||||||||
Total liabilities and stockholders’ equity | $ | 2,609,708 | $ | 2,591,527 | |||||||
See accompanying notes to consolidated financial statements.
1
BEAZER HOMES USA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands (except per share data) | 2025 | 2024 | 2023 | ||||||||||||||
Total revenue | $ | 2,371,555 | $ | 2,330,197 | $ | 2,206,785 | |||||||||||
Home construction and land sales expenses | 2,021,082 | 1,903,907 | 1,763,449 | ||||||||||||||
Inventory impairments and abandonments | 12,959 | 1,996 | 641 | ||||||||||||||
Gross profit | 337,514 | 424,294 | 442,695 | ||||||||||||||
Commissions | 76,911 | 80,056 | 73,450 | ||||||||||||||
General and administrative expenses | 204,830 | 186,345 | 179,794 | ||||||||||||||
Depreciation and amortization | 19,168 | 14,867 | 12,198 | ||||||||||||||
Operating income | 36,605 | 143,026 | 177,253 | ||||||||||||||
Loss on extinguishment of debt, net | — | (437) | (546) | ||||||||||||||
Other income, net | 4,245 | 16,496 | 5,939 | ||||||||||||||
Income from continuing operations before income taxes | 40,850 | 159,085 | 182,646 | ||||||||||||||
(Benefit) expense from income taxes | (4,738) | 18,910 | 23,958 | ||||||||||||||
Income from continuing operations | 45,588 | 140,175 | 158,688 | ||||||||||||||
Loss from discontinued operations, net of tax | — | — | (77) | ||||||||||||||
Net income | $ | 45,588 | $ | 140,175 | $ | 158,611 | |||||||||||
Weighted-average number of shares: | |||||||||||||||||
Basic | 29,758 | 30,548 | 30,353 | ||||||||||||||
Diluted | 30,011 | 30,953 | 30,747 | ||||||||||||||
Basic income per share: | |||||||||||||||||
Continuing operations | $ | 1.53 | $ | 4.59 | $ | 5.23 | |||||||||||
Discontinued operations | — | — | — | ||||||||||||||
Total | $ | 1.53 | $ | 4.59 | $ | 5.23 | |||||||||||
Diluted income per share: | |||||||||||||||||
Continuing operations | $ | 1.52 | $ | 4.53 | $ | 5.16 | |||||||||||
Discontinued operations | — | — | — | ||||||||||||||
Total | $ | 1.52 | $ | 4.53 | $ | 5.16 | |||||||||||
See accompanying notes to consolidated financial statements.
2
BEAZER HOMES USA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Common Stock | |||||||||||||||||||||||||||||
in thousands | Shares | Amount | Paid-in Capital | Retained Earnings | Total | ||||||||||||||||||||||||
Balance as of September 30, 2022 | 30,880 | $ | 31 | $ | 859,856 | $ | 79,399 | $ | 939,286 | ||||||||||||||||||||
Net income and comprehensive income | — | — | — | 158,611 | 158,611 | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | 7,275 | — | 7,275 | ||||||||||||||||||||||||
Stock option exercises | 14 | — | 262 | — | 262 | ||||||||||||||||||||||||
Shares issued under employee stock plans, net | 675 | — | — | — | — | ||||||||||||||||||||||||
Forfeiture and other settlements of restricted stock | (12) | — | — | — | — | ||||||||||||||||||||||||
Common stock redeemed for tax liability | (206) | — | (2,615) | — | (2,615) | ||||||||||||||||||||||||
Balance as of September 30, 2023 | 31,351 | 31 | 864,778 | 238,010 | 1,102,819 | ||||||||||||||||||||||||
Net income and comprehensive income | — | — | — | 140,175 | 140,175 | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | 7,391 | — | 7,391 | ||||||||||||||||||||||||
Stock option exercises | 3 | — | 20 | — | 20 | ||||||||||||||||||||||||
Shares issued under employee stock plans, net | 387 | 1 | — | — | 1 | ||||||||||||||||||||||||
Forfeiture and other settlements of restricted stock | (61) | — | — | — | — | ||||||||||||||||||||||||
Common stock redeemed for tax liability | (177) | — | (5,366) | — | (5,366) | ||||||||||||||||||||||||
Share repurchases | (455) | (1) | (12,928) | — | (12,929) | ||||||||||||||||||||||||
Balance as of September 30, 2024 | 31,048 | 31 | 853,895 | 378,185 | 1,232,111 | ||||||||||||||||||||||||
Net income and comprehensive income | — | — | — | 45,588 | 45,588 | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | 7,338 | — | 7,338 | ||||||||||||||||||||||||
Stock option exercises | 11 | — | 107 | — | 107 | ||||||||||||||||||||||||
Shares issued under employee stock plans, net | 327 | — | — | — | — | ||||||||||||||||||||||||
Forfeiture and other settlements of restricted stock | (36) | — | — | — | — | ||||||||||||||||||||||||
Common stock redeemed for tax liability | (97) | — | (3,161) | — | (3,161) | ||||||||||||||||||||||||
Share repurchases | (1,491) | (1) | (33,076) | — | (33,077) | ||||||||||||||||||||||||
Balance as of September 30, 2025 | 29,762 | $ | 30 | $ | 825,103 | $ | 423,773 | $ | 1,248,906 | ||||||||||||||||||||
See accompanying notes to consolidated financial statements.
3
BEAZER HOMES USA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net income | $ | 45,588 | $ | 140,175 | $ | 158,611 | |||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||||||||
Depreciation and amortization | 19,168 | 14,867 | 12,198 | ||||||||||||||
Stock-based compensation expense | 7,338 | 7,391 | 7,275 | ||||||||||||||
Inventory impairments and abandonments | 12,959 | 1,996 | 641 | ||||||||||||||
Model sale-leaseback revenue | (8,799) | — | — | ||||||||||||||
Deferred and other income tax (benefit) expense | (4,738) | 18,910 | 23,936 | ||||||||||||||
(Gain) loss on disposal of fixed assets | (301) | (426) | 1,113 | ||||||||||||||
Gain on sale of investment | — | (8,591) | — | ||||||||||||||
Loss on extinguishment of debt, net | — | 437 | 546 | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Increase in accounts receivable | (12,722) | (19,825) | (9,708) | ||||||||||||||
Decrease in income tax receivable | — | — | 9,987 | ||||||||||||||
Decrease (increase) in inventory | 2,763 | (282,061) | (14,749) | ||||||||||||||
(Increase) decrease in other assets | (9,680) | 341 | (2,784) | ||||||||||||||
(Decrease) increase in trade accounts payable | (20,908) | 10,133 | 10,615 | ||||||||||||||
Increase (decrease) in other liabilities | 1,313 | (20,892) | (19,624) | ||||||||||||||
Net cash provided by (used in) operating activities | 31,981 | (137,545) | 178,057 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Capital expenditures | (28,501) | (22,353) | (20,334) | ||||||||||||||
Proceeds from sale of fixed assets | 317 | 428 | 445 | ||||||||||||||
Proceeds from maturities of investment securities | 9,556 | — | — | ||||||||||||||
Purchases of investment securities | (1,031) | (8,087) | (9,779) | ||||||||||||||
Other | — | — | (2) | ||||||||||||||
Net cash used in investing activities | (19,659) | (30,012) | (29,670) | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Repayment of debt | — | (202,195) | (8,998) | ||||||||||||||
Proceeds from issuance of debt | — | 250,000 | — | ||||||||||||||
Repayment of borrowings from credit facility | (450,000) | (280,000) | — | ||||||||||||||
Borrowings from credit facility | 450,000 | 280,000 | — | ||||||||||||||
Debt issuance costs | (230) | (5,653) | (2,575) | ||||||||||||||
Repurchase of common stock | (33,077) | (12,928) | — | ||||||||||||||
Tax payments for stock-based compensation awards | (3,161) | (5,366) | (2,615) | ||||||||||||||
Stock option exercises | 107 | 20 | 262 | ||||||||||||||
Net cash (used in) provided by financing activities | (36,361) | 23,878 | (13,926) | ||||||||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (24,039) | (143,679) | 134,461 | ||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 242,610 | 386,289 | 251,828 | ||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 218,571 | $ | 242,610 | $ | 386,289 | |||||||||||
See accompanying notes to consolidated financial statements.
4
BEAZER HOMES USA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Description of Business
Beazer Homes USA, Inc. (“we,” “us,” “our,” “Beazer,” “Beazer Homes” or the “Company”) is a nationally recognized homebuilder committed to building homes and communities designed with the intention of inspiring sustainable and healthier living. Operating across 13 states in the West, East, and Southeast geographic regions of the United States, Beazer Homes offers a diverse portfolio of products tailored to meet the evolving needs of homebuyers that value a well-constructed and energy efficient home.
(2) Basis of Presentation and Summary of Significant Accounting Policies Basis of Consolidation
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), and present the consolidated financial position, income, stockholders' equity, and cash flows of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Our net income is equivalent to our comprehensive income, so we have not presented a separate statement of comprehensive income.
In the past, we have discontinued homebuilding operations in various markets. Results from certain of these exited markets are reported as discontinued operations in the accompanying consolidated statements of operations for all periods presented.
Our fiscal year 2025 began on October 1, 2024 and ended on September 30, 2025. Our fiscal year 2024 began on October 1, 2023 and ended on September 30, 2024. Our fiscal year 2023 began on October 1, 2022 and ended on September 30, 2023.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates.
Cash and Cash Equivalents and Restricted Cash
We consider highly liquid investments with maturities of three months or less when acquired to be cash equivalents. As of September 30, 2025, the majority of our cash and cash equivalents were on demand deposits with major banks. These assets were valued at par and had no withdrawal restrictions. Restricted cash includes cash restricted by state law or a contractual requirement, including cash collateral for our outstanding cash-secured letters of credit (refer to Note 7).
Accounts Receivable and Allowance
Accounts receivable includes receivables from municipalities related to the development of utilities or other infrastructure, land banker reimbursements to be received related to land development costs, rebates to be received from our suppliers, escrow proceeds to be received from title companies associated with closed homes, and other miscellaneous receivables. Generally, we receive cash from title companies within a few days of the home being closed. We regularly review our receivable balances for collectability and record an allowance for expected credit losses.
Owned Inventory
Owned inventory includes land acquisition costs, land development costs, home construction costs, capitalized interest, real estate taxes, direct overhead costs and capitalized indirect costs incurred during land development and home construction, and common costs that benefit the entire community, less impairment, if any. Land acquisition, land development and other common costs (both incurred and estimated to be incurred) are allocated to individual lots on a pro-rata basis, and the cost of individual lots is transferred to homes under construction when home construction begins. Changes in estimated land and other common costs to be incurred in a community are generally allocated to the remaining lots on a prospective basis. Home construction costs are accumulated on a per-home basis. Cost of home closings includes the specific construction costs of the home and the allocated lot costs. Refer to Note 4 for further discussion of our inventory balance.
5
Inventory Valuation - Projects in Progress
Projects in progress inventory includes homes under construction and land under development grouped together as communities. Generally, upon the commencement of land development activities, it may take three to five years (depending on, among other things, the size of the community and its sales pace) to fully develop, sell, construct and close all the homes in a typical community. Projects in progress are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable.
We assess our projects in progress inventory for indicators of impairment at the community level on a quarterly basis. We evaluate, among other things, the average sales price and margins on recent home closings, homes in backlog and expected future home sales for each community. If indicators of impairment are present for a community with more than ten homes remaining to close, we perform a recoverability test by comparing the expected undiscounted cash flows for the community to its carrying value. This undiscounted cash flow analysis requires important assumptions including, among other things, the current and future home sale prices, margins and the pace of closings to occur in the future. For those communities whose carrying values exceed the aggregate undiscounted cash flows, we perform a discounted cash flow analysis to determine the fair value of the community, and impairment charges are recorded if the fair value of the community's inventory is less than its carrying value.
The assumptions used in the determination of fair value of projects in progress communities are based on factors known to us at the time such estimates are made and our expectations of future operations and market conditions. The fair value of the community is estimated using the present value of the estimated future cash flows using discount rates commensurate with the risk associated with the underlying community. Should the estimates or expectations used in determining estimated fair values deteriorate in the future, we may be required to recognize additional impairment charges and write-offs related to these assets, and such amounts could be material.
Inventory Valuation - Land Held for Future Development
Land held for future development consists of communities for which construction and development activities are expected to occur in the future or have been idled. All applicable carrying costs, such as interest and real estate taxes, are expensed as incurred. Land held for future development is stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable, such as the future enactment of a development plan or the occurrence of outside events. We evaluate the potential plans for each community in land held for future development if changes in facts and circumstances occur that would give rise to a more detailed analysis for a change in the status of a community.
Inventory Valuation - Land Held for Sale
Land held for sale includes land and lots that do not fit within our homebuilding programs or strategic plans in certain markets. We record land held for sale at the lower of the asset's carrying value or fair value less cost to sell. Land is classified as held for sale when the following criteria are met:
•management has the authority and commits to a plan to sell the land;
•the land is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of land assets;
•there is an active program to locate a buyer and the plan to sell the property has been initiated;
•the sale of the land is probable within one year;
•the property is being actively marketed at a reasonable sale price relative to its current fair value; and
•it is unlikely that the plan to sell will be withdrawn or that significant changes to the plan will be made.
6
We evaluate the fair value less cost to sell of a land held for sale asset when indicators of impairment are present. In determining the fair value of the assets, we consider factors including executed sales contracts, current sales prices for comparable assets in the area, recent market analysis studies, appraisals, recent legitimate offers and listing prices of similar properties, as applicable. If the current carrying value of the asset exceeds the estimated fair value less cost to sell, the asset is impaired and written down.
Due to uncertainties in the estimation process, it is reasonably possible that actual results could differ from the estimates used in our analysis. Our assumptions about land sales prices require significant judgment because the market is highly sensitive to changes in economic conditions. We calculate the estimated fair values of land held for sale based on current market conditions and assumptions made by management, which may differ materially from actual results and may result in additional impairments if market conditions deteriorate.
Lot Option Agreements and Variable Interest Entities (VIE)
In addition to purchasing land directly, we utilize lot option agreements that enable us to defer acquiring portions of properties owned by third parties and unconsolidated entities until we have determined whether to exercise our lot option. The majority of our lot option agreements require a non-refundable cash deposit or issuance of an irrevocable letter of credit or surety bond based on a percentage of the purchase price of the land for the right to acquire lots during a specified period at a specified price. Purchase of the properties under these agreements is contingent upon satisfaction of certain requirements by us and the sellers. Under lot option agreements, our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred. If the Company cancels a lot option agreement, the cancellation would result in a write-off of the related deposits and pre-acquisition costs but would not expose the Company to the overall risks or losses of the applicable entity we are purchasing from. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our remaining 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.
The following table provides a summary of our interests in lot option agreements as of September 30, 2025 and 2024:
in thousands | As of September 30, 2025 | As of September 30, 2024 | |||||||||
Deposits and non-refundable pre-acquisition costs incurred(a) | $ | 333,435 | $ | 227,770 | |||||||
Remaining purchase price if lot option agreements are exercised | $ | 1,610,171 | $ | 1,458,679 | |||||||
(a)Amount is included as a component of land under development within our owned inventory in the consolidated balance sheets.
In accordance with Accounting Standards Codification (ASC) Topic 810, Consolidation (ASC 810), if the entity holding the land under option is a VIE, the Company's deposit represents a variable interest in that entity. ASC 810 requires a company to consolidate a VIE if the company is determined to be the primary beneficiary. To determine whether we are the primary beneficiary of the VIE, we first evaluate whether we have the ability to control the activities of the VIE that most significantly impact its economic performance. Such activities include, but are not limited to, (1) the ability to determine the budget and scope of land development work, if any; (2) the ability to control financing decisions for the VIE; (3) the ability to acquire additional land into the VIE or dispose of land in the VIE not under contract with Beazer; and (4) the ability to change or amend the existing option agreement with the VIE. If we are not determined to control such activities, we are not considered the primary beneficiary of the VIE and thus do not consolidate the VIE. If we do have the ability to control such activities, we will continue our analysis by determining if we are expected to absorb a potentially significant amount of the VIE's losses or, if no party absorbs the majority of such losses, if we will benefit from potentially a significant amount of the VIE's expected gains.
If we are the primary beneficiary of the VIE, we will consolidate the VIE even though creditors of the VIE have no recourse against the Company. For those we consolidate, we record the remaining contractual purchase price under the applicable lot option agreement, net of option deposits already paid, to consolidated inventory not owned with an offsetting increase to obligations related to consolidated inventory not owned on our consolidated balance sheets. Also, to reflect the total purchase price of this inventory on a consolidated basis, we present the related option deposits as consolidated inventory not owned. No VIEs required consolidation as of September 2025 and 2024 because we have determined that we were not the primary beneficiary of any VIEs.
7
Property and Equipment, Net
Our property and equipment is recorded at cost, net of accumulated depreciation. Depreciation is generally computed on a straight-line basis based on estimated useful lives as follows:
Asset Class | Useful Lives | ||||
Buildings and improvements | 25 - 30 years | ||||
Information systems | Lesser of estimated useful life of the asset or 5 years | ||||
Furniture, fixtures and computer and office equipment | 3 - 7 years | ||||
Model and sales office improvements | Lesser of estimated useful life of the asset or estimated life of the community | ||||
Leasehold improvements | Lesser of the lease term or the estimated useful life of the asset | ||||
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets from the businesses that we acquire. The Company's entire goodwill balance is recorded in our Southeast reportable segment. The Company evaluates goodwill for impairment at the reporting unit level annually during the fourth quarter or more often if indicators of impairment exist.
The Company has the option to perform a qualitative or quantitative assessment to determine whether the fair value of a reporting unit exceeds its carrying value. Qualitative factors may include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting unit and other entity and reporting unit specific events. If after assessing these qualitative factors, the Company determines it is more likely than not that the fair value of the reporting unit is less than the carrying value, then a quantitative assessment is performed.
The fair value of the reporting unit is estimated using a combination of the income approach, utilizing the discounted cash flow method, and the market approach, utilizing readily available market valuation multiples. If the estimated fair value of the reporting unit is less than its carrying value, an impairment will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. Determining the fair value of a reporting unit under the quantitative goodwill impairment assessment requires the Company to make estimates and assumptions regarding future operating results, cash flows (including timing), discount rates, expected growth rates, capital expenditures and cost of capital, similar to those a market participant would use to assess fair value. We also make certain assumptions about future economic conditions and other data. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods.
During the fourth quarter of 2025, the Company performed its annual goodwill impairment analysis and concluded our goodwill was not impaired.
Other Assets
Our other assets principally include prepaid expenses, assets related to our deferred compensation plan (refer to Note 14 for a discussion of our deferred compensation plan), investment securities, and unamortized debt issuance costs on our Senior Unsecured Revolving Credit Facility.
Other Liabilities
Our other liabilities principally include accrued compensations and benefits, accrued interest on our outstanding borrowings, customer deposits, warranty reserves, litigation accruals, income tax liabilities and other accruals related to our operations. Refer to Note 11 for details of our other liabilities.
8
Income Taxes
Our provision for income taxes is comprised of taxes that are currently payable and deferred taxes that relate to temporary differences between financial reporting carrying values and tax bases of assets and liabilities. Deferred tax assets and liabilities result from deductible or taxable amounts in future years when such assets and liabilities are recovered or settled and are measured using the enacted tax rates and laws that are expected to be in effect when the assets and liabilities are recovered or settled. We include any estimated interest and penalties on tax related matters in income taxes payable. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. We record interest and penalties related to unrecognized tax benefits in income tax expense within our consolidated statements of operations. Changes in recognition of measurement are recorded in the period in which the change in judgment occurs. Refer to Note 12 for a detailed discussion of our tax provision, deferred tax assets and valuation allowance.
Revenue Recognition
We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the process specified in ASC Topic 606, Revenue from Contracts with Customers.
The following table presents our total revenue disaggregated by revenue stream for the periods presented:
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||||||||
Homebuilding revenue | $ | 2,302,630 | $ | 2,292,984 | $ | 2,198,400 | |||||||||||
Land sales and other revenue | 68,925 | 37,213 | 8,385 | ||||||||||||||
Total revenue(a) | $ | 2,371,555 | $ | 2,330,197 | $ | 2,206,785 | |||||||||||
(a)Please see Note 17 for total revenue disaggregated by reportable segment.
Homebuilding revenue
Homebuilding revenue is reported net of discounts and is generally recognized when title to and possession of the home is transferred to the buyer at the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date. Home sale contract assets consist of cash from home closings held by title companies in escrow for our benefit, typically for less than five days, and are considered accounts receivable. Contract liabilities include customer deposits related to sold but undelivered homes and totaled $14.3 million and $18.7 million as of September 30, 2025 and 2024, respectively. Of the customer liabilities outstanding as of September 30, 2024, $16.1 million was recognized in revenue during the fiscal year ended September 30, 2025 upon closing of the related homes, and $1.9 million was refunded to or forfeited by the buyer.
Land sales and other revenue
Land sales revenue relates to land that does not fit within our homebuilding programs or strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. We also provide title examinations for our homebuyers in certain markets. Revenues associated with our title operations are recognized when closing services are rendered and title insurance policies are issued, both of which generally occur as each home is closed.
9
Home Construction and Land Sales Expenses
Home construction expenses include the specific construction costs of the home, the allocated lot costs (land acquisition, land development and other common costs are allocated to individual lots on a pro-rata basis based on the number of lots remaining to close within the community), and amortization of capitalized interest and indirect costs. All associated homebuilding costs are charged to home construction expenses in the period when the revenues from home closing are recognized.
Sales discounts and incentives include discounts on home prices, discounts on home building options and option upgrades, and seller-paid financing or closing costs, including mortgage rate buydowns. Home price discounts and option discounts are accounted for as a reduction in the sale price of the home, thereby decreasing the amount of revenue we recognize on that closing. All other sales incentives are recognized as a cost of selling the home and are included in home construction expenses.
Estimated future warranty costs are charged to home construction expense in the period when the revenues from home closings are recognized. Such estimated warranty costs generally range from 0.3% to 0.9% of total revenue recognized for each home closed. Additional warranty costs are charged to home construction expenses as necessary based on management's estimate of the costs to remediate existing claims. See Note 8 for a more detailed discussion of warranty costs and related reserves.
Land sales expenses include land acquisition costs, land development costs, and amortization of capitalized interest and indirects costs. All associated land costs are charged to land sales expenses in the period when the revenues from the land sales are recognized.
Advertising Costs
Advertising costs related to continuing operations of $23.0 million, $19.9 million and $15.1 million for our fiscal years 2025, 2024 and 2023, respectively, were expensed as incurred and were included in general and administrative (G&A) expenses in the consolidated statements of operations.
Fair Value Measurements
Certain of our assets are required to be recorded at fair value on a recurring basis, for example, the fair value of our deferred compensation plan assets is based on quoted market prices (Level 1) or market-corroborated inputs (Level 2). Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recovered (Level 3). For example, we review our long-lived assets, including inventory, for recoverability when factors indicate an impairment may exist, but no less than quarterly. Fair value is based on estimated cash flows discounted for market risks associated with the long-lived assets. The fair value of certain of our financial instruments approximates their carrying amounts due to the short maturity of these assets and liabilities or the variable interest rates on such obligations. The fair value of our publicly-held debt is generally estimated based on quoted bid prices for these instruments (Level 2). Certain of our other financial liabilities are estimated by discounting scheduled cash flows through maturity or using market rates currently being offered on loans with similar terms and credit quality. See Note 9 for additional discussion of our fair value measurements.
Stock-Based Compensation
We use the Black-Scholes option-pricing model to value our stock option grants. Restricted stock awards with market conditions are valued using the Monte Carlo valuation method. Other restricted stock awards without market conditions are valued based on the market price of the Company's common stock on the date of the grant. In addition, we reflect the benefits of tax deductions in excess of recognized compensation cost as an operating cash outflow. Compensation cost arising from all stock-based compensation awards is recognized as expense using the straight-line method over the vesting period and is included in G&A in our consolidated statements of operations. See Note 15 for additional discussion of our stock-based compensation.
10
Recent Accounting Pronouncements
Segment Reporting. In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 became effective for us for the fiscal year ending September 30, 2025, and we applied the amendments retrospectively to all prior periods presented in our consolidated financial statements. See Note 17 for more information regarding our reportable segments.
Income Taxes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for our fiscal year ending September 30, 2026. Early adoption is permitted and the amendments in this update should be applied on a prospective basis. The Company is currently evaluating the impact that the adoption of ASU 2023-09 may have on our consolidated financial statements and disclosures.
Income Statement Disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires disclosure of additional information about specific expense categories in the notes to the financial statements. ASU 2024-03 will be effective for our fiscal year ending September 30, 2028. Early adoption is permitted and the amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact that the adoption of ASU 2024-03 may have on our consolidated financial statements and disclosures.
Credit Losses. In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which allows entities to use the practical expedient to estimate expected credit losses. ASU 2025-05 will be effective for our fiscal year ending September 30, 2027 and interim reporting periods within this annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-05 may have on our consolidated financial statements and disclosures.
Internal-Use Software. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for the costs of internal-use software by removing all references to software development project stages so that the guidance is neutral to different software development methods. ASU 2025-06 will be effective for our fiscal year ending September 30, 2029 and interim reporting periods within this annual reporting period. Early adoption is permitted and the amendments in this update may be applied on a retrospective, modified transition, or prospective basis. The Company is currently evaluating the impact that the adoption of ASU 2025-06 may have on our consolidated financial statements and disclosures.
11
(3) Supplemental Cash Flow Information
The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the consolidated balance sheets and consolidated statements of cash flows for the periods presented:
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||||||||
Supplemental disclosure of non-cash activity: | |||||||||||||||||
Increase in operating lease right-of-use assets(a) | $ | 11,309 | $ | 4,114 | $ | 10,829 | |||||||||||
Increase in operating lease liabilities(a) | $ | 11,309 | $ | 4,114 | $ | 11,276 | |||||||||||
Supplemental disclosure of cash activity: | |||||||||||||||||
Interest payments | $ | 82,172 | $ | 75,226 | $ | 67,342 | |||||||||||
Income tax payments | $ | 11,751 | $ | 11,359 | $ | 1,956 | |||||||||||
Tax refunds received | $ | — | $ | — | $ | 9,987 | |||||||||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||||||||
Cash and cash equivalents | $ | 214,705 | $ | 203,907 | $ | 345,590 | |||||||||||
Restricted cash | 3,866 | 38,703 | 40,699 | ||||||||||||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ | 218,571 | $ | 242,610 | $ | 386,289 | |||||||||||
(a)Represents leases renewed or additional leases that commenced during the fiscal years ended September 30, 2025, 2024 and 2023.
(4) Owned Inventory
The components of our owned inventory are as follows as of September 30, 2025 and 2024:
in thousands | As of September 30, 2025 | As of September 30, 2024 | |||||||||
Homes under construction | $ | 692,327 | $ | 754,705 | |||||||
Land under development | 1,065,702 | 1,023,188 | |||||||||
Land held for future development | 19,489 | 19,879 | |||||||||
Land held for sale | 47,368 | 19,086 | |||||||||
Capitalized interest | 131,845 | 124,182 | |||||||||
Model homes | 72,702 | 99,600 | |||||||||
Total owned inventory | $ | 2,029,433 | $ | 2,040,640 | |||||||
Homes under construction include homes substantially finished and ready for delivery and homes in various stages of construction, including costs of the underlying lot, direct construction costs and capitalized indirect costs. As of September 30, 2025, we had 1,800 homes under construction, including 1,078 spec homes totaling $417.4 million (577 in-process spec homes totaling $201.8 million, and 501 finished spec homes totaling $215.6 million). As of September 30, 2024, we had 2,315 homes under construction, including 1,154 spec homes totaling $360.9 million (827 in-process spec homes totaling $231.4 million, and 327 finished spec homes totaling $129.5 million).
Land under development consists principally of land acquisition, land development and other common costs. These land related costs are allocated to individual lots on a pro-rata basis, and the lot costs are transferred to homes under construction when home construction begins for the respective lots. Certain of the fully developed lots in this category are reserved by a customer deposit or sales contract.
Land held for future development consists of communities for which construction and development activities are expected to occur in the future or have been idled and are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. All applicable carrying costs, such as interest and real estate taxes, are expensed as incurred.
12
Land held for sale includes land and lots that do not fit within our homebuilding programs or strategic plans in certain markets, and land is classified as held for sale once certain criteria are met (refer to Note 2). These assets are recorded at the lower of the carrying value or fair value less costs to sell.
The amount of interest we are able to capitalize depends on our qualified inventory balance, which considers the status of our inventory holdings. Our qualified inventory balance includes the majority of our homes under construction and land under development but excludes land held for future development and land held for sale (see Note 5 for additional information on capitalized interest).
Total owned inventory by reportable segment and Corporate and unallocated is presented in the table below as of September 30, 2025 and 2024:
in thousands | Projects in Progress (a) | Land Held for Future Development | Land Held for Sale | Total Owned Inventory | |||||||||||||||||||
September 30, 2025 | |||||||||||||||||||||||
West | $ | 944,601 | $ | 3,483 | $ | 29,052 | $ | 977,136 | |||||||||||||||
East | 387,954 | 10,888 | 16,086 | 414,928 | |||||||||||||||||||
Southeast | 418,497 | 5,118 | 2,230 | 425,845 | |||||||||||||||||||
Corporate and unallocated(b) | 211,524 | — | — | 211,524 | |||||||||||||||||||
Total | $ | 1,962,576 | $ | 19,489 | $ | 47,368 | $ | 2,029,433 | |||||||||||||||
September 30, 2024 | |||||||||||||||||||||||
West | $ | 1,023,140 | $ | 3,483 | $ | 17,110 | $ | 1,043,733 | |||||||||||||||
East | 411,914 | 10,888 | 1,300 | 424,102 | |||||||||||||||||||
Southeast | 365,676 | 5,508 | 676 | 371,860 | |||||||||||||||||||
Corporate and unallocated(b) | 200,945 | — | — | 200,945 | |||||||||||||||||||
Total | $ | 2,001,675 | $ | 19,879 | $ | 19,086 | $ | 2,040,640 | |||||||||||||||
(a)Projects in progress include homes under construction, land under development, capitalized interest, and model home categories from the preceding table.
(b)Projects in progress amount includes capitalized interest and indirect costs that are maintained within Corporate and unallocated.
13
Inventory Impairments
The following table presents, by reportable segment and Corporate and unallocated, our total impairment and abandonment charges for the periods presented:
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||||||||
Projects in Progress: | |||||||||||||||||
West | $ | 2,236 | $ | — | $ | — | |||||||||||
Southeast | 5,404 | — | — | ||||||||||||||
Corporate and unallocated (a) | 1,002 | — | — | ||||||||||||||
Total impairment charges on projects in progress | $ | 8,642 | $ | — | $ | — | |||||||||||
Land Held for Sale: | |||||||||||||||||
West | $ | 1,495 | $ | — | $ | — | |||||||||||
Corporate and unallocated(a) | 1,238 | $ | — | $ | — | ||||||||||||
Total impairment charges on land held for sale | $ | 2,733 | $ | — | $ | — | |||||||||||
Abandonments: | |||||||||||||||||
West | $ | 921 | $ | 1,805 | $ | 487 | |||||||||||
East | 215 | 91 | 154 | ||||||||||||||
Southeast | 448 | 100 | $ | — | |||||||||||||
Total abandonments charges | $ | 1,584 | $ | 1,996 | $ | 641 | |||||||||||
Total impairment and abandonment charges | $ | 12,959 | $ | 1,996 | $ | 641 | |||||||||||
(a)Amount represents capitalized interest and indirects balance that was impaired. Capitalized interest and indirects are maintained within Corporate and unallocated.
Projects in Progress Impairments
Projects in progress inventory includes homes under construction and land under development grouped together as communities. Projects in progress are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable.
We assess our projects in progress inventory for indicators of impairment at the community level on a quarterly basis. If indicators of impairment are present for a community with more than ten homes remaining to close, we perform a recoverability test by comparing the expected undiscounted cash flows for the community to its carrying value. If the aggregate undiscounted cash flows are in excess of the carrying value, the asset is considered to be recoverable and is not impaired. If the carrying value exceeds the aggregate undiscounted cash flows, we perform a discounted cash flow analysis to determine the fair value of the community, and impairment charges are recorded if the fair value of the community's inventory is less than its carrying value.
Valuation assumptions for communities tested for impairment are specific to each community. For projects in progress impaired during the periods presented, we determined the fair value of each community by discounting its estimated future cash flows at a rate commensurate with the risks associated with the underlying community. The discount rate used depends on (1) community specific factors such as product types, development stage and expected duration of the project, and competitive factors influencing the sales performance of the community, (2) local market factors such as employment levels, consumer confidence and existing supply of new and used homes for sale, and (3) other specific factors. The estimated future cash flows for each community were determined based on the expected pace of closings and average sales price less expected costs for land acquisition and land development, direct construction, overhead and interest. The assumptions used in the determination of fair value of projects in progress communities are based on factors known to us at the time such estimates are made and our expectations of future operations and market conditions. Due to uncertainties in the estimation process, the significant volatility in market conditions, the long life cycles of many communities, and potential changes in our strategy related to certain communities, actual results could differ significantly from our estimates.
14
During the fiscal year ended September 30, 2025, we performed discounted cash flow analyses to determine the fair value of two projects in progress communities, one in our Phoenix market and the other in our Orlando market. These analyses led to an $8.6 million projects in progress impairment charge, principally due to a reduction in price driven by the competitive and market dynamics. No projects in progress impairments were recognized during the fiscal years ended September 30, 2024 and 2023.
The following table presents, by reportable segment and Corporate and unallocated, details of the impairment charges taken on projects in progress for the period presented:
Results of Impairment Analysis | |||||||||||||||||||||||
$ in thousands | # of Communities Impaired | # of Lots Impaired | Impairment Charge | Estimated Fair Value of Impaired Inventory at Time of Impairment(b) | |||||||||||||||||||
Fiscal Year Ended September 30, 2025 | |||||||||||||||||||||||
West | 1 | 24 | $ | 2,236 | $ | 5,003 | |||||||||||||||||
Southeast | 1 | 65 | 5,404 | 11,837 | |||||||||||||||||||
Corporate and unallocated(a) | — | — | 1,002 | 2,210 | |||||||||||||||||||
Total | 2 | 89 | $ | 8,642 | $ | 19,050 | |||||||||||||||||
(a)Amount represents the capitalized interest and indirects balances that were impaired. Capitalized interest and indirects are maintained within Corporate and unallocated.
(b)Projects in progress assets are measured at fair value on a non-recurring basis when events and circumstances indicate that their carrying value is not recoverable. The fair value of projects in progress is determined using Level 3 unobservable inputs. Refer to Note 9 for further discussion of our fair value measurements and hierarchy levels.
The following table presents the ranges or values of significant quantitative unobservable inputs we used in determining the fair value of the communities impaired during the period presented:
$ in thousands | |||||
Unobservable Inputs | Fiscal Year Ended September 30, 2025 | ||||
Average selling price | $360 - $444 | ||||
Closings per community per month | 1 - 6 | ||||
Discount rate | 15.0 % | ||||
Land Held for Sale Impairments
Impairments on land held for sale generally represent write downs of these properties to fair value less cost to sell based on executed sales contracts, current sales prices for comparable assets in the area, recent market analysis studies, appraisals, recent legitimate offers and listing prices of similar properties, as applicable. Absent an executed sales contract, our assumptions related to land sales prices are based on factors known to us at the time such estimates are made and require significant judgment because the real estate market is highly sensitive to changes in economic conditions, and our estimates of sale prices could differ significantly from actual results.
During the fiscal year ended September 30, 2025, our reviews of various communities led to a decision to sell certain lots that no longer aligned with our strategic plans. As a result of changes in strategy, we reclassified 131 lots from projects in progress to land held for sale and recognized a land held for sale impairment charge of $2.7 million during the fiscal year ended September 30, 2025 related to communities in our Phoenix, San Antonio, and Houston markets. No land held for sale impairment charges were recognized during the fiscal years ended September 30, 2024 and 2023.
15
The following table presents, by reportable segment and Corporate and unallocated, details of the impairment charges taken on land held for sale for the period presented:
Results of Impairment Analysis | |||||||||||||||||||||||
$ in thousands | # of Communities Impaired | # of Lots Impaired | Impairment Charge | Estimated Fair Value of Impaired Inventory at Time of Impairment(b) | |||||||||||||||||||
Fiscal Year Ended September 30, 2025 | |||||||||||||||||||||||
West | 4 | 131 | $ | 1,495 | $ | 11,240 | |||||||||||||||||
Corporate and unallocated(a) | — | — | 1,238 | — | |||||||||||||||||||
Total | 4 | 131 | $ | 2,733 | $ | 11,240 | |||||||||||||||||
(a) Amount represents the capitalized interest and indirects balances that were impaired. Capitalized interest and indirects are maintained within Corporate and unallocated.
(b)Land held for sale assets are measured at fair value less cost to sell on a non-recurring basis when events and circumstances indicate that their carrying value is not recoverable. The fair values of land held for sale assets are determined using Level 3 unobservable inputs. Refer to Note 9 for further discussion of our fair value measurements and hierarchy levels.
Abandonments
From time to time, we may determine to abandon lots or not exercise certain option agreements that are not projected to produce adequate results or no longer fit with our long-term strategic plan. Additionally, in certain limited instances, we are forced to abandon lots due to seller non-performance, permitting or other regulatory issues that do not allow us to build on those lots. If we intend to no longer pursue the purchase of property, we record an abandonment charge to earnings for the non-refundable deposit amount and any related capitalized costs in the period such decision is made.
During the fiscal years ended September 30, 2025, 2024 and 2023, we recognized $1.6 million, $2.0 million and $0.6 million in abandonment charges, respectively. As we grow our business in the years ahead, the dollar value of abandonment charges may also grow.
(5) Interest
Interest capitalized during the fiscal years ended September 30, 2025, 2024 and 2023 was based upon the balance of inventory eligible for capitalization.
The following table presents certain information regarding interest for the periods presented:
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||||||||
Capitalized interest in inventory, beginning of period | $ | 124,182 | $ | 112,580 | $ | 109,088 | |||||||||||
Interest incurred | 86,529 | 79,835 | 71,981 | ||||||||||||||
Capitalized interest impaired | (1,462) | — | — | ||||||||||||||
Capitalized interest amortized to home construction and land sales expenses(a) | (77,404) | (68,233) | (68,489) | ||||||||||||||
Capitalized interest in inventory, end of period | $ | 131,845 | $ | 124,182 | $ | 112,580 | |||||||||||
(a)Capitalized interest amortized to home construction and land sales expenses varies based on the number of homes closed during the period and land sales, if any, as well as other factors.
16
(6) Property and Equipment
The following table presents our property and equipment as of September 30, 2025 and 2024:
in thousands | September 30, 2025 | September 30, 2024 | |||||||||
Model furnishings and sales office improvements | $ | 32,727 | $ | 32,179 | |||||||
Information systems | 39,483 | 30,140 | |||||||||
Furniture, fixtures and office equipment | 17,274 | 15,447 | |||||||||
Leasehold improvements | 4,192 | 3,226 | |||||||||
Buildings and improvements | 1,382 | 1,382 | |||||||||
Property and equipment, gross | 95,058 | 82,374 | |||||||||
Less: Accumulated depreciation | (47,113) | (43,746) | |||||||||
Property and equipment, net | $ | 47,945 | $ | 38,628 | |||||||
(7) Borrowings
The Company's debt, net of unamortized debt issuance costs consisted of the following as of September 30, 2025 and 2024:
in thousands | Maturity Date | September 30, 2025 | September 30, 2024 | ||||||||||||||
5.875% Senior Notes (2027 Notes) | October 2027 | $ | 357,255 | $ | 357,255 | ||||||||||||
7.250% Senior Notes (2029 Notes) | October 2029 | 350,000 | 350,000 | ||||||||||||||
7.500% Senior Notes (2031 Notes) | March 2031 | 250,000 | 250,000 | ||||||||||||||
Unamortized debt issuance costs | (6,611) | (8,310) | |||||||||||||||
Total Senior Notes, net | 950,644 | 948,945 | |||||||||||||||
Junior Subordinated Notes (net of unamortized accretion of $22,303 and $24,369, respectively) | July 2036 | 78,470 | 76,404 | ||||||||||||||
Senior Unsecured Revolving Credit Facility | March 2028 | — | — | ||||||||||||||
Total debt, net | $ | 1,029,114 | $ | 1,025,349 | |||||||||||||
As of September 30, 2025, the future maturities of our borrowings were as follows:
Fiscal Years Ending September 30, | |||||
in thousands | |||||
2026 | $ | — | |||
2027 | — | ||||
2028 | 357,255 | ||||
2029 | — | ||||
2030 | 350,000 | ||||
Thereafter | 350,773 | ||||
Total | $ | 1,058,028 | |||
Senior Unsecured Revolving Credit Facility
The Senior Unsecured Revolving Credit Facility (Unsecured Facility) provides working capital and letter of credit borrowing capacity. On January 28, 2025, the Company increased its available borrowing capacity under the Unsecured Facility from $300.0 million to $365.0 million. The $365.0 million capacity includes a letter of credit facility of up to $100.0 million. The Company also will have the right from time to time to request to increase the size of the commitments under the Unsecured Facility by up to $35.0 million for a maximum of $400.0 million. The Unsecured Facility terminates on March 15, 2028 (Termination Date), and the Company may borrow, repay, and reborrow amounts under the Unsecured Facility until the Termination Date.
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Substantially all of the Company's significant subsidiaries are full and unconditional guarantors of the Unsecured Facility and are jointly and severally liable for obligations under the Unsecured Facility.
As of September 30, 2025, we had no borrowings and $41.4 million in letters of credit outstanding under the Unsecured Facility, resulting in a remaining capacity of $323.6 million. The Unsecured Facility requires compliance with certain covenants, including affirmative covenants, negative covenants and financial covenants. As of September 30, 2025, the Company believes it was in compliance with all such covenants.
Letter of Credit Facilities
The Company has entered into stand-alone letter of credit agreements with banks, secured with cash or certificates of deposit, to maintain pre-existing letters of credit and to provide for the issuance of new letters of credit (in addition to the letters of credit issued under the Unsecured Facility). As of September 30, 2025, the Company had no letters of credit outstanding under these additional facilities. As of September 30, 2024, the Company had $36.4 million outstanding letters of credit under these additional facilities. The Company may enter into additional arrangements to provide additional letter of credit capacity.
Senior Notes
The Company's Senior Notes are unsecured obligations that rank equally in right of payment with all existing and future senior unsecured obligations, senior to all of the Company's existing and future subordinated indebtedness, and effectively subordinated to the Company's future secured indebtedness, to the extent of the value of the assets securing such indebtedness. Substantially all of the Company's significant subsidiaries are full and unconditional guarantors of the Senior Notes and are jointly and severally liable for obligations under the Senior Notes. Each guarantor subsidiary is a wholly owned subsidiary of Beazer Homes. The Senior Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company's subsidiaries that do not guarantee these notes.
The Company's Senior Notes are issued under indentures that contain certain restrictive covenants which, among other things, restrict our ability to pay dividends, repurchase our common stock, incur certain types of additional indebtedness, and make certain investments. Compliance with the Senior Note covenants does not significantly impact the Company's operations. The Company believes it was in compliance with the covenants contained in the indentures of all of its Senior Notes as of September 30, 2025.
No debt repurchases were made during the fiscal year ended September 30, 2025.
During the fiscal year ended September 30, 2024, we repurchased $202.2 million of our outstanding 2025 Notes using proceeds from the issuance of the 2031 Notes and cash on hand, resulting in a loss on extinguishment of debt of $0.4 million. The Company terminated, cancelled, and discharged all of its obligations under the 2025 Notes as of March 31, 2024.
During the fiscal year ended September 30, 2023, we repurchased $9.0 million of our outstanding 2025 Notes using cash on hand, resulting in a net loss on extinguishment of debt of less than $0.1 million.
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For additional redemption features, refer to the table below that summarizes the redemption terms of our Senior Notes:
Senior Note Description | Issuance Date | Maturity Date | Redemption Terms | |||||||||||||||||
5.875% Senior Notes | October 2017 | October 2027 | Callable at any time prior to October 15, 2022, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2022, callable at a redemption price equal to 102.938% of the principal amount; on or after October 15, 2023, callable at a redemption price equal to 101.958% of the principal amount; on or after October 15, 2024, callable at a redemption price equal to 100.979% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. | |||||||||||||||||
7.250% Senior Notes | September 2019 | October 2029 | Callable at any time prior to October 15, 2024, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2024, callable at a redemption price equal to 103.625% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 102.417% of the principal amount; on or after October 15, 2026, callable at a redemption price equal to 101.208% of the principal amount; on or after October 15, 2027, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. | |||||||||||||||||
7.500% Senior Notes | March 2024 | March 2031 | On or prior to March 15, 2027, we may redeem up to 35% of the aggregate principal amount of the 2031 Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 107.500% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, provided at least 65% of the aggregate principal amount of the 2031 Notes originally issued remains outstanding immediately after such redemption. Callable at any time prior to March 15, 2027, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2027, callable at a redemption price equal to 103.750% of the principal amount; on or after March 15, 2028, callable at a redemption price equal to 101.875% of the principal amount; on or after March 15, 2029, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. | |||||||||||||||||
Junior Subordinated Notes
The Company's unsecured junior subordinated notes (Junior Subordinated Notes) mature on July 30, 2036 and have an aggregate principal balance of $100.8 million as of September 30, 2025. The securities have a floating interest rate as defined in the Junior Subordinated Notes Indentures, which was a weighted-average of 7.02% as of September 30, 2025. The obligations relating to these notes are subordinated to the Unsecured Facility and the Senior Notes. In January 2010, the Company restructured $75.0 million of these notes (Restructured Notes) and recorded them at their then estimated fair value. Over the remaining life of the Restructured Notes, we will increase their carrying value until this carrying value equals the face value of the notes. As of September 30, 2025, the unamortized accretion was $22.3 million and will be amortized over the remaining life of the Restructured Notes. The remaining $25.8 million of the Junior Subordinated Notes are subject to the terms of the original agreement, have a floating interest rate equal to a three-month SOFR plus 2.71% per annum, resetting quarterly, and are redeemable in whole or in part at par value. The material terms of the $75.0 million Restructured Notes are identical to the terms of the original agreement except that the floating interest rate is subject to a floor of 4.25% and a cap of 9.25%. In addition, beginning on June 1, 2012, the Company has the option to redeem the $75.0 million principal balance in whole or in part at 75% of par value, and beginning on June 1, 2022, the redemption price has increased by 1.785% annually. As of September 30, 2025, the Company believes it was in compliance with all covenants under the Junior Subordinated Notes.
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(8) Contingencies
Beazer Homes and certain of its subsidiaries have been and continue to be named as defendants in various construction defect claims, complaints, and other legal actions. The Company is subject to the possibility of loss contingencies related to these alleged defects as well as others arising from its business. In determining loss contingencies, we consider the likelihood of loss and our ability to reasonably estimate the amount of such loss. An estimated loss is recorded when it is considered probable that a liability has been incurred and the amount of loss can be reasonably estimated.
Warranty Reserves
We currently provide a limited warranty ranging from one to two years covering workmanship and materials per our defined quality standards. In addition, we provide a limited warranty for up to ten years covering certain defined structural element failures.
Warranty reserves are included in other liabilities within the consolidated balance sheets, and the provision for warranty accruals is included in home construction expenses in the consolidated statements of operations. Reserves covering anticipated warranty expenses are recorded for each home closed, which are a function of the number of home closings in the period, the selling prices of the homes closed and the rates of accrual per home estimated as a percentage of the selling price of the home. Management assesses the adequacy of warranty reserves each reporting period based on historical experience and the expected costs to remediate potential claims. Our review includes a quarterly analysis of the historical data and trends in warranty expense by division. An analysis by division allows us to consider market specific factors such as warranty experience, the number of home closings, the selling prices of homes, product mix, and other data in estimating warranty reserves. In addition, the analysis also contemplates the existence of any non-recurring or community-specific warranty-related matters that might not be included in historical data and trends that may need to be separately estimated based on management's judgment of the ultimate cost of repair for that specific issue. While estimated warranty liabilities are adjusted each reporting period based on the results of our quarterly analyses, we may not accurately predict actual warranty costs, which could lead to significant changes in the reserve.
Changes in warranty reserves are as follows for the periods presented:
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||||||||
Balance at beginning of period | $ | 12,717 | $ | 13,046 | $ | 13,926 | |||||||||||
Warranty provision | 10,337 | 9,483 | 9,672 | ||||||||||||||
Warranty expenditures | (9,490) | (9,812) | (10,552) | ||||||||||||||
Balance at end of period | $ | 13,564 | $ | 12,717 | $ | 13,046 | |||||||||||
Our homebuilding work is performed by subcontractors who typically must agree to indemnify us with regard to their work and provide certificates of insurance demonstrating that they have met our insurance requirements and have named us as an additional insured under their policies. Therefore, many claims relating to workmanship and materials that result in warranty spending are the primary responsibility of these subcontractors. In addition, we maintain third-party insurance policies that provide for the reimbursement of certain warranty costs incurred in the normal course of business, subject to applicable self-insured retentions. Amounts recorded for anticipated insurance and other third-party recoveries are reflected within the consolidated statements of operations as a reduction to home construction expense, if applicable. Anticipated recoveries not yet received from our insurer or other third-parties are recorded within accounts receivable on our consolidated balance sheets, if applicable.
We believe that our warranty and litigation accruals and third-party insurance are adequate to cover the ultimate resolution of our potential liabilities associated with known and anticipated warranty and construction-defect related claims and litigation. However, there can be no assurance that the terms and limitations of the limited warranty will be effective against claims made by homebuyers; that we will be able to renew our insurance coverage or renew it at reasonable rates; that we will not be liable for damages, the cost of repairs, and/or the expense of litigation surrounding possible construction defects, soil subsidence, or building related claims; or that claims will not arise out of events or circumstances not covered by insurance and/or not subject to effective indemnification agreements with our subcontractors.
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Litigation
In the normal course of business, we and certain of our subsidiaries are subject to various lawsuits and have been named as defendants in various claims, complaints, and other legal actions, most relating to construction defects, moisture intrusion, and product liability. Certain of the liabilities resulting from these actions are covered in whole or in part by insurance. We cannot predict or determine the timing or final outcome of these lawsuits or the effect that any adverse findings or determinations in pending lawsuits may have on us. In addition, an estimate of possible loss or range of loss, if any, cannot presently be made with respect to certain of these pending matters. An unfavorable determination in pending lawsuits could result in the payment by us of substantial monetary damages that may not be fully covered by insurance. Further, the legal costs associated with the lawsuits and the amount of time required to be spent by management and our Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our financial condition, results of operations, or cash flows.
We have an accrual of $9.9 million and $9.3 million in other liabilities on our consolidated balance sheets related to litigation matters as of September 30, 2025 and 2024, respectively.
Surety Bonds and Letters of Credit
We had outstanding letters of credit, surety bonds, and surety-backed letters of credit of $41.4 million, $321.9 million, and $2.4 million, respectively, as of September 30, 2025, related principally to our obligations to local governments to construct roads and other improvements in various developments.
(9) Fair Value Measurements
As of the dates presented, we had assets on our consolidated balance sheets that were required to be measured at fair value on a recurring or non-recurring basis. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows:
•Level 1 – Quoted prices in active markets for identical assets or liabilities;
•Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; and
•Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.
Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value of these assets may not be recoverable. We review our long-lived assets, including inventory, for recoverability when factors indicate an impairment may exist, but no less than quarterly. The fair value of assets deemed to be impaired is determined based upon the type of asset being evaluated. The fair value of our owned inventory assets, when required to be calculated, is further discussed within Notes 2 and 4. Due to the substantial use of unobservable inputs in valuing the assets on a non-recurring basis, they are classified within Level 3.
Determining within which hierarchical level an asset or liability falls requires significant judgment. We evaluate our hierarchy disclosures each quarter. The following table presents the period-end balances of assets measured at fair value on a recurring basis for each hierarchy level:
in thousands | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
As of September 30, 2025 | |||||||||||||||||||||||
Deferred compensation plan assets(a) | $ | 8,661 | $ | — | $ | — | $ | 8,661 | |||||||||||||||
As of September 30, 2024 | |||||||||||||||||||||||
Deferred compensation plan assets(a) | $ | 8,115 | $ | — | $ | — | $ | 8,115 | |||||||||||||||
As of September 30, 2023 | |||||||||||||||||||||||
Deferred compensation plan assets(a) | $ | 6,495 | $ | — | $ | — | $ | 6,495 | |||||||||||||||
(a)Amount is included in other assets within the consolidated balance sheets.
21
The fair value of cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, and amounts due under the Unsecured Facility (if outstanding) approximate their carrying amounts due to the short maturity of these assets and liabilities. When outstanding, obligations related to land not owned under option agreements approximate fair value.
The following table presents the carrying value and estimated fair value of certain other financial assets and liabilities as of September 30, 2025 and 2024:
As of September 30, 2025 | As of September 30, 2024 | ||||||||||||||||||||||
in thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||
Financial assets | |||||||||||||||||||||||
Certificates of deposit(a) | $ | — | $ | — | $ | 9,449 | $ | 9,584 | |||||||||||||||
Total financial assets | $ | — | $ | — | $ | 9,449 | $ | 9,584 | |||||||||||||||
Financial liabilities(b) | |||||||||||||||||||||||
Senior Notes(c) | $ | 950,644 | $ | 968,634 | $ | 948,945 | $ | 976,494 | |||||||||||||||
Junior Subordinated Notes(d) | 78,470 | 78,470 | 76,404 | 76,404 | |||||||||||||||||||
Total financial liabilities | $ | 1,029,114 | $ | 1,047,104 | $ | 1,025,349 | $ | 1,052,898 | |||||||||||||||
(a)Certificates of deposit held for investment with an original maturity greater than three months are carried at original cost plus accrued interest and reported as other assets on the condensed consolidated balance sheets. The type of certificates of deposit that the Company invests in are not considered debt securities under ASC Topic 320, Investments - Debt Securities. The estimated fair value of our certificates of deposit has been determined using quoted market rates (Level 2).
(b)Carrying amounts for financial liabilities are net of unamortized debt issuance costs or accretion.
(c)The estimated fair value of our publicly-held Senior Notes has been determined using quoted market rates (Level 2).
(d)Since there is no trading market for our Junior Subordinated Notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (Level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange.
(10) Operating Leases
The Company leases certain office space and equipment under operating leases for use in our operations. We recognize operating lease expense on a straight-line basis over the lease term. Certain of our lease agreements include one or more options to renew. The exercise of lease renewal options is generally at our discretion. Variable lease expense primarily relates to maintenance and other monthly expense that do not depend on an index or rate.
We determine if an arrangement is a lease at contract inception. Lease and non-lease components are accounted for as a single component for all leases. Operating lease right to use assets and liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term, which includes optional renewal periods if we determine it is reasonably certain that the option will be exercised. As our leases do not provide an implicit rate, the discount rate used in the present value calculation represents our incremental borrowing rate determined using information available at the commencement date.
Operating lease expense is included as a component of general and administrative expenses in our consolidated statements of operations. Sublease income and variable lease expenses are de minimis. For the fiscal years ended September 30, 2025, 2024 and 2023, we recorded operating lease expense of $4.7 million, $4.4 million and $4.0 million, respectively. Cash payments on lease liabilities during the fiscal years ended September 30, 2025, 2024 and 2023 totaled $4.6 million, $4.2 million and $4.3 million, respectively.
22
During the fiscal year ended September 30, 2025, the Company executed a model sale-leaseback transaction involving the sale of 83 model homes, which were immediately leased back for terms ranging from 12 to 54 months. The Company determined that control of the model homes transferred to the buyer and the transaction qualified as a sale. The model sale-leaseback transaction generated homebuilding revenue of $45.0 million, home construction expense of $38.3 million, and cash proceeds of $36.2 million. The transaction revenue reflected the estimated fair value of the model homes, which exceeded the cash proceeds by $8.8 million. This difference was recognized as a prepayment of rent. The model home leases from the transaction are accounted for as operating leases and the Company recorded total right-of-use assets and lease liabilities of $16.5 million and $7.7 million, respectively, at the time of the transaction in the accompanying consolidated balance sheets.
At September 30, 2025 and 2024, weighted-average remaining lease term and discount rate were as follows:
September 30, | |||||||||||
2025 | 2024 | ||||||||||
Weighted-average remaining lease term | 5.0 years | 6.6 years | |||||||||
Weighted-average discount rate | 4.64% | 6.30% | |||||||||
The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of September 30, 2025:
Fiscal Years Ending September 30, | |||||
in thousands | |||||
2026 | $ | 8,738 | |||
2027 | 7,025 | ||||
2028 | 4,682 | ||||
2029 | 3,846 | ||||
2030 | 3,080 | ||||
Thereafter | 5,553 | ||||
Total lease payments | 32,924 | ||||
Less: imputed interest | 5,162 | ||||
Total operating lease liabilities | $ | 27,762 | |||
(11) Other Liabilities
Other liabilities include the following as of September 30, 2025 and 2024:
in thousands | September 30, 2025 | September 30, 2024 | |||||||||
Accrued compensations and benefits | $ | 43,793 | $ | 45,335 | |||||||
Customer deposits | 14,260 | 18,669 | |||||||||
Accrued interest | 23,211 | 23,369 | |||||||||
Warranty reserves | 13,564 | 12,717 | |||||||||
Litigation accruals | 9,930 | 9,297 | |||||||||
Income tax liabilities | 32 | 2,399 | |||||||||
Other | 55,655 | 38,114 | |||||||||
Total | $ | 160,445 | $ | 149,900 | |||||||
23
(12) Income Taxes
The Company's (benefit) expense from income taxes from continuing operations consists of the following for the periods presented:
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||||||||
Current federal | $ | 6,019 | $ | 8,377 | $ | — | |||||||||||
Current state | 3,299 | 5,101 | 1,896 | ||||||||||||||
Deferred federal | (13,202) | 6,317 | 18,997 | ||||||||||||||
Deferred state | (854) | (885) | 3,065 | ||||||||||||||
Total (benefit) expense from income taxes | $ | (4,738) | $ | 18,910 | $ | 23,958 | |||||||||||
The Company's (benefit) expense from income taxes from continuing operations differs from the amount computed by applying the federal income tax statutory rate as follows for the periods presented:
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||||||||
Income tax computed at statutory rate | $ | 8,579 | $ | 33,408 | $ | 38,356 | |||||||||||
State income taxes, net of federal benefit | 2,223 | 3,273 | 2,874 | ||||||||||||||
Permanent differences | 4,261 | 9,140 | 2,037 | ||||||||||||||
Stock-based compensation | 611 | 1,055 | 179 | ||||||||||||||
Tax credits | (20,253) | (27,918) | (20,287) | ||||||||||||||
Deferred rate change | (343) | 53 | 665 | ||||||||||||||
Other, net | 184 | (101) | 134 | ||||||||||||||
Total (benefit) expense from income taxes | $ | (4,738) | $ | 18,910 | $ | 23,958 | |||||||||||
The principal differences between our effective tax rate and the U.S. federal statutory rate for fiscal years 2025, 2024 and 2023 relate to state taxes, permanent differences and tax credits. Due to the effects of tax credits, our income tax (benefit) expense is not always directly correlated to the amount of pre-tax income for the associated periods.
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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of our assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of significant temporary differences that give rise to the net deferred tax assets are as follows as of September 30, 2025 and 2024:
in thousands | September 30, 2025 | September 30, 2024 | |||||||||
Deferred tax assets: | |||||||||||
Federal and state net operating loss and tax credit carryforwards | $ | 140,962 | $ | 126,547 | |||||||
Inventory adjustments | 21,286 | 7,914 | |||||||||
Property, equipment and other assets | 7,900 | 6,199 | |||||||||
Warranty and other reserves | 7,789 | 6,613 | |||||||||
Incentive compensation | 7,565 | 8,621 | |||||||||
Uncertain tax positions | 705 | 705 | |||||||||
Other | 1,953 | 4,816 | |||||||||
Total deferred tax assets | 188,160 | 161,415 | |||||||||
Valuation allowance | (35,758) | (27,578) | |||||||||
Total deferred tax assets, net of valuation allowance | $ | 152,402 | $ | 133,837 | |||||||
Deferred tax liabilities: | |||||||||||
Operating lease right-of-use assets | $ | (8,449) | $ | (4,286) | |||||||
Intangible assets | (1,306) | (1,026) | |||||||||
Total deferred tax liabilities | (9,755) | (5,312) | |||||||||
Net deferred tax assets | $ | 142,647 | $ | 128,525 | |||||||
As of September 30, 2025, our gross deferred tax assets included $18.9 million of federal net operating loss (NOL) carryforwards, $84.1 million of federal tax credits, and $39.9 million of state NOL carryforwards. Our federal NOL carryforwards expire at various dates through our fiscal 2033, our federal tax credits expire at various dates through our fiscal 2045, and our state NOL carryforwards expire at various dates through our fiscal 2045. As of September 30, 2025, our valuation allowance of $35.8 million remains on various state NOL carryforwards for which the Company has concluded that it is more likely than not that these attributes will not be realized.
We experienced an “ownership change” as defined in Section 382 and Section 383 of the Internal Revenue Code as of January 12, 2010. Section 382 and Section 383 contain rules that limit the ability of a company that undergoes an “ownership change” to utilize its net operating loss carryforwards, tax credits and certain built-in losses or deductions recognized during the five-year period after the ownership change to offset future taxable income. Because the five-year period has expired, we have determined the actual impact and final classification of those amounts, which are properly reflected in the amounts presented above. There can be no assurance that another ownership change, as defined in the tax law, will not occur. If another “ownership change” occurs, a new annual limitation on the utilization of net operating loss carryforwards, tax credits and built-in losses would be determined as of that date. This limitation, should one be required in the future, is subject to assumptions and estimates that could differ from actual results.
Valuation Allowance
A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, we assess the need to establish valuation allowances for deferred tax assets periodically based on the more-likely-than-not realization threshold criterion. In our assessment, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company's experience with operating loss carryforwards and tax credit carryforwards not expiring unused, the Section 382 and Section 383 limitation on our ability to carryforward pre-ownership change net operating losses, tax credits and certain built-in losses or deductions, and tax planning alternatives. Our assessment, while rooted in actual Company performance, is subjective and rely on certain estimates, including forecasts, which could differ materially from actual results.
25
In fiscal 2025, our conclusions about our ability to more likely than not realize all of our federal and certain state tax attributes remain consistent with our prior determinations. We considered positive factors including our sustained tax profitability, interest savings from our debt reduction strategies, shortage in housing supply, and our backlog. The negative factors included the overall health of the broader economy, elevated mortgage interest rates, and softening housing demand due to affordability challenges. We expect to realize our deferred tax assets prior to their expiration through our regular operations and future earnings.
Unrecognized Tax Benefits
A reconciliation of our unrecognized tax benefits is as follows for the beginning and end of each period presented:
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||||||||
Balance at beginning of year | $ | 2,420 | $ | 3,358 | $ | 3,358 | |||||||||||
Additions for tax positions related to current year | — | — | — | ||||||||||||||
Additions for tax positions related to prior years | — | — | — | ||||||||||||||
Reductions in tax positions of prior years | — | — | — | ||||||||||||||
Lapse of statute of limitations | (425) | (938) | — | ||||||||||||||
Balance at end of year | $ | 1,995 | $ | 2,420 | $ | 3,358 | |||||||||||
If we were to recognize our $2.0 million gross unrecognized tax benefits remaining as of September 30, 2025, substantially all would result in adjustments to other tax accounts, primarily deferred taxes. Additionally, we had no accrued interest or penalties as of September 30, 2025, 2024 and 2023. If applicable, we would record interest and penalties related to unrecognized tax benefits in income tax expense within our consolidated statements of operations.
In the normal course of business, we are subject to audits by federal and state tax authorities regarding various tax liabilities. The statute of limitations for our major tax jurisdictions remains open for examination for fiscal year 2007 and subsequent years. As of September 30, 2025, we expect $0.4 million of our uncertain tax positions will reverse within the next twelve months.
(13) Stockholders' Equity
Preferred Stock
The Company currently has no shares of preferred stock outstanding.
Common Stock
As of September 30, 2025, the Company had 63,000,000 shares of common stock authorized and 29,762,293 shares both issued and outstanding.
Common Stock Repurchases
In April 2025, the Company's Board of Directors approved a new share repurchase program that authorizes the Company to repurchase up to $100.0 million of its outstanding common stock. The newly authorized program replaced the prior share repurchase program authorized in May 2022 of up to $50.0 million of common stock repurchases, pursuant to which $8.3 million of the capacity remained prior to the replacement of the program. Under our share repurchase programs, the Company repurchased 1.5 million shares of its common stock for $33.1 million at an average price per share of $22.20 during the fiscal year ended September 30, 2025 through open market transactions. All shares have been retired upon repurchase. The aggregate reduction to stockholders' equity related to share repurchases during the fiscal year ended September 30, 2025 was $33.1 million. As of September 30, 2025, the remaining availability of the share repurchase program was $87.5 million.
During the fiscal year ended September 30, 2024, the Company repurchased 455 thousand shares of its common stock for $12.9 million at an average price per share of $28.41 through open market transactions. The aggregate reduction to stockholders’ equity related to share repurchases during the fiscal year ended September 30, 2024 was $12.9 million. No share repurchases were made during fiscal year 2023.
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Dividends
The indentures under which our Senior Notes were issued contain certain restrictive covenants, including limitations on our payment of dividends. There were no dividends paid during our fiscal 2025, 2024 or 2023.
Rights Agreement
As of September 30, 2025 and 2024, the Company had net deferred tax assets of $142.6 million and $128.5 million, respectively, representing an 11.0% increase. The vast majority of these tax assets are subject to potential limitation under Internal Revenue Code Sections 382 and 383, and approximately $84.1 million are Energy-Efficiency Tax Credits.
On November 12, 2025, the Company, with the unanimous approval of its Board of Directors, entered into that certain Rights Agreement for the Protection of NOLs and Energy-Efficiency Tax Credits (the New Rights Agreement). The New Rights Agreement will replace the existing rights agreement upon its expiration, effective as of the close of business on November 14, 2025. The New Rights Agreement is intended to preserve the value of the Company’s deferred tax assets, particularly Energy-Efficiency Tax Credits, by acting as a deterrent to any person desiring to acquire 4.95% or more of our common stock. At the 2026 Annual Meeting of Stockholders (the 2026 Annual Meeting), the Company intends to seek stockholder ratification of the New Rights Agreement, as well as approval of a charter amendment that would prohibit certain transfers of our common stock that could result in an ownership change under Internal Revenue Code rules. Subject to stockholder ratification at the 2026 Annual Meeting, the New Rights Agreement will expire upon the earlier of (i) the first day of the Company’s taxable year when the Company’s Board of Directors determines that no Energy-Efficiency Tax Credits carry-forwards are available, or (ii) any other event triggering expiration under its terms, but in no event later than November 14, 2028.
(14) Retirement and Deferred Compensation Plans
401(k) Retirement Plan
The Company sponsors a defined-contribution plan that is a tax-qualified retirement plan under section 401(k) of the Internal Revenue Code (the Plan). Substantially all employees are eligible for participation in the Plan. Participants may defer and contribute from 1% to 80% of their salary to the Plan, with certain limitations on highly compensated individuals. The Company matches up to 50% of the participant's contributions limited to 6% of the participant's earnings. The participant's contributions vest immediately, while the Company's contributions vest over five years. The total Company contributions for the fiscal years ended September 30, 2025, 2024 and 2023 were $3.7 million, $3.5 million and $3.2 million, respectively. During fiscal 2025, 2024 and 2023, participants forfeited $0.9 million, $0.9 million and $0.7 million, respectively, of unvested matching contributions.
Deferred Compensation Plan
The Beazer Homes USA, Inc. Deferred Compensation Plan (DCP) is a non-qualified deferred compensation plan for a select group of executives and highly compensated employees. The DCP allows the executives to defer current compensation on a pre-tax basis to a future year, until termination of employment. The objectives of the DCP are to assist executives with financial planning and capital accumulation and to provide the Company with a method of attracting, rewarding and retaining executives. Participation in the DCP is voluntary. The Company may voluntarily make a contribution to the participants' DCP accounts. For the years ended September 30, 2025, 2024 and 2023, the Company contributed $0.2 million, $0.2 million and $0.2 million, respectively, to the participants' DCP accounts in the form of voluntary contributions, which was recorded as compensation expense within general and administrative expenses in our consolidated statements of operations. DCP assets of $8.7 million and $8.1 million as of September 30, 2025 and 2024, respectively, are included in other assets on our consolidated balance sheets and are recorded at fair value. Realized and unrealized gains and losses on DCP assets are recorded in other income, net within our consolidated statement of operations. DCP liabilities of $8.7 million and $8.1 million as of September 30, 2025 and 2024, respectively, are included in other liabilities on our consolidated balance sheets.
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(15) Stock-Based Compensation
The Company has shares available for grant under the Amended and Restated 2014 Beazer Homes USA, Inc. Long-Term Incentive Plan, as amended. We issue new shares upon the exercise of stock options and the grant of restricted stock awards. In cases of forfeitures and cancellations, those shares are returned to the share pool for future issuance. As of September 30, 2025, we had 2.7 million shares of common stock available for future issuances under our equity incentive plan, of which 1,642 shares are to be issued upon exercise of outstanding options.
Stock-based compensation expense is included in general and administrative expenses in our consolidated statements of operations. The following table presents a summary of stock-based compensation expense related to stock options and restricted stock awards for the periods presented.
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||||||||
Stock options expense | $ | 7 | $ | 1 | $ | — | |||||||||||
Restricted stock awards expense | 7,331 | 7,390 | 7,275 | ||||||||||||||
Stock-based compensation expense | $ | 7,338 | $ | 7,391 | $ | 7,275 | |||||||||||
Stock Options
Stock options have an exercise price equal to the fair market value of the common stock on the grant date, generally vest two or three years after the date of grant, and may be exercised thereafter until their expiration, subject to forfeiture upon termination of employment as provided in the applicable plan. Under certain conditions of retirement, eligible participants may receive a partial vesting of stock options. Stock options generally expire on the eighth anniversary from the date such options were granted, depending on the terms of the award.
The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model (Black-Scholes Model). As of both September 30, 2025 and 2024, there was less than $0.1 million of total unrecognized compensation cost related to unvested stock options. The cost remaining as of September 30, 2025 is expected to be recognized over a weighted-average period of 1.4 years.
During fiscal 2018, the Compensation Committee of our Board of Directors approved the Employee Stock Option Program (ESOP). This program is available to all full-time employees and is designed to enable employees to share in potential price appreciation of the Company's stock. The ESOP matches stock purchases made by eligible employees meeting certain conditions with an option to purchase an additional share of the Company's shares on a one-to-one basis. The exercise price of the options granted is equal to the closing price of the Company's stock on the day the underlying shares are purchased by the employee, which is also the ESOP grant date. The options will vest on the second anniversary of the date of grant but are forfeited if (1) the eligible employee no longer works for the Company or (2) the underlying shares are sold before the two-year vesting period is over. The total number of options available under the ESOP is limited to 100,000, each for one share of the Company's common stock, of which 33,810 options were granted through the end of fiscal 2025.
During the fiscal years ended September 30, 2025, 2024, and 2023, we issued 1,692, 50, and 100 stock options under the ESOP, respectively.
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Following is a summary of stock option activity for the periods presented:
Fiscal Year Ended September 30, | |||||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
Shares | Weighted-Average Exercise Price | Shares | Weighted-Average Exercise Price | Shares | Weighted-Average Exercise Price | ||||||||||||||||||||||||||||||
Outstanding at beginning of period | 11,150 | $ | 10.04 | 13,575 | $ | 9.61 | 27,507 | $ | 14.31 | ||||||||||||||||||||||||||
Granted | 1,692 | $ | 22.38 | 50 | $ | 27.73 | 100 | $ | 27.98 | ||||||||||||||||||||||||||
Exercised | (11,000) | $ | 9.79 | (2,475) | $ | 8.08 | (13,796) | $ | 19.00 | ||||||||||||||||||||||||||
Forfeited | (200) | $ | 20.27 | — | $ | — | (236) | $ | 16.58 | ||||||||||||||||||||||||||
Outstanding at end of period | 1,642 | $ | 23.14 | 11,150 | $ | 10.04 | 13,575 | $ | 9.61 | ||||||||||||||||||||||||||
Exercisable at end of period | 100 | $ | 27.98 | 11,000 | $ | 9.79 | 13,475 | $ | 9.48 | ||||||||||||||||||||||||||
Restricted Stock Awards
The fair value of each restricted stock award with market conditions is estimated on the date of grant using the Monte Carlo valuation method. The fair value of restricted stock awards without market conditions is based on the market price of the Company's common stock on the date of grant. If applicable, the cash-settled component of any awards granted to employees is accounted for as a liability, which is adjusted to fair value each reporting period until vested.
Compensation cost arising from restricted stock awards granted to employees is recognized as an expense using the straight-line method over the vesting period. As of September 30, 2025 and 2024, there was $9.1 million and $6.8 million, respectively, of total unrecognized compensation cost related to unvested restricted stock awards. The cost remaining as of September 30, 2025 is expected to be recognized over a weighted-average period of 1.9 years.
During fiscal 2025, we issued time-based restricted stock awards and performance-based restricted stock awards with a payout subject to certain performance and market conditions. Each award type is discussed below.
Performance-Based Restricted Stock Awards
During the fiscal year ended September 30, 2025, we issued 96,603 shares of performance-based restricted stock (2025 Performance Shares), containing market conditions, to our executive officers and certain other employees. The 2025 Performance Shares are structured to be awarded based on the Company's performance under three pre-determined financial and operational metrics at the end of the three-year performance period. After determining the number of shares earned based on the financial and operational metrics, which can range from 0% to 175% of the targeted number of shares, the award will be subject to further upward or downward adjustment by as much as 30% based on the Company's relative total shareholder return (TSR) compared against a selected small to mid-cap homebuilder peers during the three-year performance period. The 2025 Performance Shares were valued using the Monte Carlo valuation model due to the existence of the TSR market condition and had an estimated fair value of $36.86 per share on the date of grant.
A Monte Carlo valuation model requires the following inputs: (1) the expected dividend yield on the underlying stock; (2) the expected price volatility of the underlying stock; (3) the risk-free interest rate for the period corresponding with the expected term of the award; and (4) the fair value of the underlying stock. For the Company and each member of the peer group, the following inputs were used, as applicable, in the Monte Carlo valuation model to determine the fair value as of the grant date for performance-based restricted stock granted in each of the fiscal years ended.
Fiscal Year Ended September 30, | |||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||
Expected volatility range | 36.3% - 82.7% | 32.5% - 84.6% | 41.5% - 86.9% | ||||||||||||||
Risk-free interest rate | 4.22 % | 4.57 % | 4.26 % | ||||||||||||||
Dividend yield | — | — | — | ||||||||||||||
Grant-date stock price range | $10.49 - $179.41 | $9.81 - $142.79 | $10.31 - $93.50 | ||||||||||||||
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Each of our performance shares represents a contingent right to receive one share of the Company's common stock if vesting is satisfied at the end of the three-year performance period. Our performance stock award plans provide that any performance shares earned in excess of the target number of performance shares issued may be settled in cash or additional shares at the discretion of the Human Capital Committee. We have no current plans to settle any additional performance-based restricted shares in the future in cash.
The performance criteria of the 2023 Performance Share grant were satisfied as of September 30, 2025. Based on the actual performance level achieved, 140,035 performance-based restricted stock awards from the 2023 Performance Share grant will cliff vest at the end of the three-year vesting period on November 20, 2025. Of the total $2.5 million compensation cost related to these awards, we have recognized $0.3 million, $1.5 million and $0.6 million during the fiscal years ended September 30, 2025, 2024 and 2023, respectively. The remaining $0.1 million of unrecognized compensation cost will be recognized in the first quarter of fiscal 2026.
Time-Based Restricted Stock Awards
During the fiscal year ended September 30, 2025, we also issued 229,186 shares of time-based restricted stock (Restricted Shares) to our directors, executive officers, and certain other employees. Restricted Shares are valued based on the market price of the Company's common stock on the date of the grant. The Restricted Shares granted to our non-employee directors vest on the first anniversary of the grant, while the Restricted Shares granted to our executive officers and other employees generally vest ratably over three years from the date of grant.
Activity relating to all restricted stock awards for the periods presented is as follows:
Fiscal Year Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
Performance-Based | Time-Based | Total | |||||||||||||||||||||||||||||||||
Shares | Weighted-Average Grant Date Fair Value | Shares | Weighted-Average Grant Date Fair Value | Shares | Weighted-Average Grant Date Fair Value | ||||||||||||||||||||||||||||||
Beginning of period | 303,712 | $ | 19.48 | 415,787 | $ | 19.89 | 719,499 | $ | 19.72 | ||||||||||||||||||||||||||
Granted | 96,603 | $ | 36.86 | 229,186 | $ | 31.03 | 325,789 | $ | 32.76 | ||||||||||||||||||||||||||
Vested | -71,470 | $ | 23.36 | -228,863 | $ | 19.89 | -300,333 | $ | 20.72 | ||||||||||||||||||||||||||
Forfeited(a) | -21,748 | $ | 23.51 | -14,085 | $ | 26.36 | -35,833 | $ | 24.63 | ||||||||||||||||||||||||||
End of period | 307,097 | $ | 23.76 | 402,025 | $ | 26.01 | 709,122 | $ | 25.04 | ||||||||||||||||||||||||||
(a)During the fiscal year ended September 30, 2025, 17,875 of the 89,345 performance-based shares issued under the fiscal 2022 performance-based award plan were forfeited by the holders of the awards based on the performance level achieved under the terms of the plan.
Fiscal Year Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||
Performance-Based(a) | Time-Based | Total | |||||||||||||||||||||||||||||||||
Shares | Weighted-Average Grant Date Fair Value | Shares | Weighted-Average Grant Date Fair Value | Shares | Weighted-Average Grant Date Fair Value | ||||||||||||||||||||||||||||||
Beginning of period | 348,223 | $ | 16.20 | 593,834 | $ | 14.15 | 942,057 | $ | 14.91 | ||||||||||||||||||||||||||
Granted | 183,396 | $ | 20.80 | 202,042 | $ | 27.14 | 385,438 | $ | 24.12 | ||||||||||||||||||||||||||
Vested | (210,176) | $ | 15.24 | (336,821) | $ | 14.37 | (546,997) | $ | 14.70 | ||||||||||||||||||||||||||
Forfeited | (17,731) | $ | 18.96 | (43,268) | $ | 17.92 | (60,999) | $ | 18.22 | ||||||||||||||||||||||||||
End of period | 303,712 | $ | 19.48 | 415,787 | $ | 19.89 | 719,499 | $ | 19.72 | ||||||||||||||||||||||||||
30
(a)Grant and vesting activity during the fiscal year ended September 30, 2024 include 108,108 shares that were issued above target based on performance level achieved under performance-based restricted stock vesting in the current period.
Fiscal Year Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
Performance-Based(a) | Time-Based | Total | |||||||||||||||||||||||||||||||||
Shares | Weighted-Average Grant Date Fair Value | Shares | Weighted-Average Grant Date Fair Value | Shares | Weighted-Average Grant Date Fair Value | ||||||||||||||||||||||||||||||
Beginning of period | 436,146 | $ | 17.76 | 412,042 | $ | 18.52 | 848,188 | $ | 18.13 | ||||||||||||||||||||||||||
Granted | 249,534 | $ | 14.17 | 425,398 | $ | 12.05 | 674,932 | $ | 12.83 | ||||||||||||||||||||||||||
Vested | (334,736) | $ | 16.80 | (234,218) | $ | 18.02 | (568,954) | $ | 17.30 | ||||||||||||||||||||||||||
Forfeited | (2,721) | $ | 15.20 | (9,388) | $ | 14.38 | (12,109) | $ | 14.56 | ||||||||||||||||||||||||||
End of period | 348,223 | $ | 16.20 | 593,834 | $ | 14.15 | 942,057 | $ | 14.91 | ||||||||||||||||||||||||||
(a)Grant and vesting activity during the fiscal year ended September 30, 2023 include 92,104 shares that were issued above target based on performance level achieved under performance-based restricted stock vesting in the current period.
(16) Earnings Per Share
Basic income per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted income per share adjusts the basic income per share for the effects of any potentially dilutive securities in periods in which the Company has net income and such effects are dilutive under the treasury stock method.
Following is a summary of the components of basic and diluted income per share for the periods presented:
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands (except per share data) | 2025 | 2024 | 2023 | ||||||||||||||
Numerator: | |||||||||||||||||
Income from continuing operations | $ | 45,588 | $ | 140,175 | $ | 158,688 | |||||||||||
Loss from discontinued operations, net of tax | — | — | (77) | ||||||||||||||
Net income | $ | 45,588 | $ | 140,175 | $ | 158,611 | |||||||||||
Denominator: | |||||||||||||||||
Basic weighted-average shares | $ | 29,758 | $ | 30,548 | $ | 30,353 | |||||||||||
Dilutive effect of restricted stock awards | 251 | 397 | 388 | ||||||||||||||
Dilutive effect of stock options | 2 | 8 | 6 | ||||||||||||||
Diluted weighted-average shares(a) | $ | 30,011 | $ | 30,953 | $ | 30,747 | |||||||||||
Basic income per share: | |||||||||||||||||
Continuing operations | $ | 1.53 | $ | 4.59 | $ | 5.23 | |||||||||||
Discontinued operations | — | — | — | ||||||||||||||
Total | $ | 1.53 | $ | 4.59 | $ | 5.23 | |||||||||||
Diluted income per share: | |||||||||||||||||
Continuing operations | $ | 1.52 | $ | 4.53 | $ | 5.16 | |||||||||||
Discontinued operations | — | — | — | ||||||||||||||
Total | $ | 1.52 | $ | 4.53 | $ | 5.16 | |||||||||||
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(a)The following potentially dilutive shares were excluded from the calculation of diluted income per share as a result of their anti-dilutive effect.
Fiscal Year Ended September 30, | |||||||||||
in thousands | 2025 | 2024 | 2023 | ||||||||
Stock options | 1 | — | 11 | ||||||||
Time-based restricted stock | 110 | 2 | — | ||||||||
Performance-based restricted stock | 2 | — | — | ||||||||
(17) Segment Information
Per ASC Topic 280, Segment Reporting (ASC 280), an operating segment is defined as a component of an enterprise that engages in business activities from which it earns revenues and incur expenses and has discrete financial information available that is reviewed regularly by the Company's chief operating decision maker (CODM) to evaluate performance, make operating decisions, and determine how to allocate resources. We have identified each homebuilding component as an operating segment because each homebuilding component is engaged in development, design, construction, marketing, and sale of homes as well as land and lot sales, and provides title examinations for our homebuyers in certain markets. In accordance with the aggregation criteria defined in ASC 280, we aggregate our homebuilding operating segments into reportable segments based on similar long-term economic characteristics and geographical proximity.
We currently operate in 13 states that are grouped into three reportable segments as follows:
West: Arizona, California, Nevada, and Texas
East: Delaware, Indiana, Maryland, Tennessee, and Virginia
Southeast: Florida, Georgia, North Carolina, and South Carolina
Our Corporate and unallocated component includes 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.
The Company's CODM is the Chief Executive Officer. The CODM is regularly provided with the operating results of individual operating segments which comprise our reportable segments. Segment performance is evaluated, and resources are allocated primarily based on segment operating income (loss), which also plays a central role in the Company's forecasting process. In addition, the CODM considers forecast-to-actual variances when determining the allocation of operating and capital resources across segments. The accounting policies of our segments are those described in Note 2.
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The following tables provide financial information about our reportable segments and Corporate and unallocated component for the periods presented:
Fiscal Year Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
in thousands | West | East | Southeast | Reportable Segment Subtotal | Corporate and unallocated | Total | |||||||||||||||||||||||||||||
Revenue | $ | 1,476,311 | $ | 585,337 | $ | 309,907 | $ | 2,371,555 | $ | — | $ | 2,371,555 | |||||||||||||||||||||||
Home construction and land sale expenses | 1,206,374 | 484,521 | 254,919 | 1,945,814 | 75,268 | 2,021,082 | |||||||||||||||||||||||||||||
Inventory impairments and abandonments | 4,652 | 215 | 5,852 | 10,719 | 2,240 | 12,959 | |||||||||||||||||||||||||||||
Commissions | 48,940 | 17,335 | 10,636 | 76,911 | — | 76,911 | |||||||||||||||||||||||||||||
Sales and marketing | 30,703 | 11,152 | 8,552 | 50,407 | 14,377 | 64,784 | |||||||||||||||||||||||||||||
Other general and administrative expenses | 33,376 | 14,968 | 12,884 | 61,228 | 78,818 | 140,046 | |||||||||||||||||||||||||||||
Depreciation and amortization | 9,752 | 2,491 | 1,881 | 14,124 | 5,044 | 19,168 | |||||||||||||||||||||||||||||
Operating income (loss) | 142,514 | 54,655 | 15,183 | 212,352 | (175,747) | 36,605 | |||||||||||||||||||||||||||||
Other income, net | 4,245 | ||||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 40,850 | ||||||||||||||||||||||||||||||||||
Total assets(a) | $ | 1,060,650 | $ | 451,299 | $ | 461,110 | $ | 1,973,059 | $ | 636,649 | $ | 2,609,708 | |||||||||||||||||||||||
Fiscal Year Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||
in thousands | West | East | Southeast | Reportable Segment Subtotal | Corporate and unallocated | Total | |||||||||||||||||||||||||||||
Revenue | $ | 1,467,287 | $ | 501,206 | $ | 361,704 | $ | 2,330,197 | $ | — | $ | 2,330,197 | |||||||||||||||||||||||
Home construction and land sale expenses | 1,154,678 | 407,243 | 281,742 | 1,843,663 | 60,244 | 1,903,907 | |||||||||||||||||||||||||||||
Inventory impairments and abandonments | 1,805 | 91 | 100 | 1,996 | — | 1,996 | |||||||||||||||||||||||||||||
Commissions | 50,658 | 15,846 | 13,552 | 80,056 | — | 80,056 | |||||||||||||||||||||||||||||
Sales and marketing | 27,560 | 10,013 | 7,749 | 45,322 | 11,582 | 56,904 | |||||||||||||||||||||||||||||
Other general and administrative expenses | 33,027 | 13,323 | 11,417 | 57,767 | 71,674 | 129,441 | |||||||||||||||||||||||||||||
Depreciation and amortization | 9,820 | 1,792 | 1,478 | 13,090 | 1,777 | 14,867 | |||||||||||||||||||||||||||||
Operating income (loss) | 189,739 | 52,898 | 45,666 | 288,303 | (145,277) | 143,026 | |||||||||||||||||||||||||||||
Loss on extinguishment of debt, net | (437) | ||||||||||||||||||||||||||||||||||
Other income, net(b) | 16,496 | ||||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 159,085 | ||||||||||||||||||||||||||||||||||
Total assets(a) | $ | 1,114,450 | $ | 454,255 | $ | 389,058 | $ | 1,957,763 | $ | 633,764 | $ | 2,591,527 | |||||||||||||||||||||||
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Fiscal Year Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
in thousands | West | East | Southeast | Reportable Segment Subtotal | Corporate and unallocated | Total | |||||||||||||||||||||||||||||
Revenue | $ | 1,297,005 | $ | 505,844 | $ | 403,936 | $ | 2,206,785 | $ | — | $ | 2,206,785 | |||||||||||||||||||||||
Home construction and land sale expenses | 986,289 | 401,852 | 310,874 | 1,699,015 | 64,434 | 1,763,449 | |||||||||||||||||||||||||||||
Inventory impairments and abandonments | 487 | 154 | — | 641 | — | 641 | |||||||||||||||||||||||||||||
Commissions | 43,971 | 15,100 | 14,379 | 73,450 | — | 73,450 | |||||||||||||||||||||||||||||
Sales and marketing | 23,378 | 8,472 | 6,980 | 38,830 | 8,983 | 47,813 | |||||||||||||||||||||||||||||
Other general and administrative expenses | 29,480 | 13,583 | 12,722 | 55,785 | 76,196 | 131,981 | |||||||||||||||||||||||||||||
Depreciation and amortization | 7,550 | 1,662 | 1,655 | 10,867 | 1,331 | 12,198 | |||||||||||||||||||||||||||||
Operating income (loss) | 205,850 | 65,021 | 57,326 | 328,197 | (150,944) | 177,253 | |||||||||||||||||||||||||||||
Loss on extinguishment of debt, net | (546) | ||||||||||||||||||||||||||||||||||
Other income, net | 5,939 | ||||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 182,646 | ||||||||||||||||||||||||||||||||||
Total assets(a) | $ | 994,597 | $ | 356,020 | $ | 320,430 | $ | 1,671,047 | $ | 739,986 | $ | 2,411,033 | |||||||||||||||||||||||
(a)Total assets at Corporate and unallocated include cash and cash equivalents, restricted cash, deferred taxes, capitalized interest and indirect costs, and other items that are not allocated to the segments.
(b)We recognized a gain on sale of investment of $8.6 million during the fiscal year ended September 30, 2024 within other income, net. We previously held a minority interest in a technology company specializing in digital marketing for new home communities, which was sold in March 2024. In exchange for the previously held investment, we received cash in escrow along with a minority partnership interest in the acquiring company, which was recorded within other assets in our consolidated balance sheets.
34
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Beazer Homes USA, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Beazer Homes USA, Inc. and subsidiaries (the "Company") as of September 30, 2025 and 2024, the related consolidated statements of operations, stockholders' equity, and cash flows, for each of the three years in the period ended September 30, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Owned Inventory—Valuation of Projects in Progress—Refer to Notes 2 and 4 to the financial statements.
Critical Audit Matter Description
Projects in progress inventory includes homes under construction and land under development grouped together as communities. Projects in progress are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. The Company assesses its projects in progress inventory for indicators of potential impairment at the community level on a quarterly basis. The Company evaluates, among other things, the average sales price and margins on current homes and sales contracts in backlog for each community. As of September 30, 2025, the carrying value of the Company’s projects in progress inventory was $1.96 billion.
Given the subjectivity in determining whether impairment indicators are present at a community, management exercises significant judgment when evaluating for indicators of impairment. Accordingly, auditing management’s judgments regarding the identification of impairment indicators involved an increased extent of effort and especially subjective auditor judgment.
35
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s identification of impairment indicators for projects in progress included the following, among others:
•We tested the operating effectiveness of controls over management’s evaluation of impairment indicators.
•We evaluated management’s impairment indicator analysis by:
◦Testing whether all communities classified as projects in progress inventory were included in the impairment indicators analysis.
◦Testing each community classified as projects in progress inventory for indicators of impairment including considering average sales price and margins on current homes and sales contracts in backlog.
◦Developing an independent expectation of indicators and comparing such expectations to those included in the impairment indicator analysis.
/s/ Deloitte & Touche LLP
Atlanta, Georgia
November 13, 2025
We have served as the Company’s auditor since 1996.
36
| Exhibit 99.3 | ||
Item 1. Financial Statements
BEAZER HOMES USA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| in thousands (except share and per share data) | June 30, 2026 | September 30, 2025 | ||||||||||||
| ASSETS | ||||||||||||||
| Cash and cash equivalents | $ | 124,641 | $ | 214,705 | ||||||||||
| Restricted cash | 3,418 | 3,866 | ||||||||||||
| Accounts receivable (net of allowance of $260 and $266, respectively) | 96,621 | 78,145 | ||||||||||||
| Income tax receivable | 2,309 | — | ||||||||||||
| Inventory | 2,369,470 | 2,029,433 | ||||||||||||
| Deferred tax assets, net | 166,191 | 142,647 | ||||||||||||
| Property and equipment, net | 55,262 | 47,945 | ||||||||||||
| Operating lease right-of-use assets | 29,572 | 34,987 | ||||||||||||
| Goodwill | 11,376 | 11,376 | ||||||||||||
| Other assets | 45,890 | 46,604 | ||||||||||||
| Total assets | $ | 2,904,750 | $ | 2,609,708 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
| Trade accounts payable | $ | 177,337 | $ | 143,481 | ||||||||||
| Operating lease liabilities | 26,345 | 27,762 | ||||||||||||
| Other liabilities | 144,946 | 160,445 | ||||||||||||
| Total debt (net of debt issuance costs of $10,888 and $6,611, respectively) | 1,409,132 | 1,029,114 | ||||||||||||
| Total liabilities | 1,757,760 | 1,360,802 | ||||||||||||
| Stockholders’ equity: | ||||||||||||||
| Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, no shares issued) | — | — | ||||||||||||
| Common stock (par value $0.001 per share, 63,000,000 shares authorized, 27,330,791 issued and outstanding and 29,762,293 issued and outstanding, respectively) | 27 | 30 | ||||||||||||
| Paid-in capital | 760,918 | 825,103 | ||||||||||||
| Retained earnings | 386,045 | 423,773 | ||||||||||||
| Total stockholders’ equity | 1,146,990 | 1,248,906 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 2,904,750 | $ | 2,609,708 | ||||||||||
See accompanying notes to condensed consolidated financial statements.
1
BEAZER HOMES USA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||
in thousands (except per share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Total revenue | $ | 516,306 | $ | 545,367 | $ | 1,289,643 | $ | 1,579,659 | ||||||||||||||||||
| Home construction and land sales expenses | 447,863 | 462,448 | 1,131,631 | 1,338,136 | ||||||||||||||||||||||
| Inventory impairments and abandonments | 2,342 | 10,339 | 6,007 | 10,867 | ||||||||||||||||||||||
| Gross profit | 66,101 | 72,580 | 152,005 | 230,656 | ||||||||||||||||||||||
| Commissions | 17,156 | 18,615 | 42,562 | 53,511 | ||||||||||||||||||||||
| General and administrative expenses | 55,386 | 53,104 | 158,569 | 152,075 | ||||||||||||||||||||||
| Depreciation and amortization | 4,924 | 4,571 | 13,050 | 13,273 | ||||||||||||||||||||||
| Operating (loss) income | (11,365) | (3,710) | (62,176) | 11,797 | ||||||||||||||||||||||
| Loss on extinguishment of debt, net | (668) | — | (668) | — | ||||||||||||||||||||||
| Other income, net | 1,532 | 1,204 | 2,743 | 3,031 | ||||||||||||||||||||||
| (Loss) income before income taxes | (10,501) | (2,506) | (60,101) | 14,828 | ||||||||||||||||||||||
| Benefit from income taxes | (6,274) | (2,182) | (22,373) | (756) | ||||||||||||||||||||||
| Net (loss) income | $ | (4,227) | $ | (324) | $ | (37,728) | $ | 15,584 | ||||||||||||||||||
| Weighted-average number of shares: | ||||||||||||||||||||||||||
| Basic | 26,510 | 29,440 | 27,813 | 29,996 | ||||||||||||||||||||||
| Diluted | 26,510 | 29,440 | 27,813 | 30,238 | ||||||||||||||||||||||
| (Loss) income per share: | ||||||||||||||||||||||||||
| Basic | $ | (0.16) | $ | (0.01) | $ | (1.36) | $ | 0.52 | ||||||||||||||||||
| Diluted | $ | (0.16) | $ | (0.01) | $ | (1.36) | $ | 0.52 | ||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
2
BEAZER HOMES USA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
| Three Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||
| Common Stock | Paid-in Capital | Retained Earnings | Total | |||||||||||||||||||||||||||||
| in thousands | Shares | Amount | ||||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | 28,332 | $ | 28 | $ | 780,480 | $ | 390,272 | $ | 1,170,780 | |||||||||||||||||||||||
| Net loss and comprehensive loss | — | — | — | (4,227) | (4,227) | |||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 1,711 | — | 1,711 | |||||||||||||||||||||||||||
| Shares issued under employee stock plans, net | 4 | — | — | — | — | |||||||||||||||||||||||||||
| Forfeiture and other settlements of restricted stock | (3) | — | — | — | — | |||||||||||||||||||||||||||
| Common stock redeemed for tax liability | (2) | — | (45) | — | (45) | |||||||||||||||||||||||||||
| Share repurchases | (1,000) | (1) | (21,228) | — | (21,229) | |||||||||||||||||||||||||||
| Balance as of June 30, 2026 | 27,331 | $ | 27 | $ | 760,918 | $ | 386,045 | $ | 1,146,990 | |||||||||||||||||||||||
| Nine Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||
| Common Stock | Paid-in Capital | Retained Earnings | Total | |||||||||||||||||||||||||||||
| in thousands | Shares | Amount | ||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | 29,762 | $ | 30 | $ | 825,103 | $ | 423,773 | $ | 1,248,906 | |||||||||||||||||||||||
| Net loss and comprehensive loss | — | — | — | (37,728) | (37,728) | |||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 5,141 | — | 5,141 | |||||||||||||||||||||||||||
| Shares issued under employee stock plans, net | 569 | 1 | (1) | — | — | |||||||||||||||||||||||||||
| Forfeiture and other settlements of restricted stock | (10) | — | — | — | — | |||||||||||||||||||||||||||
| Common stock redeemed for tax liability | (117) | — | (2,537) | — | (2,537) | |||||||||||||||||||||||||||
| Share repurchases | (2,873) | (4) | (66,788) | — | (66,792) | |||||||||||||||||||||||||||
| Balance as of June 30, 2026 | 27,331 | $ | 27 | $ | 760,918 | $ | 386,045 | $ | 1,146,990 | |||||||||||||||||||||||
| Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| Common Stock | Paid-in Capital | Retained Earnings | Total | |||||||||||||||||||||||||||||
| in thousands | Shares | Amount | ||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | 30,303 | $ | 30 | $ | 833,944 | $ | 394,093 | $ | 1,228,067 | |||||||||||||||||||||||
| Net loss and comprehensive loss | — | — | — | (324) | (324) | |||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 1,817 | — | 1,817 | |||||||||||||||||||||||||||
| Stock option exercises | — | — | 1 | — | 1 | |||||||||||||||||||||||||||
| Shares issued under employee stock plans, net | 12 | — | — | — | — | |||||||||||||||||||||||||||
| Forfeiture and other settlements of restricted stock | (2) | — | — | — | — | |||||||||||||||||||||||||||
| Common stock redeemed for tax liability | (1) | — | (15) | — | (15) | |||||||||||||||||||||||||||
| Share repurchases | (586) | — | (12,515) | — | (12,515) | |||||||||||||||||||||||||||
| Balance as of June 30, 2025 | 29,726 | $ | 30 | $ | 823,232 | $ | 393,769 | $ | 1,217,031 | |||||||||||||||||||||||
3
| Nine Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| Common Stock | Paid-in Capital | Retained Earnings | Total | |||||||||||||||||||||||||||||
| in thousands | Shares | Amount | ||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | 31,048 | $ | 31 | $ | 853,895 | $ | 378,185 | $ | 1,232,111 | |||||||||||||||||||||||
| Net income and comprehensive income | — | — | — | 15,584 | 15,584 | |||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 5,442 | — | 5,442 | |||||||||||||||||||||||||||
| Stock option exercises | 11 | — | 107 | — | 107 | |||||||||||||||||||||||||||
| Shares issued under employee stock plans, net | 286 | — | — | — | — | |||||||||||||||||||||||||||
| Forfeiture and other settlements of restricted stock | (32) | — | — | — | — | |||||||||||||||||||||||||||
| Common stock redeemed for tax liability | (96) | — | (3,136) | — | (3,136) | |||||||||||||||||||||||||||
| Share repurchases | (1,491) | (1) | (33,076) | — | (33,077) | |||||||||||||||||||||||||||
| Balance as of June 30, 2025 | 29,726 | $ | 30 | $ | 823,232 | $ | 393,769 | $ | 1,217,031 | |||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
4
BEAZER HOMES USA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| in thousands | 2026 | 2025 | ||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net (loss) income | $ | (37,728) | $ | 15,584 | ||||||||||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||||||||
| Depreciation and amortization | 13,050 | 13,273 | ||||||||||||
| Stock-based compensation expense | 5,141 | 5,442 | ||||||||||||
| Inventory impairments and abandonments | 6,007 | 10,867 | ||||||||||||
| Benefit from income taxes | (22,373) | (756) | ||||||||||||
| Gain on disposal of fixed assets | (122) | (192) | ||||||||||||
| Loss on extinguishment of debt, net | 668 | — | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Increase in accounts receivable | (18,476) | (10,701) | ||||||||||||
| Increase in income tax receivable | (2,309) | (1,532) | ||||||||||||
| Increase in inventory | (342,589) | (258,908) | ||||||||||||
| Decrease (increase) in other assets | 3,541 | (4,377) | ||||||||||||
| Increase in trade accounts payable | 33,856 | 20,139 | ||||||||||||
| Decrease in other liabilities | (14,340) | (7,035) | ||||||||||||
| Net cash used in operating activities | (375,674) | (218,196) | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | (20,367) | (21,027) | ||||||||||||
| Proceeds from sale of fixed assets | 122 | 192 | ||||||||||||
| Purchases of investment securities | (1,374) | (965) | ||||||||||||
| Proceeds from maturities of investment securities | — | 9,144 | ||||||||||||
| Net cash used in investing activities | (21,619) | (12,656) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Repayment of debt | (357,255) | — | ||||||||||||
| Proceeds from issuance of debt | 400,000 | — | ||||||||||||
| Repayment of borrowings from credit facility | (425,000) | (260,000) | ||||||||||||
| Borrowings from credit facility | 765,000 | 375,000 | ||||||||||||
| Debt issuance costs | (7,242) | (230) | ||||||||||||
| Repurchase of common stock | (66,185) | (33,077) | ||||||||||||
| Tax payments for stock-based compensation awards | (2,537) | (3,136) | ||||||||||||
| Stock option exercises | — | 107 | ||||||||||||
| Net cash provided by financing activities | 306,781 | 78,664 | ||||||||||||
| Net decrease in cash, cash equivalents, and restricted cash | (90,512) | (152,188) | ||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 218,571 | 242,610 | ||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 128,059 | $ | 90,422 | ||||||||||
See accompanying notes to condensed consolidated financial statements.
5
BEAZER HOMES USA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Description of Business
Beazer Homes USA, Inc. (“we,” “us,” “our,” “Beazer,” “Beazer Homes” or the “Company”) is a nationally recognized homebuilder committed to building homes and communities designed to inspire sustainable and healthier living. Operating across 13 states in the West, East, and Southeast geographic regions of the United States, Beazer Homes offers a diverse portfolio of products tailored to meet the evolving needs of homebuyers that value a well-constructed and energy efficient home.
For an additional description of our business, refer to Item 1 within our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (2025 Annual Report).
(2) Basis of Presentation and Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited condensed consolidated financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2025 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. The results of the Company's consolidated operations presented herein for the three and nine months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full fiscal year due to seasonal variations in our operations and other factors.
Basis of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Our net (loss) income is equivalent to our comprehensive (loss) income, so we have not presented a separate statement of comprehensive (loss) income.
Our fiscal year 2026 began on October 1, 2025 and ends on September 30, 2026. Our fiscal year 2025 began on October 1, 2024 and ended on September 30, 2025.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates.
Share Repurchase Program
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.
6
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 (inclusive of commissions and exclusive of accrued excise tax). 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 (inclusive of commissions and exclusive of accrued excise tax).
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.
Revenue Recognition
We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the process specified in Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers.
The following table presents our total revenue disaggregated by revenue stream for the periods presented:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||
| in thousands | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Homebuilding revenue | $ | 490,870 | $ | 535,390 | $ | 1,248,360 | $ | 1,551,844 | ||||||||||||||||||
| Land sales and other revenue | 25,436 | 9,977 | 41,283 | 27,815 | ||||||||||||||||||||||
| Total revenue(a) | $ | 516,306 | $ | 545,367 | $ | 1,289,643 | $ | 1,579,659 | ||||||||||||||||||
(a) Please see Note 14 for total revenue disaggregated by reportable segment.
Homebuilding revenue
Homebuilding revenue is reported net of price concessions, including discounts on home prices, discounts on homebuilding options and option upgrades. Closing cost incentives, such as seller-paid financing or closing costs, including rate buydowns, are recognized as a cost of selling the home and are included in home construction expenses.
Homebuilding revenue is generally recognized when title to and possession of the home is transferred to the buyer on the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date. Home sale contract assets consist of cash from home closings held by title companies in escrow for our benefit, typically for less than five days, and are considered accounts receivable. Contract liabilities include customer deposits related to sold but undelivered homes and totaled $21.3 million and $14.3 million as of June 30, 2026 and September 30, 2025, respectively. Of the customer deposits outstanding as of September 30, 2025, $1.1 million and $12.4 million were recognized in revenue during the three and nine months ended June 30, 2026, upon closing of the related homes.
Land sales and other revenue
Land sales revenue relates to land that does not fit within our homebuilding programs or strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. We also provide title examinations for our homebuyers in certain markets. Revenues associated with our title operations are recognized when closing services are rendered and title insurance policies are issued, both of which generally occur as each home is closed.
7
Recent Accounting Pronouncements
Income Taxes. In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for our fiscal year ending September 30, 2026. Early adoption is permitted and the amendments in this update should be applied on a prospective basis. The Company is still evaluating the impact of the adoption of ASU 2023-09 and expects to include additional disclosures within the consolidated financial statements for the fiscal year ending September 30, 2026.
Income Statement Disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires disclosure of additional information about specific expense categories in the notes to the financial statements. ASU 2024-03 will be effective for our fiscal year ending September 30, 2028. Early adoption is permitted and the amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact that the adoption of ASU 2024-03 may have on our consolidated financial statements and disclosures.
Credit Losses. In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which allows entities to use the practical expedient to estimate expected credit losses. ASU 2025-05 will be effective for our fiscal year ending September 30, 2027, and interim reporting periods within this annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-05 may have on our consolidated financial statements and disclosures.
Internal-Use Software. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for the costs of internal-use software by removing all references to software development project stages so that the guidance is neutral to different software development methods. ASU 2025-06 will be effective for our fiscal year ending September 30, 2029, and interim reporting periods within this annual reporting period. Early adoption is permitted and the amendments in this update may be applied on a retrospective, modified transition, or prospective basis. The Company does not expect the adoption of ASU 2025-06 to have a material impact on our consolidated financial statements and disclosures.
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(3) Supplemental Cash Flow Information
The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the condensed consolidated balance sheets and condensed consolidated statements of cash flows for the periods presented:
| Nine Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| in thousands | 2026 | 2025 | ||||||||||||
| Supplemental disclosure of non-cash activity: | ||||||||||||||
| Increase in operating lease right-of-use assets(a) | $ | 3,834 | $ | 1,493 | ||||||||||
| Increase in operating lease liabilities(a) | $ | 3,834 | $ | 1,493 | ||||||||||
| Supplemental disclosure of cash activity: | ||||||||||||||
| Interest payments | $ | 74,167 | $ | 67,645 | ||||||||||
| Income tax payments | $ | 3,513 | $ | 9,930 | ||||||||||
| Reconciliation of cash, cash equivalents, and restricted cash: | ||||||||||||||
| Cash and cash equivalents | $ | 124,641 | $ | 82,932 | ||||||||||
| Restricted cash | 3,418 | 7,490 | ||||||||||||
| Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ | 128,059 | $ | 90,422 | ||||||||||
(a) Represents leases renewed or additional leases that commenced during the nine months ended June 30, 2026 and 2025.
(4) Inventory
The components of our inventory are as follows as of June 30, 2026 and September 30, 2025:
| in thousands | As of June 30, 2026 | As of September 30, 2025 | ||||||||||||
| Homes under construction | $ | 934,394 | $ | 692,327 | ||||||||||
| Land under development | 1,054,354 | 1,065,702 | ||||||||||||
| Land held for future development | 19,489 | 19,489 | ||||||||||||
| Land held for sale | 87,542 | 47,368 | ||||||||||||
| Capitalized interest | 156,554 | 131,845 | ||||||||||||
| Model homes | 92,321 | 72,702 | ||||||||||||
| Land not owned under option agreements | 24,816 | — | ||||||||||||
| Total inventory | $ | 2,369,470 | $ | 2,029,433 | ||||||||||
Homes under construction include homes substantially finished and ready for delivery and homes in various stages of construction, including costs of the underlying lot, direct construction costs and capitalized indirect costs. As of June 30, 2026, we had 2,532 homes under construction, including 1,403 speculative (spec) homes totaling $513.1 million (1,016 in-process spec homes totaling $339.6 million, and 387 finished spec homes totaling $173.5 million). As of September 30, 2025, we had 1,800 homes under construction, including 1,078 spec homes totaling $417.4 million (577 in-process spec homes totaling $201.8 million, and 501 finished spec homes totaling $215.6 million).
Land under development consists principally of land acquisition, land development and other common costs. These land-related costs are allocated to individual lots on a pro-rata basis, and the lot costs are transferred to homes under construction when home construction begins for the respective lots. Certain of the fully developed lots in this category are reserved by a customer deposit or sales contract.
Land held for future development consists of communities for which construction and development activities are expected to occur in the future or have been idled and are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. All applicable carrying costs, such as interest and real estate taxes, are expensed as incurred.
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Land held for sale includes land and lots that do not fit within our homebuilding programs or strategic plans in certain markets, and land is classified as held for sale once certain criteria are met (refer to Note 2 to the consolidated financial statements within our 2025 Annual Report). These assets are recorded at the lower of the carrying value or fair value less cost to sell.
The amount of interest we are able to capitalize depends on our qualified inventory balance, which considers the status of our inventory holdings. Our qualified inventory balance includes the majority of our homes under construction and land under development but excludes land held for future development and land held for sale (see Note 5 for additional information on capitalized interest).
Land not owned under option agreements includes the remaining contractual purchase price for certain land and lot option agreements that we account for as financing arrangements pursuant to ASC Subtopic 470-40, Product Financing Arrangements, which occurs when we are economically compelled to exercise the option and purchase the land, even though the Company has no direct obligation to pay these future amounts. For these contracts, the remaining purchase price is recorded within land not owned under option agreements with a corresponding liability recorded within obligations related to land not owned under option agreements within other liabilities on our condensed consolidated balance sheet.
Total inventory by reportable segment and Corporate and unallocated is presented in the table below as of June 30, 2026 and September 30, 2025:
| in thousands | Projects in Progress(a) | Land Held for Future Development | Land Held for Sale | Total Inventory | ||||||||||||||||||||||
| June 30, 2026 | ||||||||||||||||||||||||||
| West | $ | 1,066,860 | $ | 3,483 | $ | 50,472 | $ | 1,120,815 | ||||||||||||||||||
| East | 457,324 | 10,888 | 18,365 | 486,577 | ||||||||||||||||||||||
| Southeast | 490,081 | 5,118 | 18,705 | 513,904 | ||||||||||||||||||||||
Corporate and unallocated(b) | 248,174 | — | — | 248,174 | ||||||||||||||||||||||
| Total | $ | 2,262,439 | $ | 19,489 | $ | 87,542 | $ | 2,369,470 | ||||||||||||||||||
| September 30, 2025 | ||||||||||||||||||||||||||
| West | $ | 944,601 | $ | 3,483 | $ | 29,052 | $ | 977,136 | ||||||||||||||||||
| East | 387,954 | 10,888 | 16,086 | 414,928 | ||||||||||||||||||||||
| Southeast | 418,497 | 5,118 | 2,230 | 425,845 | ||||||||||||||||||||||
Corporate and unallocated(b) | 211,524 | — | — | 211,524 | ||||||||||||||||||||||
| Total | $ | 1,962,576 | $ | 19,489 | $ | 47,368 | $ | 2,029,433 | ||||||||||||||||||
(a) Projects in progress include homes under construction, land under development, capitalized interest, model homes, and land not owned under option agreements categories from the preceding table.
(b) Projects in progress amount include capitalized interest and indirect costs that are maintained within Corporate and unallocated.
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Inventory Impairments
Inventory assets are assessed for recoverability periodically in accordance with the policies described in Notes 2 and 4 to the consolidated financial statements within our 2025 Annual Report.
The following table presents, by reportable segment and Corporate and unallocated, our total impairment and abandonment charges for the periods presented:
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||
| in thousands | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Projects in Progress: | ||||||||||||||||||||||||||
| West | $ | — | $ | 2,236 | $ | 1,174 | $ | 2,236 | ||||||||||||||||||
| Southeast | — | 5,404 | — | 5,404 | ||||||||||||||||||||||
Corporate and unallocated(a) | — | 1,002 | 121 | 1,002 | ||||||||||||||||||||||
| Total impairment charges on projects in progress | — | 8,642 | 1,295 | 8,642 | ||||||||||||||||||||||
| Land Held for Sale: | ||||||||||||||||||||||||||
| West | 1,028 | 845 | 1,073 | 845 | ||||||||||||||||||||||
| East | 1,015 | — | 1,893 | — | ||||||||||||||||||||||
Corporate and unallocated(a) | 299 | 621 | 421 | 621 | ||||||||||||||||||||||
| Total impairment charges on land held for sale | 2,342 | 1,466 | 3,387 | 1,466 | ||||||||||||||||||||||
| Abandonments: | ||||||||||||||||||||||||||
| West | — | — | 1,304 | 528 | ||||||||||||||||||||||
| East | — | — | 21 | — | ||||||||||||||||||||||
| Southeast | — | 231 | — | 231 | ||||||||||||||||||||||
| Total abandonments charges | — | 231 | 1,325 | 759 | ||||||||||||||||||||||
| Total impairment and abandonment charges | $ | 2,342 | $ | 10,339 | $ | 6,007 | $ | 10,867 | ||||||||||||||||||
(a) Amount represents capitalized interest and indirects balance that was impaired. Capitalized interest and indirects are maintained within Corporate and unallocated.
Projects in Progress Impairments
Projects in progress inventory includes homes under construction and land under development grouped together as communities. Projects in progress are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable.
We assess our projects in progress inventory for indicators of impairment at the community level on a quarterly basis. If indicators of impairment are present for a community with more than ten homes remaining to close, we perform a recoverability test by comparing the expected undiscounted cash flows for the community to its carrying value. If the aggregate undiscounted cash flows are in excess of the carrying value, the asset is considered to be recoverable and is not impaired. If the carrying value exceeds the aggregate undiscounted cash flows, we perform a discounted cash flow analysis to determine the fair value of the community, and impairment charges are recorded if the fair value of the community's inventory is less than its carrying value.
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Valuation assumptions for communities tested for impairment are specific to each community. For projects in progress impaired during the periods presented, we determined the fair value of each community by discounting its estimated future cash flows at a rate commensurate with the risks associated with the underlying community. The discount rate used depends on (1) community specific factors such as product types, development stage and expected duration of the project, and competitive factors influencing the sales performance of the community, (2) local market factors such as employment levels, consumer confidence and existing supply of new and used homes for sale, and (3) other specific factors. The estimated future cash flows for each community were determined based on the expected pace of closings and average sales price less expected costs for land acquisition and land development, direct construction, overhead and interest. The assumptions used in the determination of fair value of projects in progress communities are based on factors known to us at the time such estimates are made and our expectations of future operations and market conditions. Due to uncertainties in the estimation process, the significant volatility in market conditions, the long life cycles of many communities, and potential changes in our strategy related to certain communities, actual results could differ significantly from our estimates.
No project in progress impairments were recognized during the three months ended June 30, 2026. During the nine months ended June 30, 2026, we recognized a $1.3 million projects in progress impairment charge in one community located in our Houston market, principally due to a reduction in price driven by the competitive market dynamics. During the three and nine months ended June 30, 2025, we recognized $8.6 million of projects in progress impairments.
The following table presents by reportable segment and Corporate and unallocated details of the impairment charges taken on projects in progress for the period presented:
| $ in thousands | Results of Impairment Analysis | |||||||||||||||||||||||||
| # of Communities Impaired | # of Lots Impaired | Impairment Charge | Estimated Fair Value of Impaired Inventory at Time of Impairment(b) | |||||||||||||||||||||||
| Nine Months Ended June 30, 2026 | ||||||||||||||||||||||||||
| West | 1 | 37 | $ | 1,174 | $ | 5,072 | ||||||||||||||||||||
Corporate and unallocated(a) | — | — | $ | 121 | $ | 525 | ||||||||||||||||||||
| Total | 1 | 37 | $ | 1,295 | $ | 5,597 | ||||||||||||||||||||
(a) Amount represents the capitalized interest and indirects balances that were impaired. Capitalized interest and indirects are maintained within Corporate and unallocated.
(b) Projects in progress assets are measured at fair value on a non-recurring basis when events and circumstances indicate that their carrying value is not recoverable. The fair value of projects in progress is determined using Level 3 unobservable inputs. Refer to Note 9 for further discussion of our fair value measurements and hierarchy levels.
The following table presents the ranges or values of significant quantitative unobservable inputs we used in determining the fair value of the communities impaired during the period presented:
| $ in thousands | ||||||||
| Unobservable Inputs | Nine Months Ended June 30, 2026 | |||||||
| Average selling price | $375 | |||||||
| Closings per community per month | 1-3 | |||||||
| Discount rate | 14.0 % | |||||||
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Land Held for Sale Impairments
We evaluate the fair value less cost to sell of a land held for sale asset when indicators of impairment are present. Impairments on land held for sale generally represent write downs of these properties from their carrying values to estimated fair value less cost to sell based on executed sales contracts, current sales prices for comparable assets in the area, recent market analysis studies, appraisals, recent legitimate offers and listing prices of similar properties, as applicable. Absent an executed sales contract, our assumptions related to land sales prices are based on factors known to us at the time such estimates are made and require significant judgment because the real estate market is highly sensitive to changes in economic conditions, and our estimates of sale prices could differ significantly from actual results.
During the three months ended June 30, 2026, we recognized $2.3 million of land held for sale impairment charges related to four communities in our West and East segments. This brings the total for the nine months ended June 30, 2026 to $3.4 million of land held for sale impairment charges. Estimated fair value less selling cost for these impaired assets at the time of impairment was $34.0 million. The fair values of the impaired land held for sale assets were determined using Level 3 unobservable inputs. During the three and nine months ended June 30, 2025, we recognized $1.5 million of land held for sale impairments.
Abandonments
From time to time, we may determine to abandon lots or not exercise certain option agreements that are not projected to produce adequate results or no longer fit with our long-term strategic plan. Additionally, in certain limited instances, we are forced to abandon lots due to seller non-performance, permitting or other regulatory issues that do not allow us to build on those lots. If we intend to no longer pursue the purchase of property, we record an abandonment charge to earnings for the non-refundable deposit amount and any related capitalized costs in the period such decision is made.
No abandonment charges were recognized during the three months ended June 30, 2026. During the nine months ended June 30, 2026, we recognized $1.3 million of abandonment charges. During the three and nine months ended June 30, 2025, we recognized $0.2 million and $0.8 million of abandonment charges. As we grow our business in the years ahead, the dollar value of abandonment charges may also grow.
Lot Option Agreements
In addition to purchasing land directly, we utilize lot option agreements that enable us to defer acquiring portions of properties owned by third parties and unconsolidated entities until we have determined whether to exercise our lot option. The majority of our lot option agreements require a non-refundable cash deposit or issuance of an irrevocable letter of credit or surety bond based on a percentage of the purchase price of the land for the right to acquire lots during a specified period at a specified price. Purchase of the properties under these agreements is contingent upon satisfaction of certain requirements by us and the sellers. Under lot option agreements, our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred. If the Company cancels a lot option agreement, the cancellation would result in a write-off of the related deposits and pre-acquisition costs but would not expose the Company to the overall risks or losses of the applicable entity we are purchasing from. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our remaining 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.
The following table provides a summary of our interests in lot option agreements as of June 30, 2026 and September 30, 2025:
| As of June 30, 2026 | As of September 30, 2025 | |||||||||||||
| in thousands | ||||||||||||||
| Deposits and non-refundable pre-acquisition costs incurred(a) | $ | 387,422 | $ | 333,435 | ||||||||||
| Remaining purchase price if lot option agreements are exercised | $ | 1,631,298 | $ | 1,610,171 | ||||||||||
(a) Amount is included as a component of land under development and land not owned under option agreements within our inventory in the condensed consolidated balance sheets.
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(5) Interest
Interest capitalized during the three and nine months ended June 30, 2026 and 2025 was based upon the balance of inventory eligible for capitalization. The following table presents certain information regarding interest for the periods presented:
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||
| in thousands | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Capitalized interest in inventory, beginning of period | $ | 147,786 | $ | 134,292 | $ | 131,845 | $ | 124,182 | ||||||||||||||||||
| Interest incurred | 25,458 | 22,441 | 67,214 | 64,219 | ||||||||||||||||||||||
| Capitalized interest impaired | (192) | (1,096) | (293) | (1,096) | ||||||||||||||||||||||
| Capitalized interest amortized to home construction and land sales expenses(a) | (16,498) | (17,878) | (42,212) | (49,546) | ||||||||||||||||||||||
| Capitalized interest in inventory, end of period | $ | 156,554 | $ | 137,759 | $ | 156,554 | $ | 137,759 | ||||||||||||||||||
(a) Capitalized interest amortized to home construction and land sales expenses varies based on the number of homes closed during the period and land sales, if any, as well as other factors.
(6) Borrowings
The Company's debt, net of unamortized debt issuance costs consisted of the following as of June 30, 2026 and September 30, 2025:
| in thousands | Maturity Date | June 30, 2026 | September 30, 2025 | |||||||||||||||||
| 5.875% Senior Notes (2027 Notes) | October 2027 | $ | — | $ | 357,255 | |||||||||||||||
| 7.250% Senior Notes (2029 Notes) | October 2029 | 350,000 | 350,000 | |||||||||||||||||
| 7.500% Senior Notes (2031 Notes) | March 2031 | 250,000 | 250,000 | |||||||||||||||||
| 8.000% Senior Notes (2032 Notes) | January 2032 | 400,000 | — | |||||||||||||||||
| Unamortized debt issuance costs | (10,888) | (6,611) | ||||||||||||||||||
| Total Senior Notes, net | 989,112 | 950,644 | ||||||||||||||||||
| Junior Subordinated Notes (net of unamortized accretion of $20,753 and $22,303, respectively) | July 2036 | 80,020 | 78,470 | |||||||||||||||||
| Senior Unsecured Revolving Credit Facility | March 2030 | 340,000 | — | |||||||||||||||||
| Total debt, net | $ | 1,409,132 | $ | 1,029,114 | ||||||||||||||||
Senior Unsecured Revolving Credit Facility
The Senior Unsecured Revolving Credit Facility (Unsecured Facility) provides working capital and letter of credit capacity. In March 2026, the Company executed an amendment to increase its available borrowing capacity under the Unsecured Facility from $365.0 million to $525.0 million. The $525.0 million borrowing capacity includes a letter of credit facility of up to $100.0 million. The Company will have the right from time to time to request to increase the size of the commitments under the Unsecured Facility by up to $100.0 million for a maximum of $625.0 million. The Company also extended the termination date (Termination Date) from March 15, 2028 to March 13, 2030. The Company may borrow, repay, and reborrow amounts under the Unsecured Facility until the Termination Date.
Borrowings under the Unsecured Facility bear interest, at our option, at either (i) a secured overnight financing rate (SOFR) plus an applicable margin ranging from 2.15% to 2.90% per annum or (ii) an alternate base rate (ABR) plus an applicable margin ranging from 1.15% to 1.90% per annum. Commitment fees on the unused portion of the facility range from 0.25% to 0.40% per annum. The applicable margin and the commitment fees vary based on the Company's leverage ratio, as defined under the Unsecured Facility.
14
Substantially all of the Company's significant subsidiaries are full and unconditional guarantors of the Unsecured Facility and are jointly and severally liable for obligations under the Unsecured Facility. For additional discussion of the Unsecured Facility, refer to Note 7 to the consolidated financial statements within our 2025 Annual Report.
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 capacity of $139.2 million. The weighted-average interest rate on outstanding borrowings as of June 30, 2026 was 6.97%. The Unsecured Facility requires compliance with certain covenants, including affirmative covenants, negative covenants and financial covenants. As of June 30, 2026, the Company believes it was in compliance with all such covenants.
Senior Notes
The Company's senior notes (Senior Notes) are unsecured obligations that rank equally in right of payment with all existing and future senior unsecured obligations, senior to all of the Company's existing and future subordinated indebtedness, and effectively subordinated to the Company's future secured indebtedness, to the extent of the value of the assets securing such indebtedness. Substantially all of the Company's significant subsidiaries are full and unconditional guarantors of the Senior Notes and are jointly and severally liable for obligations under the Senior Notes. Each guarantor subsidiary is a wholly owned subsidiary of Beazer Homes. The Senior Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company's subsidiaries that do not guarantee these notes.
The Company's Senior Notes are issued under indentures that contain certain restrictive covenants which, among other things, restrict our ability to pay dividends, repurchase our common stock, incur certain types of additional indebtedness, and make certain investments. Compliance with the Senior Note covenants does not significantly impact the Company's operations. The Company believes it was in compliance with the covenants contained in the indentures of all of its Senior Notes as of June 30, 2026.
In June 2026, we issued and sold $400.0 million aggregate principal amount of the 2032 Notes at par (before underwriting and other issuance costs) through a private placement to qualified institutional buyers. Interest on the 2032 Notes is payable semiannually, beginning in January 2027. The 2032 Notes will mature in January 2032. The covenants related to the 2032 Notes are substantially consistent with our other Senior Notes.
During the three months ended June 30, 2026, we redeemed the remaining $357.3 million of our outstanding 2027 Notes using proceeds from the issuance of the 2032 Notes, resulting in a loss on extinguishment of debt of $0.7 million. The Company has terminated, cancelled, and discharged all of its obligations under the 2027 Notes as of June 30, 2026. No debt repurchases were made during the three and nine months ended June 30, 2025
15
For additional redemption features, refer to the table below that summarizes the redemption terms of our Senior Notes:
| Senior Note Description | Issuance Date | Maturity Date | Redemption Terms | |||||||||||||||||
| 7.250% Senior Notes | September 2019 | October 2029 | Callable at any time prior to October 15, 2024, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2024, callable at a redemption price equal to 103.625% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 102.417% of the principal amount; on or after October 15, 2026, callable at a redemption price equal to 101.208% of the principal amount; on or after October 15, 2027, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. | |||||||||||||||||
| 7.500% Senior Notes | March 2024 | March 2031 | On or prior to March 15, 2027, we may redeem up to 35% of the aggregate principal amount of the 2031 Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 107.500% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, provided at least 65% of the aggregate principal amount of the 2031 Notes originally issued remains outstanding immediately after such redemption. Callable at any time prior to March 15, 2027, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2027, callable at a redemption price equal to 103.750% of the principal amount; on or after March 15, 2028, callable at a redemption price equal to 101.875% of the principal amount; on or after March 15, 2029, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. | |||||||||||||||||
| 8.000% Senior Notes | June 2026 | January 2032 | On or prior to July 15, 2028, we may redeem up to 35% of the aggregate principal amount of the 2032 Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 108.000% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, provided at least 65% of the aggregate principal amount of the 2032 Notes originally issued remains outstanding immediately after such redemption. Callable at any time prior to July 15, 2028, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after July 15, 2028, callable at a redemption price equal to 104.000% of the principal amount; on or after July 15, 2029, callable at a redemption price equal to 102.000% of the principal amount; on or after July 15, 2030, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. | |||||||||||||||||
16
Junior Subordinated Notes
The Company's unsecured junior subordinated notes (Junior Subordinated Notes) mature on July 30, 2036 and have an aggregate principal balance of $100.8 million as of June 30, 2026. The securities have a floating interest rate as defined in the Junior Subordinated Notes Indentures, which was a weighted-average of 6.38% as of June 30, 2026. The obligations relating to these notes are subordinated to the Unsecured Facility and the Senior Notes. In January 2010, the Company restructured $75.0 million of these notes (Restructured Notes) and recorded them at their then estimated fair value. Over the remaining life of the Restructured Notes, we will increase their carrying value until this carrying value equals the face value of the notes. As of June 30, 2026, the unamortized accretion was $20.8 million and will be amortized over the remaining life of the Restructured Notes. The remaining $25.8 million of the Junior Subordinated Notes are subject to the terms of the original agreement, have a floating interest rate equal to a three-month SOFR plus 2.71% per annum, resetting quarterly, and are redeemable in whole or in part at par value. The material terms of the $75.0 million Restructured Notes are identical to the terms of the original agreement except that the floating interest rate is subject to a floor of 4.25% and a cap of 9.25%. In addition, beginning on June 1, 2012, the Company has the option to redeem the $75.0 million principal balance in whole or in part at 75% of par value, and beginning on June 1, 2022, the redemption price has increased by 1.785% annually. As of June 30, 2026, the Company believes it was in compliance with all covenants under the Junior Subordinated Notes.
(7) Operating Leases
The Company leases certain office space and equipment under operating leases for use in our operations. We recognize operating lease expense on a straight-line basis over the lease term. Some of our lease agreements include one or more options to renew. The exercise of lease renewal options is generally at our discretion. Variable lease expense primarily relates to maintenance and other monthly expenses that do not depend on an index or rate.
We determine if an arrangement is a lease at contract inception. Lease and non-lease components are accounted for as a single component for all leases. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term, which includes optional renewal periods if we determine it is reasonably certain that the option will be exercised. As our leases do not provide an implicit rate, the discount rate used in the present value calculation represents our incremental borrowing rate determined using information available at the commencement date.
Operating lease expense is included as a component of general and administrative expenses in our condensed consolidated statements of operations. Sublease income and variable lease expenses are de minimis. The following table presents operating lease expense and cash payments on lease liabilities for the periods presented:
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||
| in thousands | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Operating lease expense | $ | 3,428 | $ | 1,172 | $ | 10,272 | $ | 3,481 | ||||||||||||||||||
| Cash payments on lease liabilities | $ | 2,155 | $ | 1,154 | $ | 6,244 | $ | 3,435 | ||||||||||||||||||
At June 30, 2026 and 2025, the weighted-average remaining lease term and discount rate were as follows:
| As of June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Weighted-average remaining lease term | 5.2 years | 6.2 years | ||||||||||||
| Weighted-average discount rate | 5.30% | 6.43% | ||||||||||||
17
The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of June 30, 2026:
| Fiscal Years Ending September 30, | ||||||||
| in thousands | ||||||||
2026(a) | $ | 2,409 | ||||||
| 2027 | 7,184 | |||||||
| 2028 | 5,492 | |||||||
| 2029 | 4,678 | |||||||
| 2030 | 3,864 | |||||||
| Thereafter | 7,986 | |||||||
Total lease payments(b) | 31,613 | |||||||
| Less: imputed interest | 5,268 | |||||||
| Total operating lease liabilities | $ | 26,345 | ||||||
(a) Remaining lease payments are for the period beginning July 1, 2026 through September 30, 2026.
(b) Lease payments exclude $3.5 million of legally binding minimum lease payments for office leases signed but not yet commenced. The related right-of-use asset and operating lease liability are not reflected on the Company's condensed consolidated balance sheet as of June 30, 2026.
(8) Contingencies
Beazer Homes and certain of its subsidiaries have been and continue to be named as defendants in various construction defect claims, complaints, and other legal actions. The Company is subject to the possibility of loss contingencies related to these alleged defects as well as others arising from its business. In determining loss contingencies, we consider the likelihood of loss and our ability to reasonably estimate the amount of such loss. An estimated loss is recorded in other liabilities on the condensed consolidated balance sheets when it is considered probable that a liability has been incurred and the amount of loss can be reasonably estimated.
Warranty Reserves
We currently provide a limited warranty ranging from one to two years covering workmanship and materials per our defined quality standards. In addition, we provide a limited warranty for up to ten years covering certain defined structural element failures.
Warranty reserves are included in other liabilities within the consolidated balance sheets, and the provision for warranty accruals is included in home construction expenses in the consolidated statements of operations. Reserves covering anticipated warranty expenses are recorded for each home closed, which are a function of the number of home closings in the period, the selling prices of the homes closed and the rates of accrual per home estimated as a percentage of the selling price of the home. Management assesses the adequacy of warranty reserves each reporting period based on historical experience and the expected costs to remediate potential claims. Our review includes a quarterly analysis of the historical data and trends in warranty expense by division. An analysis by division allows us to consider market specific factors such as warranty experience, the number of home closings, the selling prices of homes, product mix, and other data in estimating warranty reserves. In addition, the analysis also contemplates the existence of any non-recurring or community-specific warranty-related matters that might not be included in historical data and trends that may need to be separately estimated based on management's judgment of the ultimate cost of repair for that specific issue. While estimated warranty liabilities are adjusted each reporting period based on the results of our quarterly analyses, we may not accurately predict actual warranty costs, which could lead to significant changes in the reserve.
18
Changes in warranty reserves are as follows for the periods presented:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||
| in thousands | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Balance at beginning of period | $ | 11,202 | $ | 11,554 | $ | 13,564 | $ | 12,717 | ||||||||||||||||||
| Warranty provision | 2,494 | 1,521 | 5,994 | 4,766 | ||||||||||||||||||||||
| Warranty expenditures | (1,535) | (2,162) | (7,397) | (6,570) | ||||||||||||||||||||||
| Balance at end of period | $ | 12,161 | $ | 10,913 | $ | 12,161 | $ | 10,913 | ||||||||||||||||||
Our homebuilding work is performed by subcontractors who typically must agree to indemnify us with regard to their work and provide certificates of insurance demonstrating that they have met our insurance requirements and have named us as an additional insured under their policies. Therefore, many claims relating to workmanship and materials that result in warranty spending are the primary responsibility of these subcontractors. In addition, we maintain third-party insurance policies that provide for the reimbursement of certain warranty costs incurred in the normal course of business, subject to applicable self-insured retentions. Amounts recorded for anticipated insurance and other third-party recoveries are reflected within the consolidated statements of operations as a reduction to home construction expense, if applicable. Anticipated recoveries not yet received from our insurer or other third-parties are recorded within accounts receivable on our consolidated balance sheets, if applicable.
We believe that our warranty and litigation accruals and third-party insurance are adequate to cover the ultimate resolution of our potential liabilities associated with known and anticipated warranty and construction-defect related claims and litigation. However, there can be no assurance that the terms and limitations of the limited warranty will be effective against claims made by homebuyers; that we will be able to renew our insurance coverage or renew it at reasonable rates; that we will not be liable for damages, the cost of repairs, and/or the expense of litigation surrounding possible construction defects, soil subsidence, or building related claims; or that claims will not arise out of events or circumstances not covered by insurance and/or not subject to effective indemnification agreements with our subcontractors.
Litigation
In the normal course of business, we and certain of our subsidiaries are subject to various lawsuits and have been named as defendants in various claims, complaints, and other legal actions, most relating to construction defects, moisture intrusion, and product liability. Certain of the liabilities resulting from these actions are covered in whole or in part by insurance. We cannot predict or determine the timing or final outcome of these lawsuits or the effect that any adverse findings or determinations in pending lawsuits may have on us. In addition, an estimate of possible loss or range of loss, if any, cannot presently be made with respect to certain of these pending matters. An unfavorable determination in pending lawsuits could result in the payment by us of substantial monetary damages that may not be fully covered by insurance. Further, the legal costs associated with the lawsuits and the amount of time required to be spent by management and our Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our financial condition, results of operations, or cash flows.
We have an accrual of $12.3 million and $9.9 million in other liabilities on our condensed consolidated balance sheets related to litigation matters as of June 30, 2026 and September 30, 2025, respectively.
Surety Bonds and 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, related principally to our obligations to local governments to construct roads and other improvements in various developments.
19
(9) Fair Value Measurements
As of the dates presented, we had assets on our condensed consolidated balance sheets that were required to be measured at fair value on a recurring or non-recurring basis. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows:
•Level 1 – Quoted prices in active markets for identical assets or liabilities;
•Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; and
•Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.
Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value of these assets may not be recoverable. We review our long-lived assets, including inventory, for recoverability when factors indicate an impairment may exist, but no less than quarterly. The fair value of assets deemed to be impaired is determined based upon the type of asset being evaluated. The fair value of our inventory assets, when required to be calculated, is further discussed within Note 4. Due to the substantial use of unobservable inputs in valuing the assets on a non-recurring basis, they are classified within Level 3.
Determining within which hierarchical level an asset or liability falls requires significant judgment. We evaluate our hierarchy disclosures each quarter. The following table presents the period-end balances of assets measured at fair value on a recurring basis for each hierarchy level:
| in thousands | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
| As of June 30, 2026 | ||||||||||||||||||||||||||
Deferred compensation plan assets(a) | $ | 6,764 | $ | — | $ | — | $ | 6,764 | ||||||||||||||||||
| As of September 30, 2025 | ||||||||||||||||||||||||||
Deferred compensation plan assets(a) | $ | 8,661 | $ | — | $ | — | $ | 8,661 | ||||||||||||||||||
(a) Amount is included in other assets within the condensed consolidated balance sheets.
The fair value of cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, and amounts due under the Unsecured Facility (if outstanding) approximate their carrying amounts due to the short maturity of these assets and liabilities. When outstanding, obligations related to land not owned under option agreements approximate fair value.
20
The following table presents the carrying value and estimated fair value of certain other financial liabilities as of June 30, 2026 and September 30, 2025:
| As of June 30, 2026 | As of September 30, 2025 | |||||||||||||||||||||||||
| in thousands | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||||
Financial liabilities(a) | ||||||||||||||||||||||||||
Senior Notes(b) | $ | 989,112 | $ | 1,004,386 | $ | 950,644 | $ | 968,634 | ||||||||||||||||||
Junior Subordinated Notes(c) | 80,020 | 80,020 | 78,470 | 78,470 | ||||||||||||||||||||||
| Total financial liabilities | $ | 1,069,132 | $ | 1,084,406 | $ | 1,029,114 | $ | 1,047,104 | ||||||||||||||||||
(a) Carrying amounts for financial liabilities are net of unamortized debt issuance costs or accretion.
(b) The estimated fair value of our publicly-held Senior Notes has been determined using quoted market rates (Level 2).
(c) Since there is no trading market for our Junior Subordinated Notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (Level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange.
(10) Income Taxes
Income Tax Provision
Our income tax expense or benefit is not always directly correlated to the amount of pre-tax income or loss for the associated period due to a variety of factors, including, but not limited to, the impact of tax credits and permanent differences. Historically, the Company's income tax provision for quarterly interim periods was based on an estimated annual effective income tax rate, adjusted for the effect of discrete items arising in that quarter. For the three and nine months ended June 30, 2026, the Company utilized the discrete effective tax rate method, as allowed by ASC Subtopic 740- 270, Income Taxes—Interim Reporting, to calculate its interim income tax provision. The discrete method is applied when the use of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year-to-date period as if it were the annual period and determines the income tax expense or benefit on that basis. The Company believes that use of the discrete method is more appropriate than the estimated annual effective tax rate method because the significant impact of expected energy efficiency tax credits for the current fiscal year prevents the Company from reliably estimating its annual effective tax rate.
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.
Deferred Tax Assets and Liabilities
The Company continues to evaluate its deferred tax assets each period to determine if a valuation allowance is required based on whether it is more likely than not that some portion of these deferred tax assets will not be realized. As of June 30, 2026, management concluded that it is more likely than not that all of our federal and certain state deferred tax assets will be realized. As part of our analysis, we considered both positive and negative factors that impact profitability and whether those factors would lead to a change in the estimate of our deferred tax assets that may be realized in the future. At this time, our conclusions on the valuation allowance and Internal Revenue Code Section 382 and Section 383 limitations related to our deferred tax assets remain consistent with the determinations we made during the period ended September 30, 2025, and such conclusions are based on similar company specific and industry factors to those discussed in Note 12 to the consolidated financial statements within our 2025 Annual Report.
21
(11) Stock-Based Compensation
Stock-based compensation expense is included in general and administrative expenses in our condensed consolidated statements of operations. The following table presents a summary of stock-based compensation expense related to stock options and restricted stock awards for the periods presented:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||
| in thousands | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Stock-based compensation expense | $ | 1,711 | $ | 1,817 | $ | 5,141 | $ | 5,442 | ||||||||||||||||||
Stock Options
Following is a summary of stock option activity for the nine months ended June 30, 2026:
| Nine Months Ended | ||||||||||||||
| June 30, 2026 | ||||||||||||||
| Shares | Weighted Average Exercise Price | |||||||||||||
| Outstanding at beginning of period | 1,642 | $ | 23.14 | |||||||||||
| Granted | 20,769 | 22.92 | ||||||||||||
| Outstanding at end of period | 22,411 | 22.93 | ||||||||||||
| Exercisable at end of period | 150 | $ | 27.90 | |||||||||||
As of June 30, 2026 and September 30, 2025, total unrecognized compensation cost related to unvested stock options was $0.2 million and less than $0.1 million, respectively. The remaining cost as of June 30, 2026 is expected to be recognized over a weighted average period of 2.3 years.
Restricted Stock Awards
During the nine months ended June 30, 2026, the Company issued time-based and performance-based restricted stock awards. The time-based restricted shares granted to our non-employee directors vest on the first anniversary of the grant, while the time-based restricted shares granted to our executive officers and other employees generally vest ratably over three years from the date of grant. Performance-based restricted share awards vest subject to the achievement of performance and market conditions over a three-year performance period.
Following is a summary of restricted stock activity for the nine months ended June 30, 2026:
| Nine Months Ended June 30, 2026 | ||||||||||||||||||||
| Performance-Based Restricted Shares | Time-Based Restricted Shares | Total Restricted Shares | ||||||||||||||||||
| Beginning of period | 307,097 | 402,025 | 709,122 | |||||||||||||||||
| Granted | 175,175 | 392,085 | 567,260 | |||||||||||||||||
| Vested | (140,035) | (225,317) | (365,352) | |||||||||||||||||
Forfeited(a) | (6,051) | (4,033) | (10,084) | |||||||||||||||||
| End of period | 336,186 | 564,760 | 900,946 | |||||||||||||||||
(a) Each of our performance shares represent a contingent right to receive one share of the Company's common stock if vesting is satisfied at the end of the three-year performance period. Our performance stock award plans provide that any performance shares earned in excess of the target number of performance shares issued may be settled in cash or additional shares at the discretion of the Human Capital Committee. We have no current plans to settle any additional performance-based restricted shares in the future in cash. During November 2025, 3,599 of the 143,634 performance-based shares issued under the fiscal 2023 performance-based award plan were forfeited by the holders of the awards based on the performance level achieved under the terms of the plan.
22
As of June 30, 2026 and September 30, 2025, total unrecognized compensation costs related to unvested restricted stock awards were $12.0 million and $9.1 million, respectively. The costs remaining as of June 30, 2026 are expected to be recognized over a weighted average period of 2.0 years.
(12) Earnings Per Share
Basic (loss) income per share is calculated by dividing net (loss) income by the weighted-average number of shares outstanding during the period. Diluted (loss) income per share adjusts the basic (loss) income per share for the effects of any potentially dilutive securities in periods in which the Company has net income and such effects are dilutive under the treasury stock method.
Following is a summary of the components of basic and diluted (loss) income per share for the periods presented:
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||
| in thousands (except per share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
| Net (loss) income | $ | (4,227) | $ | (324) | $ | (37,728) | $ | 15,584 | ||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Basic weighted-average shares | 26,510 | 29,440 | 27,813 | 29,996 | ||||||||||||||||||||||
| Dilutive effect of restricted stock awards | — | — | — | 240 | ||||||||||||||||||||||
| Dilutive effect of stock options | — | — | — | 2 | ||||||||||||||||||||||
Diluted weighted-average shares(a) | 26,510 | 29,440 | 27,813 | 30,238 | ||||||||||||||||||||||
| (Loss) income per share: | ||||||||||||||||||||||||||
| Basic | $ | (0.16) | $ | (0.01) | $ | (1.36) | $ | 0.52 | ||||||||||||||||||
| Diluted | $ | (0.16) | $ | (0.01) | $ | (1.36) | $ | 0.52 | ||||||||||||||||||
(a) The following potentially dilutive shares were excluded from the calculation of diluted (loss) income per share as a result of their anti-dilutive effect. Due to the reported net loss for the three and nine months ended June 30, 2026 and the three months ended June 30, 2025, all common stock equivalents were excluded from the computation of diluted loss per share for that respective period because inclusion would have resulted in anti-dilution.
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||
| in thousands | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Stock options | 22 | 2 | 22 | 1 | ||||||||||||||||||||||
| Time-based restricted stock | 565 | 370 | 565 | 110 | ||||||||||||||||||||||
| Performance-based restricted stock | 336 | 307 | 336 | 2 | ||||||||||||||||||||||
(13) Other Liabilities
Other liabilities include the following as of June 30, 2026 and September 30, 2025:
| in thousands | As of June 30, 2026 | As of September 30, 2025 | ||||||||||||
| Accrued compensation and benefits | $ | 21,491 | $ | 43,793 | ||||||||||
| Customer deposits | 21,309 | 14,260 | ||||||||||||
| Accrued interest | 12,803 | 23,211 | ||||||||||||
| Warranty reserves | 12,161 | 13,564 | ||||||||||||
| Litigation accruals | 12,340 | 9,930 | ||||||||||||
| Income tax liabilities | — | 32 | ||||||||||||
| Obligations related to land not owned under option agreements | 13,980 | — | ||||||||||||
| Other | 50,862 | 55,655 | ||||||||||||
| Total | $ | 144,946 | $ | 160,445 | ||||||||||
23
(14) Segment Information
Per ASC Topic 280, Segment Reporting (ASC 280), an operating segment is defined as a component of an enterprise that engages in business activities from which it earns revenues and incurs expenses and has discrete financial information available that is reviewed regularly by the Company's chief operating decision maker (CODM) to evaluate performance, make operating decisions, and determine how to allocate resources. We have identified each homebuilding component as an operating segment because each homebuilding component is engaged in development, design, construction, marketing, and sale of homes as well as land and lot sales, and provides title examinations for our homebuyers in certain markets. In accordance with the aggregation criteria defined in ASC 280, we aggregate our homebuilding operating segments into reportable segments based on similar long-term economic characteristics and geographical proximity.
We currently operate in 13 states that are grouped into three reportable segments as follows:
West: Arizona, California, Nevada, and Texas
East: Delaware, Indiana, Maryland, Tennessee, and Virginia
Southeast: Florida, Georgia, North Carolina, and South Carolina
Our Corporate and unallocated component includes 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.
The Company's CODM is the Chief Executive Officer. The CODM is regularly provided with the operating results of individual operating segments which comprise our reportable segments. Segment performance is evaluated, and resources are allocated primarily based on segment operating income (loss), which also plays a central role in the Company's forecasting process. In addition, the CODM considers forecast-to-actual variances when determining the allocation of operating and capital resources across segments. The accounting policies of our segments are those described in Note 2 to the consolidated financial statements within our 2025 Annual Report.
The following tables provide financial information about our reportable segments and Corporate and unallocated component for the periods presented:
| Three Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| in thousands | West | East | Southeast | Reportable Segment Subtotal | Corporate and unallocated | Total | ||||||||||||||||||||||||||||||||
| Revenue | $ | 287,324 | $ | 121,533 | $ | 107,449 | $ | 516,306 | $ | — | $ | 516,306 | ||||||||||||||||||||||||||
| Home construction and land sales expenses | 242,113 | 104,043 | 86,254 | 432,410 | 15,453 | 447,863 | ||||||||||||||||||||||||||||||||
| Inventory impairments and abandonments | 1,028 | 1,015 | — | 2,043 | 299 | 2,342 | ||||||||||||||||||||||||||||||||
| Commissions | 9,919 | 3,223 | 4,014 | 17,156 | — | 17,156 | ||||||||||||||||||||||||||||||||
| Sales and marketing | 9,106 | 3,275 | 2,982 | 15,363 | 5,031 | 20,394 | ||||||||||||||||||||||||||||||||
| Other general and administrative expenses | 8,261 | 3,685 | 3,387 | 15,333 | 19,659 | 34,992 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 2,033 | 774 | 859 | 3,666 | 1,258 | 4,924 | ||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 14,864 | $ | 5,518 | $ | 9,953 | $ | 30,335 | $ | (41,700) | $ | (11,365) | ||||||||||||||||||||||||||
| Loss on extinguishment of debt, net | (668) | |||||||||||||||||||||||||||||||||||||
| Other income, net | 1,532 | |||||||||||||||||||||||||||||||||||||
| Loss before income taxes | $ | (10,501) | ||||||||||||||||||||||||||||||||||||
24
| Nine Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| in thousands | West | East | Southeast | Reportable Segment Subtotal | Corporate and unallocated | Total | ||||||||||||||||||||||||||||||||
| Revenue | $ | 747,684 | $ | 312,117 | $ | 229,842 | $ | 1,289,643 | $ | — | $ | 1,289,643 | ||||||||||||||||||||||||||
| Home construction and land sales expenses | 636,002 | 266,615 | 188,784 | 1,091,401 | 40,230 | 1,131,631 | ||||||||||||||||||||||||||||||||
| Inventory impairments and abandonments | 3,551 | 1,914 | — | 5,465 | 542 | 6,007 | ||||||||||||||||||||||||||||||||
| Commissions | 25,966 | 8,342 | 8,254 | 42,562 | — | 42,562 | ||||||||||||||||||||||||||||||||
| Sales and marketing | 26,665 | 9,647 | 7,713 | 44,025 | 14,239 | 58,264 | ||||||||||||||||||||||||||||||||
| Other general and administrative expenses | 24,871 | 10,644 | 8,801 | 44,316 | 55,989 | 100,305 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 5,509 | 1,577 | 1,786 | 8,872 | 4,178 | 13,050 | ||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 25,120 | $ | 13,378 | $ | 14,504 | $ | 53,002 | $ | (115,178) | $ | (62,176) | ||||||||||||||||||||||||||
| Loss on extinguishment of debt, net | (668) | |||||||||||||||||||||||||||||||||||||
| Other income, net | 2,743 | |||||||||||||||||||||||||||||||||||||
| Loss before income taxes | $ | (60,101) | ||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| in thousands | West | East | Southeast | Reportable Segment Subtotal | Corporate and unallocated | Total | ||||||||||||||||||||||||||||||||
| Revenue | $ | 329,149 | $ | 149,160 | $ | 67,058 | $ | 545,367 | $ | — | $ | 545,367 | ||||||||||||||||||||||||||
| Home construction and land sales expenses | 269,198 | 122,495 | 55,112 | 446,805 | 15,643 | 462,448 | ||||||||||||||||||||||||||||||||
| Inventory impairments and abandonments | 3,081 | — | 5,635 | 8,716 | 1,623 | 10,339 | ||||||||||||||||||||||||||||||||
| Commissions | 11,489 | 4,630 | 2,496 | 18,615 | — | 18,615 | ||||||||||||||||||||||||||||||||
| Sales and marketing | 7,796 | 2,865 | 2,302 | 12,963 | 3,900 | 16,863 | ||||||||||||||||||||||||||||||||
| Other general and administrative expenses | 8,031 | 4,064 | 3,647 | 15,742 | 20,499 | 36,241 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 2,152 | 633 | 427 | 3,212 | 1,359 | 4,571 | ||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 27,402 | $ | 14,473 | $ | (2,561) | $ | 39,314 | $ | (43,024) | $ | (3,710) | ||||||||||||||||||||||||||
| Other income, net | 1,204 | |||||||||||||||||||||||||||||||||||||
| Loss before income taxes | $ | (2,506) | ||||||||||||||||||||||||||||||||||||
| Nine Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| in thousands | West | East | Southeast | Reportable Segment Subtotal | Corporate and unallocated | Total | ||||||||||||||||||||||||||||||||
| Revenue | $ | 1,001,921 | $ | 379,898 | $ | 197,840 | $ | 1,579,659 | $ | — | $ | 1,579,659 | ||||||||||||||||||||||||||
| Home construction and land sales expenses | 814,996 | 318,595 | 164,541 | 1,298,132 | 40,004 | 1,338,136 | ||||||||||||||||||||||||||||||||
| Inventory impairments and abandonments | 3,609 | — | 5,635 | 9,244 | 1,623 | 10,867 | ||||||||||||||||||||||||||||||||
| Commissions | 34,596 | 11,823 | 7,092 | 53,511 | — | 53,511 | ||||||||||||||||||||||||||||||||
| Sales and marketing | 22,936 | 8,267 | 6,218 | 37,421 | 10,482 | 47,903 | ||||||||||||||||||||||||||||||||
| Other general and administrative expenses | 24,632 | 10,874 | 9,435 | 44,941 | 59,231 | 104,172 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 6,861 | 1,637 | 1,122 | 9,620 | 3,653 | 13,273 | ||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 94,291 | $ | 28,702 | $ | 3,797 | $ | 126,790 | $ | (114,993) | $ | 11,797 | ||||||||||||||||||||||||||
| Other income, net | 3,031 | |||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 14,828 | ||||||||||||||||||||||||||||||||||||
25
The following table presents assets by segment as of June 30, 2026 and September 30, 2025:
| in thousands | June 30, 2026 | September 30, 2025 | ||||||||||||
| Assets | ||||||||||||||
| West | $ | 1,211,517 | $ | 1,060,650 | ||||||||||
| East | 519,134 | 451,299 | ||||||||||||
| Southeast | 547,375 | 461,110 | ||||||||||||
Corporate and unallocated(a) | 626,724 | 636,649 | ||||||||||||
| Total assets | $ | 2,904,750 | $ | 2,609,708 | ||||||||||
(a) Total assets at Corporate and unallocated include cash and cash equivalents, restricted cash, deferred taxes, capitalized interest and indirect costs, and other items that are not allocated to the segments.
(15) Subsequent Events
Merger with Dream Finders Homes, Inc.
On August 6, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Dream Finders Homes, Inc. (“Dream Finders”) and Bulldogs Merger Sub, Inc., a wholly-owned subsidiary of Dream Finders (“Merger Sub”). Subject to the terms and conditions of the Merger Agreement, Dream Finders has agreed to acquire the Company in an all-cash transaction for $33.50 per share of the Company’s common stock. Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”) with the Company surviving the Merger as a wholly-owned subsidiary of Dream Finders. Upon the consummation of the Merger, the Company will cease to be a publicly traded company. The Company has agreed to various customary covenants and agreements, including, among others, agreements to conduct its business in the ordinary course during the period between the execution of the Merger Agreement and the effective time of the Merger. The Company does not believe these restrictions will prevent it from meeting its debt service obligations, ongoing costs of operations, working capital needs, or capital expenditure requirements. The transaction is currently expected to close during the fourth quarter of calendar 2026. Consummation of the Merger is subject to stockholder approval, regulatory approval and completion of other customary closing conditions.
26
Exhibit 99.4 | ||
Contents
| 1 | |||||
| 1 | |||||
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Introduction and Description of the Transactions
On August 6, 2026, Dream Finders Homes, Inc., a Texas corporation (the “Company” or “Dream Finders”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Bulldogs Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and Beazer Homes USA, Inc., a Delaware corporation (“Beazer”). The Merger Agreement provides, among other things and subject to the terms and conditions set forth therein, that Merger Sub will be merged with and into Beazer, with Beazer surviving as a wholly owned subsidiary of the Company (the “Merger” or the “Beazer Acquisition”).
Under the terms of the Merger Agreement, each share of common stock, par value $0.001 per share, of Beazer issued and outstanding immediately prior to the effective time of the Merger (other than cancelled or converted shares and dissenting shares) will be converted into the right to receive $33.50 per Beazer share in cash.
The Merger Agreement provides that:
-Stock options will be cancelled and settled in cash based on the intrinsic value of the award (if any), with options that are out-of-the-money cancelled without consideration.
-Restricted stock awards (“RSAs”) will generally be cancelled and converted into cash based on the merger consideration. Performance-based restricted stock awards will be cancelled and settled in cash based on the merger consideration, with performance conditions for uncompleted performance periods deemed achieved at target levels.
-Performance-based cash awards will be cancelled and settled in cash, with performance conditions for uncompleted performance periods deemed achieved at target levels.
The Beazer Acquisition, including the repayment of Beazer indebtedness and payment of transaction expenses, was funded with proceeds from the following transactions:
-On September 14, 2026, the Company sold 225,000 shares of newly designated Series B Convertible Preferred Stock at a first closing for an aggregate purchase price of $225.0 million, of which $154.3 million was used to redeem its existing Series A Convertible Preferred Stock.
-On October 20, 2026, the Company sold an additional 450,000 shares of its existing Series B Convertible Preferred Stock at a second closing for an aggregate purchase price of $450.0 million.
-On October 20, 2026, the Company received $572.1 million of net land banking capital proceeds from Millrose Properties (NYSE: MRP) and/or its affiliates which is acquiring Beazer homesites under option from the Company in connection with the Merger.
The remainder was paid from available cash on hand and borrowings under the Company’s existing revolving credit facility.
On October 9, 2026, the Company partially exercised an accordion feature under its existing credit facility increasing the aggregate commitments under the revolving credit facility to $1.7 billion. The pro forma borrowing base for the combined Company after the Merger was $1.7 billion as of October 20, 2026.
The Beazer Acquisition was accounted for by applying the guidance under Accounting Standards Codification 805, Business Combinations (“ASC 805”). In accordance with ASC 805, the acquired assets and liabilities will be recorded by the Company at estimated fair values at the closing date. Any differences between the fair value of the consideration transferred and the fair value of the assets acquired, and liabilities assumed will be recorded as goodwill.
The unaudited pro forma condensed combined financial information and related notes are provided for illustrative purposes only and do not purport to represent what the combined company’s actual results of operations or financial position would have been had the Merger been completed on the dates indicated, nor are they necessarily indicative of the combined company’s future results of operations or financial position for any future period. The pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. It is likely that the actual adjustments upon the completion of the Merger will differ from the pro forma adjustments, and it is possible the differences may be material.
1
The following unaudited pro forma condensed combined financial information gives effect to the Merger, which includes adjustments for the following:
-certain reclassifications to conform Beazer historical financial statement presentation to Dream Finders historical financial statement presentation;
-transaction adjustments to reflect purchase accounting under ASC 805;
-financing adjustments associated with acquisition-related debt financing, preferred equity issuance and land bank financing arrangements; and
-non-recurring transaction costs in connection with the Merger.
2
| UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET | ||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| (USD in Thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2026 | As of June 30, 2026 | As of June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||
| Dream Finders Homes, Inc. (Historical) - USD | Beazer Homes USA, Inc. (Historical) - USD Adjusted (Note 2) | Merger Transaction Accounting Adjustments | Notes | Financing Transaction Accounting Adjustments | Notes | Pro Forma Combined for Merger and Financing Adjustments | ||||||||||||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 203,494 | $ | 124,641 | $ | (1,575,402) | 3B | $ | 322,963 | 3P | $ | 88,333 | ||||||||||||||||||||||||||||||||
| (57,409) | 3E | 225,000 | 3Q | |||||||||||||||||||||||||||||||||||||||||
| 683,000 | 3I | (154,275) | 3Q | |||||||||||||||||||||||||||||||||||||||||
| (44,000) | 3J | 450,000 | 3Q | |||||||||||||||||||||||||||||||||||||||||
| (30,804) | 3M | (16,875) | 3R | |||||||||||||||||||||||||||||||||||||||||
| (42,000) | 3O | |||||||||||||||||||||||||||||||||||||||||||
| Restricted Cash | 50,272 | 3,418 | — | — | 53,690 | |||||||||||||||||||||||||||||||||||||||
| Accounts receivable | 29,533 | 96,621 | — | — | 126,154 | |||||||||||||||||||||||||||||||||||||||
| Inventories | 2,327,779 | 2,141,470 | (92,000) | 3C | — | 3,581,315 | ||||||||||||||||||||||||||||||||||||||
| (794,000) | 3I | — | ||||||||||||||||||||||||||||||||||||||||||
| (1,934) | 3L | — | ||||||||||||||||||||||||||||||||||||||||||
| Lot deposits | 501,755 | 228,000 | 44,000 | 3J | — | 773,755 | ||||||||||||||||||||||||||||||||||||||
| Mortgage loans held for sale | 198,131 | — | — | — | 198,131 | |||||||||||||||||||||||||||||||||||||||
| Other assets | 249,562 | 299,224 | (31,159) | 3B | — | 527,849 | ||||||||||||||||||||||||||||||||||||||
| 40,000 | 3D | — | ||||||||||||||||||||||||||||||||||||||||||
| 5,069 | 3F | — | ||||||||||||||||||||||||||||||||||||||||||
| (3,374) | 3K | — | ||||||||||||||||||||||||||||||||||||||||||
| (31,473) | 3N | |||||||||||||||||||||||||||||||||||||||||||
| Investments in unconsolidated entities | 21,783 | — | — | — | 21,783 | |||||||||||||||||||||||||||||||||||||||
| Goodwill | 377,361 | 11,376 | (1,146,990) | 3A | — | 421,314 | ||||||||||||||||||||||||||||||||||||||
| 1,606,561 | 3B | — | ||||||||||||||||||||||||||||||||||||||||||
| 92,000 | 3C | — | ||||||||||||||||||||||||||||||||||||||||||
| (40,000) | 3D | — | ||||||||||||||||||||||||||||||||||||||||||
| (690,000) | 3G | — | ||||||||||||||||||||||||||||||||||||||||||
| 12,270 | 3H | — | ||||||||||||||||||||||||||||||||||||||||||
| 111,000 | 3I | — | ||||||||||||||||||||||||||||||||||||||||||
| 14,263 | 3K | — | ||||||||||||||||||||||||||||||||||||||||||
| 31,473 | 3N | |||||||||||||||||||||||||||||||||||||||||||
| 42,000 | 3O | |||||||||||||||||||||||||||||||||||||||||||
| Total | 3,959,670 | 2,904,750 | (1,898,909) | 826,813 | 5,792,324 | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 3,959,670 | $ | 2,904,750 | $ | (1,898,909) | $ | 826,813 | $ | 5,792,324 | ||||||||||||||||||||||||||||||||||
| See accompanying notes to unaudited pro forma condensed combined financial information. | ||||||||||||||||||||||||||||||||||||||||||||
3
| UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET | ||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| (USD in Thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2026 | As of June 30, 2026 | As of June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||
| Dream Finders Homes, Inc. (Historical) - USD | Beazer Homes USA, Inc. (Historical) - USD Adjusted (Note 2) | Merger Transaction Accounting Adjustments | Notes | Financing Transaction Accounting Adjustments | Notes | Pro Forma Combined for Merger and Financing Adjustments | ||||||||||||||||||||||||||||||||||||||
| LIABILITIES | ||||||||||||||||||||||||||||||||||||||||||||
| Accounts payable | $ | 156,114 | $ | 177,337 | $ | — | $ | — | $ | 333,451 | ||||||||||||||||||||||||||||||||||
| Accrued liabilities | 280,118 | 149,982 | — | — | 430,100 | |||||||||||||||||||||||||||||||||||||||
| Customer deposits | 94,459 | 21,309 | — | — | 115,768 | |||||||||||||||||||||||||||||||||||||||
| Revolving credit facilities and other borrowings | 1,037,986 | 420,020 | (340,000) | 3G | 322,963 | 3P | 1,440,969 | |||||||||||||||||||||||||||||||||||||
| Senior unsecured notes, net | 592,342 | 989,112 | (8,200) | 3E | — | 1,246,413 | ||||||||||||||||||||||||||||||||||||||
| (350,000) | 3G | — | ||||||||||||||||||||||||||||||||||||||||||
| 12,270 | 3H | — | ||||||||||||||||||||||||||||||||||||||||||
| 10,889 | 3K | — | ||||||||||||||||||||||||||||||||||||||||||
| Mortgage warehouse facilities | 186,785 | — | — | — | 186,785 | |||||||||||||||||||||||||||||||||||||||
| Total | 2,347,804 | 1,757,760 | (675,041) | 322,963 | 3,753,486 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | $ | 2,347,804 | $ | 1,757,760 | $ | (675,041) | $ | 322,963 | $ | 3,753,486 | ||||||||||||||||||||||||||||||||||
| See accompanying notes to unaudited pro forma condensed combined financial information. | ||||||||||||||||||||||||||||||||||||||||||||
4
| UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET | ||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| (USD in Thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2026 | As of June 30, 2026 | As of June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||
| Dream Finders Homes, Inc. (Historical) - USD | Beazer Homes USA, Inc. (Historical) - USD Adjusted (Note 2) | Merger Transaction Accounting Adjustments | Notes | Financing Transaction Accounting Adjustments | Notes | Pro Forma Combined for Merger and Financing Adjustments | ||||||||||||||||||||||||||||||||||||||
| EQUITY | ||||||||||||||||||||||||||||||||||||||||||||
| Shareholder’s equity | ||||||||||||||||||||||||||||||||||||||||||||
| Redeemable preferred stock | $ | 148,500 | $ | — | $ | — | $ | 225,000 | 3Q | $ | 658,125 | |||||||||||||||||||||||||||||||||
| — | (148,500) | 3Q | ||||||||||||||||||||||||||||||||||||||||||
| — | 450,000 | 3Q | ||||||||||||||||||||||||||||||||||||||||||
| — | (16,875) | 3R | ||||||||||||||||||||||||||||||||||||||||||
| Redeemable noncontrolling interest | 29,539 | — | — | — | 29,539 | |||||||||||||||||||||||||||||||||||||||
| Class A common stock | 374 | — | — | — | 374 | |||||||||||||||||||||||||||||||||||||||
| Class B common stock | 577 | — | — | — | 577 | |||||||||||||||||||||||||||||||||||||||
| Preferred stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Common stock | — | 27 | (27) | 3A | — | — | ||||||||||||||||||||||||||||||||||||||
| Accumulated other comprehensive income | 1,407 | — | — | — | 1,407 | |||||||||||||||||||||||||||||||||||||||
| Additional paid-in capital | 304,205 | 760,918 | (760,918) | 3A | (5,775) | 3Q | 298,430 | |||||||||||||||||||||||||||||||||||||
| Retained earnings | 1,208,177 | 386,045 | (386,045) | 3A | — | 1,131,299 | ||||||||||||||||||||||||||||||||||||||
| (49,209) | 3E | — | ||||||||||||||||||||||||||||||||||||||||||
| 5,069 | 3F | — | ||||||||||||||||||||||||||||||||||||||||||
| (1,934) | 3L | — | ||||||||||||||||||||||||||||||||||||||||||
| (30,804) | 3M | — | ||||||||||||||||||||||||||||||||||||||||||
| Treasury stock | (82,837) | — | — | — | (82,837) | |||||||||||||||||||||||||||||||||||||||
| Total Shareholder’s equity | 1,609,942 | 1,146,990 | (1,223,868) | 503,850 | 2,036,914 | |||||||||||||||||||||||||||||||||||||||
| Noncontrolling interest | ||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling interests | 1,924 | — | — | — | 1,924 | |||||||||||||||||||||||||||||||||||||||
| Total non-controlling interest | 1,924 | — | — | — | 1,924 | |||||||||||||||||||||||||||||||||||||||
| Total equity | 1,611,866 | 1,146,990 | (1,223,868) | 503,850 | 2,038,838 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 3,959,670 | $ | 2,904,750 | $ | (1,898,909) | $ | 826,813 | $ | 5,792,324 | ||||||||||||||||||||||||||||||||||
| See accompanying notes to unaudited pro forma condensed combined financial information. | ||||||||||||||||||||||||||||||||||||||||||||
5
| UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT | ||||||||||||||||||||||||||||||||
| For the Six Months ended June 30, 2026 | ||||||||||||||||||||||||||||||||
| (USD in Thousands) | ||||||||||||||||||||||||||||||||
| For the Six Months ended June 30, 2026 | For the Six Months ended June 30, 2026 | For the Six Months ended June 30, 2026 | ||||||||||||||||||||||||||||||
| Dream Finders Homes, Inc. (Historical) - USD | Beazer Homes USA, Inc. (Historical) - USD Adjusted (Note 2) | Merger Transaction Accounting Adjustments | Notes | Pro Forma Combined for Merger Adjustments | ||||||||||||||||||||||||||||
| Homebuilding | $ | 1,843,803 | $ | 923,737 | $ | (4,247) | 4B | $ | 2,763,293 | |||||||||||||||||||||||
| Financial services | 107,460 | 2,415 | — | $ | 109,875 | |||||||||||||||||||||||||||
| Total revenues | 1,951,263 | 926,152 | (4,247) | $ | 2,873,168 | |||||||||||||||||||||||||||
| Homebuilding cost of sales | 1,579,425 | 807,772 | (3,288) | 4B | $ | 2,371,221 | ||||||||||||||||||||||||||
| (12,688) | 4H | |||||||||||||||||||||||||||||||
| Financial services expense | 87,950 | 653 | — | $ | 88,603 | |||||||||||||||||||||||||||
| Selling, general and administrative expenses | 239,343 | 147,291 | 5,000 | 4A | $ | 388,046 | ||||||||||||||||||||||||||
| (3,588) | 4C | |||||||||||||||||||||||||||||||
| Income from unconsolidated entities | (378) | — | — | $ | (378) | |||||||||||||||||||||||||||
| Contingent consideration revaluation | — | — | — | $ | — | |||||||||||||||||||||||||||
| Other (income) expense, net | (10,729) | (528) | — | $ | (11,257) | |||||||||||||||||||||||||||
| Income before taxes | 55,652 | (29,036) | 10,317 | $ | 36,933 | |||||||||||||||||||||||||||
| Income tax (expense) benefit | (14,248) | 23,905 | (580) | 4G | $ | 9,077 | ||||||||||||||||||||||||||
| Net income | 41,404 | (5,131) | 9,737 | $ | 46,010 | |||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | (427) | — | — | $ | (427) | |||||||||||||||||||||||||||
| Net income attributable to Dream Finders Homes, Inc. | 40,977 | (5,131) | 9,737 | $ | 45,583 | |||||||||||||||||||||||||||
| Earnings per share | ||||||||||||||||||||||||||||||||
| Basic | $ | 0.37 | $ | — | $ | — | $ | 0.06 | ||||||||||||||||||||||||
| Diluted | $ | 0.37 | $ | — | $ | — | $ | 0.06 | ||||||||||||||||||||||||
| Weighted-average number of shares | ||||||||||||||||||||||||||||||||
| Basic | 91,657,686 | — | — | 91,657,686 | ||||||||||||||||||||||||||||
| Diluted | 91,883,564 | — | — | 91,883,564 | ||||||||||||||||||||||||||||
| See accompanying notes to unaudited pro forma condensed combined financial information. | ||||||||||||||||||||||||||||||||
6
| UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT | ||||||||||||||||||||||||||||||||
| For the Year ended December 31, 2025 | ||||||||||||||||||||||||||||||||
| (USD in Thousands) | ||||||||||||||||||||||||||||||||
| For the Year ended December 31, 2025 | For the Year ended September 30, 2025 | For the Year ended December 31, 2025 | ||||||||||||||||||||||||||||||
| Dream Finders Homes, Inc. (Historical) - USD | Beazer Homes USA, Inc. (Historical) - USD Adjusted (Note 2) | Merger Transaction Accounting Adjustments | Notes | Pro Forma Combined for Merger Adjustments | ||||||||||||||||||||||||||||
| Homebuilding | $ | 4,145,347 | $ | 2,365,934 | $ | (3,391) | 4B | $ 6,507,890 | ||||||||||||||||||||||||
| Financial services | 177,501 | 5,621 | — | 183,122 | ||||||||||||||||||||||||||||
| Total revenues | 4,322,848 | 2,371,555 | (3,391) | 6,691,012 | ||||||||||||||||||||||||||||
| Homebuilding cost of sales | 3,423,354 | 2,040,599 | (2,416) | 4B | 5436162 | |||||||||||||||||||||||||||
| (25,375) | 4H | |||||||||||||||||||||||||||||||
| Financial services expense | 144,727 | 1,640 | — | 146,367 | ||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 485,213 | 290,565 | 10,000 | 4A | 858,299 | |||||||||||||||||||||||||||
| (7,338) | 4C | |||||||||||||||||||||||||||||||
| 49,055 | 4D | |||||||||||||||||||||||||||||||
| 30,804 | 4E | |||||||||||||||||||||||||||||||
| Income for unconsolidated entities | (417) | — | — | (417) | ||||||||||||||||||||||||||||
| Contingent consideration revaluation | (9,820) | — | — | (9,820) | ||||||||||||||||||||||||||||
| Other (income) expense, net | (4,311) | (2,099) | (5,069) | 4F | (11,479) | |||||||||||||||||||||||||||
| Income before taxes | 284,102 | 40,850 | (53,052) | 271,900 | ||||||||||||||||||||||||||||
| Income tax expense | (66,698) | 4,738 | (7,352) | 4G | (69,312) | |||||||||||||||||||||||||||
| Net income | 217,404 | 45,588 | (60,404) | 202,588 | ||||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | (207) | — | — | (207) | ||||||||||||||||||||||||||||
| Net income attributable to Dream Finders Homes, Inc. | $ | 217,197 | $ | 45,588 | $ | (60,404) | 202381 | |||||||||||||||||||||||||
| Earnings per share | ||||||||||||||||||||||||||||||||
| Basic | $ | 2.19 | $ | — | $ | — | 1.30 | |||||||||||||||||||||||||
| Diluted | $ | 2.14 | $ | — | $ | — | 1.20 | |||||||||||||||||||||||||
| Weighted-average number of shares | — | |||||||||||||||||||||||||||||||
| Basic | 93,106,397 | — | — | 93,106,397 | ||||||||||||||||||||||||||||
| Diluted | 101,296,630 | — | — | 101,296,630 | ||||||||||||||||||||||||||||
| See accompanying notes to unaudited pro forma condensed combined financial information. | ||||||||||||||||||||||||||||||||
7
Note 1. Basis of Presentation
The accompanying unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and presents the transaction accounting adjustments and financing adjustments directly attributable to the Merger that are expected to have a continuing impact on the combined company.
The unaudited pro forma combined balance sheet as of June 30, 2026 is presented to reflect the Merger as if it had occurred on June 30, 2026. The unaudited pro forma combined statement of operations for the six months ended June 30, 2026 and the year ended December 31, 2025 gives pro forma effect to the Beazer Acquisition, as if the Merger had been completed on January 1, 2025.
The unaudited pro forma condensed combined financial information has been derived from the following historical financial information:
Dream Finders Homes, Inc.
•Unaudited condensed consolidated balance sheet as of June 30, 2026
•Unaudited condensed consolidated statement of operations for the six months ended June 30, 2026
•Audited consolidated statement of operations for the fiscal year ending December 31, 2025
Beazer Homes USA, Inc.
•Unaudited condensed consolidated balance sheet as of June 30, 2026
•Unaudited condensed consolidated statement of operations for the nine months ended June 30, 2026 and condensed consolidated statement of operations for the three months ended December 31, 2025 – see note below for further information on how Beazer’s unaudited pro forma condensed combined financial information for the six months ended June 30, 2026 was derived
•Audited consolidated statement of operations for the fiscal year ending September 30, 2025
For the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025, Dream Finders reports on a fiscal year ending December 31, while Beazer historically reported on a fiscal year ending September 30. Since the fiscal year-ends differ by not more than 93 days, consistent with Article 11, Dream Finders combined Beazer’s statement of operations for the year-ended September 30, 2025 with Dream Finders statement of operations for the year-ended December 31, 2025.
In order to derive the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2026, Beazer’s results of operations for the period October 1, 2025 through December 31, 2025 have been removed from Beazer’s unaudited consolidated statement of operations for the nine months ended June 30, 2026.
Beazer’s revenue for the period from October 1, 2025 through December 31, 2025 was approximately $363.5 million, and its net loss for the same period was approximately $32.6 million. During this excluded period, Beazer continued its normal homebuilding, land development and financing operations. Management has not identified any unusual or non-recurring transactions occurring during the period that would be necessary to understand the unaudited pro forma condensed combined financial information. Refer to Note 2.1 below for the calculation of Beazer’s statement of operations for the six-month period from January 1, 2026 through June 30, 2026.
Note 2. Accounting Policy and Reclassification Adjustments
During the preparation of this unaudited pro forma condensed combined financial information, management performed a preliminary review of Beazer’s financial information to identify differences in accounting policies compared to those of Dream Finders and differences in financial statement presentation compared to the presentation of Dream Finders. At the time of preparing the unaudited pro forma condensed combined financial information, other than the adjustments described herein, Dream Finders is not aware of any other material differences. However, Dream Finders will continue to perform its detailed review of Beazer’s accounting policies. Upon completion of that review, differences may be identified between the accounting policies of Dream Finders and Beazer that, when conformed, could have a material impact on the unaudited pro forma condensed combined financial information.
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| Unaudited Pro Forma Condensed Combined Balance Sheet | ||||||||||||||||||||||||||||||||
| As of June 30, 2026 (USD in Thousands) | ||||||||||||||||||||||||||||||||
| Beazer Homes USA, Inc. | ||||||||||||||||||||||||||||||||
| Dream Finders Homes, Inc. | Line item presentation | Historical | Reclassification Adjustments | Notes | Historical - Adjusted | |||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | Cash and cash equivalents | $ | 124,641 | $ | $ | 124,641 | ||||||||||||||||||||||||||
| Restricted Cash | Restricted Cash | 3,418 | 3,418 | |||||||||||||||||||||||||||||
| Accounts receivable | Accounts receivable | 96,621 | 96,621 | |||||||||||||||||||||||||||||
| Inventories | Inventory | 2,369,470 | (228,000) | 2A | 2,141,470 | |||||||||||||||||||||||||||
| Lot deposits | — | 228,000 | 2A | 228,000 | ||||||||||||||||||||||||||||
| Mortgage loans held for sale | — | — | — | |||||||||||||||||||||||||||||
| Other assets | Other assets | 45,890 | 253,334 | 2B | 299,224 | |||||||||||||||||||||||||||
| Investments in unconsolidated entities | — | — | ||||||||||||||||||||||||||||||
| Goodwill | Goodwill | 11,376 | 11,376 | |||||||||||||||||||||||||||||
| Income tax receivable | 2,309 | (2,309) | 2B | — | ||||||||||||||||||||||||||||
| Deferred tax assets, net | 166,191 | (166,191) | 2B | — | ||||||||||||||||||||||||||||
| Property and equipment, net | 55,262 | (55,262) | 2B | — | ||||||||||||||||||||||||||||
| Operating lease right of use asset | 29,572 | (29,572) | 2B | — | ||||||||||||||||||||||||||||
| Total Assets | $ | 2,904,750 | $ | — | $ | 2,904,750 | ||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Accounts payable | Trade accounts payable | $ | 177,337 | $ | $ | 177,337 | ||||||||||||||||||||||||||
| Accrued liabilities | — | 149,982 | 2C, 2E | 149,982 | ||||||||||||||||||||||||||||
| Customer deposits | — | 21,309 | 2C | 21,309 | ||||||||||||||||||||||||||||
| Revolving credit facilities and other borrowings | — | 420,020 | 2D | 420,020 | ||||||||||||||||||||||||||||
| Senior unsecured notes, net | — | 989,112 | 2D | 989,112 | ||||||||||||||||||||||||||||
| Mortgage warehouse facilities | — | — | ||||||||||||||||||||||||||||||
| Operating lease liabilities | 26,345 | (26,345) | 2E | — | ||||||||||||||||||||||||||||
| Other liabilities | 144,946 | (144,946) | 2C | — | ||||||||||||||||||||||||||||
| Total debt | 1,409,132 | (1,409,132) | 2D | — | ||||||||||||||||||||||||||||
| Total liabilities | $ | 1,757,760 | $ | — | $ | 1,757,760 | ||||||||||||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||||||||||||||
| Mezzanine equity | ||||||||||||||||||||||||||||||||
| Redeemable preferred stock | ||||||||||||||||||||||||||||||||
| Redeemable noncontrolling interest | $ | $ | $ | — | ||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||
| Class A common stock | ||||||||||||||||||||||||||||||||
| Class B common stock | — | |||||||||||||||||||||||||||||||
| Preferred stock | ||||||||||||||||||||||||||||||||
| Common stock | 27 | — | 27 | |||||||||||||||||||||||||||||
| Accumulated other comprehensive income | — | |||||||||||||||||||||||||||||||
| Additional paid in capital | Paid in capital | 760,918 | 760,918 | |||||||||||||||||||||||||||||
| Retained earnings | Retained earnings | 386,045 | 386,045 | |||||||||||||||||||||||||||||
| Treasury stock | ||||||||||||||||||||||||||||||||
| Total Dream Finders Homes, Inc. stockholders’ equity | ||||||||||||||||||||||||||||||||
| Noncontrolling interests | ||||||||||||||||||||||||||||||||
| Total equity | 1,146,990 | — | 1,146,990 | |||||||||||||||||||||||||||||
| Total liabilities, mezzanine equity and equity | $ | 2,904,750 | $ | — | $ | 2,904,750 | ||||||||||||||||||||||||||
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2A - Reclassifications of $228.0 million of deposits on lot option agreements from Inventory to Lot deposits
2B – Reclassifications of $253.3 million from Income tax receivable; Deferred tax assets, net; Property and equipment, net; and Operating lease right of use asset to Other assets
2C – Reclassifications from Other liabilities:
-$123.6 million consisting of accrued compensation and benefits, accrued interest, litigation accruals, warranty reserves, obligations related to land not owned under option agreements and other liabilities to Accrued liabilities
-$21.3 million of customer deposits to Customer deposits
2D – Reclassifications from Total debt:
-$80.0 million of junior subordinated notes and $340.0 million of senior unsecured revolving credit facility to Revolving credit facilities and other borrowings
-$989.1 million of total senior notes to Senior unsecured notes, net
2E – Reclassification of $26.3 million from Operating lease liabilities to Accrued liabilities
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| Unaudited Pro Forma Condensed Combined Statement of Operations | ||||||||||||||||||||||||||||||||
| For the period January 1, 2026 to June 30, 2026 (USD in Thousands) | ||||||||||||||||||||||||||||||||
| Beazer Homes USA, Inc. | ||||||||||||||||||||||||||||||||
| Dream Finders Homes, Inc. | Line Item Presentation | Historical | Reclassification Adjustments | Notes | Historical - Adjusted | |||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||
| Homebuilding | Total revenue | $ | 926,152 | $ | (2,415) | 2AA | $ | 923,737 | ||||||||||||||||||||||||
| Financial services | 2,415 | 2AA | 2,415 | |||||||||||||||||||||||||||||
| Total revenues | 926,152 | — | 926,152 | |||||||||||||||||||||||||||||
| Homebuilding cost of sales | 807,772 | 2BB, 2CC, 2DD | 807,772 | |||||||||||||||||||||||||||||
| Financial services expense | 653 | 2BB | 653 | |||||||||||||||||||||||||||||
| Home construction and land sales expenses | 807,714 | (807,714) | 2BB | — | ||||||||||||||||||||||||||||
| Inventory impairments and abandonments | 3,637 | (3,637) | 2CC | — | ||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 147,291 | 2BB, 2EE, 2FF | 147,291 | |||||||||||||||||||||||||||||
| Income for unconsolidated entities | — | |||||||||||||||||||||||||||||||
| Contingent consideration revaluation | — | |||||||||||||||||||||||||||||||
| Other (income) expense, net | (528) | 2BB, 2GG, 2HH | (528) | |||||||||||||||||||||||||||||
| Commissions | 30,546 | (30,546) | 2DD | — | ||||||||||||||||||||||||||||
| General and administrative expenses | 105,580 | (105,580) | 2EE | — | ||||||||||||||||||||||||||||
| Depreciation and amortization | 9,008 | (9,008) | 2FF | — | ||||||||||||||||||||||||||||
| Loss on extinguishment of debt, net | 668 | (668) | 2GG | — | ||||||||||||||||||||||||||||
| Other income, net | (1,965) | 1,965 | 2HH | — | ||||||||||||||||||||||||||||
| Income before taxes | (29,036) | — | (29,036) | |||||||||||||||||||||||||||||
| Income tax expense | Benefit from income taxes | (23,905) | — | (23,905) | ||||||||||||||||||||||||||||
| Net income | (5,131) | — | (5,131) | |||||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | ||||||||||||||||||||||||||||||||
| Net income attributable to Dream Finders Homes, Inc | $ | (5,131) | $ | — | $ | (5,131) | ||||||||||||||||||||||||||
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| Unaudited Pro Forma Condensed Combined Statement of Operations | ||||||||||||||||||||||||||||||||
| For the period October 1, 2024 to September 30, 2025 (USD in Thousands) | ||||||||||||||||||||||||||||||||
| Beazer Homes USA, Inc. | ||||||||||||||||||||||||||||||||
| Dream Finders Homes, Inc. | Line Item Presentation | Historical | Reclassification Adjustments | Notes | Historical - Adjusted | |||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||
| Homebuilding | Total revenue | $ | 2,371,555 | $ | (5,621) | 2AA | $ | 2,365,934 | ||||||||||||||||||||||||
| Financial services | 5,621 | 2AA | 5,621 | |||||||||||||||||||||||||||||
| Total revenues | 2,371,555 | — | 2,371,555 | |||||||||||||||||||||||||||||
| Homebuilding cost of sales | 2,040,599 | 2BB, 2CC, 2DD | 2,040,599 | |||||||||||||||||||||||||||||
| Financial services expense | 1,640 | 2BB, | 1,640 | |||||||||||||||||||||||||||||
| Home construction and land sales expenses | 2,021,082 | (2,021,082) | 2BB | — | ||||||||||||||||||||||||||||
| Inventory impairments and abandonments | 12,959 | (12,959) | 2CC | — | ||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 290,565 | 2BB, 2CC, 2EE, 2FF | 290,565 | |||||||||||||||||||||||||||||
| Income for unconsolidated entities | — | |||||||||||||||||||||||||||||||
| Contingent consideration revaluation | — | |||||||||||||||||||||||||||||||
| Other (income) expense, net | (2,099) | 2BB, 2HH | (2,099) | |||||||||||||||||||||||||||||
| Commissions | 76,911 | (76,911) | 2DD | — | ||||||||||||||||||||||||||||
| General and administrative expenses | 204,830 | (204,830) | 2EE | — | ||||||||||||||||||||||||||||
| Depreciation and amortization | 19,168 | (19,168) | 2FF | — | ||||||||||||||||||||||||||||
| Loss on extinguishment of debt, net | — | — | — | |||||||||||||||||||||||||||||
| Other income, net | (4,245) | 4,245 | 2HH | — | ||||||||||||||||||||||||||||
| — | ||||||||||||||||||||||||||||||||
| — | ||||||||||||||||||||||||||||||||
| Income before taxes | 40,850 | — | 40,850 | |||||||||||||||||||||||||||||
| Income tax expense | Benefit from income taxes | (4,738) | — | (4,738) | ||||||||||||||||||||||||||||
| Net income | 45,588 | — | 45,588 | |||||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | ||||||||||||||||||||||||||||||||
| Net income attributable to Dream Finders Homes, Inc | $ | 45,588 | $ | — | $ | 45,588 | ||||||||||||||||||||||||||
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2AA – Reclassification from total revenue:
-$2.4 million of Total revenue to Financial Services for the six months ended June 30, 2026
-$5.6 million of Total revenue to Financial Services for the year ended December 31, 2025
2BB - Reclassification from Home construction and land sales expenses:
-$773.6 million to Homebuilding cost of sales for the six months ended June 30, 2026
-$1,952.3 million to Homebuilding cost of sales for the year ended December 31, 2025
-$0.7 million to Financial services expense for the six months ended June 30, 2026
-$1.6 million to Financial services expense for the year ended December 31, 2025
-$33.0 million of Indirect costs, $1.5 million of Forward mortgage commitment costs, and ($1.8 million) of Forward commitment costs to Selling, general and administrative expenses for the six months ended June 30, 2026
-$67.7 million Indirect costs, $2.1 million of Forward mortgage commitment costs and ($4.8 million) of Forward commitment costs to Selling, general and administrative expenses for the year ended December 31, 2025
-$0.8 million of litigation expense to Other (income) expense, net for the six months ended June 30, 2026
-$2.1 million of litigation expense to Other (income) expense, net for the year ended December 31, 2025
2CC – Reclassification from inventory impairments and abandonments:
-$3.6 million to Homebuilding cost of sales for the six months ended June 30, 2026
-$11.4 million to Homebuilding cost of sales for the year ended December 31, 2025
-$1.6 million to Selling, general and administrative expenses for the year ended December 31, 2025
2DD – Reclassification from commissions:
-$30.5 million to Homebuilding cost of sales for the six months ended June 30, 2026
-$76.9 million to Homebuilding cost of sales for the year ended December 31, 2025
2EE – Reclassification from G&A expense:
-$105.6 million to Selling, general and administrative expenses for the six months ended June 30, 2026
-$204.8 million to Selling, general and administrative expenses for the year ended December 31, 2025
2FF – Reclassification from D&A:
-$9.0 million to Selling, general and administrative expenses for the six months ended June 30, 2026
-$19.2 million to Selling, general and administrative expenses for the year ended December 31, 2025
2GG – Reclassification from Loss on extinguishment of debt, net
-$0.7 million to Other (income) expense, net for the six months ended June 30, 2026
2HH – Reclassification from other income, net
-($2.0 million) to Other (income) expense, net for the six months ended June 30, 2026
-($4.2 million) to Other (income) expense, net for the year ended December 31, 2025
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Note 2.1. Interim Statement of Operations for Beazer for the Period January 1, 2026 to June 30, 2026
The table below provides the calculation to derive the unaudited statement of operations for Beazer for the six months ended June 30, 2026. The historical results of Beazer for the nine months ended June 30, 2026, have been adjusted to remove the results attributable to operations for the three month period October 1, 2025 through December 31, 2025. This adjustment is made to present Beazer’s results for the six-month period ended June 30, 2026, to align with the interim period presented for Dream Finders as shown below:
Beazer’s interim statement of operations for the period January 1, 2026 to June 30, 2026 (USD in Thousands) | ||||||||||||||||||||
| Nine Months Ended June 30, 2026 | Three Months Ended December 31, 2025 | For the period January 1, 2026 to June 30, 2026 | ||||||||||||||||||
| BEAZER HOMES USA, INC. | [A] | [B] | [C]=[A]-[B] | |||||||||||||||||
| Total revenue | $ | 1,289,643 | $ | 363,491 | $ | 926,152 | ||||||||||||||
| Home construction and land sales expenses | 1,131,631 | 323,917 | 807,714 | |||||||||||||||||
| Inventory impairments and abandonments | 6,007 | 2,370 | 3,637 | |||||||||||||||||
| Gross profit | 152,005 | 37,204 | 114,801 | |||||||||||||||||
| Commissions | 42,562 | 12,016 | 30,546 | |||||||||||||||||
| General and administrative expenses | 158,569 | 52,989 | 105,580 | |||||||||||||||||
| Depreciation and amortization | 13,050 | 4,042 | 9,008 | |||||||||||||||||
| Operating (loss) income | (62,176) | (31,843) | (30,333) | |||||||||||||||||
| Loss on extinguishment of debt, net | (668) | — | (668) | |||||||||||||||||
| Other income, net | 2,743 | 778 | 1,965 | |||||||||||||||||
| (Loss) income before income taxes | (60,101) | (31,065) | (29,036) | |||||||||||||||||
| Expense (Benefit) from income taxes | (22,373) | 1,532 | (23,905) | |||||||||||||||||
| Net (loss) income | $ | (37,728) | $ | (32,597) | $ | (5,131) | ||||||||||||||
Note 3: Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet
The adjustments included in the Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2026 are detailed below:
Merger Transaction Accounting Adjustments
(3A) Represents the elimination of Beazer’s historical stockholders’ equity balances as of the acquisition date.
(3B) Represents the preliminary estimated purchase consideration of approximately $1.6 billion for the Beazer Acquisition. The purchase consideration includes (i) $854.2 million of cash consideration payable to Beazer common stockholders, (ii) $31.2 million related to the pre-merger portion of equity awards and performance cash awards, consisting of approximately $11.3 million of restricted stock awards, $6.4 million of performance stock awards, $13.2 million of performance cash awards and $0.3 million of stock options, (iii) $31.2 million representing the fair value of Dream Finders’ previously held equity investment in Beazer, and (iv) $690.0 million of Beazer indebtedness repaid in connection with the Beazer Acquisition. The estimated purchase consideration forms the basis for the preliminary allocation of consideration to the identifiable assets acquired and liabilities assumed in accordance with ASC 805.
The following table sets forth a preliminary allocation of the estimated purchase consideration to the identifiable tangible and intangible assets acquired and liabilities assumed of Beazer based on Beazer’s June 30, 2026 balance sheet, with the excess recorded as goodwill. Refer to note 3I below for details on the land banking arrangement.
The preliminary purchase accounting adjustments are based on management’s preliminary estimates and assumptions, including limited valuation procedures and available information as of the date of preparation of the pro forma financial information, to allocate the consideration transferred to the identifiable assets acquired and liabilities assumed, including intangible assets and inventory. The final allocation of the consideration transferred will be completed after the Company finalizes its detailed valuations during the measurement period, which will not exceed one year from the acquisition date. As a result, the final allocation may differ materially from the preliminary amounts presented herein, and such differences could result in changes to the amounts assigned to goodwill and could have a material impact on future depreciation and amortization expense in the combined company’s results of operations.
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| PPA allocation | |||||
| (USD in thousands) | Carrying value as of June 30, 2026 | ||||
Cash and cash equivalents1 | $ | 721,641 | |||
Restricted Cash | 3,418 | ||||
Accounts receivable | 96,621 | ||||
Inventories | 1,255,470 | ||||
Lot deposits | 272,000 | ||||
Other assets | 304,377 | ||||
| Total Assets | $ | 2,653,527 | |||
Accounts payable | 177,337 | ||||
Accrued liabilities | 149,982 | ||||
Customer deposits | 21,309 | ||||
Revolving credit facilities and other borrowings | 80,020 | ||||
Senior unsecured notes, net | 662,271 | ||||
| Total Liabilities | $ | 1,090,919 | |||
| Net assets acquired (a) | $ | 1,562,608 | |||
| Estimated purchase consideration (b) | 1,606,561 | ||||
| Estimated goodwill (b) - (a) | $ | 43,953 | |||
| 1 - Cash and cash equivalents include net cash proceeds of $639.0 million associated with the land banking arrangement with Millrose Properties received by Beazer at closing from the sale of land assets. | |||||
(3C) Reflects the preliminary estimated asset fair value adjustment to the inventory acquired in the Beazer Acquisition. The fair value of inventory is subject to change as Dream Finders finalizes various estimates, inputs and analyses.
(3D) Represents the preliminary estimated asset fair value adjustment to the identifiable intangible assets acquired in the Beazer Acquisition, primarily consisting of brand names. The fair value of intangibles is subject to change as Dream Finders finalizes various estimates, inputs and analyses.
| (USD in thousands) | Estimated useful Life (in years) | Preliminary estimated FV | Amortization expense for the year ended December 31, 2025 | Amortization expense for the six months ended June 30, 2026 | ||||||||||||||||||||||
| Brand names | 4 | $40,000 | $10,000 | $5,000 | ||||||||||||||||||||||
Fair value was estimated using a market benchmarking approach based on observed intangible asset values and useful lives from comparable transactions within the homebuilding industry.
(3E) Represents payment of estimated direct and incremental transaction costs incurred by Dream Finders in connection with the Beazer Acquisition, including advisory, financing, legal, accounting, valuation and other professional fees. Dream Finders expensed $49.06 million of these costs in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 and capitalized $8.2 million pertaining to a consent solicitation fee paid to Beazer’s bondholders to facilitate the assumption and refinancing of outstanding debt.
(3F) Represents the remeasurement of Dream Finders’ previously held equity interest in Beazer to fair value as of the acquisition date. The adjustment reflects the difference between Beazer’s acquisition-date fair value of $33.50 per share and its June 30, 2026 share price of $28.05 per share, applied to the 930,128 shares held by Dream Finders immediately prior to the Beazer Acquisition, resulting in a fair value step-up of approximately $5.1 million.
(3G) Represents the write-off of Beazer’s existing indebtedness paid off on the acquisition date for $340.0 million of revolving credit facilities and other borrowings and $350.0 million of 2029 senior unsecured notes respectively.
(3H) Represents the adjustment to record Beazer’s 7.500% Senior Notes due 2031 and 8.000% Senior Notes due 2032 at their estimated acquisition-date fair values in accordance with ASC 805.
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(3I) Represents the sale of certain acquired land assets to Millrose Properties pursuant to the committed $800.0 million Land Bank Facility entered into in connection with the Beazer Acquisition. The adjustment reflects the transfer of land with a carrying value of approximately $794.0 million in exchange for cash proceeds of approximately $683.0 million and the recognition of related lot deposits of approximately $44.0 million, as noted in Note 3J below, resulting in net cash proceeds of approximately $639.0 million. The difference between the carrying value of the land transferred and the net proceeds received has been reflected as an adjustment to goodwill.
(3J) Represents the recognition of lot deposits of $44 million associated with land sold to Millrose Properties in connection with the land banking transaction noted immediately above.
(3K) Represents the write-off of unamortized debt issuance costs of $14.3 million related to Beazer Homes USA, Inc.’s existing debt arrangements. The adjustment removes the remaining carrying value of these costs in connection with the Beazer Acquisition and related financing activities.
(3L) Represents the elimination of unrealized profit associated with historical intercompany lot sales between Dream Finders and Beazer prior to the Beazer Acquisition. The adjustment removes the profit embedded in the carrying value of inventory of $1.9 million.
(3M) Represents the settlement of stock-based compensation awards of $30.8 million identified by management that contain double-trigger vesting provisions and that are therefore treated as post-combination compensation arrangements under ASC 805.
(3N) Represents a $31.5 million adjustment to deferred tax assets primarily as a result of the pro forma adjustments for assets acquired and liabilities assumed - specifically, relative to fair market value adjustments to assets and an adjustment to the acquired deferred tax asset for Goodwill which resets as a result of the Merger. These estimates are preliminary as adjustments to our deferred taxes could change due to further refinement of our statutory income tax rates used to measure our deferred taxes, changes in judgment regarding realizability of assets, and changes in the estimates of the fair values of assets acquired and liabilities assumed that may occur in conjunction with the closing of the Merger. These changes in estimates could be material.
(3O) Represents cash payment associated with the estimated sell side advisory fees.
Financing Adjustments
(3P) Represents additional borrowings of approximately $323.0 million under Dream Finders’ existing unsecured revolving credit facility to partially fund the Beazer Acquisition.
(3Q) Represents the issuance of $225.0 million and $450.0 million of Series B Convertible Preferred Stock, issued at a 2.5% original issue discount. $154.3 million of the proceeds were used to redeem $148.5 million of existing Series A Convertible Preferred Stock, resulting in a $5.8 million adjustment to additional paid-in capital. The remaining proceeds, including $450.0 million from the second closing, were retained for general corporate purposes and to fund a portion of the Beazer Acquisition consideration. The Series B Convertible Preferred Stock is presented as redeemable preferred stock within mezzanine equity.
(3R) Represents the payment of $16.9 million of original issuance discount in connection with the issuance of $225.0 million and $450.0 million of convertible preferred equity financing by Dream Finders as noted immediately above. The Company has elected to recognize changes in the redemption value of the Series B Convertible Preferred stock only when redemption becomes probable. Because redemption is not currently probable, no accretion has been reflected in the unaudited pro forma condensed combined financial information.
Note 4: Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations
The following adjustments have been reflected in the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025, and the six months ended June 30, 2026, to give effect to the Beazer Acquisition and related financing transactions as if they had occurred on January 1, 2025. The adjustments reflect the corresponding impacts of the transaction accounting adjustments and financing adjustments recorded in the unaudited pro forma condensed combined balance sheet.
(4A) The adjustment represents the straight-line amortization expense associated with the preliminary fair value of identifiable intangible assets acquired. The amortization expense was calculated based on the estimated fair values and useful lives of the acquired intangible assets as noted in Note 3D above.
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(4B) Represents the elimination of intercompany land sale transactions between Dream Finders and Beazer recognized during the periods presented. The adjustment removes the related intercompany revenue and corresponding cost of sales associated with such transactions, as the sales would not be reflected in the consolidated results of operations following the Beazer Acquisition. The adjustment assumes that the underlying lots acquired from the intercompany transactions remained unsold to third parties during the periods presented and, therefore, the related profit remained unrealized within consolidated inventory.
(4C) Reflects the reversal of historical stock-based compensation expense recorded by Beazer related to outstanding stock options and restricted stock awards of $3.6 million and $7.3 million for the six months ended June 30, 2026 and twelve months ended September 30, 2025 respectively. The adjustment eliminates the compensation expense previously recognized in Beazer’s financial statements for the periods presented, as these awards are settled upon acquisition.
(4D) Represents the income statement impact of the acquisition-related transaction costs incurred by Dream Finders in connection with the Beazer Acquisition, as noted in Note 3E above. The adjustment reflects transaction costs that are directly attributable to the Beazer Acquisition and are not expected to have a continuing impact on the combined company’s results of operations. The adjustment excludes the $8.2 million of consent solicitation fees capitalized as debt issuance costs, as described in Note 3E, and any transaction costs paid as of June 30, 2026.
(4E) As noted in Note 3M above, certain equity awards that were settled as part of the Beazer Acquisition contained double-trigger vesting provisions and are therefore accounted for as post-combination compensation arrangements under ASC 805. Accordingly, the related compensation cost is excluded from purchase consideration and recognized as compensation expense following the Beazer Acquisition. The adjustment reflects the recognition of the associated compensation expense in the first reporting period subsequent to the acquisition date for $30.8 million.
(4F) As noted in 3F above, Dream Finders’ previously held equity interest in Beazer is remeasured to its acquisition-date fair value. The adjustment reflects the resulting gain of $5.1 million recognized in earnings attributable to the increase in the fair value of Dream Finders’ existing investment from Beazer’s June 30, 2026 market price to the value implied by the merger consideration.
(4G) Represents the estimated income tax effect of the pro forma adjustments described above. The income tax impact is calculated using the combined company’s estimated statutory tax rates applicable to each period presented. The adjustment has been determined using an estimated blended tax rate of 24.45% for the year ended December 31, 2025 and for the six months ended June 30, 2026.
(4H) Reflects reduction in cost of sales on capitalized interest, calculated at 7.25%, associated with $350.0 million less debt on a combined pro forma company basis.
Note 5. Earnings Per Share
Basic pro forma Earnings Per Share (“EPS”) is calculated using pro forma net income (loss) available to common stockholders of Dream Finders divided by the weighted-average number of common shares outstanding during the period. Diluted pro forma EPS is calculated using pro forma net income (loss) available to common stockholders divided by the weighted-average number of common shares outstanding during the period, adjusted for the effect of potentially dilutive securities.
The pro forma EPS calculation reflects the impact of the Beazer Acquisition and related financing transactions as if such transactions had occurred on January 1, 2025. The pro forma EPS computation also reflects the impact of the Series B Convertible Preferred Stock as part of the transaction financing.
Pursuant to the terms of the Series B Convertible Preferred Stock, conversion of such stock following the expiration of the non-conversion period is based on the average closing price of Dream Finders’ Class A common stock over the applicable measurement period, subject to a conversion discount and floor price provisions.
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The following table presents the computation of pro forma basic and diluted EPS:
| (USD in thousands, except per share data and number of shares) | For the year ended December 31, 2025 | For the six months ended June 30, 2026 | |||||||||
| Numerator: | |||||||||||
| Net income attributable to Dream Finders Homes, Inc. | $ | 202,381 | $ | 45,583 | |||||||
Less: Preference dividend, net (1) | 81,000 | 40,500 | |||||||||
| Net income available to common shareholders - basic | 121,381 | 5,083 | |||||||||
Add: Preference dividend, net (2) | — | — | |||||||||
| Net income available to common shareholders - diluted | $ | 121,381 | $ | 5,083 | |||||||
| Denominator: | |||||||||||
| Weighted-average number of common shares outstanding - basic | 93,106,397 | 91,657,686 | |||||||||
| Add: Common stock equivalent shares ‘’ | 8,190,233 | 225,878 | |||||||||
Add: Convertible shares of preferred equity (New preferred equity) (2) | — | — | |||||||||
| Weighted-average number of shares outstanding - diluted | 101,296,630 | 91,883,564 | |||||||||
| Earnings per share: | |||||||||||
| Basic | $ | 1.30 | $ | 0.06 | |||||||
| Diluted | $ | 1.20 | $ | 0.06 | |||||||
(1) Preferred dividends associated with both the initial 225,000 shares and the additional 450,000 shares of Series B Convertible Preferred Stock assumed to be outstanding for the periods presented will accumulate at a rate per annum equal to 12.00%.
(2) The assumed conversion of the Series B Convertible Preferred Stock was excluded from diluted EPS because its inclusion would be anti-dilutive for each period presented. Under the if-converted method, preferred dividends would be added back to the numerator and approximately 37 million and 56 million incremental shares would be included in the denominator for the year ended December 31, 2025 and six months ended June 30, 2026, respectively. The resulting effect would increase earnings per share for each period.
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