1) Market Environment & Strategy
- Demand was stable at the start of Q1 2026 but weakened significantly in March due to geopolitical issues, economic uncertainties, and rising interest rates and gas prices.
- The company is optimistic about bipartisan efforts to address affordable housing shortages and believes it is well-positioned for growth when demand improves.
- Century Communities plans to balance pace and price while managing costs and inventory levels, and aims to return capital to shareholders through dividends and share repurchases.
- The company repurchased approximately 2% of its shares at a 27% discount to book value and increased its quarterly dividend by 10% to $0.32 per share.

2) Financial Performance
- Q1 2026 pretax income was $33 million, net income was $24 million ($0.84 per diluted share), and adjusted net income was $26 million ($0.88 per diluted share).
- Home sales revenue reached $734 million, with an average sales price of $365,000, remaining flat sequentially.
- The company delivered 2,013 homes in Q1, with net new orders totaling 2,379 homes.
- Adjusted gross margin improved to 19.7%, up from 18.3% in Q4 2025, driven by lower incentives.

3) Operational Insights
- The company started 2,749 homes in Q1 and ended the quarter with a community count of 316, a 4% increase sequentially.
- Finished spec inventory decreased by 16% sequentially and 31% year-over-year, with an average of less than 3 finished specs per community.
- The cancellation rate improved to 12.2%, lower than in 2025, indicating stronger buyer commitment.
- Direct construction costs declined by 2% sequentially, and cycle times improved to an average of 114 days, down from 134 days in the prior year.

4) Guidance & Outlook
- The company reduced its full-year 2026 home delivery guidance by 5%, now expecting 9,500 to 10,500 homes, and home sales revenues of $3.5 billion to $3.8 billion.
- For Q2 2026, deliveries are expected to range from 2,200 to 2,400 homes, with incentives anticipated to remain flat compared to Q1 levels.
- The company plans to continue managing its land acquisition and development expenses, estimating them to be between $1 billion and $1.2 billion for 2026.

5) Challenges & Market Dynamics
- Market pressures intensified in March, impacting order activity, particularly due to the conflict in the Middle East and rising costs.
- Competitors are also utilizing aggressive incentives, but Century Communities aims to maintain a balanced approach.
- There is uncertainty regarding potential cost increases from vendors, although the company has managed to avoid price hikes so far.

Bottom line: Century Communities is navigating a challenging market environment with a focus on managing costs and inventory while positioning itself for growth when demand rebounds. The company's proactive strategies, including share repurchases and dividend increases, reflect a commitment to shareholder value amidst current headwinds.