LGIH · LGI Homes, Inc.

LGI Homes’ Q1 2026 results reflect a deliberate trade-off: lower unit volume (881 closings, down 11.5% YoY) offset by disciplined pricing—ASP increased 2.9% to $362,924—and improved cost management, driving adjusted gross margin to 23.4%, above prior guidance and up 240 bps from the 21.0% GAAP gross margin reported in Q1 2025. This margin strength—attributed to cost discipline, self-developed land pipeline advantages, and targeted financing strategies—prompted management to raise full-year adjusted gross margin guidance to 22.0%–24.0%. Revenue declined 9.0% YoY to $319.7M, consistent with reduced closings, while net income fell 45.7% to $2.2M ($0.09 EPS), reflecting both lower top-line and elevated SG&A relative to revenue (8.7% of revenue vs. 8.1% in Q1 2025). Critically, backlog surged 63.4% YoY to 1,699 homes valued at $660.5M, indicating robust demand retention despite a 45.6% cancellation rate—more than double the 16.3% in Q1 2025—suggesting heightened buyer caution or financing friction. Management explicitly tied the strong margin performance and backlog growth to operational execution and structural advantages in land control and inventory management, reinforcing confidence in full-year guidance for closings (4,600–5,400), ASP ($355K–$365K), and tax rate (26.5%). The earnings release underscores that LGI’s model remains resilient amid macro uncertainty, prioritizing margin integrity and balance sheet strength—including $355.0M total liquidity—over aggressive volume growth.