Century Communities, Inc.

Second-quarter 2026 pretax income was $49 million, net income was $36 million, and EPS was $1.26 per diluted share, up 11% year over year and 50% sequentially. Home sales revenue was $898 million, with an average sales price of $358,000, and deliveries were 2,506 homes, up 25% sequentially. GAAP homebuilding gross margin was 18.1% and adjusted gross margin was 20%, both up 30 basis points sequentially; SG&A was 14.2% of home sales revenue; financial services revenue was $25 million and pretax income was $10 million. For the third quarter, management expects deliveries of 2,500 to 2,700 homes and said fourth-quarter deliveries should increase sequentially. For full-year 2026, the company raised delivery guidance to 9,750 to 10,500 homes and reaffirmed home sales revenue guidance of $3.5 billion to $3.8 billion.

Rob Francescon said demand improved in the quarter, with stronger absorption, higher traffic, and orders that were consistent through the quarter, while incentives declined. He highlighted Texas, Las Vegas, Phoenix, Utah, and parts of the Mountain region as areas of strength, but noted Colorado remains challenging and heavily incentivized. His tone was constructive but measured, emphasizing that the company is balancing pace and price while positioning for growth when conditions improve.

Scott Dixon focused on the margin bridge and balance sheet. He said the 20% adjusted gross margin was driven by lower incentives and direct construction costs, and that the key margin variable going forward remains incentives, which are expected to stay at first-half levels in Q3 if conditions hold. He also cited SG&A of 14.2%, liquidity of $802 million, stockholders’ equity of $2.6 billion, net homebuilding debt to net capital of 31.9%, and homebuilding debt-to-capital of 34.2%; the company also repurchased 353,000 shares for $20 million in the quarter and 970,000 shares for $60 million in the first half.

Analysts pressed on whether 20% gross margin can hold or improve, and management said incentives will be the main swing factor, with direct construction costs currently well controlled but subject to macro pressures. They also asked about Texas, where management said the market is recovering and that Houston, San Antonio, and Austin are improving, while Dallas is still early. Other questions covered higher fuel and lumber costs, with management saying diesel/asphalt requests are being pushed back, lumber pressure has shifted from tailwind to flat-to-up, July traffic is tracking seasonal trends despite rate increases, and ARM usage has room to rise further from nearly 35%.