UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________________________________________
FORM 10-Q
_____________________________________________________________________________________________
(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the quarterly period ended March 31, 2026
or
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period from to
Commission File Number 1-35796
_____________________________________________________________________________________________
Tri Pointe Homes, Inc.
(Exact Name of Registrant as Specified in Its Charter)
_____________________________________________________________________________________________
| Delaware | 61-1763235 | |||||||
| (State or other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
_____________________________________________________________________________________________
940 Southwood Blvd, Suite 200
Incline Village, Nevada 89451
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (775) 413-1030
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
____________________________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| Common Stock, par value $0.01 per share | TPH | New York Stock Exchange | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
| 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
85,163,883 shares of the registrant’s common stock were issued and outstanding as of April 15, 2026.
EXPLANATORY NOTE
As used in this quarterly report on Form 10-Q, references to “Tri Pointe”, “the Company”, “we”, “us”, or “our” (including in the consolidated financial statements and related notes thereto in this annual report on Form 10-Q) refer to Tri Pointe Homes, Inc., a Delaware corporation, and its consolidated subsidiaries.
TRI POINTE HOMES, INC.
QUARTERLY REPORT ON FORM 10-Q
INDEX
March 31, 2026
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TRI POINTE HOMES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
| March 31, 2026 | December 31, 2025 | ||||||||||
| (unaudited) | |||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 847,903 | $ | 982,814 | |||||||
| Receivables | 144,641 | 147,250 | |||||||||
| Real estate inventories | 3,302,319 | 3,178,248 | |||||||||
| Investments in unconsolidated entities | 217,019 | 183,075 | |||||||||
| Mortgage loans held for sale | 66,152 | 98,514 | |||||||||
| Goodwill and other intangible assets, net | 156,603 | 156,603 | |||||||||
| Deferred tax assets, net | 43,132 | 43,132 | |||||||||
| Other assets | 184,555 | 187,899 | |||||||||
| Total assets | $ | 4,962,324 | $ | 4,977,535 | |||||||
| Liabilities | |||||||||||
| Accounts payable | $ | 63,155 | $ | 41,693 | |||||||
| Accrued expenses and other liabilities | 428,366 | 425,289 | |||||||||
| Loans payable | 456,468 | 456,468 | |||||||||
| Senior notes, net | 647,858 | 647,586 | |||||||||
| Mortgage repurchase facilities | 59,315 | 90,570 | |||||||||
| Total liabilities | 1,655,162 | 1,661,606 | |||||||||
| Commitments and contingencies (Note 13) | |||||||||||
| Equity | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively | — | — | |||||||||
Common stock, $0.01 par value, 500,000,000 shares authorized; 85,135,803 and 84,478,836 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively | 851 | 844 | |||||||||
| Additional paid-in capital | — | — | |||||||||
| Retained earnings | 3,306,192 | 3,314,990 | |||||||||
| Total stockholders’ equity | 3,307,043 | 3,315,834 | |||||||||
| Noncontrolling interests | 119 | 95 | |||||||||
| Total equity | 3,307,162 | 3,315,929 | |||||||||
| Total liabilities and equity | $ | 4,962,324 | $ | 4,977,535 | |||||||
See accompanying condensed notes to the unaudited consolidated financial statements.
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TRI POINTE HOMES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except share and per share amounts)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Homebuilding: | ||||||||||||||
| Home sales revenue | $ | 506,496 | $ | 720,786 | ||||||||||
| Land and lot sales revenue | 575 | 1,821 | ||||||||||||
| Other operations revenue | 825 | 820 | ||||||||||||
| Total revenues | 507,896 | 723,427 | ||||||||||||
| Cost of home sales | 411,066 | 548,273 | ||||||||||||
| Cost of land and lot sales | 979 | 1,741 | ||||||||||||
| Other operations expense | 813 | 794 | ||||||||||||
| Sales and marketing | 37,887 | 42,942 | ||||||||||||
| General and administrative | 52,959 | 57,675 | ||||||||||||
| Homebuilding income from operations | 4,192 | 72,002 | ||||||||||||
| Equity in (loss) income of unconsolidated entities | (88) | 495 | ||||||||||||
| Transaction expense | (5,877) | — | ||||||||||||
| Other income, net | 7,236 | 9,129 | ||||||||||||
| Homebuilding income before income taxes | 5,463 | 81,626 | ||||||||||||
| Financial Services: | ||||||||||||||
| Revenues | 13,493 | 17,501 | ||||||||||||
| Expenses | 12,065 | 12,617 | ||||||||||||
| Financial services income before income taxes | 1,428 | 4,884 | ||||||||||||
| Income before income taxes | 6,891 | 86,510 | ||||||||||||
| Provision for income taxes | (81) | (22,493) | ||||||||||||
| Net income | 6,810 | 64,017 | ||||||||||||
| Net (income) loss attributable to noncontrolling interests | (24) | 19 | ||||||||||||
| Net income available to common stockholders | $ | 6,786 | $ | 64,036 | ||||||||||
| Earnings per share | ||||||||||||||
| Basic | $ | 0.08 | $ | 0.70 | ||||||||||
| Diluted | $ | 0.08 | $ | 0.70 | ||||||||||
| Weighted average shares outstanding | ||||||||||||||
| Basic | 84,796,116 | 91,638,960 | ||||||||||||
| Diluted | 85,176,744 | 92,077,680 | ||||||||||||
See accompanying condensed notes to the unaudited consolidated financial statements.
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TRI POINTE HOMES, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
(in thousands, except share amounts)
| Number of Shares of Common Stock (Note 1) | Common Stock | Additional Paid-in Capital | Retained Earnings | Total Stockholders' Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | 84,478,836 | $ | 844 | $ | — | $ | 3,314,990 | $ | 3,315,834 | $ | 95 | $ | 3,315,929 | ||||||||||||||||||||||||||||
| Net income | — | — | — | 6,786 | 6,786 | 24 | 6,810 | ||||||||||||||||||||||||||||||||||
| Shares issued under share-based awards | 656,967 | 7 | (7) | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Tax withholding paid on behalf of employees for share-based awards | — | — | (17,534) | — | (17,534) | — | (17,534) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 1,957 | — | 1,957 | — | 1,957 | ||||||||||||||||||||||||||||||||||
| Reclass the negative APIC to retained earnings | — | — | 15,584 | (15,584) | — | — | — | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | 85,135,803 | $ | 851 | $ | — | $ | 3,306,192 | $ | 3,307,043 | $ | 119 | $ | 3,307,162 | ||||||||||||||||||||||||||||
| Number of Shares of Common Stock (Note 1) | Common Stock | Additional Paid-in Capital | Retained Earnings | Total Stockholders' Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | 92,451,729 | $ | 925 | $ | — | $ | 3,334,785 | $ | 3,335,710 | $ | 12 | $ | 3,335,722 | ||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | 64,036 | 64,036 | (19) | 64,017 | ||||||||||||||||||||||||||||||||||
| Shares issued under share-based awards | 488,845 | 5 | (5) | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Tax withholding paid on behalf of employees for share-based awards | — | — | (9,921) | — | (9,921) | — | (9,921) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 7,556 | — | 7,556 | — | 7,556 | ||||||||||||||||||||||||||||||||||
| Share repurchases | (2,270,712) | (23) | (75,612) | — | (75,635) | 32 | (75,603) | ||||||||||||||||||||||||||||||||||
| Acquisition of joint venture minority interest | — | — | — | (47) | (47) | — | (47) | ||||||||||||||||||||||||||||||||||
| Reclass the negative APIC to retained earnings | — | — | 77,982 | (77,982) | — | — | — | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | 90,669,862 | $ | 907 | $ | — | $ | 3,320,792 | $ | 3,321,699 | $ | 25 | $ | 3,321,724 | ||||||||||||||||||||||||||||
See accompanying condensed notes to the unaudited consolidated financial statements.
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TRI POINTE HOMES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 6,810 | $ | 64,017 | |||||||
| Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | 7,618 | 7,387 | |||||||||
| Equity in income of unconsolidated entities, net | 88 | (495) | |||||||||
| Amortization of stock-based compensation | 1,957 | 7,556 | |||||||||
| Charges for impairments and lot option abandonments | 1,068 | 1,073 | |||||||||
| Fair value adjustment on mortgage loans held for sale | 647 | 340 | |||||||||
| Returns on investments in unconsolidated entities, net | — | 495 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Real estate inventories | (126,939) | (113,615) | |||||||||
| Mortgage loans held for sale | 31,715 | 35,218 | |||||||||
| Receivables | 2,609 | (20,242) | |||||||||
| Other assets | (1,458) | 1,007 | |||||||||
| Accounts payable | 21,462 | 7,554 | |||||||||
| Accrued expenses and other liabilities | 6,459 | (21,452) | |||||||||
| Net cash used in operating activities | (47,964) | (31,157) | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | (6,716) | (8,105) | |||||||||
| Investments in unconsolidated entities | (32,442) | (2,164) | |||||||||
| Distributions from unconsolidated entities | 1,000 | 6,993 | |||||||||
| Net cash used in investing activities | (38,158) | (3,276) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Borrowings from loans payable | — | 1,600 | |||||||||
| Repayment of loans payable and senior notes | — | (4,796) | |||||||||
| Borrowings on mortgage repurchase facilities | 258,235 | 288,018 | |||||||||
| Repayments on mortgage repurchase facilities | (289,490) | (322,530) | |||||||||
| Tax withholding paid on behalf of employees for share-based awards | (17,534) | (9,921) | |||||||||
| Share repurchases, excluding excise tax | — | (75,046) | |||||||||
| Net cash used in financing activities | (48,789) | (122,675) | |||||||||
| Net decrease in cash and cash equivalents | (134,911) | (157,108) | |||||||||
| Cash and cash equivalents–beginning of period | 982,814 | 970,045 | |||||||||
| Cash and cash equivalents–end of period | $ | 847,903 | $ | 812,937 | |||||||
See accompanying condensed notes to the unaudited consolidated financial statements.
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TRI POINTE HOMES, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Organization, Basis of Presentation and Summary of Significant Accounting Policies
Organization
Tri Pointe is engaged in the design, construction and sale of innovative single-family attached and detached homes across twelve states, including Arizona, California, Colorado, Florida, Maryland, Nevada, North Carolina, South Carolina, Texas, Virginia, Utah and Washington, and the District of Columbia. In April 2024, we announced our expansion into the Coastal Carolinas region, which includes parts of South Carolina and Georgia. While we have an established presence in South Carolina, we have not yet commenced operations in Georgia as of March 31, 2026.
On February 13, 2026, the Company entered into the Agreement and Plan of Merger, dated February 13, 2026 (the “Merger Agreement”), with Sumitomo Forestry Co., Ltd., a Japanese corporation (kabushiki kaisha) (“Sumitomo Forestry”), and Teton NewCo, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Sumitomo Forestry (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and an indirect wholly owned subsidiary of Sumitomo Forestry (the “Merger”). For further details, see Note 17, Merger Transaction.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They should be read in conjunction with our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. In the opinion of management, all adjustments consisting of normal recurring adjustments, necessary for a fair presentation with respect to interim financial statements, have been included. The results for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full year ending December 31, 2026 due to seasonal variations and other factors.
The consolidated financial statements include the accounts of Tri Pointe Homes and its wholly owned subsidiaries, as well as other entities in which Tri Pointe Homes has a controlling interest and variable interest entities (“VIEs”) in which Tri Pointe Homes is the primary beneficiary. The noncontrolling interests as of March 31, 2026 and December 31, 2025 represent the outside owners’ interests in the Company’s consolidated entities. All significant intercompany accounts have been eliminated upon consolidation.
Unless the context otherwise requires, the terms “Tri Pointe”, “the Company”, “we”, “us”, and “our” used herein refer to Tri Pointe Homes, Inc., a Delaware corporation, and its consolidated subsidiaries.
Reclassifications
Certain amounts for prior years have been reclassified to conform to the current period presentation.
Use of Estimates
The preparation of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from our estimates.
Cash and Cash Equivalents and Concentration of Credit Risk
We define cash and cash equivalents as cash on hand, demand deposits with financial institutions, and short-term liquid investments with a maturity date of less than three months from the date of acquisition, including U.S. Treasury bills and government money-market funds with maturities of 90 days or less when purchased. The Company’s cash balances exceed federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as
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appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts.
Revenue Recognition
We recognize revenue in accordance with Accounting Standards Topic 606 (“ASC 606”), Revenue from Contracts with Customers. Under ASC 606, we apply the following steps to determine the timing and amount of revenue to recognize: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.
Home sales revenue
We generate the majority of our total revenues from home sales, which consists of our core business operation of building and delivering completed homes to homebuyers. Home sales revenue and related profit is generally recognized when title to and possession of the home are transferred to the homebuyer at the home closing date. Our performance obligation to deliver the agreed-upon home is generally satisfied in less than one year from the original contract date. Included in home sales revenue are forfeited deposits, which occur when homebuyers cancel home purchase contracts that include a nonrefundable deposit. Both revenue from forfeited deposits and deferred revenue resulting from uncompleted performance obligations existing at the time we deliver new homes to our homebuyers are immaterial.
Financial services revenues
Tri Pointe Solutions is a reportable segment and is comprised of our Tri Pointe Connect mortgage financing operations, Tri Pointe Assurance title and escrow services operations, and Tri Pointe Advantage property and casualty insurance agency operations.
Mortgage financing operations
Effective February 1, 2024, we acquired the minority equity interest in the joint venture, upon which Tri Pointe Connect became a wholly owned subsidiary of the Company. In connection with this transaction, Tri Pointe Connect expanded operations to include mortgage lending services to our homebuyers in all of the markets in which we operate and provide mortgage financing by utilizing funds made available pursuant to repurchase agreements with third party lenders and by utilizing our own funds. Tri Pointe Connect will retain the ability to act as a mortgage loan broker for our homebuyers that originate loans with third party lenders.
Revenues from mortgage financing operations primarily represent mortgage loan broker fees paid by third party lenders, fees earned on mortgage loan originations and the realized and unrealized gains and losses associated with the sales and changes in the fair value of mortgage loans held for sale. When we act as a mortgage loan broker and originate loans with third party lenders, mortgage loan broker fees and mortgage loan origination fees are recognized at the time the mortgage loans are funded. When we provide mortgage financing, we recognize fees on mortgage loan originations upon loan origination.
Mortgage loans held for sale
We intend to sell all of the loans we originate in the secondary market within a short period of time after origination. As of March 31, 2026, mortgage loans held for sale had an aggregate estimated fair value of $66.2 million and an aggregate outstanding principal balance of $66.0 million. For the three months ended March 31, 2026, we recorded an unrealized loss of $647,000. These amounts were included in Financial Services revenue and relate to the mortgage loans held for sale as of March 31, 2026.
Title and escrow services operations
Tri Pointe Assurance provides title examinations for our homebuyers in the Carolinas and Colorado and both title examinations and escrow services for our homebuyers in Arizona, the District of Columbia, Maryland, Nevada, Texas, Washington and Virginia. Tri Pointe Assurance is a wholly owned subsidiary of Tri Pointe and acts as a title agency for First American Title Insurance Company. Revenue from our title and escrow services operations is fully recognized at the time of the consummation of the home sales transaction, at which time no further performance obligations are left to be satisfied. Tri Pointe Assurance revenue is included in the Financial Services section of our consolidated statements of operations.
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Property and casualty insurance agency operations
Tri Pointe Advantage is a wholly owned subsidiary of Tri Pointe and provides property and casualty insurance agency services that help facilitate the closing process in all of the markets in which we operate. The total consideration for these services, including renewal options, is estimated upon the issuance of the initial insurance policy, subject to constraint. Tri Pointe Advantage revenue is included in the Financial Services section of our consolidated statements of operations.
Transaction Expense
On February 13, 2026, we entered into the Merger Agreement with Sumitomo Forestry and Merger Sub, pursuant to which the parties intend to effectuate the Merger. Transaction expense related to the Merger for the three months ended March 31, 2026 was $5.9 million and is included on the consolidated statements of operations. We expect to incur additional transaction-related costs in future periods in connection with the Merger, which is expected to close in the second quarter of 2026, subject to the conditions set forth in the Merger Agreement.
New Accounting Standards
In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. ASU 2024-03 is effective for our annual report covering the fiscal year beginning January 1, 2027, and for interim periods beginning January 1, 2028. We are currently evaluating the impact this new standard will have on our financial statement disclosures.
2. Segment Information
We operate two principal businesses: homebuilding and financial services.
Tri Pointe Homes is engaged in the business of acquiring and developing land and constructing and selling single-family detached and attached homes. In accordance with ASC Topic 280, Segment Reporting, we have aggregated our geographical homebuilding segments under the aggregation criteria outlined. In determining the most appropriate reportable segments, we considered similar economic and other characteristics, including product types, average selling prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply. In addition, our determination of reporting segments considered how our chief operating decision maker evaluates operating performance and capital allocation. Based upon these factors and in consideration of the geographical layout of our homebuilding markets, we have identified three homebuilding reporting segments which are reported under the following hierarchy:
West region: Arizona, California, Nevada and Washington
Central region: Colorado, Texas and Utah
East region: District of Columbia, Florida, Maryland, North Carolina, South Carolina and Virginia
In April 2024, we announced our expansion into the Coastal Carolinas region, which includes parts of South Carolina and Georgia. While we have an established presence in South Carolina, we have not yet commenced operations in Georgia as of March 31, 2026.
Our Tri Pointe Solutions financial services operation is a reportable segment and is comprised of our Tri Pointe Connect mortgage financing operations, our Tri Pointe Assurance title and escrow services operations, and our Tri Pointe Advantage property and casualty insurance agency operations. These financial services businesses have been aggregated in accordance with the criteria outlined in ASC 280, considering their similar economic and operational characteristics. For further details, see Note 1, Organization and Summary of Significant Accounting Policies.
Corporate is a non-operating segment that develops and implements company-wide strategic initiatives and provides support to our homebuilding reporting segments by centralizing certain administrative functions, such as marketing, legal, accounting, treasury, insurance, internal audit and risk management, information technology and human resources, to benefit from economies of scale. Our Corporate non-operating segment also includes general and administrative expenses related to operating our corporate headquarters.
The reportable segments follow the same accounting policies used for our consolidated financial statements, as described in Note 1, Organization and Summary of Significant Accounting Policies. Operational results of each reportable segment are
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not necessarily indicative of the results that would have been achieved had the reportable segment been an independent, stand-alone entity during the periods presented.
Our Chief Executive Officer (“CEO”) is our Chief Operating Decision Maker (“CODM”) and reviews segment performance to make resource allocation decisions. The CODM evaluates each segment based on revenue, operating profit, and other key homebuilding metrics to guide strategic decisions.
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Total revenues, significant expenses and income before income taxes for each of our reportable segments were as follows (in thousands):
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||
| West | Central | East | Homebuilding Operations | Financial Services | Corporate | Consolidated | |||||||||||||||||
| Home sales revenue | $ | 265,933 | $ | 154,275 | $ | 86,288 | $ | 506,496 | $ | — | $ | — | $ | 506,496 | |||||||||
| Land and lot sales revenue | — | 575 | — | 575 | — | — | 575 | ||||||||||||||||
| Other operations revenue | 825 | — | — | 825 | — | — | 825 | ||||||||||||||||
| Financial services revenue | — | — | — | — | 13,493 | — | 13,493 | ||||||||||||||||
| Total revenues | 266,758 | 154,850 | 86,288 | 507,896 | 13,493 | — | 521,389 | ||||||||||||||||
| Cost of home sales | (217,203) | (124,626) | (67,806) | (409,635) | — | (1,431) | (411,066) | ||||||||||||||||
| Cost of land and lot sales | (305) | (674) | — | (979) | — | — | (979) | ||||||||||||||||
| Other operations expense | (813) | — | — | (813) | — | — | (813) | ||||||||||||||||
| Sales and marketing | (19,138) | (12,340) | (6,211) | (37,689) | — | (198) | (37,887) | ||||||||||||||||
| General and administrative | (16,844) | (8,787) | (7,841) | (33,472) | — | (19,487) | (52,959) | ||||||||||||||||
| Financial services expense | — | — | — | — | (12,065) | — | (12,065) | ||||||||||||||||
| Income from operations | 12,455 | 8,423 | 4,430 | 25,308 | 1,428 | (21,116) | 5,620 | ||||||||||||||||
| Equity in income (loss) of unconsolidated entities | (4) | — | (84) | (88) | — | — | (88) | ||||||||||||||||
| Transaction expense | — | — | — | — | — | (5,877) | (5,877) | ||||||||||||||||
| Other income, net | 7 | 274 | 17 | 298 | — | 6,938 | 7,236 | ||||||||||||||||
| Income (loss) before income taxes | $ | 12,458 | $ | 8,697 | $ | 4,363 | $ | 25,518 | $ | 1,428 | $ | (20,055) | $ | 6,891 | |||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||
| West | Central | East | Homebuilding Operations | Financial Services | Corporate | Consolidated | |||||||||||||||||
| Home sales revenue | $ | 400,522 | $ | 210,522 | $ | 109,742 | $ | 720,786 | $ | — | $ | — | $ | 720,786 | |||||||||
| Land and lot sales revenue | 421 | 1,400 | — | 1,821 | — | — | 1,821 | ||||||||||||||||
| Other operations revenue | 806 | 10 | 4 | 820 | — | — | 820 | ||||||||||||||||
| Financial services revenue | — | — | — | — | 17,501 | — | 17,501 | ||||||||||||||||
| Total revenues | 401,749 | 211,932 | 109,746 | 723,427 | 17,501 | — | 740,928 | ||||||||||||||||
| Cost of home sales | (305,626) | (160,037) | (81,140) | (546,803) | — | (1,470) | (548,273) | ||||||||||||||||
| Cost of land and lot sales | (553) | (1,188) | — | (1,741) | — | — | (1,741) | ||||||||||||||||
| Other operations expense | (794) | — | — | (794) | — | — | (794) | ||||||||||||||||
| Sales and marketing | (22,769) | (13,337) | (6,373) | (42,479) | — | (463) | (42,942) | ||||||||||||||||
| General and administrative | (18,326) | (8,801) | (7,754) | (34,881) | — | (22,794) | (57,675) | ||||||||||||||||
| Financial services expense | — | — | — | — | (12,617) | — | (12,617) | ||||||||||||||||
| Income from operations | 53,681 | 28,569 | 14,479 | 96,729 | 4,884 | (24,727) | 76,886 | ||||||||||||||||
| Equity in income (loss) of unconsolidated entities | 2 | 493 | — | 495 | — | — | 495 | ||||||||||||||||
| Other income, net | 90 | 304 | 4 | 398 | — | 8,731 | 9,129 | ||||||||||||||||
| Income (loss) before income taxes | $ | 53,773 | $ | 29,366 | $ | 14,483 | $ | 97,622 | $ | 4,884 | $ | (15,996) | $ | 86,510 | |||||||||
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Total real estate inventories and total assets for each of our reportable segments, as of the date indicated, were as follows (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Real estate inventories | |||||||||||
| West | $ | 1,989,254 | $ | 1,902,818 | |||||||
| Central | 823,491 | 794,189 | |||||||||
| East | 489,574 | 481,241 | |||||||||
| Total | $ | 3,302,319 | $ | 3,178,248 | |||||||
Total assets(1) | |||||||||||
| West | $ | 2,269,352 | $ | 2,187,263 | |||||||
| Central | 1,096,630 | 1,038,430 | |||||||||
| East | 541,455 | 530,401 | |||||||||
| Corporate | 927,098 | 1,064,313 | |||||||||
| Total homebuilding assets | 4,834,535 | 4,820,407 | |||||||||
| Financial services | 127,789 | 157,128 | |||||||||
| Total | $ | 4,962,324 | $ | 4,977,535 | |||||||
__________
(1) Total assets as of March 31, 2026 and December 31, 2025 includes $139.3 million of goodwill, with $125.4 million included in the West segment, $8.3 million included in the Central segment and $5.6 million included in the East segment. Total Corporate assets as of March 31, 2026 and December 31, 2025 includes our Tri Pointe Homes trade name. For further details on goodwill and our intangible assets, see Note 8, Goodwill and Other Intangible Assets.
3. Earnings Per Share
The following table sets forth the components used in the computation of basic and diluted earnings per share (in thousands, except share and per share amounts):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Numerator: | ||||||||||||||
| Net income available to common stockholders | $ | 6,786 | $ | 64,036 | ||||||||||
| Denominator: | ||||||||||||||
| Basic weighted-average shares outstanding | 84,796,116 | 91,638,960 | ||||||||||||
| Effect of dilutive shares: | ||||||||||||||
| Stock options and unvested restricted stock units | 380,628 | 438,720 | ||||||||||||
| Diluted weighted-average shares outstanding | 85,176,744 | 92,077,680 | ||||||||||||
| Earnings per share | ||||||||||||||
| Basic | $ | 0.08 | $ | 0.70 | ||||||||||
| Diluted | $ | 0.08 | $ | 0.70 | ||||||||||
| Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share | 1,985,572 | 1,964,127 | ||||||||||||
4. Receivables
Receivables consisted of the following (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Escrow proceeds and other accounts receivable, net | $ | 75,724 | $ | 78,229 | |||||||
| Warranty insurance receivable (Note 13) | 68,917 | 69,021 | |||||||||
| Total receivables | $ | 144,641 | $ | 147,250 | |||||||
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Receivables are evaluated for collectability and allowances for potential losses are established or maintained on applicable receivables based on an expected credit loss approach. Receivables were net of allowances for doubtful accounts of $436,000 as of both March 31, 2026 and December 31, 2025.
5. Real Estate Inventories
Real estate inventories consisted of the following (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Real estate inventories owned: | |||||||||||
| Homes completed or under construction | $ | 1,128,003 | $ | 1,038,990 | |||||||
| Land under development | 1,445,073 | 1,445,671 | |||||||||
| Land held for future development | 160,018 | 159,627 | |||||||||
| Model homes | 323,424 | 304,742 | |||||||||
| Total real estate inventories owned | 3,056,518 | 2,949,030 | |||||||||
| Real estate inventories not owned: | |||||||||||
| Land purchase and land option deposits | 226,225 | 209,642 | |||||||||
| Consolidated inventory not owned | 19,576 | 19,576 | |||||||||
| Total real estate inventories not owned | 245,801 | 229,218 | |||||||||
| Total real estate inventories | $ | 3,302,319 | $ | 3,178,248 | |||||||
Homes completed or under construction is comprised of costs associated with homes in various stages of construction and includes direct construction and related land acquisition and land development costs. Land under development primarily consists of land acquisition and land development costs, which include capitalized interest and real estate taxes, associated with land undergoing improvement activity. Land held for future development principally reflects land acquisition and land development costs related to land where development activity has not yet begun or has been suspended, but is expected to occur in the future.
Real estate inventories not owned includes deposits related to land purchase and land and lot option agreements. For further details on deposits, see Note 7, Variable Interest Entities. In addition, real estate inventories not owned includes land sold under a land bank financing arrangement for which we retained a repurchase option.
Interest incurred, capitalized and expensed were as follows (in thousands):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Interest incurred | $ | 18,585 | $ | 21,319 | ||||||||||
| Interest capitalized | (18,585) | (21,319) | ||||||||||||
| Interest expensed | $ | — | $ | — | ||||||||||
| Capitalized interest in beginning inventory | $ | 161,300 | $ | 186,370 | ||||||||||
| Interest capitalized as a cost of inventory | 18,585 | 21,319 | ||||||||||||
Interest previously capitalized as a cost of inventory, included in cost of sales | (16,470) | (23,153) | ||||||||||||
| Capitalized interest in ending inventory | $ | 163,415 | $ | 184,536 | ||||||||||
Interest is capitalized to real estate inventory during development and other qualifying activities. During all periods presented, we capitalized all interest incurred to real estate inventory in accordance with ASC Topic 835, Interest, as our qualified assets exceeded our debt. Interest that is capitalized to real estate inventory is included in cost of home sales or cost of land and lot sales as related units or lots are delivered. Interest that is expensed as incurred is included in other (expense) income, net.
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Real Estate Inventory Impairments and Land Option Abandonments
Real estate inventory impairments and land and lot option abandonments and pre-acquisition charges consisted of the following (in thousands):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Real estate inventory impairments | $ | — | $ | — | ||||||||||
| Land and lot option abandonments and pre-acquisition charges | 1,068 | 1,073 | ||||||||||||
| Total | $ | 1,068 | $ | 1,073 | ||||||||||
There were no real estate inventory impairment charges recorded during the three months ended March 31, 2026 or 2025.
In addition to owning land and residential lots, we also have option agreements to purchase land and lots at a future date. We have option deposits and capitalized pre-acquisition costs associated with the optioned land and lots. When the economics of a project no longer support acquisition of the land or lots under option, we may elect not to move forward with the acquisition. Option deposits and capitalized pre-acquisition costs associated with the assets under option may be forfeited at that time.
Real estate inventory impairments and land option abandonments are recorded in cost of home sales in the consolidated statements of operations.
6. Investments in Unconsolidated Entities
As of March 31, 2026, we held equity investments in sixteen active homebuilding partnerships or limited liability companies. Our participation in these entities may be as a developer, a builder, or an investment partner. Our ownership percentage varies from 8% to 50%, depending on the investment, with no controlling interest held in any of these homebuilding investments. In addition, we have one consolidated financial services joint venture in which we own an 80% interest. This joint venture is included in our consolidated financial statements, and the noncontrolling interest is presented separately.
Aggregated assets, liabilities and equity of the entities we account for as equity-method investments are as follows (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Cash | $ | 27,529 | $ | 34,867 | |||||||
| Receivables | 2,240 | 446 | |||||||||
| Real estate inventories | 818,164 | 695,084 | |||||||||
| Other assets | 513 | 615 | |||||||||
| Total assets | $ | 848,446 | $ | 731,012 | |||||||
| Liabilities and equity | |||||||||||
| Debt obligations and other liabilities | $ | 283,339 | $ | 217,956 | |||||||
| Company’s equity | 217,019 | 183,075 | |||||||||
| Outside interests’ equity | 348,088 | 329,981 | |||||||||
| Total liabilities and equity | $ | 848,446 | $ | 731,012 | |||||||
Guarantees
The unconsolidated entities in which we hold an equity investment generally finance their activities with a combination of equity and secured project debt financing. We have, and in some cases our joint venture partner has, guaranteed portions of the loan obligations for some of the homebuilding partnerships or limited liability companies, which may include any or all of the following: (i) project completion; (ii) remargin obligations; and (iii) environmental indemnities.
In circumstances in which we have entered into joint and several guarantees with our joint venture partner, we generally seek to implement a reimbursement agreement with our partner that provides that neither party is responsible for more than its proportionate share or agreed-upon share of the guaranteed obligations. In the event our joint venture partner does not have
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adequate financial resources to meet its obligations under such a reimbursement agreement, or otherwise fails to satisfy its obligations thereunder, we may be responsible for more than our proportionate share of any obligations under such guarantees.
As of March 31, 2026 and December 31, 2025, we have not recorded any liabilities for these obligations and guarantees, as the fair value of the related joint venture real estate assets exceeded the threshold where a remargin payment would be required and no other obligations under the guarantees existed as of such time. At March 31, 2026 and December 31, 2025, aggregate outstanding debt for unconsolidated entities, included in the “Debt obligations and other liabilities” line of the aggregated assets, liabilities and equity shown in the table above, was $197.4 million and $177.6 million, respectively.
Aggregated results of operations from unconsolidated entities (in thousands):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net sales | $ | 19,379 | $ | 17,910 | ||||||||||
| Other operating expense | (19,458) | (13,881) | ||||||||||||
| Other income (expense), net | (209) | 5 | ||||||||||||
| Net (loss) income | $ | (288) | $ | 4,034 | ||||||||||
| Company’s equity in (loss) income of unconsolidated entities | $ | (88) | $ | 495 | ||||||||||
The aggregate results of operations from unconsolidated entities include related party transactions with the Company. When we purchase land from a joint venture in which we are a partner, such transactions are reflected as net sales in the joint ventures’ operating results, with any profit eliminated in the consolidated financial statements. Additionally, when we act as the general partner or managing member, we earn an immaterial, market-based administrative fee for services provided, which is reflected as other operating expense in the joint ventures’ operating results, and as other income (expense) on our consolidated statements of operations.
7. Variable Interest Entities
Land and Lot Option Agreements
In the ordinary course of business, we enter into land and lot option agreements in order to procure land and residential lots for future development and the construction of homes. The use of such land and lot option agreements generally allows us to reduce the risks associated with direct land ownership and development, and reduces our capital and financial commitments. Pursuant to these land and lot option agreements, we generally provide a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices. These deposits are recorded as land purchase and land option deposits under real estate inventories not owned on the accompanying consolidated balance sheets.
We analyze each of our land and lot option agreements and other similar contracts under the provisions of Accounting Standards Topic 810 (“ASC 810”), Consolidation to determine whether the land seller is a VIE and, if so, whether we are the primary beneficiary. Although we do not have legal title to the underlying land, if we are determined to be the primary beneficiary of the VIE, we will consolidate the VIE in our financial statements and reflect its assets as real estate inventory not owned included in our real estate inventories, its liabilities as debt (nonrecourse) held by VIEs in accrued expenses and other liabilities and the net equity of the VIE owners as noncontrolling interests on our consolidated balance sheets. In determining whether we are the primary beneficiary, we consider, among other things, whether we have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. Such activities would include, among other things, determining or limiting the scope or purpose of the VIE, selling or transferring property owned or controlled by the VIE, or arranging financing for the VIE.
Creditors of the entities with which we have land and lot option agreements have no recourse against us. The maximum exposure to loss under our land and lot option agreements is generally limited to non-refundable option deposits and any capitalized pre-acquisition costs. In some cases, we have also contracted to complete development work at a fixed cost on behalf of the landowner and budget shortfalls and savings will be borne by us. Additionally, we have entered into land banking arrangements which require us to complete development work even if we terminate the option to procure land or lots.
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The following provides a summary of our interests in land and lot option agreements (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Deposits | Remaining Purchase Price | Consolidated Inventory Held by VIEs | Deposits | Remaining Purchase Price | Consolidated Inventory Held by VIEs | ||||||||||||||||||||||||||||||
| Unconsolidated VIEs | $ | 218,809 | $ | 1,977,531 | N/A | $ | 201,640 | $ | 1,960,508 | N/A | |||||||||||||||||||||||||
| Other land option agreements | 7,416 | 81,584 | N/A | 8,002 | 108,850 | N/A | |||||||||||||||||||||||||||||
| Total | $ | 226,225 | $ | 2,059,115 | $ | — | $ | 209,642 | $ | 2,069,358 | $ | — | |||||||||||||||||||||||
Unconsolidated VIEs represent land option agreements that were not consolidated because we were not the primary beneficiary. Other land option agreements were not with VIEs.
In addition to the deposits presented in the table above, our exposure to loss related to our land and lot option contracts consisted of capitalized pre-acquisition costs of $13.4 million and $13.1 million as of March 31, 2026 and December 31, 2025, respectively. These pre-acquisition costs are included in real estate inventories as land under development on our consolidated balance sheets.
8. Goodwill and Other Intangible Assets
As of March 31, 2026 and December 31, 2025, $139.3 million of goodwill is included in goodwill and other intangible assets, net on each of the consolidated balance sheets, which was recorded in connection with our merger with Weyerhaeuser Real Estate Company (“WRECO”) in 2014. In addition, as of March 31, 2026 and December 31, 2025, we have one intangible asset with a carrying amount of $17.3 million comprised of a Tri Pointe Homes trade name, which has an indefinite useful life and is non-amortizing, resulting from the acquisition of WRECO in 2014.
Goodwill and other intangible assets are evaluated for impairment on an annual basis, or more frequently if indicators of impairment exist.
9. Other Assets
Other assets consisted of the following (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Prepaid expenses | $ | 13,432 | $ | 12,377 | |||||||
| Refundable fees and other deposits | 19,816 | 18,913 | |||||||||
| Development rights, held for future use or sale | — | 845 | |||||||||
| Deferred loan costs—loans payable | 6,663 | 7,181 | |||||||||
| Operating properties and equipment, net | 60,425 | 61,212 | |||||||||
| 72,458 | 75,840 | ||||||||||
| Income tax receivable | 6,377 | 6,377 | |||||||||
| Other | 5,384 | 5,154 | |||||||||
| Total | $ | 184,555 | $ | 187,899 | |||||||
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10. Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consisted of the following (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Accrued payroll and related costs | $ | 28,140 | $ | 50,938 | |||||||
Warranty reserves (Note 13) | 125,422 | 124,103 | |||||||||
| Estimated cost for completion of real estate inventories | 103,395 | 92,623 | |||||||||
| Customer deposits | 33,198 | 23,757 | |||||||||
| Liabilities related to inventory not owned | 19,576 | 19,576 | |||||||||
| Accrued income taxes payable | 2,997 | 2,764 | |||||||||
| Accrued interest | 13,323 | 4,714 | |||||||||
| Other tax liability | 3,766 | 3,910 | |||||||||
| 85,868 | 88,386 | ||||||||||
| Other | 12,681 | 14,518 | |||||||||
| Total | $ | 428,366 | $ | 425,289 | |||||||
11. Senior Notes, Loans Payable and Mortgage Repurchase Facilities
Senior Notes
The Company’s outstanding senior notes (together, the “Senior Notes”) consisted of the following (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
5.250% Senior Notes due June 1, 2027 | $ | 300,000 | $ | 300,000 | |||||||
5.700% Senior Notes due June 15, 2028 | 350,000 | 350,000 | |||||||||
| Deferred loan costs | (2,142) | (2,414) | |||||||||
| Total | $ | 647,858 | $ | 647,586 | |||||||
In June 2020, Tri Pointe issued $350 million aggregate principal amount of 5.700% Senior Notes due 2028 (the “2028 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $345.2 million, after debt issuance costs and discounts. The 2028 Notes mature on June 15, 2028 and interest is paid semiannually in arrears on June 15 and December 15 of each year until maturity.
In June 2017, Tri Pointe issued $300 million aggregate principal amount of 5.250% Senior Notes due 2027 (the “2027 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $296.3 million, after debt issuance costs and discounts. The 2027 Notes mature on June 1, 2027 and interest is paid semiannually in arrears on June 1 and December 1 of each year until maturity.
As of March 31, 2026 and December 31, 2025, there were $2.1 million and $2.4 million, respectively, of capitalized debt financing costs, included in senior notes, net on our consolidated balance sheets, related to the Senior Notes that will amortize over the terms of the Senior Notes. Accrued interest related to the Senior Notes was $11.1 million and $2.1 million as of March 31, 2026 and December 31, 2025, respectively.
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Loans Payable
The Company’s outstanding loans payable consisted of the following (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Term loan facility | $ | 450,000 | $ | 450,000 | |||||||
| Seller financed loans | 6,468 | 6,468 | |||||||||
| Total | $ | 456,468 | $ | 456,468 | |||||||
On April 30, 2025, we entered into a Fifth Modification Agreement (the “Fifth Modification”) to our Second Amended and Restated Credit Agreement dated as of March 29, 2019 (the “Credit Agreement”). The Fifth Modification, among other things, amends the Credit Agreement to (i) increase the maximum amount of the revolving credit facility (the “Revolving Facility”) under the Credit Agreement from $750.0 million to $850.0 million, with the ability to increase the aggregate amount of the Revolving Facility up to $1.2 billion under certain circumstances, (ii) extend the maturity date of the Revolving Facility to April 30, 2030, (iii) permit three one-year extension requests for the maturity date of the Revolving Facility under certain circumstances, and (iv) modify certain financial covenants. Following the Fifth Modification, The Credit Facility (as defined below), consisted of an $850 million revolving credit facility (the “Revolving Facility”) and a $250 million term loan facility (the “Term Facility” and together with the Revolving Facility, the “Credit Facility”). The Term Facility was scheduled to mature on June 29, 2027 while the Revolving Facility matures on April 30, 2030. We may borrow under the Revolving Facility in the ordinary course of business to repay senior notes and fund our operations, including our land acquisition, land development and homebuilding activities. Borrowings under the Revolving Facility will be governed by, among other things, a borrowing base. Interest rates under the Revolving Facility will be based on the Secured Overnight Financing Rate (“SOFR”), plus a spread ranging from 1.25% to 1.90%, depending on the Company’s leverage ratio. Interest rates under the Term Facility will be based on SOFR, plus a spread ranging from 1.10% to 1.85%, depending on the Company’s leverage ratio.
On September 18, 2025, we entered into a Sixth Modification Agreement (the “Sixth Modification”) to the Credit Agreement. The Sixth Modification increased the Term Facility from $250.0 million to $450.0 million and divided it into two tranches: (i) Term Facility Tranche A, which matures on September 29, 2027 and includes extension options for up to two additional one-year periods under certain conditions, and (ii) Term Facility Tranche B, which comprised $10.0 million as of March 31, 2026 and continues to mature on June 29, 2027.
On April 16, 2026, we entered into a Seventh Modification Agreement (the “Seventh Modification”) to the Credit
Agreement. The Seventh Modification (i) provides that the administrative agent and the lenders consent to, and waive any
default or event of default that would otherwise arise as a result of, the consummation by the Company of the transactions
contemplated by Merger Agreement; and (ii) effective upon the consummation of the transactions contemplated by the Merger
Agreement, amends the Credit Agreement to revise the definition of “Change in Control” to include the failure of Sumitomo
Forestry to directly or indirectly (a) own more than 50% of the outstanding shares of voting stock of the Company or (b)
possess the power to direct or cause the direction of the management, policies, or activities of the Company.
As of March 31, 2026, we had no outstanding debt under the Revolving Facility and there was $827.5 million of availability after considering the borrowing base provisions and outstanding letters of credit. As of March 31, 2026, we had $450 million of outstanding debt under the Term Facility with an interest rate of 4.83%. As of March 31, 2026, there were $6.7 million of capitalized debt financing costs, included in other assets on our consolidated balance sheet, related to the Credit Facility that will amortize over the remaining term of the Credit Facility. Accrued interest, including loan commitment fees, related to the Credit Facility was $1.9 million and $2.4 million as of March 31, 2026 and December 31, 2025, respectively.
At March 31, 2026 and December 31, 2025, we had outstanding letters of credit of $22.5 million and $51.9 million, respectively. These letters of credit were issued to secure various financial obligations. We believe it is not probable that any outstanding letters of credit will be drawn upon.
As of both March 31, 2026 and December 31, 2025, we had $6.5 million outstanding related to two seller-financed loans. All seller-financed loans are to acquire lots for the construction of homes. Principal on these loans are expected to be fully paid by the end of fiscal year 2026, provided certain achievements are met. One of the seller-financed loans, representing $5.9 million of the total balance as of both March 31, 2026 and December 31, 2025, accrues interest at an imputed interest rate of 4.50% per annum. The remaining seller-financed loan represented $600,000 of the total balance as of both March 31, 2026 and December 31, 2025.
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Interest Incurred
During the three months ended March 31, 2026 and 2025, we incurred interest of $18.6 million and $21.3 million, respectively, related to all debt and land banking arrangements. Included in interest incurred are amortization of deferred financing costs of $790,000 and $617,000 for the three months ended March 31, 2026 and 2025, respectively. Accrued interest related to all outstanding debt at March 31, 2026 and December 31, 2025 was $13.3 million and $4.7 million, respectively.
Mortgage Repurchase Facilities
As of March 31, 2026, Tri Pointe Connect had two active Master Repurchase Agreements totaling $200 million (“Repurchase Agreements”). The Repurchase Agreements contain various affirmative and negative covenants applicable to Tri Pointe Connect, including thresholds related to net worth, net income, liquidity, and profitability. As of March 31, 2026, Tri Pointe Connect had $59.3 million of outstanding debt related to the Repurchase Agreements at a weighted-average interest rate of 5.4%, and $140.7 million of remaining capacity under the Repurchase Agreements. Tri Pointe Connect was in compliance with all covenants and requirements as of March 31, 2026.
The following table provides a summary of Tri Pointe Connect’s Repurchase Agreements as of March 31, 2026 ($ in thousands):
| Facility | Outstanding Balance | Facility Amount | Interest Rate | Expiration Date | Collateral (1) | ||||||||||||||||||||||||
| Warehouse A | $ | 37,822 | $ | 100,000 | Term SOFR + 1.75% | 5/31/2026 | Mortgage Loans | ||||||||||||||||||||||
| Warehouse B (2) | 21,493 | 50,000 | Term SOFR + 1.75% | 7/28/2026 | Mortgage Loans | ||||||||||||||||||||||||
| Warehouse B (2) | — | 50,000 | Term SOFR + 1.75% | On Demand | Mortgage Loans | ||||||||||||||||||||||||
| Total | $ | 59,315 | $ | 200,000 | |||||||||||||||||||||||||
(1) Mortgage loans held for sale consist of single-family residential loans collateralized by the underlying property. Generally, all of the loans originated by us are sold in the secondary mortgage market within 30 days after origination. As of March 31, 2026, mortgage loans held for sale had an aggregate fair value of $66.2 million.
(2) Warehouse B is a $100 million facility, of which $50 million is committed and $50 million is uncommitted.
At December 31, 2025, outstanding borrowings under the Company’s repurchase facilities totaled $90.6 million, with an aggregate facility amount of $200.0 million.
Covenant Requirements
The Senior Notes contain covenants that restrict our ability to, among other things, create liens or other encumbrances, enter into sale and leaseback transactions, or merge or sell all or substantially all of our assets. These limitations are subject to a number of qualifications and exceptions.
Under the Credit Facility, the Company is required to comply with certain financial covenants, including those relating to consolidated tangible net worth, leverage, liquidity or interest coverage, and a spec unit inventory test. The Credit Facility also requires that at least 95.0% of consolidated tangible net worth must be attributable to the Company and its guarantor subsidiaries, subject to certain grace periods.
The Company was in compliance with all applicable financial covenants as of March 31, 2026 and December 31, 2025.
12. Fair Value Disclosures
Fair Value Measurements
ASC Topic 820, Fair Value Measurement, defines “fair value” as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date and requires assets and liabilities carried at fair value to be classified and disclosed in the following three categories:
•Level 1—Quoted prices for identical instruments in active markets
•Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at measurement date
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•Level 3—Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at measurement date
Fair Value of Financial Instruments
A summary of assets and liabilities at March 31, 2026 and December 31, 2025, related to our financial instruments, is set forth below (in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||
| Hierarchy | Book Value | Fair Value | Book Value | Fair Value | |||||||||||||||||||||||||
Senior Notes(1) | Level 2 | $ | 650,000 | $ | 653,500 | $ | 650,000 | $ | 657,888 | ||||||||||||||||||||
Term Loan Facility(2) | Level 2 | $ | 450,000 | $ | 450,000 | $ | 450,000 | $ | 450,000 | ||||||||||||||||||||
Seller financed loans(3) | Level 2 | $ | 6,468 | $ | 6,468 | $ | 6,468 | $ | 6,468 | ||||||||||||||||||||
Mortgage loans held for sale(4) | Level 2 | $ | 66,152 | $ | 66,152 | $ | 98,514 | $ | 98,514 | ||||||||||||||||||||
Mortgage repurchase facilities(5) | Level 2 | $ | 59,315 | $ | 59,315 | $ | 90,570 | $ | 90,570 | ||||||||||||||||||||
__________
(1)The book value of the Senior Notes excludes deferred loan costs of $2.1 million and $2.4 million as of March 31, 2026 and December 31, 2025, respectively. The estimated fair value of the Senior Notes at March 31, 2026 and December 31, 2025 is based on quoted market prices.
(2)The estimated fair value of the Term Loan Facility as of March 31, 2026 and December 31, 2025 approximated book value due to the variable interest rate terms of this loan.
(3)The estimated fair value of our seller financed loans as of March 31, 2026 and December 31, 2025 approximated book value due to the short term nature of these loans.
(4)The estimated fair value for mortgage loans held for sale are determined based on quoted market prices, and are measured at fair value on a recurring basis, with changes in fair value recognized in our consolidated statements of operations.
(5)The estimated fair value of our mortgage repurchase facilities approximated book value due to the short term nature of these maturities.
At March 31, 2026 and December 31, 2025, the carrying value of cash and cash equivalents and receivables approximated fair value due to their short-term nature.
Fair Value of Nonfinancial Assets
Nonfinancial assets include items such as real estate inventories and long-lived assets that are measured at fair value on a nonrecurring basis when events and circumstances indicating the carrying value is not recoverable. The following table presents impairment charges and the remaining net fair value for nonfinancial assets that were measured during the periods presented (in thousands):
| Three Months Ended March 31, 2026 | Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||
| Hierarchy | Impairment Charge | Fair Value Net of Impairment | Impairment Charge | Fair Value Net of Impairment | ||||||||||||||||||||||||||||
Real estate inventories (1) | Level 3 | $ | — | $ | — | $ | 31,097 | $ | 106,315 | |||||||||||||||||||||||
(1) Fair value of real estate inventories, net of impairment charges represents only those assets whose carrying values were adjusted to fair value in the respective periods presented. Fair Value Net of Impairment represents the fair value of the real estate inventories, net of the impairment charge, as of the date that the fair value measurements were made. The carrying value for these real estate inventories subsequently changed from the fair value reflected due to activity that occurred since the measurement date.
We recorded real estate inventory impairment charges of $31.1 million during the year ended December 31, 2025, comprised of $11.0 million in the West reporting segment, $4.8 million in the Central reporting segment, and $15.3 million in the East reporting segment. These impairment charges related to active communities where the carrying value of the communities exceeded their fair value based on a discounted cash flows analysis with the discount rates used to calculate fair value ranging from 10% to 15%. We considered both market risk and community-specific risk to arrive at a discount rate appropriate for the level of total risk associated with these communities.
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13. Commitments and Contingencies
Legal Matters
Lawsuits, claims and proceedings have been and may be instituted or asserted against us in the normal course of business, including actions brought on behalf of various classes of claimants. We are also subject to local, state and federal laws and regulations related to land development activities, house construction standards, sales practices, employment practices, environmental protection and financial services. As a result, we are subject to periodic examinations or inquiry by agencies administering these laws and regulations.
We record a reserve for potential legal claims and regulatory matters when they are probable of occurring and a potential loss is reasonably estimable. We accrue for these matters based on facts and circumstances specific to each matter and revise these estimates when necessary. In view of the inherent difficulty of predicting outcomes of legal claims and related contingencies, we generally cannot predict their ultimate resolution, related timing or eventual loss. Accordingly, it is possible that the ultimate outcome of any matter, if in excess of a related accrual or if no accrual was made, could be material to our financial statements. For matters as to which the Company believes a loss is probable and reasonably estimable, we had zero legal reserves as of March 31, 2026 and December 31, 2025, respectively.
Warranty
Warranty reserves are accrued as home deliveries occur. Our warranty reserves on homes delivered will vary based on product type and geographic area and also depending on state and local laws. The warranty reserve is included in accrued expenses and other liabilities on our consolidated balance sheets and represents expected future costs based on our historical experience over previous years. Estimated warranty costs are charged to cost of home sales in the period in which the related home sales revenue is recognized.
We maintain general liability insurance designed to protect us against a portion of our risk of loss from warranty and construction defect-related claims. We also generally require our subcontractors and design professionals to indemnify us for liabilities arising from their work, subject to various limitations. However, such indemnity is significantly limited with respect to certain subcontractors that are added to our general liability insurance policy.
Our warranty reserve and related estimated insurance recoveries are based on actuarial analysis that uses our historical claim and expense data, as well as industry data to estimate these overall costs and related recoveries. Key assumptions used in developing these estimates include claim frequencies, severities and resolution patterns, which can occur over an extended period of time. Our warranty reserve may also include an estimate of future fit and finish warranty claims to the extent not contemplated in the actuarial analysis. These estimates are subject to variability due to the length of time between the delivery of a home to a homebuyer and when a warranty or construction defect claim is made, and the ultimate resolution of such claim; uncertainties regarding such claims relative to our markets and the types of product we build; and legal or regulatory actions and/or interpretations, among other factors. Due to the degree of judgment involved and the potential for variability in these underlying assumptions, our actual future costs could differ from those estimated. 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, 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 uninsurable events or circumstances not covered by insurance and not subject to effective indemnification agreements with certain subcontractors.
We also record expected recoveries from insurance carriers based on actual insurance claims made and actuarially determined amounts that depend on various factors, including the above-described reserve estimates, our insurance policy coverage limits for the applicable policy years and historical recovery rates. Because of the inherent uncertainty and variability in these assumptions, our actual insurance recoveries could differ significantly from amounts currently estimated. Outstanding warranty insurance receivables was $68.9 million and $69.0 million as of March 31, 2026 and December 31, 2025, respectively. Warranty insurance receivables are recorded in receivables on the accompanying consolidated balance sheets.
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Warranty reserve activity consisted of the following (in thousands):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Warranty reserves, beginning of period | $ | 124,103 | $ | 116,150 | ||||||||||
| Warranty reserves accrued | 5,328 | 7,188 | ||||||||||||
| Warranty expenditures | (4,009) | (9,473) | ||||||||||||
| Warranty reserves, end of period | $ | 125,422 | $ | 113,865 | ||||||||||
Performance Bonds
We obtain surety bonds in the normal course of business to ensure completion of certain infrastructure improvements of our projects. The beneficiaries of the bonds are various municipalities. As of March 31, 2026 and December 31, 2025, the Company had outstanding surety bonds totaling $644.1 million and $634.9 million, respectively. As of March 31, 2026 and December 31, 2025, our estimated cost to complete obligations related to these surety bonds was $528.9 million and $492.4 million, respectively.
Lease Obligations
Under ASC 842, Leases (“ASC 842”), we recognize a right-of-use lease asset and a lease liability for contracts deemed to contain a lease at the inception of the contract. Our lease population is fully comprised of operating leases, which are now recorded at the net present value of future lease obligations existing at each balance sheet date. At the inception of a lease, or if a lease is subsequently modified, we determine whether the lease is an operating or financing lease. Key estimates involved with ASC 842 include the discount rate used to measure our future lease obligations and the lease term, where considerations include renewal options and intent to renew. Lease right-of-use assets are included in other assets and lease liabilities are included in accrued expenses and other liabilities on our consolidated balance sheet.
Operating Leases
We lease certain property and equipment under non-cancelable operating leases. Office leases are for terms of up to ten years and generally provide renewal options. In most cases, we expect that, in the normal course of business, leases that expire will be renewed or replaced by other leases. Equipment leases are typically for terms of to four years.
Ground Leases
In 1987, we obtained two 55-year ground leases of commercial property that provided for three renewal options of ten years each and one 45-year renewal option. We exercised the three 10-year extensions on one of these ground leases to extend the lease through 2071. The commercial buildings on these properties have been sold and the ground leases have been sublet to the buyers.
For one of these leases, we are responsible for making lease payments to the landowner, and we collect sublease payments from the buyers of the buildings. This ground lease has been subleased through 2041 to the buyers of the commercial buildings. For the second lease, the buyers of the buildings are responsible for making lease payments directly to the landowner, however, we have guaranteed the performance of the buyers/lessees. See below for additional information on leases (dollars in thousands):
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| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |||||||||||||
| Lease Cost | ||||||||||||||
| Operating lease cost (included in SG&A expense) | $ | 3,537 | $ | 3,222 | ||||||||||
| Ground lease cost (included in other operations expense) | 813 | 794 | ||||||||||||
| Sublease income, operating leases | — | — | ||||||||||||
| Sublease income, ground leases (included in other operations revenue) | (825) | (805) | ||||||||||||
| Net lease cost | $ | 3,525 | $ | 3,211 | ||||||||||
| Other information | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
| Operating lease cash flows (included in operating cash flows) | $ | 3,705 | $ | 3,234 | ||||||||||
| Ground lease cash flows (included in operating cash flows) | $ | 663 | $ | 663 | ||||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 169 | $ | 830 | ||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||
| Weighted-average discount rate: | |||||||||||
| Operating leases | 5.4 | % | 5.4 | % | |||||||
| Ground leases | 10.2 | % | 10.2 | % | |||||||
| Weighted-average remaining lease term (in years): | |||||||||||
| Operating leases | 5.5 | 5.7 | |||||||||
| Ground leases | 42.3 | 42.5 | |||||||||
The future minimum lease payments under our operating leases are as follows (in thousands):
| Property, Equipment and Other Leases | Ground Leases (1) | ||||||||||
| Remaining in 2026 | $ | 9,695 | $ | 2,428 | |||||||
| 2027 | 13,661 | 3,237 | |||||||||
| 2028 | 13,297 | 3,237 | |||||||||
| 2029 | 11,766 | 3,237 | |||||||||
| 2030 | 8,190 | 3,237 | |||||||||
| Thereafter | 11,595 | 68,928 | |||||||||
| Total lease payments | $ | 68,204 | $ | 84,304 | |||||||
| Less: Interest | 9,470 | 57,170 | |||||||||
| Present value of operating lease liabilities | $ | 58,734 | $ | 27,134 | |||||||
__________
(1) Ground leases are fully subleased through 2041, representing $50.5 million of the $84.3 million future ground lease obligations.
14. Stock-Based Compensation
2022 Long-Term Incentive Plan
On April 20, 2022, our stockholders approved the Tri Pointe Homes, Inc. 2022 Long-Term Incentive Plan (the “2022 Plan”), which had been previously approved by our board of directors. The 2022 Plan replaced the Company’s prior stock compensation plan, the TRI Pointe Group, Inc. Amended and Restated 2013 Long-Term Incentive Plan (the “2013 Plan”). The 2022 Plan provides for the grant of equity-based awards, including options to purchase shares of common stock, stock appreciation rights, restricted stock, restricted stock units, bonus stock and performance awards. The 2022 Plan will automatically expire on the tenth anniversary of its effective date. Our board of directors may terminate or amend the 2022 Plan at any time, subject to any requirement of stockholder approval required by applicable law, rule or regulation.
The total number of shares of our common stock initially reserved under the 2022 Plan was 7,500,000 shares.
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To the extent that shares of our common stock subject to an outstanding option, stock appreciation right, stock award or performance award granted under the 2022 Plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or the settlement of such award in cash, then such shares of our common stock generally will again be available under the 2022 Plan. However, the 2022 Plan prohibits us from re-using shares that are tendered or surrendered to pay the exercise cost or tax obligation for stock options and stock appreciation rights.
As of March 31, 2026, there were 4,281,085 shares available for future grant under the 2022 Plan.
The following table presents compensation expense recognized related to all stock-based awards (in thousands):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Total stock-based compensation | $ | 1,957 | $ | 7,556 | ||||||||||
Stock-based compensation is charged to general and administrative expense on the accompanying consolidated statements of operations. As of March 31, 2026, total unrecognized stock-based compensation expense related to all stock-based awards was $44.4 million and the weighted average term over which the expense was expected to be recognized was 1.4 years.
Summary of Restricted Stock Unit Activity
The following table presents a summary of time-based and performance-based RSUs for the three months ended March 31, 2026:
| Restricted Stock Units | Weighted Average Grant Date Fair Value Per Share | ||||||||||
| Nonvested RSUs at December 31, 2025 | 3,122,349 | $ | 30.42 | ||||||||
| Granted | 575,329 | $ | 46.28 | ||||||||
| Vested | (1,095,599) | $ | 25.81 | ||||||||
| Forfeited | (23,374) | $ | 26.42 | ||||||||
| Nonvested RSUs at March 31, 2026 | 2,578,705 | $ | 35.95 | ||||||||
On February 17, 2026, the Company granted an aggregate of 573,812 time-based RSUs to certain employees and officers. The RSUs granted vest in equal installments annually on the anniversary of the grant date over a three-year period. The fair value of each RSU granted on February 17, 2026 was measured using a price of $46.30 per share, which was the closing stock price on the date of grant. Each award will be expensed on a straight-line basis over the vesting period.
For the three months ended March 31, 2026, the Company granted an aggregate of 1,517 time-based RSUs to certain employees not described above. The RSUs granted vest in equal installments annually beginning on anniversary of the grant date over a three-year period. The fair value of the RSUs granted were measured using the closing stock prices on the applicable date of each grant. Each award will be expensed on a straight-line basis over the vesting period.
On February 19, 2025, the Company granted an aggregate of 509,446 time-based RSUs to certain employees and officers. The RSUs granted vest in equal installments annually on the anniversary of the grant date over a three-year period. The fair value of each RSU granted on February 19, 2025 was measured using a price of $30.89 per share, which was the closing stock price on the date of grant. Each award will be expensed on a straight-line basis over the vesting period.
On February 19, 2025, the Company granted an aggregate of 760,119 performance-based RSUs to the Company’s Chief Executive Officer, Chief Operating Officer and President, Chief Financial Officer, General Counsel, Executive Vice President and Chief Marketing Officer, Chief Human Resources Officer, and division presidents. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) 50% to homebuilding revenue of the applicable Company division, and (ii) 50% to pre-tax earnings of the applicable Company division. The vesting, if at all, of these performance-based RSUs may range from 0% to 100% and will be based on the applicable Company division’s percentage attainment of specified threshold, target and maximum performance goals. The performance period for these performance-based RSUs is January 1,
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2025 to December 31, 2027. The fair value of these performance-based RSUs was measured using a price of $30.89 per share, which was the closing stock price on the date of grant. Each award will be expensed over the requisite service period.
On May 5, 2025, the Company granted an aggregate of 27,820 time-based RSUs to the non-employee members of its board of directors. The RSUs granted to the non-employee directors vest in their entirety on the day immediately prior to the Company’s 2026 annual meeting of stockholders. The fair value of each RSU granted on May 5, 2025 was measured using a price of $31.45 per share, which was the closing stock price on the date of grant. Each award will be expensed on a straight-line basis over the vesting period.
For the twelve months ended December 31, 2025, the Company granted an aggregate of 11,903 time-based RSUs to certain employees not described above. The RSUs granted vest in equal installments annually beginning on anniversary of the grant date over a three-year period. The fair value of the RSUs granted were measured using the closing stock prices on the applicable date of each grant. Each award will be expensed on a straight-line basis over the vesting period
As RSUs vest for employees, a portion of the shares awarded is generally withheld to cover employee tax withholdings. As a result, the number of RSUs vested and the number of shares of Tri Pointe common stock issued will differ.
15. Income Taxes
We account for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which requires an asset and liability approach for measuring deferred taxes based on temporary differences between the financial statements and tax bases of assets and liabilities using enacted tax rates for the years in which taxes are expected to be paid or recovered. Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable under ASC 740. We are required to establish a valuation allowance for any portion of the asset we conclude is more likely than not to be unrealizable. Our assessment considers, among other things, the nature, frequency and severity of our current and cumulative losses, forecasts of our future taxable income, the duration of statutory carryforward periods and tax planning alternatives.
We had net deferred tax assets of $43.1 million as of both March 31, 2026 and December 31, 2025. We had a valuation allowance related to those net deferred tax assets of $3.7 million and $3.4 million as of March 31, 2026 and December 31, 2025, respectively. The Company will continue to evaluate both positive and negative evidence in determining the need for a valuation allowance against its deferred tax assets. Changes in positive and negative evidence, including differences between the Company’s future operating results and the estimates utilized in the determination of the valuation allowance, could result in changes in the Company’s estimate of the valuation allowance against its deferred tax assets. The accounting for deferred taxes is based upon estimates of future results. Differences between the anticipated and actual outcomes of these future results could have a material impact on the Company’s consolidated results of operations or financial position. Also, changes in existing federal and state tax laws and tax rates could affect future tax results and the valuation allowance against the Company’s deferred tax assets.
Our provision for income taxes totaled $81,000 and $22.5 million for the three months ended March 31, 2026 and 2025, respectively. The Company classifies any interest and penalties related to income taxes assessed by jurisdiction as part of income tax expense. The Company did not have any uncertain tax positions recorded as of March 31, 2026 and December 31, 2025. The Company has not been assessed interest or penalties by any major tax jurisdictions related to prior years.
The Company files income tax returns in the U.S., including federal and multiple state and local jurisdictions.
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16. Supplemental Disclosure to Consolidated Statements of Cash Flows
The following are supplemental disclosures to the consolidated statements of cash flows (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Interest paid (capitalized), net | $ | (9,399) | $ | (9,046) | |||||||
| Income taxes paid, net | $ | — | $ | 518 | |||||||
| Supplemental disclosures of noncash activities: | |||||||||||
| Increase in share repurchase excise tax accrual | $ | — | $ | 589 | |||||||
| Amortization of deferred loan costs capitalized to real estate inventory | $ | 790 | $ | 618 | |||||||
| Increase in noncontrolling interests | $ | — | $ | 32 | |||||||
17. Merger Transaction
On February 13, 2026, we entered into the Merger Agreement with Sumitomo Forestry and Merger Sub, pursuant to which the parties intend to effectuate the Merger. As of the date of this Quarterly Report on Form 10-Q, the Merger has not yet been completed.
Under the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of our common stock will be converted into the right to receive $47.00 in cash, without interest (the “Merger Consideration”), except for shares that are (A)(1) held by us as treasury stock; (2) held directly by Sumitomo Forestry or Merger Sub; or (3) held by any direct or indirect wholly owned subsidiary of Sumitomo Forestry or Merger Sub, in each case, immediately prior to the Effective Time (“Owned Company Shares”), or (B) held by a holder who has not voted in favor of the adoption of the Merger Agreement, and has properly and validly demanded appraisal for such shares in accordance, and who complies in all respects, with Section 262 of the DGCL (“Dissenting Shares”). Further, at the Effective Time, each Owned Company Share will automatically be cancelled and cease to exist, and no consideration or payment will be delivered in exchange therefor or in respect thereof, and each share held by any direct or indirect wholly owned subsidiary of the Company will, if any, be converted into such number of shares of common stock of the surviving corporation with an aggregate value immediately after the consummation of the Merger equal to the Merger Consideration.
Additionally, at the Effective Time, (i) each restricted stock unit (“RSU”) granted under the 2022 Plan granted prior to 2026 and each RSU held by any of our non-employee directors, in each case whether vested or unvested, that is outstanding as of immediately prior to the Effective Time will be fully vested, cancelled and automatically converted into the right to receive an amount in cash (without interest and subject to deduction for any required tax withholdings) equal to the product of (A) the aggregate number of shares of common stock subject to such RSU, and (B) the Merger Consideration; (ii) each RSU that is not subject to the preceding clause (i) above that is outstanding as of immediately prior to the Effective Time will be cancelled and automatically converted into and substituted with a cash award representing the right to receive, upon each applicable vesting date for such RSU (or if earlier, upon a severance-eligible termination of employment), and subject to the same time-vesting terms and conditions that applied to such RSU (other than vesting terms providing for accelerated vesting in connection with the Merger), as in effect immediately prior to such conversion, an amount in cash (without interest and subject to deduction for any required tax withholdings) equal to the product of (A) the aggregate number of shares of common stock subject to such RSU that would have vested on such vesting date had such RSU remained outstanding through such vesting date, and (B) the Merger Consideration; and (iii) each performance stock unit (“PSU”) granted under the 2022 Plan, whether vested or unvested, that is outstanding as of immediately prior to the Effective Time will be fully vested, cancelled, and automatically converted into the right to receive an amount in cash (without interest, and subject to deduction for any required tax withholdings) equal to the product of (A) the aggregate number of shares of common stock subject to such PSU (at maximum performance) and (B) the Merger Consideration.
At the Effective Time, all Dissenting Shares will be cancelled and cease to exist, and the holders of Dissenting Shares will only be entitled to the rights granted to them under Section 262 of the DGCL with respect to such Dissenting Shares. If the Merger is consummated, our common stock will be de-listed from The New York Stock Exchange and de-registered under the Exchange Act.
The completion of the Merger is subject to customary closing conditions, including, but not limited to, the (i) approval of the holders of a majority of the outstanding shares of common stock entitled to vote on such matters to adopt the Merger Agreement; (ii) expiration or termination of any waiting period (and extensions thereof) applicable to the Transactions under
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the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), and the rules and regulations promulgated thereunder; (iii) absence of any law, order or injunction enacted or issued after the date of the Merger Agreement restraining, enjoining or otherwise prohibiting the Merger; and (iv) absence of certain events comprising a material adverse effect on the Company’s business following the date of the Merger Agreement. As of the date of this Quarterly Report on Form 10-Q, the portions of the conditions to the Merger relating to stockholder approval of the Merger Agreement and the expiration or termination of the waiting period under the HSR Act have been satisfied. The Merger continues to be subject to the remaining conditions set forth in the Merger Agreement. The obligations of Sumitomo Forestry and Merger Sub to consummate the Merger are not subject to any financing condition.
From the execution of the Merger Agreement until the earlier to occur of the termination of the Merger Agreement and the Effective Time, we will be subject to customary “no-shop” restrictions on our ability to solicit alternative acquisition proposals from third parties and to provide information to, and participate in discussions and negotiations with, third parties regarding any alternative acquisition proposals, subject to a customary “fiduciary out” provision that allows us, under certain specified circumstances (prior to the receipt of stockholder approval of the Merger Agreement), to provide information to, and participate or engage in discussions or negotiations with, third parties with respect to an acquisition proposal if our board of directors determines in good faith (after consultation with our independent financial advisor and outside legal counsel) that such alternative acquisition proposal constitutes a superior proposal or would reasonably be expected to result in a superior proposal, and the failure to take such actions would be inconsistent with our directors’ fiduciary duties pursuant to applicable law. As of April 16, 2026, the Company’s stockholders approved the Merger Agreement at a special meeting and, accordingly, as of the
date of this Quarterly Report on Form 10-Q, the “fiduciary out” is no longer available to the Company.
The Merger Agreement contains certain termination rights for us, on the one hand, and Sumitomo Forestry and Merger Sub, on the other hand. Upon termination of the Merger Agreement under specified circumstances, we would be required to pay Sumitomo Forestry a termination fee of $82,336,000. Following the approval of the Merger Agreement by the Company’s stockholders on April 16, 2026, the Company is no longer permitted to terminate the Merger Agreement to enter into an alternative acquisition agreement or to effect a change of recommendation pursuant to the “fiduciary out” provisions of the Merger Agreement.
The Company also made customary representations and warranties in the Merger Agreement and agreed to customary covenants regarding the operation of our business prior to the consummation of the Merger. The Merger Agreement also provides that we, on the one hand, or Sumitomo Forestry and Merger Sub, on the other hand, may specifically enforce the obligations under the Merger Agreement, including the obligation to consummate the Merger if the conditions set forth in the Merger Agreement are satisfied. The parties to the Merger Agreement have also agreed to use their respective reasonable best efforts and take certain actions to obtain the requisite regulatory approvals for the Transactions.
The foregoing description of the Merger Agreement and the Transactions does not purport to be complete, and is subject, and qualified in its entirety by reference, to the full text of the Merger Agreement, which has been filed herewith as Exhibit 2.1 and is incorporated by reference herein.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are based on our current intentions, beliefs, expectations and predictions for the future, and you should not place undue reliance on these statements. These statements use forward-looking terminology, are based on various assumptions made by us, and may not be accurate because of risks and uncertainties surrounding the assumptions that are made.
Factors listed in this section—as well as other factors not included—may cause actual results to differ significantly from the forward-looking statements included in this Quarterly Report on Form 10-Q. There is no guarantee that any of the events anticipated by the forward-looking statements in this Quarterly Report on Form 10-Q will occur, or if any of the events occurs, there is no guarantee what effect it will have on our operations, financial condition, or share price.
We undertake no, and hereby disclaim any, obligation to update or revise any forward-looking statements, unless required by law. However, we reserve the right to make such updates or revisions from time to time by press release, periodic report, or other method of public disclosure without the need for specific reference to this Quarterly Report on Form 10-Q. No such update or revision shall be deemed to indicate that other statements not addressed by such update or revision remain correct or create an obligation to provide any other updates or revisions.
Forward-Looking Statements
Forward-looking statements that are included in this Quarterly Report on Form 10-Q are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” or other words that convey the uncertainty of future events or outcomes. These forward-looking statements may include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, the outcome of legal proceedings, the anticipated impact of natural disasters or contagious diseases on our operations, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects and capital spending, as well as the expected timetable for completing the proposed transactions contemplated by the Merger Agreement (the “Transactions”), future opportunities for the combined businesses and the expected benefits of the proposed Transactions, including with respect to U.S. home deliveries and home sales, community count expansion and the growth of the Tri Pointe Homes brand.
Risks, Uncertainties and Assumptions
The major risks and uncertainties—and assumptions that are made—that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:
•risks related to the Transactions, including but not limited to (i) the risk that the Transactions may not be completed in a timely manner or at all, which may adversely affect our businesses and the price of the shares of our common stock; (ii) the failure to satisfy all conditions to the consummation of the Transactions; (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; (iv) the risk that the Merger Agreement may be terminated in circumstances that require us to pay a termination fee; (v) unanticipated difficulties or expenditures relating to the Transactions, including the response of business partners and competitors to the announcement of the Transactions or difficulties in employee retention as a result of the announcement and pendency of the Transactions; (vi) risks that the Transactions disrupt current plans and operations; (vii) risks related to diverting management’s attention from ongoing business operations; (viii) the risk of any litigation relating to the Transactions; (ix) the ability to obtain the necessary financing arrangements set forth in the commitment letter received in connection with the Transactions; (x) risks relating to certain restrictions during the pendency of the Transactions that may impact the ability of the Company and Sumitomo Forestry to pursue certain business opportunities or strategic transactions; and (xi) risks that the benefits of the Transactions are not realized when and as expected;
•the effects of general economic conditions, including employment rates, housing starts, interest rate levels, home affordability, inflation, consumer sentiment, availability of financing for home mortgages and strength of the U.S. dollar;
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•market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
•the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels;
•access to adequate capital on acceptable terms;
•geographic concentration of our operations;
•levels of competition;
•the successful execution of our internal performance plans, including restructuring and cost reduction initiatives;
•the prices and availability of supply chain inputs, including raw materials, labor and home components;
•oil and other energy prices;
•the effects of U.S. trade policies, including the imposition of tariffs and duties on homebuilding products and retaliatory measures taken by other countries;
•the effects of weather, including the occurrence of drought conditions in parts of the western United States;
•the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters;
•the risk of loss from acts of war, terrorism, civil unrest or public health emergencies, including outbreaks of contagious disease, such as COVID-19;
•transportation costs;
•federal and state tax policies;
•the effects of land use, environment and other governmental laws and regulations;
•legal proceedings or disputes and the adequacy of reserves;
•risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects;
•changes in accounting principles;
•risks related to unauthorized access to our computer systems, theft of our homebuyers’ confidential information or other forms of cyber-attack; and
•other factors described in “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025 and in other filings we make with the Securities and Exchange Commission (“SEC”).
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related condensed notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. The information contained in this Quarterly Report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our securities. We urge investors to review and consider carefully the various disclosures made by us in this report and in our other reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2025 and subsequent reports on Form 8-K, which discuss our business in greater detail. The section entitled “Risk Factors” set forth in Item 1A of our Annual Report on Form 10-K, and similar disclosures in our other SEC filings, discuss some of the important risk factors that may affect our business, results of operations and financial condition. Investors should carefully consider those risks, in addition to the information in this report and in our other filings with the SEC, before deciding to invest in, or maintain an investment in, our common stock.
Overview and Outlook
During the first quarter of 2026, the U.S. housing market experienced moderated activity, primarily reflecting mortgage interest rates that remain elevated relative to recent years, along with heightened geopolitical and macroeconomic uncertainty that negatively impacted consumer sentiment. As a result, homebuyers remained cautious, contributing to slower absorption rates and extended decision-making timelines across many of our markets. While near-term conditions remain challenging, we believe the sustained period of reduced activity may be contributing to an increase in prospective buyer interest. In the event affordability improves and consumer confidence stabilizes, we expect demand to strengthen, though the timing and extent of any such improvement remain uncertain. We believe the long-term outlook for the housing sector continues to be supported by favorable demographic trends and a structural imbalance between housing supply and demand in the United States, although near-term market conditions may continue to affect our results.
During the quarter, we delivered 736 new homes at an average sales price of $688,000. Our homebuilding gross margin was 18.8%, reflecting the increased use of sales incentives in response to a more challenging housing environment. Lower home sales revenue also reduced operating leverage, resulting in an increase in selling, general and administrative (“SG&A”) expense 17.9% of home sales revenue. We incurred $5.9 million of transaction expenses during the quarter in connection with our previously announced Merger with Sumitomo Forestry, which remains on track to close in the second quarter of 2026. Other than transaction-related expenses and potential changes upon closing, we do not expect the pending Merger to materially
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impact our results of operations or liquidity prior to consummation. Net income available to common stockholders was $6.8 million, and diluted earnings per share was $0.08. These results reflect softer demand trends experienced throughout 2025 and into the early months of 2026. Despite these conditions, we continue to emphasize disciplined operations and cost management while positioning the business for improved performance as market conditions stabilize.
Net new home orders for the quarter were 1,234, on a monthly absorption rate of 2.6 orders per average selling community. Our backlog units and dollar value as of the end of the quarter were 1,360 and $989.9 million, respectively. Our strong and well-positioned lot supply provides a solid foundation to support continued community openings and future growth. In addition, our diversified market portfolio across geographies and price points continues to enhance resilience, allowing us to navigate varying local market conditions while capturing opportunities in higher-growth regions. With a homebuilding debt-to-capital ratio of 25.0% and a net homebuilding debt-to-net capital ratio of 7.2%, our strong balance sheet continues to provide the financial flexibility needed to support our growth initiatives, as we continue to invest to scale our existing markets and grow organically within our three new markets.
Consolidated Financial Data (in thousands, except per share amounts):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Homebuilding: | ||||||||||||||
| Home sales revenue | $ | 506,496 | $ | 720,786 | ||||||||||
| Land and lot sales revenue | 575 | 1,821 | ||||||||||||
| Other operations revenue | 825 | 820 | ||||||||||||
| Total revenues | 507,896 | 723,427 | ||||||||||||
| Cost of home sales | 411,066 | 548,273 | ||||||||||||
| Cost of land and lot sales | 979 | 1,741 | ||||||||||||
| Other operations expense | 813 | 794 | ||||||||||||
| Sales and marketing | 37,887 | 42,942 | ||||||||||||
| General and administrative | 52,959 | 57,675 | ||||||||||||
| Homebuilding income from operations | 4,192 | 72,002 | ||||||||||||
| Equity in (loss) income of unconsolidated entities | (88) | 495 | ||||||||||||
| Transaction expense | (5,877) | — | ||||||||||||
| Other income, net | 7,236 | 9,129 | ||||||||||||
| Homebuilding income before income taxes | 5,463 | 81,626 | ||||||||||||
| Financial Services: | ||||||||||||||
| Revenues | 13,493 | 17,501 | ||||||||||||
| Expenses | 12,065 | 12,617 | ||||||||||||
| Financial services income before income taxes | 1,428 | 4,884 | ||||||||||||
| Income before income taxes | 6,891 | 86,510 | ||||||||||||
| Provision for income taxes | (81) | (22,493) | ||||||||||||
| Net income | 6,810 | 64,017 | ||||||||||||
| Net (income) loss attributable to noncontrolling interests | (24) | 19 | ||||||||||||
| Net income available to common stockholders | $ | 6,786 | $ | 64,036 | ||||||||||
| Earnings per share | ||||||||||||||
| Basic | $ | 0.08 | $ | 0.70 | ||||||||||
| Diluted | $ | 0.08 | $ | 0.70 | ||||||||||
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Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | Percentage Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net New Home Orders | Average Selling Communities | Monthly Absorption Rates | Net New Home Orders | Average Selling Communities | Monthly Absorption Rates | Net New Home Orders | Average Selling Communities | Monthly Absorption Rates | |||||||||||||||||||||||||||||||||||||||||||||
| West | 605 | 72.3 | 2.8 | 644 | 66.3 | 3.2 | (6) | % | 9 | % | (14) | % | |||||||||||||||||||||||||||||||||||||||||
| Central | 436 | 61.7 | 2.4 | 413 | 60.5 | 2.3 | 6 | % | 2 | % | 4 | % | |||||||||||||||||||||||||||||||||||||||||
| East | 193 | 24.0 | 2.7 | 181 | 18.7 | 3.2 | 7 | % | 28 | % | (17) | % | |||||||||||||||||||||||||||||||||||||||||
| Total | 1,234 | 158.0 | 2.6 | 1,238 | 145.5 | 2.8 | — | % | 9 | % | (8) | % | |||||||||||||||||||||||||||||||||||||||||
Net new home orders for the three months ended March 31, 2026 remained flat at 1,234, compared to 1,238 during the prior-year period. Net new home orders remained flat primarily due to an 8% decrease in monthly absorption rates, offset by a 9% increase in average selling communities. Softer consumer sentiment, further impacted by heightened geopolitical uncertainty, together with elevated inventory levels across many markets, added competitive pressure and contributed to a slower sales pace. During the quarter, we opened 13 new communities and closed out of eight existing communities. We remain focused on executing our planned community growth for the year in a disciplined manner. This measured approach to increasing community count is expected to support higher volumes over time while remaining aligned with market demand.
Our West segment reported a 6% decrease in net new home orders due to a 14% decrease in monthly absorption rates, offset by a 9% increase in average selling communities. Market conditions in the West remain challenging as mortgage rates stayed elevated and geopolitical factors continued to weigh on buyer sentiment and demand. Our Central segment reported a 6% increase in net new home orders due to a 4% increase in monthly absorption rates and a 2% increase in average selling communities. While Houston and Colorado experienced improving year-over-year absorption trends, Austin and Dallas-Fort Worth saw modest declines, as elevated local supply continued to pressure sales conditions. Utah delivered strong absorption during the quarter, reflecting positive early momentum as we continue to ramp up this startup division. Our East segment reported a 7% increase in net new home orders due to a 28% increase in average selling communities, offset by a 17% decrease in monthly absorption rate. Despite the slowdown in absorption, we continue to actively engage buyers through targeted pricing strategies, mortgage financing solutions, and ongoing price discovery efforts. These tools have helped sustain traffic and maintain buyer interest, even amid a more cautious demand environment.
Backlog Units, Dollar Value and Average Sales Price by Segment (dollars in thousands)
| As of March 31, 2026 | As of March 31, 2025 | Percentage Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Backlog Units | Backlog Dollar Value | Average Sales Price | Backlog Units | Backlog Dollar Value | Average Sales Price | Backlog Units | Backlog Dollar Value | Average Sales Price | |||||||||||||||||||||||||||||||||||||||||||||
| West | 687 | $ | 564,180 | $ | 821 | 930 | $ | 757,952 | $ | 815 | (26) | % | (26) | % | 1 | % | |||||||||||||||||||||||||||||||||||||
| Central | 422 | 251,486 | 596 | 508 | 296,636 | 584 | (17) | % | (15) | % | 2 | % | |||||||||||||||||||||||||||||||||||||||||
| East | 251 | 174,240 | 694 | 277 | 253,198 | 914 | (9) | % | (31) | % | (24) | % | |||||||||||||||||||||||||||||||||||||||||
| Total | 1,360 | $ | 989,906 | $ | 728 | 1,715 | $ | 1,307,786 | $ | 763 | (21) | % | (24) | % | (5) | % | |||||||||||||||||||||||||||||||||||||
Backlog units reflect the number of homes, net of actual cancellations experienced during the period, for which we have entered into a sales contract with a homebuyer but for which we have not yet delivered the home. Homes in backlog are generally delivered within seven to ten months from the time the sales contract is entered into, although we may experience cancellations of sales contracts prior to delivery. Our cancellation rate of homebuyers who contracted to buy a home but cancelled prior to delivery of the home (as a percentage of overall orders) was 9% and 10% during the three-month periods ended March 31, 2026 and 2025, respectively. The dollar value of backlog was $989.9 million as of March 31, 2026 compared to $1.3 billion as of March 31, 2025. Backlog units were down 21% to 1,360, due primarily to the 43% lower backlog leading into the current year and the sustained softer demand environment experienced throughout the first quarter of 2026. Throughout the period, we remained focused on protecting price, maintaining a disciplined approach to incentives and avoiding more aggressive pricing actions to drive volume. While shifts in product and geographic mix weighed on average sales price in backlog, we believe this approach helped mitigate further pricing pressure, while contributing to lower order activity and a
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corresponding decline in backlog units. The average sales price in backlog decreased 5% to $728,000 as of March 31, 2026, compared to $763,000 at March 31, 2025. This decrease was due to a combination of geographical mix shifts, along with a higher level of incentives.
Backlog dollar value in our West segment decreased 26% due to a 26% decrease in backlog units, offset by a 1% increase in average sales price. The decrease in backlog units was largely due to a 6% decrease in net new home orders for the current year-to-date period, in addition to the 47% decrease in backlog units to start the current year. In our Central segment, backlog dollar value decreased by 15%, driven by a 17% decline in backlog units, offset slightly by a 2% increase in average sales price. This reduction in backlog units was largely due to the 45% decrease in backlog units to start the current year. In our East segment, backlog dollar value decreased by 31%, driven by a 9% decline in backlog units and a 24% decrease in average sales price. The reduction in units was driven by a 25% decrease in backlog units to start the current year. The decrease in average sales price was largely attributable to increased incentives and a shift in geographic mix, with a higher concentration of backlog in the higher-priced DC Metro market in the prior year, compared to a greater mix of backlog in Raleigh and Charlotte in the current year.
New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands)
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | Percentage Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
| New Homes Delivered | Home Sales Revenue | Average Sales Price | New Homes Delivered | Home Sales Revenue | Average Sales Price | New Homes Delivered | Home Sales Revenue | Average Sales Price | |||||||||||||||||||||||||||||||||||||||||||||
| West | 342 | $ | 265,933 | $ | 778 | 521 | $ | 400,522 | $ | 769 | (34) | % | (34) | % | 1 | % | |||||||||||||||||||||||||||||||||||||
| Central | 274 | 154,275 | 563 | 377 | 210,522 | 558 | (27) | % | (27) | % | 1 | % | |||||||||||||||||||||||||||||||||||||||||
| East | 120 | 86,288 | 719 | 142 | 109,742 | 773 | (15) | % | (21) | % | (7) | % | |||||||||||||||||||||||||||||||||||||||||
| Total | 736 | $ | 506,496 | $ | 688 | 1,040 | $ | 720,786 | $ | 693 | (29) | % | (30) | % | (1) | % | |||||||||||||||||||||||||||||||||||||
Home sales revenue decreased $214.3 million to $506.5 million for the three months ended March 31, 2026 compared to the prior year period. The decrease was comprised of $210.7 million related to a 304-unit decrease in new homes delivered in the three months ended March 31, 2026, and a $3.7 million decrease related to a $5,000 decrease in average sales price for the three months ended March 31, 2026. Our lower backlog entering the current year period, which was down 43% on a unit basis and 42% on a dollar value basis compared to the prior year period, resulted in fewer new home deliveries and was the primary driver of the revenue decline.
Home sales revenue in our West segment decreased 34% due to a 34% decrease in new homes delivered, while average sales price increased by 1%. The decrease in deliveries reflects a lower backlog at the start of the current year compared to the prior year. Home sales revenue in our Central segment decreased 27% due to a 27% decrease in new homes delivered, while average sales price increased by 1%. The decrease in new homes delivered was due to a decrease in backlog units to start the current year compared to the prior year. Home sales revenue in our East segment decreased by 21% due to a 15% decrease in new homes delivered and a 7% decrease in average sales price. The decrease in deliveries reflects a lower backlog at the start of the current year period compared to the prior year.
Homebuilding Gross Margins (dollars in thousands)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | % | 2025 | % | ||||||||||||||||||||
| Home sales revenue | $ | 506,496 | 100.0 | % | $ | 720,786 | 100.0 | % | |||||||||||||||
| Cost of home sales | 411,066 | 81.2 | % | 548,273 | 76.1 | % | |||||||||||||||||
| Homebuilding gross margin | 95,430 | 18.8 | % | 172,513 | 23.9 | % | |||||||||||||||||
| Add: interest in cost of home sales | 16,470 | 3.3 | % | 23,035 | 3.2 | % | |||||||||||||||||
| Add: impairments and lot option abandonments | 1,068 | 0.2 | % | 1,073 | 0.1 | % | |||||||||||||||||
Adjusted homebuilding gross margin(1) | $ | 112,968 | 22.3 | % | $ | 196,621 | 27.3 | % | |||||||||||||||
| Homebuilding gross margin percentage | 18.8 | % | 23.9 | % | |||||||||||||||||||
Adjusted homebuilding gross margin percentage(1) | 22.3 | % | 27.3 | % | |||||||||||||||||||
__________
(1)Non-GAAP financial measure (as discussed below).
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Our homebuilding gross margin percentage decreased to 18.8% for the three months ended March 31, 2026 compared to 23.9% for the prior-year period. The year-over-year decline was primarily driven by higher incentives, as we continue to adjust price and pace at the local market level to align with evolving demand dynamics. As affordability pressures persist, we continue to calibrate our pricing strategies, sales pace, and the use of incentives to support absorption while protecting returns. Excluding interest, impairments, and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 22.3% for the three months ended March 31, 2026 compared to 27.3% for the prior-year period.
Adjusted homebuilding gross margin is a non-GAAP financial measure. We believe this information is meaningful as it isolates the impact that leverage and noncash charges have on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion. Because adjusted homebuilding gross margin is not calculated in accordance with GAAP, it may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP. See the table above reconciling this non-GAAP financial measure to homebuilding gross margin, the most directly comparable GAAP measure.
Sales and Marketing, General and Administrative Expense (dollars in thousands)
| Three Months Ended March 31, | As a Percentage of Home Sales Revenue | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Sales and marketing | $ | 37,887 | $ | 42,942 | 7.5 | % | 6.0 | % | |||||||||||||||
| General and administrative (G&A) | 52,959 | 57,675 | 10.5 | % | 8.0 | % | |||||||||||||||||
| Total sales and marketing and G&A | $ | 90,846 | $ | 100,617 | 17.9 | % | 14.0 | % | |||||||||||||||
Total SG&A expense as a percentage of home sales revenue increased to 17.9% for the three months ended March 31, 2026, compared to 14.0% in the prior-year period. Total SG&A expense decreased $9.8 million to $90.8 million for the three months ended March 31, 2026 from $100.6 million in the prior-year period.
Sales and marketing expense as a percentage of home sales revenue increased to 7.5% for the three months ended March 31, 2026, compared to 6.0% for the prior-year period. This increase was largely due to lower home sales revenue, which negatively impacted our fixed cost leverage. Sales and marketing expense decreased to $37.9 million for the three months ended March 31, 2026 compared to $42.9 million for the prior-year period, largely driven by a decrease in broker commissions, along with internal commissions. Given that many components of sales and marketing expense bear a variable relationship to home sales revenue, which decreased by 30% compared to the prior-year period, such a decrease in absolute dollars is expected.
G&A expense as a percentage of home sales revenue increased to 10.5% of home sales revenue for the three months ended March 31, 2026 compared to 8.0% for the prior-year period. This increase was due primarily to reduced leverage on our fixed components of G&A expenses, which is directly associated with the lower home sales revenue in the current year period. G&A expense decreased to $53.0 million for the three months ended March 31, 2026 compared to $57.7 million for the prior-year period, largely driven by a decrease in incentive compensation-related costs.
Interest
Interest, which we incurred principally to finance land acquisitions, land development, and home construction, totaled $18.6 million and $21.3 million for the three months ended March 31, 2026 and 2025, respectively. All interest incurred in both periods was capitalized.
Transaction Expense
Transaction expense related to the Merger with Sumitomo Forestry for the three months ended March 31, 2026 was $5.9 million. We expect to incur additional transaction-related costs in future periods in connection with the Merger, which is expected to close in the second quarter of 2026, subject to the conditions set forth in the Merger Agreement.
Other Income, Net
Other income, net for the three months ended March 31, 2026 and 2025 was income of $7.2 million and $9.1 million, respectively. Results were generally consistent year-over-year, with interest income the primary driver of activity in both periods.
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Income Tax
For the three months ended March 31, 2026, we recorded a tax provision of $81,000 based on an effective tax rate of 1.2%. For the three months ended March 31, 2025, we recorded a tax provision of $22.5 million based on an effective tax rate of 26.0%. The difference between our effective tax rate for the three months ended March 31, 2026 and 2025 and the federal statutory rate was primarily due to state income tax expense, benefits from share-based compensation and non-deductible executive compensation.
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Financial Services Segment
Income before income taxes from our financial services operations decreased to $1.4 million for the three months ended March 31, 2026 compared to $4.9 million for the prior year period. The decline was primarily attributable to lower revenue, which varies with home sales activity and, accordingly, decreased in line with lower home sales revenue.
The following table presents selected financial information for Tri Pointe Connect, our mortgage financing operations, excluding brokered loan originations (dollars in thousands):
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | ||||||||||
| Total Originations: | |||||||||||
| Loans | 478 | 520 | |||||||||
| Principal | $ | 260,608 | $ | 273,800 | |||||||
| Mortgage Loan Origination Product Mix: | |||||||||||
| Government (FHA, VA, USDA) | 22 | % | 12 | % | |||||||
| Other agency | 78 | % | 88 | % | |||||||
| Total agency | 100 | % | 100 | % | |||||||
| Loan Type: | |||||||||||
| Fixed rate | 93 | % | 100 | % | |||||||
| ARM | 7 | % | — | % | |||||||
| Credit Quality: | |||||||||||
| Average FICO score | 754 | 759 | |||||||||
| Other Data: | |||||||||||
| Average combined LTV ratio | 80 | % | 78 | % | |||||||
| Full documentation loans | 100 | % | 100 | % | |||||||
| Loans Sold to Third Parties: | |||||||||||
| Loans | 534 | 598 | |||||||||
| Principal | $ | 292,326 | $ | 316,072 | |||||||
Lots Owned or Controlled by Segment
Lots owned or controlled include our share of lots controlled by our unconsolidated land development joint ventures. Investments in joint ventures are described in Note 6, Investments in Unconsolidated Entities, of the notes to our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q. The table below summarizes our lots owned or controlled by segment as of the dates presented:
| March 31, | Increase (Decrease) | ||||||||||||||||||||||
| 2026 | 2025 | Amount | % | ||||||||||||||||||||
| Lots Owned | |||||||||||||||||||||||
| West | 8,690 | 9,542 | (852) | (9) | % | ||||||||||||||||||
| Central | 5,157 | 5,475 | (318) | (6) | % | ||||||||||||||||||
| East | 2,055 | 1,843 | 212 | 12 | % | ||||||||||||||||||
| Total | 15,902 | 16,860 | (958) | (6) | % | ||||||||||||||||||
Lots Controlled(1) | |||||||||||||||||||||||
| West | 4,010 | 4,358 | (348) | (8) | % | ||||||||||||||||||
| Central | 8,576 | 9,276 | (700) | (8) | % | ||||||||||||||||||
| East | 4,449 | 4,707 | (258) | (5) | % | ||||||||||||||||||
| Total | 17,035 | 18,341 | (1,306) | (7) | % | ||||||||||||||||||
Total Lots Owned or Controlled(1) | 32,937 | 35,201 | (2,264) | (6) | % | ||||||||||||||||||
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__________
(1)As of March 31, 2026 and 2025, lots controlled represented lots that were under land or lot option contracts or purchase contracts. As of March 31, 2026 and 2025, lots controlled for Central include 5,709 and 5,711 lots, respectively, which represent our expected share of lots owned by our unconsolidated land development joint ventures.
Liquidity and Capital Resources
Overview
Our principal uses of capital for the three months ended March 31, 2026 were operating expenses, land purchases, land development, and home construction. We used funds generated by our operations to meet our short-term working capital requirements. We monitor financing requirements to evaluate potential financing sources, including bank credit facilities and note offerings. We also continue to monitor the credit markets as we remain focused on generating positive margins in our homebuilding operations and acquiring desirable land positions in order to maintain a strong balance sheet and keep us poised for growth. As of March 31, 2026, we had total liquidity of $1.7 billion, including cash and cash equivalents of $847.9 million and $827.5 million of availability under our Credit Facility, as described below, after considering the borrowing base provisions and outstanding letters of credit.
Our board of directors will consider a number of factors when evaluating our level of indebtedness and when making decisions regarding the incurrence of new indebtedness, including the purchase price of assets to be acquired with debt financing, the estimated market value of our assets and the availability of particular assets, and our Company as a whole, to generate cash flow to cover the expected debt service.
Senior Notes
In June 2020, Tri Pointe issued $350 million aggregate principal amount of 5.700% Senior Notes due 2028 (the “2028 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $345.2 million, after debt issuance costs and discounts. The 2028 Notes mature on June 15, 2028 and interest is paid semiannually in arrears on June 15 and December 15 of each year until maturity.
In June 2017, Tri Pointe issued $300 million aggregate principal amount of 5.250% Senior Notes due 2027 (the “2027 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $296.3 million, after debt issuance costs and discounts. The 2027 Notes mature on June 1, 2027 and interest is paid semiannually in arrears on June 1 and December 1 of each year until maturity.
As of March 31, 2026 and December 31, 2025, there were $2.1 million and $2.4 million, respectively, of capitalized debt financing costs, included in senior notes, net on our consolidated balance sheets, related to the Senior Notes that will amortize over the terms of the Senior Notes. Accrued interest related to the Senior Notes was $11.1 million and $2.1 million as of March 31, 2026 and December 31, 2025, respectively.
Our outstanding senior notes (the “Senior Notes”) contain covenants that restrict our ability to, among other things, create liens or other encumbrances, enter into sale and leaseback transactions, or merge or sell all or substantially all of our assets. These limitations are subject to a number of qualifications and exceptions. As of March 31, 2026, we were in compliance with the covenants required by our Senior Notes.
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Loans Payable
On April 30, 2025, we entered into a Fifth Modification Agreement (the “Fifth Modification”) to our Second Amended and Restated Credit Agreement dated as of March 29, 2019 (the “Credit Agreement”). The Fifth Modification, among other things, amends the Credit Agreement to (i) increase the maximum amount of the revolving credit facility (the “Revolving Facility”) under the Credit Agreement from $750.0 million to $850.0 million, with the ability to increase the aggregate amount of the Revolving Facility up to $1.2 billion under certain circumstances, (ii) extend the maturity date of the Revolving Facility to April 30, 2030, (iii) permit three one-year extension requests for the maturity date of the Revolving Facility under certain circumstances, and (iv) modify certain financial covenants. Following the Fifth Modification, The Credit Facility (as defined below), consisted of an $850 million revolving credit facility (the “Revolving Facility”) and a $250 million term loan facility (the “Term Facility” and together with the Revolving Facility, the “Credit Facility”). The Term Facility was scheduled to mature on June 29, 2027 while the Revolving Facility matures on April 30, 2030. We may borrow under the Revolving Facility in the ordinary course of business to repay senior notes and fund our operations, including our land acquisition, land development and homebuilding activities. Borrowings under the Revolving Facility will be governed by, among other things, a borrowing base. Interest rates under the Revolving Facility will be based on the Secured Overnight Financing Rate (“SOFR”), plus a spread ranging from 1.25% to 1.90%, depending on the Company’s leverage ratio. Interest rates under the Term Facility will be based on SOFR, plus a spread ranging from 1.10% to 1.85%, depending on the Company’s leverage ratio.
On September 18, 2025, we entered into a Sixth Modification Agreement (the “Sixth Modification”) to the Credit Agreement. The Sixth Modification increased the Term Facility from $250.0 million to $450.0 million and divided it into two tranches: (i) Term Facility Tranche A, which matures on September 29, 2027 and includes extension options for up to two additional one-year periods under certain conditions, and (ii) Term Facility Tranche B, which comprised $10.0 million as of March 31, 2026 and continues to mature on June 29, 2027.
On April 16, 2026, we entered into a Seventh Modification Agreement (the “Seventh Modification”) to the Credit Agreement. The Seventh Modification (i) provides that the administrative agent and the lenders consent to, and waive any default or event of default that would otherwise arise as a result of, the consummation by the Company of the transactions contemplated by Merger Agreement; and (ii) effective upon the consummation of the transactions contemplated by the Merger Agreement, amends the Credit Agreement to revise the definition of “Change in Control” to include the failure of Sumitomo Forestry to directly or indirectly (a) own more than 50% of the outstanding shares of voting stock of the Company or (b) possess the power to direct or cause the direction of the management, policies, or activities of the Company.
As of March 31, 2026, we had no outstanding debt under the Revolving Facility and there was $827.5 million of availability after considering the borrowing base provisions and outstanding letters of credit. As of March 31, 2026, we had $450 million of outstanding debt under the Term Facility with an interest rate of 4.83%. As of March 31, 2026, there were $6.7 million of capitalized debt financing costs, included in other assets on our consolidated balance sheet, related to the Credit Facility that will amortize over the remaining term of the Credit Facility. Accrued interest, including loan commitment fees, related to the Credit Facility was $1.9 million and $2.4 million as of March 31, 2026 and December 31, 2025, respectively.
At March 31, 2026 and December 31, 2025, we had outstanding letters of credit of $22.5 million and $51.9 million, respectively. These letters of credit were issued to secure various financial obligations. We believe it is not probable that any outstanding letters of credit will be drawn upon.
As of both March 31, 2026 and December 31, 2025, we had $6.5 million outstanding related to two seller-financed loans. All seller-financed loans are to acquire lots for the construction of homes. Principal on these loans are expected to be fully paid by the end of fiscal year 2026, provided certain achievements are met. One of the seller-financed loans, representing $5.9 million of the total balance as of both March 31, 2026 and December 31, 2025, accrues interest at an imputed interest rate of 4.50% per annum. The remaining seller-financed loan represented $600,000 of the total balance as of both March 31, 2026 and December 31, 2025.
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Under the Credit Facility, we are required to comply with certain financial covenants, including, but not limited to, those set forth in the table below (dollars in thousands):
| Actual at March 31, | Covenant Requirement at March 31, | ||||||||||
| Financial Covenants | 2026 | 2026 | |||||||||
| Consolidated Tangible Net Worth | $ | 3,158,820 | $ | 2,346,759 | |||||||
| (Not less than $2.22 billion plus 50% of net income and 50% of the net proceeds from equity offerings after December 31, 2024) | |||||||||||
| Leverage Test | 9.2 | % | ≤60% | ||||||||
| (Not to exceed 60%) | |||||||||||
| Interest Coverage Test | 5.6 | ≥1.5 | |||||||||
| (Not less than 1.5:1.0) | |||||||||||
The Credit Facility further requires that at least 95.0% of consolidated tangible net worth must be attributable to the Company and its guarantor subsidiaries, subject to certain grace periods.
As of March 31, 2026, we were in compliance with all of these financial covenants.
Leverage Ratios
We believe that our leverage ratios provide useful information to the users of our financial statements regarding our financial position and cash and debt management. The ratio of homebuilding debt-to-capital and the ratio of net homebuilding debt-to-net capital are calculated as follows (dollars in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Loans payable | $ | 456,468 | $ | 456,468 | |||||||
| Senior notes | 647,858 | 647,586 | |||||||||
| Mortgage repurchase facilities | 59,315 | 90,570 | |||||||||
| Total debt | 1,163,641 | 1,194,624 | |||||||||
| Less: mortgage repurchase facilities | (59,315) | (90,570) | |||||||||
| Total homebuilding debt | 1,104,326 | 1,104,054 | |||||||||
| Stockholders’ equity | 3,307,043 | 3,315,834 | |||||||||
| Total capital | $ | 4,411,369 | $ | 4,419,888 | |||||||
| Ratio of homebuilding debt-to-capital(1) | 25.0 | % | 25.0 | % | |||||||
| Total homebuilding debt | $ | 1,104,326 | $ | 1,104,054 | |||||||
| Less: Cash and cash equivalents | (847,903) | (982,814) | |||||||||
| Net homebuilding debt | 256,423 | 121,240 | |||||||||
| Stockholders’ equity | 3,307,043 | 3,315,834 | |||||||||
| Net capital | $ | 3,563,466 | $ | 3,437,074 | |||||||
| Ratio of net homebuilding debt-to-net capital(2) | 7.2 | % | 3.5 | % | |||||||
__________
(1)The ratio of homebuilding debt-to-capital is computed as the quotient obtained by dividing total homebuilding debt by the sum of total homebuilding debt plus stockholders’ equity.
(2)The ratio of net homebuilding debt-to-net capital is a non-GAAP financial measure and is computed as the quotient obtained by dividing net homebuilding debt (which is total homebuilding debt less cash and cash equivalents) by the sum of net homebuilding debt plus stockholders’ equity. The most directly comparable GAAP financial measure is the ratio of homebuilding debt-to-capital. We believe the ratio of net homebuilding debt-to-net capital is a relevant financial measure for investors to understand the leverage employed in our operations and as an indicator of our ability to obtain financing. See the table above reconciling this non-GAAP financial measure to the ratio of homebuilding debt-to-capital. Because the ratio of net homebuilding debt-to-net capital is not calculated in accordance with GAAP, it may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
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Cash Flows—Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025:
•Net cash used in operating activities increased by $16.8 million to cash used of $48.0 million for the three months ended March 31, 2026 compared to $31.2 million of cash used in the prior year period. The increase was driven by a $57.2 million decrease in net income, and a $13.3 million increase in cash used related to real estate inventories. Additional fluctuations were due to changes in accounts receivable, accounts payable, accrued expenses and other liabilities, other assets, and mortgage loans held for sale.
•Net cash used in investing activities was $38.2 million for the three months ended March 31, 2026, compared to cash used of $3.3 million for the prior year period. The year-over-year change was primarily attributable to a higher level of net investments in unconsolidated entities in the current year period.
•Net cash used in financing activities was $48.8 million for the three months ended March 31, 2026, compared to net cash used in financing activities of $122.7 million for the prior year period. The decrease was primarily due to the absence of share repurchases in the current period, compared to $75.0 million during the prior year period.
Off-Balance Sheet Arrangements and Contractual Obligations
In the ordinary course of business, we enter into purchase contracts in order to procure lots for the construction of our homes. We are subject to customary obligations associated with entering into contracts for the purchase of land and improved lots. These purchase contracts typically require a cash deposit and the purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements by the sellers, including obtaining applicable property and development entitlements. We also utilize option contracts with land sellers and land banking arrangements as a method of acquiring land in staged takedowns, to help us manage the financial and market risk associated with land holdings, and to reduce the use of funds from our corporate financing sources. These option contracts and land banking arrangements generally require a non-refundable deposit for the right to acquire land and lots over a specified period of time at pre-determined prices. We generally have the right, at our discretion, to terminate our obligations under both purchase contracts and option contracts by forfeiting our cash deposit with no further financial responsibility to the land seller. In some cases, however, we may be contractually obligated to complete development work even if we terminate the option to procure land or lots. As of March 31, 2026, we had $226.2 million of cash deposits, the majority of which are non-refundable, pertaining to land and lot option contracts and purchase contracts with an aggregate remaining purchase price of $2.1 billion (net of deposits). See Note 7, Variable Interest Entities, to the accompanying condensed notes to unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.
Our utilization of land and lot option contracts and land banking arrangements is dependent on, among other things, the availability of land sellers or land banking firms willing to enter into such arrangements, the availability of capital to finance the development of optioned land and lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions.
As of March 31, 2026, we held equity investments in sixteen active homebuilding partnerships or limited liability companies. Our participation in these entities may be as a developer, a builder, or an investment partner. See Note 6, Investments in Unconsolidated Entities, to the accompanying condensed notes to unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.
Supplemental Guarantor Financial Information
2027 Notes and 2028 Notes
On June 5, 2017, Tri Pointe issued the 2027 Notes and on June 10, 2020, Tri Pointe issued the 2028 Notes. All of Tri Pointe’s 100% owned subsidiaries that are guarantors (each a “Guarantor” and, collectively, the “Guarantors”) of the Credit Facility, including Tri Pointe Homes Holdings, are party to supplemental indentures pursuant to which they jointly and severally guarantee Tri Pointe’s obligations with respect to these Notes. Each Guarantor of the 2027 Notes and the 2028 Notes is 100% owned by Tri Pointe, and all guarantees are full and unconditional, subject to customary exceptions pursuant to the indentures governing the 2027 Notes and the 2028 Notes, as described in the following paragraph. All of our non-Guarantor subsidiaries have nominal assets and operations and are considered minor, as defined in Rule 3-10(h) of Regulation S-X. In addition, Tri Pointe has no independent assets or operations, as defined in Rule 3-10(h) of Regulation S-X. There are no significant restrictions upon the ability of Tri Pointe or any Guarantor to obtain funds from any of their respective wholly owned subsidiaries by dividend or loan. None of the assets of our subsidiaries represent restricted net assets pursuant to Rule 4-08(e)(3) of Regulation S-X.
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A Guarantor of the 2027 Notes and the 2028 Notes shall be released from all of its obligations under its guarantee if (i) all of the assets of the Guarantor have been sold; (ii) all of the equity interests of the Guarantor held by Tri Pointe or a subsidiary thereof have been sold; (iii) the Guarantor merges with and into Tri Pointe or another Guarantor, with Tri Pointe or such other Guarantor surviving the merger; (iv) the Guarantor is designated “unrestricted” for covenant purposes; (v) the Guarantor ceases to guarantee any indebtedness of Tri Pointe or any other Guarantor which gave rise to such Guarantor guaranteeing the 2027 Notes or the 2028 Notes; (vi) Tri Pointe exercises its legal defeasance or covenant defeasance options; or (vii) all obligations under the applicable supplemental indenture are discharged.
Inflation
Inflation remained relatively stable through most of the first quarter of 2026, though it continues to run above the Federal Reserve’s target. Recent geopolitical tensions, particularly the conflict involving Iran and resulting oil supply disruptions, have introduced renewed upside risk. We are actively monitoring these developments for potential impacts on inflation trends moving forward. Additionally, emerging trade policy developments—including potential new or increased tariffs—may drive input costs higher and contribute to renewed inflation, potentially affecting construction costs, consumer behavior, and demand for new homes. Our operations can be adversely impacted by inflation, primarily from higher land, financing, labor, material and construction costs. In addition, inflation can lead to higher and more volatile mortgage rates, which can significantly affect the affordability of mortgage financing to homebuyers, as well as the confidence of our consumer base. While we attempt to pass on cost increases to customers through increased prices, when weak housing market conditions exist, we are often unable to offset cost increases with higher selling prices.
Seasonality
We have experienced seasonal variations in our quarterly operating results and capital requirements. We typically take orders for more homes in the first half of the fiscal year than in the second half, which creates additional working capital requirements in the second and third quarters to build our inventories to satisfy the deliveries in the second half of the year. We expect this seasonal pattern to continue over the long-term, although it may be affected by volatility in the homebuilding industry. In addition to the overall volume of orders and deliveries, our operating results in a given quarter are significantly affected by the number and characteristics of our active selling communities; timing of new community openings; the timing of land and lot sales; and the mix of product types, geographic locations and average sales prices of the homes delivered during the quarter. Therefore, our operating results in any given quarter will fluctuate compared to prior periods based on these factors.
Critical Accounting Estimates
The preparation of our consolidated financial statements requires the use of judgment in the application of accounting policies and estimates of uncertain matters. There have been no significant changes to our critical accounting policies and estimates during the three months ended March 31, 2026 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended December 31, 2025.
Recently Issued Accounting Standards
See Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies, to the accompanying condensed notes to unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks related to fluctuations in interest rates on our outstanding debt. We did not utilize swaps, forward or option contracts on interest rates or commodities, or other types of derivative financial instruments as of or during the three months ended March 31, 2026. We did not enter into during the three months ended March 31, 2026, and currently do not hold, derivatives for trading or speculative purposes.
Item 4. Controls and Procedures
We have established disclosure controls and procedures to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and accumulated and communicated to management, including the Chief Executive Officer (the “Principal Executive Officer”) and Chief Financial Officer (the “Principal Financial Officer”), as appropriate, to
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allow timely decisions regarding required disclosure. Under the supervision and with the participation of senior management, including our Principal Executive Officer and Principal Financial Officer, we evaluated our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2026.
Our management, including our Principal Executive Officer and Principal Financial Officer, has evaluated our internal control over financial reporting to determine whether any change occurred during the three months ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the three months ended March 31, 2026.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The information required with respect to this item can be found under Note 13, Commitments and Contingencies—Legal Matters, to the accompanying condensed notes to unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q and is incorporated by reference into this Item 1.
Item 1A. Risk Factors
There have been no material changes to the risk factors in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. If any of the risks discussed in our Annual Report on Form 10-K, as supplemented and updated, occur, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected, in which case the trading price of our common stock could decline significantly and you could lose all or a part of your investment. Some statements in this Quarterly Report on Form 10-Q constitute forward-looking statements. Please refer to Part I, Item 2 of this Quarterly Report on Form 10-Q entitled “Cautionary Note Concerning Forward-Looking Statements.”
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
None.
Item 5. Other Information
(c) During the quarter ended March 31, 2026, no director or officer subject to Section 16 of the Exchange Act adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).
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Item 6. Exhibits
| Exhibit Number | Exhibit Description | |||||||
| 2.1 | ||||||||
| 3.1 | ||||||||
| 3.2 | ||||||||
| 3.3 | ||||||||
| 3.4 | ||||||||
| 10.1 | ||||||||
| 22.1 | ||||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32.1 | ||||||||
| 32.2 | ||||||||
| 101 | The following materials from Tri Pointe Homes, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statement of Cash Flows, and (iv) Condensed Notes to Consolidated Financial Statement. | |||||||
| 104 | Cover page from Tri Pointe Homes, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline XBRL (and contained in Exhibit 101). | |||||||
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SIGNATURES
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, thereunto duly authorized.
| Tri Pointe Homes, Inc. | ||||||||
| Date: April 29, 2026 | By: | /s/ Douglas F. Bauer | ||||||
| Douglas F. Bauer | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
| Date: April 29, 2026 | By: | /s/ Glenn J. Keeler | ||||||
| Glenn J. Keeler | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
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