Meritage Homes (MTH) investor relations material

Executive summary

• Q2 2026 saw home closing volume of 3,725, down 10.7%-14% year-over-year, with revenue of $1.39-$1.4 billion, reflecting softer demand, affordability pressures, and a 3.8%-4% decrease in ASP.

• Operational focus included inventory management, cycle time reduction, and cost savings, supporting margin preservation and liquidity.

• Strategic shift underway to rebalance portfolio toward a one-third first move-up, two-thirds entry-level mix, with increased land acquisition for move-up buyers.

• Community count increased 9% year-over-year to 340, with expectations for further growth in the second half of 2026.

• Accelerated community closeouts and improved cycle times contributed to a 200% backlog conversion rate, with nearly 60% of closings from intra-quarter sales.

Financial highlights

• Adjusted home closing gross margin was 18.6%, down from 21.4% in Q2 2025; reported margin was 18.3%.

• Adjusted diluted EPS was $1.42, excluding impairments and land deal walkaway charges; reported diluted EPS was $1.37, down 33%-38% year-over-year.

• SG&A as a percentage of revenue was 10.4%, nearly flat year-over-year.

• Net earnings for Q2 2026 were $90.6-$91 million, down from $146.9-$147 million in Q2 2025.

• Book value per share increased 5% year-over-year.

Outlook and guidance

• Full-year 2026 home closings and revenue expected to be around 5% below 2025 results, with potential for further downside if incentives increase.

• Q3 2026 guidance: 3,300–3,600 closings, $1.26–$1.35 billion revenue, ~18% gross margin, EPS $1.10–$1.30.

• Community count expected to grow 5%-10% year-over-year by year-end.

• Long-term gross margin target remains 22.5%-23.5% under normalized conditions.