Meritage Homes (MTH) Q2 2026 earnings summary

Executive summary

• Q2 2026 saw home closing volume of 3,725, down about 11% year-over-year, with revenue of $1.4 billion, a 14% decrease, driven by lower volume and a 3.8% drop in ASP to $373,000.

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

• Operational focus included reducing aged inventory, improving cycle times to under 110 days, and maintaining a 200% backlog conversion rate.

• 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 growth expected to continue in the second half of 2026.

Financial highlights

• Home closing revenue fell 14% year-over-year to $1.39–$1.4 billion, driven by an 11% lower volume and a 4% decrease in ASP.

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

• SG&A expenses were 10.4% of revenue, nearly flat year-over-year.

• Net earnings for Q2 2026 were $90.6–$91 million, down 38% year-over-year.

• For the first half of 2026, orders were down 7%, closings down 12%, and home closing revenue down 16% to $2.5 billion.

Outlook and guidance

• Full-year 2026 home closings and revenue expected to be around 5% below 2025, 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, supporting delivery targets.

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