Century Communities, Inc. (CCS)

ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

As used in this Quarterly Report on Form 10-Q (which we refer to as this “Form 10-Q”), references to “we,” “us,” “our,” “Century” or the “Company” refer to Century Communities, Inc., a Delaware corporation, and, unless the context otherwise requires, its subsidiaries and affiliates.

The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand our Company, business, operations and present business environment and is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We use certain non-GAAP financial measures that we believe are important for purposes of comparison to prior periods. This information is also used by our management to measure the profitability of our ongoing operations and analyze our business performance and trends.

Cautionary Note Regarding Forward-Looking Statements

Some of the statements included in this Form 10-Q constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, forecasts, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual results could differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential,” “outlook,” the negative of such terms and other comparable terminology and the use of future dates. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors.

The forward-looking statements included in this Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking and subject to risks and uncertainties including among others:

the cyclical nature of the homebuilding industry, which is particularly susceptible to economic changes, either nationally or in the regional and local markets in which we operate, including continued elevated and any future increases in interest rates and the resulting impact on the accessibility and cost of mortgage loans to homebuyers; persistent inflation; decreased employment levels and job insecurity concerns due in part to the rapid adoption of artificial intelligence; cautious consumer sentiment; affordability concerns; and increased recessionary conditions;

unstable economic and political conditions as well as geopolitical conflicts, including in the Middle East, which have adversely affected and could continue to adversely affect our supply chain by causing shortages or increases in costs for materials necessary to construct homes and/or increases to the price of gasoline and other fuels, and cause higher interest rates, inflation, reduced consumer confidence, general economic uncertainty, and/or other adverse effects;

other shortages of or increased prices for labor, land or raw materials used in housing construction and resource shortages, including as a result of, among other factors, supply chain disruptions, tariffs, and immigration laws or the enforcement thereof

the availability of qualified personnel and contractors and our ability to obtain additional or retain existing key personnel and contractor relationships and successfully transition key executive positions in the future;

the availability and price of land to acquire, and our ability to acquire such land on favorable terms or at all or dispose of it when appropriate or on favorable terms or at all;

a downturn in the homebuilding industry, including a reduction in demand for our homes, increased cancellation rates, or a decline in real estate values or market conditions resulting in an adverse impact on our business, operating results and financial condition, which may include a continued elevated use of sales incentives adversely affecting our margins and possible future impairment or restructuring charges;

changes in assumptions used to make industry forecasts, population growth or decline rates, or trends affecting housing availability, demand or prices;

the availability or cost of mortgage financing and the substantial increase in the use of adjustable-rate mortgages which involve additional risk since rates fluctuate based on current interest rates potentially leading to increased cancellation rates and foreclosure rates;

delays in land development, home construction or the completion of projects, or reduced consumer demand for housing, resulting from significant weather conditions or natural or manmade disasters in the geographic areas where we operate, regulatory or tax changes, or other events outside our control;

the impact of construction defect, product liability, and/or home warranty claims, including the adequacy of accruals and the applicability and sufficiency of our insurance coverage;

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the degree and nature of our competition, including the supply and pricing of new and existing homes and other housing alternatives, and recent consolidation within the homebuilding industry, and the effect on our business and operating results;

changes in, or the failure or inability to comply with, governmental laws and regulations and the evolving nature of such laws and regulations;

the timing of receipt of municipal, utility and other regulatory approvals and the opening of projects and construction and completion of our homes;

the impact and cost of compliance with evolving environmental, health and safety, and other laws and regulations and third-party challenges to required permits and other approvals and potential legal liability in connection therewith;

the ability of our homebuyers to obtain or afford homeowners or flood insurance policies, and/or typical or lender-required policies for other hazards or events, for their homes, which may depend on the ability and willingness of insurers or government-funded or -sponsored programs to offer coverage at an affordable price or at all;

our ability to continue to fund and succeed in our mortgage lending business and the additional risks involved in that business;

risks associated with and the success of our multi-family rental business;

our future business operations, operating results and financial condition; future impairment and restructuring charges; and changes in our business, investment and capital allocation strategy;

our leverage, debt service obligations, and exposure to changes in interest rates and our ability to obtain additional or refinance our existing debt when needed or on favorable terms;

volatility and uncertainty in the credit markets and broader financial markets and the impact on such markets and our ability to access them, including as a result of, among other factors, geopolitical conditions, U.S. government shutdowns, and in the event of a threatened or actual sovereign default;

availability, terms and deployment of our capital and possible challenges to our capital allocation;

the effect of and risks associated with any future acquisitions;

income tax expense variability due to, among other factors, the expiration of or changes in the availability and amount of federal home tax credits, and volatility associated with stock-based compensation;

our ability to continue to pay dividends and make stock repurchases in the future at current levels or at all;

taxation and tax policy changes, tax rate changes, new tax laws, or new or revised tax law interpretations or guidance;

the effect of recent federal housing legislation; and

the effect of a public health issue, such as a major epidemic or pandemic, on the economy and our business.

Forward-looking statements are based on our beliefs, assumptions and expectations of future events, taking into account all information currently available to us. Forward-looking statements are not guarantees of future events or of our performance. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these events and factors are described above and in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and other risks and uncertainties detailed in this report, including “Part II, Item 1A. Risk Factors,” and our other reports and filings with the SEC. If a change occurs, our business, financial condition, liquidity, cash flows and results of operations may vary materially from those expressed in or implied by our forward-looking statements. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Therefore, you should not rely on these forward-looking statements as of any date subsequent to the date of this Form 10-Q.

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Business Overview

Century is engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 16 states. In many of our projects, in addition to building homes, we entitle and develop the underlying land. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand has an emphasis on serving the affordable homebuilding market but offers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the limited ability to personalize their homes through certain option and upgrade selections. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios, centralized locations, and the internet, and generally provides no option or upgrade selections.

Our homebuilding operations are organized into the following five reportable segments: West, Mountain, Texas, Southeast, and Century Complete. Our indirect wholly-owned subsidiaries, Inspire Home Loans Inc., Parkway Title, LLC, IHL Home Insurance Agency, LLC, and IHL Escrow Inc., which provide mortgage, title, insurance brokerage and escrow services, respectively, primarily to our homebuyers, have been identified as our Financial Services segment. Additionally, our Century Living segment is engaged in the development, construction, management, and sales of multi-family rental properties, currently all located in Colorado.

While we offer homes that appeal to a broad range of entry-level, move-up, and lifestyle homebuyers, our offerings are heavily weighted towards providing affordable housing options in each of our homebuyer segments. Additionally, we prefer building move-in-ready homes over built-to-order homes, which we believe allows

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ITEM 7.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand our Company, business, operations and current business environment and is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-K. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” in Part I, Item 1A of this Form 10-K and elsewhere in this Form 10-K. We use certain non-GAAP financial measures that we believe are important for purposes of comparison to prior periods. This information is also used by our management to measure the profitability of our ongoing operations and analyze our business performance and trends. Some of the numbers included herein have been rounded for the convenience of presentation.

This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Business Overview

We are engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 16 states. In many of our projects, in addition to building homes, we entitle and develop the underlying land. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand has an emphasis on serving the affordable homebuilding market but offers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the limited ability to personalize their homes through certain option and upgrade selections. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios, centralized locations and the internet, and generally provides no option or upgrade selections.

Our homebuilding operations are organized into the following five reportable segments: West, Mountain, Texas, Southeast, and Century Complete. Our indirect wholly-owned subsidiaries, Inspire Home Loans Inc., Parkway Title, LLC, IHL Home Insurance Agency, LLC, and IHL Escrow Inc., which provide mortgage, title, insurance brokerage, and escrow services, respectively, primarily to our homebuyers, have been identified as our Financial Services segment. Additionally, our Century Living segment is engaged in the development, construction, management, and sales of multi-family rental properties, currently all located in Colorado.

While we offer homes that appeal to a broad range of entry-level, move-up, and lifestyle homebuyers, our offerings are heavily weighted towards providing affordable housing options in each of our homebuyer segments. Additionally, we prefer building move-in-ready homes over built-to-order homes, which we believe allows for a faster construction process, advantageous pricing with subcontractors, and shortened time period from home sale to home delivery, thus allowing our customers greater certainty on their financing and allowing us to more appropriately price the homes and deploy our capital. Of the 10,387 new homes delivered during the year ended December 31, 2025, approximately 94% of our deliveries were made to entry-level homebuyers that were below the Federal Housing Administration-insured mortgage limits and approximately 99% of homes delivered were built as move-in ready homes.

Market conditions in the homebuilding industry have continued to be impacted by elevated mortgage rates, macro-economic and geopolitical uncertainty, and broader concerns about affordability by homebuyers. Amidst these market conditions, we experienced a slowing in demand during the year ended December 31, 2025, as net new home contracts (new home contracts net of cancellations) for the year ended 2025 decreased 3.3%, respectively, as compared to the prior year. Still, there remains an underlying need for affordable new homes, supported by solid demographic trends, and we have continued to provide, when necessary, incentive offerings across our communities, including discounts on base home prices, lot premiums, options and upgrades, and financing incentives, including interest rate buydowns and closing cost concessions. In the latter half of 2025, we have also experienced increased acceptance to adjustable-rate mortgages among our homebuyers. During the year ended December 31, 2025, cycle times were in the approximately three- to four-month timeframe.

We anticipate the homebuilding markets in each of our operating segments will continue to be tied to both the macro-economic environment and the local economy, and we expect our operating strategy will continue to adapt to market changes, though we cannot provide any assurance that our strategies will remain consistent or continue to be successful. We believe future demand for our homes remains uncertain as future economic, market and geopolitical conditions remain uncertain, in particular with respect to inflation; the impact of potential future increases or decreases to the U.S. Federal funds interest rate by the U.S. Federal Reserve; interest rates; availability and cost of mortgage loans to homebuyers; financial, credit and mortgage markets; the extent to which and how long

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government monetary directives and actions will impact the U.S. economy; the effect of significant new tariffs and/or duties; consumer confidence; wage growth; household formations; levels of new and existing homes for sale; prevailing home and rental prices; availability and cost of land, labor and construction materials; demographic trends; housing demand; the possibility of an economic recession or another U.S. governmental shutdown; and other factors, including those described elsewhere in this Form 10-K. Specifically, changes in mortgage interest rates impact the costs of owning a home and affect the purchasing power of our customers and could impact homebuyer confidence. Changes in demand for our homes or cancellations due to mortgage interest rates, consumer confidence or otherwise affect our operating results in future periods, including our net sales, home deliveries, gross margin, origination volume of and revenues from our Financial Services segment, and net income.

In October 2025, certain new tariffs took effect related to various imported products used in the homebuilding industry, including cabinets, lumber, and certain other wood products. As of the date of the filing of this report, we have not experienced significant cost increases or supply chain disruptions for raw materials; however, we could experience increases in the costs of materials utilized for the construction of our homes and/or supply chain disruptions that, in turn, would impact our business and our consolidated financial statements in future reporting periods. Additionally, during the latter half of 2025, the U.S. Federal Reserve reduced the U.S. Federal funds interest rate, and we cannot provide any assurance as to the impact of any future potential changes to the U.S. Federal funds interest rate on mortgage rates or our current or future business. The potential extent and effect of these and other factors on our business is highly uncertain and outside our control, and our past performance may not be indicative of our future results.

We believe we are well-positioned to benefit from the favorable demographics that support the need for new affordable housing. We believe our operations are prepared to withstand volatility in future market conditions as a result of our product offerings, which both span the home buying segment and focus on affordable price points, our efficiencies in direct construction costs and cycle times, and our current and future inventories of attractive land positions.

Results of Operations – Years Ended December 31, 2025 and 2024

During the year ended December 31, 2025, we generated $194.4 million in income before income tax expense, as compared to $440.1 million in the prior year. During the year ended December 31, 2025, we generated net income of $147.6 million, or $4.86 per diluted share, as compared to $333.8 million, or $10.40 per diluted share in the prior year.

‎During the year ended December 31, 2025, we generated total revenues of $4.1 billion, as compared to $4.4 billion in the prior year, and we delivered 10,792 residential units, comprised of 10,387 new homes, 105 previously leased rental homes, and 300 multi-family units delivered through our Century Living business. Our 10,387 new home deliveries, with an average sales price of $378.0 thousand, decreased by 5.6% as compared to the prior year, primarily due to slower absorption rates. The average sales price per new home decreased 3.3% as compared to the prior year, primarily due to higher incentives during 2025. During the year ended December 31, 2025, net new contracts decreased 3.3% to 10,326 as compared to the prior year.

We ended 2025 with $109.4 million of cash and cash equivalents and $48.6 million of cash held in escrow. We had $51.5 million outstanding under our revolving line of credit, with a homebuilding debt to capital ratio of 29.1% and a net homebuilding debt to net capital ratio of 25.9%. During the year ended December 31, 2025, we paid quarterly cash dividends to our stockholders of $0.29 per share, and aggregate cash dividends of $1.16 per share, a 12% increase from the quarterly dividends paid during the year ended December 31, 2024 of $0.26 per share, or $1.04 per share in the aggregate. During the year ended December 31, 2025, we repurchased an aggregate of 2.3 million shares for a total purchase price of approximately $143.6 million and a weighted average price of $63.32 per share. We have continued to strategically manage our lot pipeline, while selectively reducing our lot pipeline by terminating certain contracts in our markets that no longer met our investment criteria, in light of current market conditions, in order to maintain a balance between the number of owned lots as compared to lots we control through option and other contracts, resulting in 60,916 lots owned and controlled at December 31, 2025.

For the year ended December 31 2025, our Financial Services segment generated income before income tax expense of $19.2 million representing a decrease of 28.2% from the prior year. During the year ended December 31, 2025, while the capture rate of Century homebuyers increased 2%, the number of mortgages originated decreased 5.8% and the number of loans sold to third parties decreased 8.3% as compared to the prior year.

Our Century Living operations are engaged in the development, construction, management, and sales of multi-family rental properties. During the year ended December 31, 2025, we generated $97.2 million in multi-family sales revenue and $4.9 million in income before income tax expense, which included the sale of one multi-family rental property comprised of 300 units.

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The following table summarizes our results of operations for the years ended December 31, 2025 and 2024:

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