Earnings release
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NEWS RELEASE KB HOME REPORTS 2026 THIRD QUARTER RESULTS 2026-09-22 Revenues of $1.30 Billion; Diluted Earnings Per Share of $1.05 Repurchased $50.0 Million of Common Stock LOS ANGELES, Sept. 22, 2026 /PRNewswire/ -- KB Home (NYSE: KBH) today reported results for its third quarter ended August 31, 2026. "We are operating in a housing market that continues to be challenging, with conditions weakening since our June earnings report. Higher mortgage interest rates have further pressured a ordability and, together with geopolitical uncertainty and broader economic headwinds, have caused many prospective buyers to be more cautious on purchasing a home," said Je rey Mezger, Executive Chairman. "Against this backdrop, we produced third quarter nancial results that re ected solid sequential improvement." "We also made signi cant progress and have now achieved our goal of returning to a predominantly Built to Order business, with BTO homes representing nearly three-quarters of our deliveries in the third quarter, which contributed to our sequentially higher housing gross pro t margin," said Robert McGibney, President and Chief Executive O cer. "In addition, we generated year-over-year community count growth. This re ects a signi cant number of new community openings over the past year that will help support our sales e orts going forward, along with a continued focus on balancing price and pace for the best possible return." "Looking ahead to the remainder of this scal year, we continue to expect our full-year deliveries, housing revenues and margins to be within the ranges we last provided. We remain committed to enhancing long-term shareholder value through both our performance and our balanced approach to 1
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capital allocation, with the nancial capacity to continue investing in our future growth and rewarding shareholders through our ongoing repurchase program and long-standing quarterly dividend," concluded Mezger. Three Months Ended August 31, 2026 (comparisons on a year-over-year basis) Revenues were down 20% to $1.30 billion. Homes delivered decreased 19% to 2,732. Average selling price was $473,000, compared to $475,700. Homebuilding operating income was $67.1 million, compared to $131.2 million. The homebuilding operating income margin was 5.2%, compared to 8.1%, due to a lower housing gross pro t margin and a higher selling, general and administrative expense ratio. Excluding inventory-related charges of $3.0 million for the current quarter and $11.3 million for the year- earlier quarter, the homebuilding operating income margin was 5.4%, compared to 8.8%. The housing gross pro t margin was 16.5%, compared to 18.2%. Excluding the above- mentioned inventory-related charges, the housing gross pro t margin was 16.8%, compared to 18.9%, primarily re ecting continued pricing pressure, higher relative land costs and reduced operating leverage. Selling, general and administrative expenses were 11.3% of housing revenues, compared to 10.0%, mainly due to a decrease in operating leverage, partly o set by lower costs associated with certain performance-based employee compensation plans and personnel reductions. Financial services pretax income totaled $7.4 million, compared to $8.7 million, primarily re ecting lower results from title and insurance operations. Pretax income totaled $81.2 million, including a $3.5 million gain on the sale of an equity investment in a privately held technology company, compared to $143.2 million. Net income was $65.3 million, compared to $109.8 million, with an e ective tax rate of 19.6%, compared to 23.3%. The lower e ective tax rate was mainly due to the impact of excess tax bene ts from stock-based compensation in the current period. Diluted earnings per share was $1.05, compared to $1.61, re ecting current quarter net income, partly o set by the favorable impact of the Company's common stock repurchases. Nine Months Ended August 31, 2026 (comparisons on a year-over-year basis) Revenues totaled $3.49 billion, compared to $4.54 billion. Homes delivered of 7,497 were down 19%. Average selling price decreased 5% to $462,900. Net income was $126.1 million, compared to $327.3 million. Diluted earnings per share was $2.00, compared to $4.60. Net Orders and Backlog (comparisons on a year-over-year basis) Net orders of 2,604 for the quarter decreased 12%. Ending backlog increased for the rst time in four years, with the number of homes in backlog up 2% to 4,398 and backlog value up 3% to $2.05 billion. Monthly net orders per community were 3.1, compared to 3.8. The cancellation rate as a percentage of gross orders was 18%, compared to 17%. The average community count for the quarter grew 8% to 279, and the ending community count was up 5% to 277. Balance Sheet as of August 31, 2026 (comparisons to November 30, 2025, except as noted) 2
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The Company had total liquidity of $942.4 million, including $159.0 million of cash and cash equivalents and $783.4 million of available capacity under its unsecured revolving credit facility ("Credit Facility"), with $415.0 million of cash borrowings outstanding. Inventories increased 5% to $5.98 billion. Investments in land and land development for the quarter increased 40% to $722.3 million, compared to $514.1 million for the prior-year quarter. For the nine months ended August 31, 2026, total land-related investments decreased 8% to $1.79 billion, compared to $1.95 billion for the year-earlier period. The Company's lots owned or under contract decreased 5% to 61,581, of which approximately 60% were owned and 40% were under contract. Notes payable were $2.11 billion, compared to $1.69 billion, re ecting cash borrowings outstanding under the Credit Facility. The debt to capital ratio was 35.7%, compared to 30.3%. As of August 31, 2025, the debt to capital ratio was 33.2%. Stockholders' equity totaled $3.80 billion, compared to $3.90 billion, primarily re ecting common stock repurchases and cash dividends for the nine months ended August 31, 2026, partly o set by net income for the same period. In the 2026 third quarter, the Company repurchased .9 million shares of its outstanding common stock at a cost of $50.0 million, bringing its total repurchases for the nine months ended August 31, 2026 to 3.1 million shares at a total cost of $175.0 million. As of August 31, 2026, the Company had $725.0 million remaining under its current common stock repurchase authorization. Based on the Company's approximately 60.8 million outstanding shares as of August 31, 2026, book value per share of $62.56 increased 4% year over year. Guidance The Company is providing the following guidance for its 2026 fourth quarter and full year as to certain metrics: 2026 Fourth Quarter — Deliveries in the range of 3,000 to 3,500 homes. Housing revenues in the range of $1.45 billion to $1.65 billion. Housing gross pro t margin in the range of 16.0% to 16.6%, assuming no inventory-related charges. Selling, general and administrative expenses as a percentage of revenues in the range of 10.3% to 10.9%. E ective tax rate of approximately 26%. Ending community count in the range of 270 to 275. 2026 Full Year — Deliveries in the range of 10,500 to 11,000 homes. Housing revenues in the range of $4.90 billion to $5.10 billion. Housing gross pro t margin in the range of 16.0% to 16.2%, assuming no inventory-related charges. Selling, general and administrative expenses as a percentage of revenues in the range of 11.5% to 11.7%. E ective tax rate of approximately 23%. Conference Call The conference call to discuss the Company's 2026 third quarter earnings will be broadcast live TODAY 3
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at 2:00 p.m. Paci c Time, 5:00 p.m. Eastern Time. To listen, please go to the Investor Relations section of the Company's website at kbhome.com. About KB Home KB Home is one of the largest and most trusted homebuilders in the United States. We operate in 50 markets, have built over 700,000 quality homes in our nearly 70-year history, and are honored to be one of the top customer-ranked national homebuilders based on third-party buyer surveys. What sets KB Home apart is building strong, personal relationships with every customer and creating an exceptional homebuying experience that o ers our homebuyers the ability to personalize their home based on what they value at a price they can a ord. As the industry leader in sustainability, KB Home has achieved one of the highest residential energy-e ciency ratings and delivered more ENERGY STAR® certi ed homes than any other builder, helping to lower the total cost of homeownership. For more information, visit kbhome.com. Forward-Looking and Cautionary Statements Certain matters discussed in this press release, including any statements that are predictive in nature or concern future market and economic conditions, business and prospects, our future nancial and operational performance, or our future actions and their expected results are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations and projections about future events and are not guarantees of future performance. We do not have a speci c policy or intent of updating or revising forward-looking statements. If we update or revise any such statement(s), no assumption should be made that we will further update or revise that statement(s) or update or revise any other such statement(s). In addition, such forward-looking statements may be based in whole or in part on general observations or opinions of our management, limited or anecdotal evidence and/or business or industry experience without in-depth or any particular empirical investigation, inquiry or analysis and are not intended, and do not express, factual assertions about past events. Actual events and results may di er materially from those expressed or forecasted in forward-looking statements due to a number of factors. The most important risk factors that could cause our actual performance and future events and actions to di er materially from such forward-looking statements include, but are not limited to the following: general economic, employment and business conditions (including, without limitation, consumer and producer price in ation; interest rates and terms available from outside nancing sources for our business and for consumer mortgage loans; and consumer con dence, either generally or speci cally with respect to purchasing homes); material and trade costs and availability; disruptions in world and regional trade ows and supply chains due to the military con icts in the Middle East and in Ukraine and/or U.S. trade policies, including the imposition of tari s and duties on homebuilding materials and products, and related trade disputes with and retaliatory measures taken by other countries; population, household formations and demographic trends; government actions, policies, programs and regulations, including tax-related, directed at or a ecting, directly or indirectly, the housing market, the homebuilding industry, or our business; our ability to successfully implement our business strategies, achieve any associated nancial and operational targets and objectives, and manage the related challenges or risks, including those identi ed or discussed in this press release, during today's webcast conference call or in any of our other public lings, presentations or disclosures; homebuyer interest in and ability to a ord to purchase our homes (including their ability to obtain typical or lender-required insurance or other policies to cover hazards to their homes); our debt level, including our ratio of debt to capital, and our ability to adjust our debt level and maturity schedule; our compliance with the terms of our unsecured revolving credit facility and our senior unsecured term loan; the execution of any securities repurchases pursuant to our board of directors' authorization; impairment, land option contract abandonment or other inventory-related charges, including any stemming from decreases in the value of our land assets; volatility in the market 4
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price of our common stock; the costs we incur in connection with relocating our corporate headquarters o ce from Los Angeles, California to Tempe, Arizona in 2027; the performance of mortgage lenders for our homebuyers; the performance of KBHS Home Loans, LLC ("KBHS"); information technology failures and data security breaches; and other events outside of our control. Please see our lings with the Securities and Exchange Commission for a further discussion of these and other risks and uncertainties applicable to our business, including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our most recently led periodic reports on Form 10-K and Form 10-Q. (Tables Follow) KB HOMECONSOLIDATED STATEMENTS OF OPERATIONSFor the Three Months and Nine Months Ended August 31, 2026 and 2025(In Thousands, Except Per Share Amounts – Unaudited) Three Months Ended August 31, Nine Months Ended August 31, 2026 2025 2026 2025 Total revenues $ 1,297,101 $ 1,620,474 $ 3,486,547 $ 4,541,836 Homebuilding: Revenues $ 1,292,350 $ 1,614,462 $ 3,471,516 $ 4,526,219 Costs and expenses (1,225,216) (1,483,299) (3,343,245) (4,136,254) Operating income 67,134 131,163 128,271 389,965 Interest income and other 4,518 1,870 6,963 5,628Equity in income of unconsolidated joint ventures 2,147 1,509 3,938 5,002 Homebuilding pretax income 73,799 134,542 139,172 400,595 Financial services: Revenues 4,751 6,012 15,031 15,617 Expenses (1,464) (1,580) (4,507) (4,689)Equity in income of unconsolidated joint venture 4,094 4,254 9,057 13,445 Financial services pretax income 7,381 8,686 19,581 24,373 Total pretax income 81,180 143,228 158,753 424,968 Income tax expense (15,900) (33,400) (32,700) (97,700) Net income $ 65,280 $ 109,828 $ 126,053 $ 327,268 Earnings per share: Basic $ 1.07 $ 1.64 $ 2.03 $ 4.69 Diluted $ 1.05 $ 1.61 $ 2.00 $ 4.60 Weighted average shares outstanding: Basic 60,833 66,368 61,753 69,279 Diluted 61,759 67,737 62,732 70,643 KB HOMECONSOLIDATED BALANCE SHEETS(In Thousands – Unaudited) August 31, 2026 November 30, 2025 Assets Homebuilding: Cash and cash equivalents $ 159,018 $ 228,614 Receivables 397,791 350,636 Inventories 5,981,182 5,670,802 Investments in unconsolidated joint ventures 74,763 72,436 5
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Property and equipment, net 102,880 101,457 Deferred tax assets, net 88,665 88,665 Other assets 106,431 107,833 6,910,730 6,620,443 Financial services 58,422 59,809 Total assets $ 6,969,152 $ 6,680,252 Liabilities and stockholders' equity Homebuilding: Accounts payable $ 319,520 $ 351,261 Accrued expenses and other liabilities 736,954 731,946 Notes payable 2,109,145 1,692,977 3,165,619 2,776,184 Financial services 2,024 3,210 Stockholders' equity 3,801,509 3,900,858 Total liabilities and stockholders' equity $ 6,969,152 $ 6,680,252 KB HOMESUPPLEMENTAL INFORMATIONFor the Three Months and Nine Months Ended August 31, 2026 and 2025(In Thousands, Except Average Selling Price – Unaudited) Three Months Ended August 31, Nine Months Ended August 31, 2026 2025 2026 2025 Homebuilding revenues: Housing $ 1,292,350 $ 1,613,975 $ 3,470,076 $ 4,525,732 Land — 487 1,440 487 Total $ 1,292,350 $ 1,614,462 $ 3,471,516 $ 4,526,219 Homebuilding costs and expenses: Construction and land costs Housing $ 1,078,590 $ 1,320,611 $ 2,923,732 $ 3,658,080 Land — 536 1,296 536 Subtotal 1,078,590 1,321,147 2,925,028 3,658,616 Selling, general and administrative expenses 146,626 162,152 418,217 477,638 Total $ 1,225,216 $ 1,483,299 $ 3,343,245 $ 4,136,254 Interest expense: Interest incurred $ 31,520 $ 29,658 $ 88,629 $ 84,676 Interest capitalized (31,520) (29,658) (88,629) (84,676) Total $ — $ — $ — $ — Other information: Amortization of previously capitalized interest $ 22,552 $ 27,026 $ 60,084 $ 75,755 Depreciation and amortization 11,646 10,308 34,265 30,126 Average selling price: West Coast $ 641,800 $ 684,000 $ 633,500 $ 690,800 Southwest 441,500 492,700 453,000 476,500 Central 337,500 329,400 337,800 347,000 Southeast 374,100 380,200 367,600 389,700 Total $ 473,000 $ 475,700 $ 462,900 $ 487,500 6
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KB HOMESUPPLEMENTAL INFORMATIONFor the Three Months and Nine Months Ended August 31, 2026 and 2025(Dollars in Thousands – Unaudited) Three Months Ended August 31, Nine Months Ended August 31, 2026 2025 2026 2025 Homes delivered: West Coast 966 972 2,494 2,789 Southwest 503 681 1,256 2,020 Central 609 943 1,880 2,505 Southeast 654 797 1,867 1,969 Total 2,732 3,393 7,497 9,283 Net orders: West Coast 937 870 3,142 2,872 Southwest 448 459 1,485 1,561 Central 587 795 2,050 2,545 Southeast 632 826 2,090 2,204 Total 2,604 2,950 8,767 9,182 Net order value: West Coast $ 596,541 $ 550,753 $ 2,025,545 $ 1,886,073 Southwest 194,690 218,931 644,590 757,074 Central 188,092 255,530 691,528 823,869 Southeast 227,901 289,393 758,269 804,672 Total $ 1,207,224 $ 1,314,607 $ 4,119,932 $ 4,271,688 August 31, 2026 August 31, 2025 Homes Value Homes Value Backlog data: West Coast 1,589 $ 1,019,253 1,294 $ 833,715 Southwest 696 296,130 675 326,959 Central 1,042 351,418 1,173 390,780 Southeast 1,071 386,407 1,191 437,409 Total 4,398 $ 2,053,208 4,333 $ 1,988,863 KB HOME RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In Thousands, Except Percentages – Unaudited) Company management's discussion of the results presented in this press release may include information about the Company's adjusted housing gross pro t margin, which is not calculated in accordance with generally accepted accounting principles ("GAAP"). The Company believes this non- GAAP nancial measure is relevant and useful to investors in understanding its operations, and may be helpful in comparing the Company with other companies in the homebuilding industry to the extent they provide similar information. However, because it is not calculated in accordance with GAAP, this non-GAAP nancial measure may not be completely comparable to other companies in the 7
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homebuilding industry and, thus, should not be considered in isolation or as an alternative to operating performance and/or nancial measures prescribed by GAAP. Rather, this non-GAAP nancial measure should be used to supplement the most directly comparable GAAP nancial measure in order to provide a greater understanding of the factors and trends a ecting the Company's operations. Adjusted Housing Gross Pro t Margin The following table reconciles the Company's housing gross pro t margin calculated in accordance with GAAP to the non-GAAP nancial measure of the Company's adjusted housing gross pro t margin: Three Months Ended August 31, Nine Months Ended August 31, 2026 2025 2026 2025 Housing revenues $ 1,292,350 $ 1,613,975 $ 3,470,076 $ 4,525,732 Housing construction and land costs (1,078,590) (1,320,611) (2,923,732) (3,658,080) Housing gross profits 213,760 293,364 546,344 867,652 Add: Inventory-related charges (a) 2,986 11,338 10,720 18,351 Adjusted housing gross profits $ 216,746 $ 304,702 $ 557,064 $ 886,003 Housing gross profit margin 16.5 % 18.2 % 15.7 % 19.2 % Adjusted housing gross profit margin 16.8 % 18.9 % 16.1 % 19.6 % (a) Represents inventory impairment and land option contract abandonment charges associated with housing operations. Adjusted housing gross pro t margin is a non-GAAP nancial measure, which the Company calculates by dividing housing revenues less housing construction and land costs excluding housing inventory impairment and land option contract abandonment charges (as applicable) recorded during a given period, by housing revenues. The most directly comparable GAAP nancial measure is housing gross pro t margin. The Company believes adjusted housing gross pro t margin is a relevant and useful nancial measure to investors in evaluating the Company's performance as it measures the gross pro ts the Company generated speci cally on the homes delivered during a given period. This non- GAAP nancial measure isolates the impact that housing inventory impairment and land option contract abandonment charges have on housing gross pro t margins, and allows investors to make comparisons with the Company's competitors that adjust housing gross pro t margins in a similar manner. The Company also believes investors will nd adjusted housing gross pro t margin relevant and useful because it represents a pro tability measure that may be compared to a prior period without regard to variability of housing inventory impairment and land option contract abandonment charges. This nancial measure assists management in making strategic decisions regarding community location and product mix, product pricing and construction pace. For Further Information: Jill Peters, Investor Relations Contact (310) 893-7456 or jpeters@kbhome.com Cara Kane, Media Contact (321) 299-6844 or ckane@kbhome.com View original content to download multimedia:https://www.prnewswire.com/news-releases/kb-home- reports-2026-third-quarter-results-302885291.html 8
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SOURCE KB Home 9