MT
MTH
MTH Meritage Homes (MTH) Q1 FY26 earnings call
Meritage Homes navigated a cautious Q1 FY26, marked by market choppiness and increased incentives, yet achieved record community count and strong capital returns. The company's strategy of spec building, quick closings, and disciplined capital allocation positions it for future market share gains as demand normalizes, despite current affordability pressures and fragile consumer confidence.
You’re reading a preview. Opening the full call uses 1 concall credit.
Sign in to use your monthly call allowance.
MTH operating KPIs by quarter
| KPI | This call Mar 2026 Q1 FY26 | Jun 2026 Q2 FY26 | Change vs prior quarter |
|---|---|---|---|
| Backlog conversion rate | 254%Looking to our operations, our 60-day closing guarantee, available supply of new completed spec inventory, and year-over-year improved cycle times contributed to another quarter with exceptional backlog conversion rate of 254%.Source: earnings call transcript | 200%Operationally, we continue to focus on what's within our control, delivering a 200% backlog conversion rate, further improving cycle times and working down our finished inventory levels.Source: earnings call transcript | -54 pt |
| Homes delivered | 2,967We delivered 2,967 homes and home closing revenue of $1.1 billion this quarter.Source: earnings call transcript | 3,725These efforts generated 3,725 home closings and $1.4 billion of home closing revenue in the quarter.Source: earnings call transcript | +25.5% |
| Stores | 345We started the year with 336 active communities which we then grew to 345 by March 31, another company record.Source: earnings call transcript | 340Our active community count of 340 as of June 30, 2026, was at 9% year-over-year and 1% lower than the 345 in Q1 due to timing with a few early closeouts and some delayed openings since July.Source: earnings call transcript | -1.4% |
| New stores opened | 40During the quarter, we brought on 40 new communities throughout all of our regions.Source: earnings call transcript | 27We brought 27 new communities online across our regions during the quarter and 67 year-to-date.Source: earnings call transcript | -32.5% |
| Cancellation rate | 11%The cancellation rate of 11% remained slightly below the historical average of mid- to high teens as we benefit from a quick sale to close process.Source: earnings call transcript | 13%Cancellation rate of 13% was a little higher than the 11% in Q1, but still remain below typical industry averages as we benefit from a quick sale to close process.Source: earnings call transcript | +2 pt |
| Average absorption pace | 3.6Our first quarter 2026 average absorption pace was 3.6 compared to 4.4 in the prior year.Source: earnings call transcript | 3.5Demand remained relatively stable between Q1 and Q2 this year with no meaningful sequential deterioration as average absorption pace of 3.5 net sales per month this quarter was in line with the 3.6 in the first quarter.Source: earnings call transcript | -2.8% |
| Home starts | ~2,500In Q1, we moderated start to approximately 2,500 homes.Source: earnings call transcript | ~3,900Q2 starts totaled approximately 3,900 homes, down 4% year-over-year, yet up around 1,400 units sequentially from Q1, ending the quarter with sufficient supply for Q3 and replacing older inventory with newer production with improved cost structures.Source: earnings call transcript | — |
| Ending backlog | ~1,900As a result, our ending backlog declined 7% year-over-year from approximately $2,000 as of March 31, 2025, to approximately 1,900 homes as of March 31, 2026.Source: earnings call transcript | ~1,720Our ending backlog was approximately 1,720 as of June 30, 2026, compared to approximately 1,750 homes as of June 30, 2025.Source: earnings call transcript | — |
| Spec and backlog units | ~6,600We had around 6,600 spec and backlog units at March 31, 2026, 25% less than the approximate 8,800 units we had at March 31, 2025.Source: earnings call transcript | ~6,800As for the combined total of specs and backlog, we had around 6,800 units at June 30, 2026, 22% less than the approximate 8,700 specs in backlog we had at June 30, 2025, reflecting our intentional efforts to lower the inventory in light of current market conditions.Source: earnings call transcript | — |
| Spec homes | ~4,700We ended the quarter with approximately 4,700 spec homes, down 30% from approximately 6,800 specs in the prior year and down 90% sequentially from Q4.Source: earnings call transcript | ~5,100We ended the quarter with approximately 5,100 spec homes, down 27% from approximately 6,900 specs in the prior year and up 7% sequentially from Q1.Source: earnings call transcript | — |
| Specs per store | 14The 14 specs per store this quarter was a huge level -- lowest level since early 2022, but appropriately aligned with our current absorption targets.Source: earnings call transcript | 15The 15 specs per store this quarter translated to about 4 months supply, intentionally near the lower end of our target 4- to 6-month supply due to today's demand environment and our improved cycle times.Source: earnings call transcript | +7.1% |
| Completed specs as a percent of total specs | 46%Although our completed specs units decreased 17% year-over-year, our completed specs as a percent of total specs were 46% at March 31, 2026, down from 50% in the fourth quarter of 2025.Source: earnings call transcript | 30%We reduced our completed specs to 1,500 units in Q2, which was 42% lower than prior year and 30% of our total specs, our lowest percentage in 2 years and right around our target of 1/3.Source: earnings call transcript | -16 pt |
| Net new lots under control | <400In the first quarter of 2026, we secured almost 400 net new lots under control, which included the impact of about 850 terminated lots.Source: earnings call transcript | <1,700In the second quarter of 2026, we secured nearly 1,700 net new lots under control, which is inclusive of the impact of about 300 terminated lots.Source: earnings call transcript | — |
| Total lots owned or controlled | ~75.5KAs of March 31, 2026, we owned or controlled a total of about 75,500 lots, equating to 5.2 year supply of the last 12 months closings.Source: earnings call transcript | ~73.2KAs of June 30, 2026, we owned or controlled a total of about 73,200 lots equating to 5.2 years supply of the last 12 months closings, slightly above our target of 4- to 5-year supply, but reflective of the upcoming community count growth we expect over the next 18 months.Source: earnings call transcript | — |
| Lots undergoing diligence | ~14.6KWe also had approximately 14,600 lots, though we're still undergoing diligence at the end of the quarter, which is another potential 1-year supply in the pipeline that we can choose to control.Source: earnings call transcript | ~15.3KWe also had approximately 15,300 lots that were still undergoing diligence at the end of the quarter, which is another potential 1-year supply in the pipeline that we can choose to control.Source: earnings call transcript | — |
Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.
Inve summary of the company's earnings call; see how call summaries are prepared. Not investment advice.