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    GRBK
    Earnings call· Jun 2026(Q2 FY26)

    Green Brick Partners Q2 FY26 earnings call GRBK

    Jul 30, 2026 Source

    Executive summary

    Green Brick Partners Q2 FY26 — Strong Order Growth and Industry-Leading Margins Despite Affordability Pressures

    Green Brick Partners delivered strong Q2 FY26 results, driven by robust net new order growth and industry-leading gross margins, particularly from its affordable Trophy Signature Homes brand. The company maintained a strong balance sheet and disciplined land strategy amidst persistent affordability pressures and economic uncertainty, positioning itself for future growth and market opportunities.

    Highlights

    5

    • Net new orders increased 19% year-over-year to 1,079 units.

    • Homebuilding gross margins of 29.8%, highest reported among peers.

    • Homebuilding debt to total capital ratio was 11.2% and net homebuilding debt to total capital ratio was 6.1%, among the lowest of peers.

    • Book value grew 16% year-over-year to $44.82.

    • Green Brick Mortgage funded loans up 257% year-over-year and 43% sequentially, with financial services revenue increasing to $12 million from $6.3 million.

    Concerns

    5

    • Net income attributable to Green Brick decreased 9.5% year-over-year to $74 million.

    • Diluted earnings per share decreased 8% year-over-year to $1.70 per share.

    • Home closings revenue declined 11.4% due primarily to a higher mix of deliveries from Trophy Signature Homes.

    • Discounts and incentives as a percentage of home closings revenue increased 180 basis points year-over-year to 8.8%.

    • Backlog revenue decreased 24% year-over-year to $387 million.

    Guidance & targets

    4
    CategoryTargetConfidence
    Land and lot acquisitions
    approximately $400 million
    medium materiality
    High
    Land development outflows (excluding reimbursements)
    approximately $450 million
    medium materiality
    High
    Green Brick Mortgage capture rate
    exceed 70%
    low materiality
    Medium
    Community count
    continue to increase
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Homebuilding
    Home closings revenue declined primarily due to a higher mix of deliveries from Trophy Signature Homes. Gross margin includes a 60 basis point improvement from a warranty reserve reduction.
    Deliveries: 1,047 unitsAverage Sales Price: $450,000
    		$472 million-11.4%—29.8% gross margin
    Financial Services
    Pretax income increased 91% year-over-year. The segment is focused on increasing its capture rate in Texas and expanding to Atlanta by year-end.
    Funded loans: 521 unitsFunded loans growth YoY: 257%Funded loans growth QoQ: 43%Average FICO score: 736Average debt-to-income ratio: 40%Capture rate: 66%
    		$12 million+90.5%—$5.7 million pretax income
    Trophy Signature Homes
    Trophy is the third largest builder by volume in DFW and is a primary driver of net new order growth, particularly for affordable homes targeting first-time buyers. Sales pace in DFW was double the company average.
    Sales pace (DFW): >6 per monthShare of Q2 closings: 55%Share of backlog units: 44% (vs 26% in Q2 2025)Average sales price (new communities): ~$325,000Cycle time (DFW): 84 days (vs 103 days a year ago)
    		———In line with company average gross margin

    Operational metrics

    38
    Net new orders
    1,079+19% YoY
    Q2 FY26

    Driven by higher community count and improved sales pace.

    Average active selling communities
    108+6% YoY
    Q2 FY26

    Contributed to order growth.

    Monthly sales pace
    3.3+10% YoY (from 3)
    Q2 FY26

    Increased compared to the previous year.

    Homebuilding gross margin
    29.8%-150 bps YoY, +90 bps QoQ
    Q2 FY26

    Highest reported among homebuilding peers, despite year-over-year decrease.

    Net income attributable to Green Brick
    $74 million-9.5% YoY
    Q2 FY26

    Reported for the second quarter.

    Diluted EPS
    $1.70-8% YoY
    Q2 FY26

    Reported for the second quarter.

    Book value per share
    $44.82+16% YoY
    Q2 FY26

    Reflects growth in shareholder equity.

    Homebuilding debt to total capital ratio
    11.2%
    Q2 FY26

    Among the lowest of public homebuilders.

    Net homebuilding debt to total capital ratio
    6.1%
    Q2 FY26

    Among the lowest of public homebuilders.

    Return on assets
    11.8%
    Q2 FY26

    Significantly higher than the median of homebuilding peers.

    Return on equity
    16%
    Q2 FY26

    Among the best of public homebuilding peers.

    Discounts and incentives as % of home closings revenue
    8.8%+180 bps YoY (from 7%)
    Q2 FY26

    Increased year-over-year due to market conditions.

    Backlog units
    681
    Q2 FY26

    At the end of the quarter.

    Backlog revenue
    $387 million-24% YoY
    Q2 FY26

    Decreased year-over-year.

    Average sales price of backlog
    $569,000-18% YoY
    Q2 FY26

    Decreased due to increased mix of Trophy orders and elevated incentives.

    New home starts
    1,133+19% YoY, +16% QoQ
    Q2 FY26

    Increased due to strong sales in the quarter.

    Units under construction
    2,205flat YoY, +4.1% QoQ
    Q2 FY26

    Increased sequentially to align with sales pace.

    Completed specs
    410
    Q2 FY26

    Goal is to maintain 1 to 2 months of supply.

    SG&A expenses growth
    -5%YoY
    Q2 FY26

    Declined year-over-year.

    SG&A as % of residential units revenue
    11.3%+60 bps YoY
    Q2 FY26

    Increased primarily due to lower home closings revenue.

    Shares repurchased
    143,000
    Q2 FY26

    Common stock repurchased during the quarter.

    Value of shares repurchased
    $9.4 million
    Q2 FY26

    Value of common stock repurchased during the quarter.

    Remaining share repurchase authorization
    $151 million
    Q2 FY26

    Available for opportunistic repurchases.

    Total liquidity
    $462 million
    Q2 FY26

    Includes cash and undrawn revolver capacity.

    Cash balance
    $132 million
    Q2 FY26

    Part of total liquidity.

    Undrawn revolving credit facility
    $330 million
    Q2 FY26

    No outstanding borrowings.

    Total debt (excluding warehouse facilities)
    $252 million
    Q2 FY26

    At quarter-end.

    Senior notes maturing in next 12 months
    $75 million
    Q2 FY26

    Portion of debt maturing soon.

    Owned lots
    76%
    Q2 FY26

    High percentage of owned lots supports land strategy.

    Lots owned or under contract in joint ventures
    3,300
    Q2 FY26

    Joint ventures account for a small portion of total lots and assets.

    Cancellation rates
    7.8%
    Q2 FY26

    Among the lowest cancelation rates among public homebuilding peers.

    Incentives on net new orders
    9.1%+120 bps YoY, -20 bps QoQ
    Q2 FY26

    Increased year-over-year but decreased sequentially.

    Construction cycle times
    124-29 days YoY
    Q2 FY26

    Reduced from a year ago, improving efficiency.

    Investments in land, lots and development
    $363 million
    YTD FY26

    Year-to-date investments to position for future growth.

    Total lots owned and under contract
    ~52,000
    Q2 FY26

    Provides a strong land position for future years.

    Trophy Signature Homes allocation of total lots
    ~80%
    Q2 FY26

    Significant portion of lots allocated to the Trophy brand.

    Lot supply (excluding future phases)
    ~5 years
    Q2 FY26

    Excludes approximately 30,000 lots expected in future phases within long-term master planned communities.

    Shareholder returns (repurchases)
    $39 million
    LTM

    Returned to shareholders through stock repurchases over the last 12 months.

    Industry KPIs

    1
    MetricValueDetails
    Brand segment performanceTrophy Signature Homes: growing much faster than other businesses

    Deals & partnerships

    1
    Other homebuilders or landownersJoint ventures for land development and homebuilding

    The company has 4 joint ventures, accounting for 3,300 lots owned or under contract, representing 6% of total lots and 3% of total assets. These JVs are evaluated with the same underwriting criteria as other land investments.

    Risks & headwinds

    5
    Affordability pressures and economic uncertaintyQ2 FY26 and ongoing

    Interest rates remained elevated; discounts and incentives increased 180 bps YoY to 8.8% of home closings revenue; incentives on net new orders 9.1%, +120 bps YoY.

    Mitigation: Providing price concessions, interest rate buydowns, and closing cost incentives; focus on affordable Trophy Signature Homes.

    Rising interest ratesJuly 2026 and ongoing

    FHA rates around 6.4% today compared to 6% at the beginning of the year; July traffic described as 'spotty'.

    Mitigation: Cost of buydowns will be borne by the company to maintain sales pace and buyer demand.

    Mix shift to lower average sales price homesQ2 FY26 and ongoing

    Higher mix of Trophy deliveries led to an 11.4% decline in home closings revenue; average sales price of backlog decreased 18% to $569,000.

    Mitigation: Trophy's growth is a strategic focus on first-time buyers and expanding market share, which is expected to drive overall business growth despite lower ASP.

    Atlanta market softnessJuly 2026 and ongoing

    Atlanta sales 'very slow in July'; ASP in Atlanta around $700,000.

    Mitigation: Attributed to cultural buyer headwinds (visa issues) and higher ASP product mix; no specific mitigation stated for Atlanta, but overall strategy focuses on diversified product portfolio and market expertise.

    Lumber cost increaseFY26

    Lumber has risen this year, offsetting some declines in other sticks and bricks/labor costs.

    Mitigation: Overall cost management and land strategy help maintain margins despite specific commodity fluctuations.

    What to watch in Q3 FY26

    5

    Green Brick Mortgage capture rate

    by year-end
    Current66%
    TargetExceed 70%

    Why it matters

    Increased capture rate generates additional revenue and enhances customer service, contributing to financial services growth.

    As Green Brick Mortgage continues to expand its service, we anticipate by year-end, its capture rate will exceed 70%, which should generate additional revenue as we increase the number of loans funded through our mortgage company.

    Q&A highlights

    7

    Asked for the factors contributing to the 90 bps sequential gross margin improvement, specifically regarding rate buydowns and the impact of Trophy Signature Homes.

    Jeff Cox stated that Trophy's sales pace was double the company average (over 6 per month in DFW) and its margins were in line with the company average. Trophy represented 60% of Q2 deliveries.

    “As far as the margin goes, I would say Trophy is right in line with the company average. They pretty much kind of define our average at this point. Collectively, across the 3 markets where we offer Trophy, they made up 60% of our deliveries.”

    asked by Rohit Seth · answered by Jeffery Cox

    2 min read6 chapters

    Detailed Narrative

    01

    Leadership Transition and Strategic Vision

    Jim Brickman announced the promotion of Jed Dolson to Co-CEO, effective October 15, 2026, recognizing his instrumental role in Green Brick's success since before it became a public company. This move underscores the company's commitment to developing and retaining strong leadership, aligning with its core values of honesty, objectivity, maturity, and efficiency.

    02

    Disciplined Land Strategy and Margin Preservation

    Green Brick maintains a highly disciplined land strategy, owning 76% of its approximately 52,000 lots and avoiding high-interest land banking. This self-development approach provides control over lot deliveries and is a primary driver of the company's industry-leading gross margins. The company focuses on acquiring 'A location' land and developing complex, longer-life master-planned communities, which are less attractive to land bankers.

    03

    Growth of Affordable Housing Segment (Trophy Signature Homes)

    Trophy Signature Homes remains a significant growth engine, particularly in the DFW market where it is the third-largest builder by volume. The brand's focus on affordable homes for first-time buyers, supported by an efficient land and construction platform, is driving expansion into Houston and Austin. This strategy helps diversify revenue and strengthens the company's presence in key Texas markets.

    04

    Expanding Financial Services Contribution

    Green Brick Mortgage continues its rapid growth, with funded loans increasing 257% year-over-year and 43% sequentially. The financial services segment's revenue rose to $12 million, with pretax income up 91% year-over-year to $5.7 million. The company plans to expand Green Brick Mortgage to its Atlanta builder, Providence Group, by late 2026, aiming to exceed a 70% capture rate by year-end.

    05

    Navigating Challenging Market Conditions

    Despite persistent affordability pressures, elevated interest rates, and economic uncertainty, Green Brick achieved strong sales velocity. The company actively uses rate buydowns, price concessions, and closing cost incentives to address consumer affordability challenges. Management noted 'spotty' traffic in July due to rising rates, with strong performance in Florida contrasting with slower activity in Atlanta.

    06

    Operational Efficiency and Inventory Management

    The company improved construction cycle times by 29 days year-over-year to 124 days, with Trophy's DFW cycle time reaching a record low of 84 days. This efficiency allows Green Brick to maintain optimal inventory levels, particularly for finished specs, aiming for 1 to 2 months of supply per community. New home starts increased 19% year-over-year to 1,133 units, aligning with sales pace.

    AI-generated summary of the company’s earnings call. Not investment advice.