Century Communities Q2 2026 Earnings Report

Century Communities EPS Results

• Actual EPS: $1.30
• Consensus EPS: $0.63
• Beat/Miss: Beat by +$0.67
• One Year Ago EPS: $1.37

Century Communities Revenue Results

• Actual Revenue: $927.23 million
• Expected Revenue: $857.23 million
• Beat/Miss: Beat by +$69.99 million
• YoY Revenue Growth: -8.10%

Century Communities Announcement Details

• Quarter: Q2 2026
• Date: 7/22/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, July 22, 2026
• Conference Call Time: 5:00PM ET

Century Communities (NYSE:CCS) is a national homebuilder and land developer headquartered in Greenwood Village, Colorado. The company is engaged in the acquisition, development, construction and sale of single- and multi-family residential homes, offering a range of floor plans and design options to homebuyers. In addition to its core homebuilding activities, Century Communities provides ancillary services such as mortgage financing, title and closing services, and insurance products through its wholly owned subsidiaries, aiming to deliver a comprehensive homebuying experience.

Founded in 2009, Century Communities rapidly expanded through both organic growth and strategic land acquisitions, positioning itself in high-growth markets across the United States. The company completed an initial public offering in April 2018 and began trading on the New York Stock Exchange under the ticker symbol CCS. Since its public listing, Century Communities has continued to broaden its product offerings, focusing on energy-efficient building practices and customer-driven design innovations.

Century Communities currently operates in select markets in more than a dozen states, including Arizona, California, Colorado, Florida, Georgia, Nevada, North Carolina, South Carolina, Tennessee, Texas, Utah and Washington. By tailoring its home designs and community amenities to the unique demographics and growth trends of each region, the company seeks to meet diverse buyer preferences, from first-time homebuyers to move-up and active adult purchasers.

The company is led by President and Chief Executive Officer Justin Doyle, under whose direction Century Communities has emphasized disciplined land acquisition, cost controls and a customer-focused sales process. With a leadership team combining residential construction expertise and financial acumen, Century Communities continues to pursue growth opportunities in established and emerging housing markets.

Century Communities Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Century Communities posted strong second-quarter results, with EPS of $1.26 up 11% year over year and 50% sequentially, and deliveries of 2,506 homes beating guidance. Management said improved absorption and tighter cost control helped drive the beat.
• Positive Sentiment: Margins improved in the quarter, as adjusted gross margin rose to 20% and direct construction costs fell 5% sequentially. The company credited lower incentives, better operating efficiency, and growing use of ARMs for supporting pricing power.
• Positive Sentiment: Demand trends were encouraging, with net orders up 3% year over year and traffic higher across the quarter. Cancellation rates also declined, suggesting buyers remain committed once they sign.
• Neutral Sentiment: The company raised full-year 2026 guidance, now expecting 9,750 to 10,500 home deliveries and $3.5 billion to $3.8 billion in home sales revenue. Management also guided third-quarter deliveries to 2,500 to 2,700 homes.
• Positive Sentiment: Century ended the quarter with a record 330 communities, more than 60,000 owned and controlled lots, and book value per share of $90.24. It also repurchased 3% of shares year to date at a significant discount to book value while maintaining its dividend.

Presentation

[Operator]

Please note, this conference call is being recorded. I will now turn the conference over to Tyler Langton, Senior Vice President of Investor Relations for Century Communities. Thank you. You may begin.

[Tyler Langton, SVP of Investor Relations at Century Communities]

Good afternoon. Thank you for joining us today for Century Communities earnings conference call for the second quarter 2026. Before the call begins, I would like to remind everyone that certain statements made during this call may constitute forward-looking statements. These statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described or implied in the forward-looking statements. Certain of these risks and uncertainties can be found under the heading Risk Factors in the company's latest 10-K, as supplemented by our latest 10-Q, to be filed shortly, and other SEC filings. We undertake no duty to update our forward-looking statements. Additionally, certain non-GAAP financial measures will be discussed on this conference call.

[Tyler Langton, SVP of Investor Relations at Century Communities]

Reconciliations of all non-GAAP measures to the most directly comparable GAAP measures are included in the earnings release furnished to the SEC and posted on our investor relations website. The company's presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Hosting the call today are Dale Francescon, Executive Chairman, Rob Francescon, Chief Executive Officer, and Scott Dixon, Chief Financial Officer. Following today's prepared remarks, we will open up the line for questions. With that, I'll turn the call over to Dale.

[Dale Francescon, Executive Chairman at Century Communities]

Thank you, Tyler, and good afternoon, everyone. We delivered strong second quarter results despite continued headwinds from macro challenges and weak consumer sentiment. With earnings per diluted share of $1.26, increasing by 11% on a year-over-year basis and 50% sequentially. Our deliveries of 2,506 homes exceeded our guidance of 2,200 to 2,400 on a stronger absorption rate, which increased by 6% on a quarter-over-quarter basis compared to a historic average second quarter decline of 7% over the previous five years. We coupled this improvement in our sales pace with effective management of our incentives and costs. Our adjusted gross margin of 20% increased by 30 basis points on a sequential basis, benefiting from lower incentives and direct costs. We also continued to successfully control our fixed general and administrative costs while our financial services business generated strong results.

[Dale Francescon, Executive Chairman at Century Communities]

As a result, we grew our book value per share to a company record of $90.24. We ended the quarter with a company record 330 open communities and expect our average community count in 2026 to increase in the low to mid single digit percentage range on a year-over-year basis. Our land acquisition and development spend continues to be supportive of increased scale and allow for a 10% annual delivery growth over the next several year period once market conditions improve. During the second quarter, we continued our balanced approach to capital allocation and repurchased 1% of our shares outstanding at a 38% discount to book value, bringing our year-to-date acquisition total to 3% at a 32% discount to book value. We are pleased by our second quarter results as we navigate market headwinds and position Century for the years ahead.

[Dale Francescon, Executive Chairman at Century Communities]

I'll now turn the call over to Rob to discuss our strategy, operations, and land positions in more detail.

[Rob Francescon, CEO at Century Communities]

Thank you, Dale, and good afternoon, everyone. We were encouraged by our order activity in the quarter, especially as the strength in our sales was accompanied by a continued decline in incentives. Our net orders of 2,615 homes increased 3% year-over-year and 10% sequentially, with the majority of this increase being driven by improved absorption rates. Our order activity was also very consistent throughout the quarter, with June orders roughly in line with both May and April. Our average community count was 321 communities in the second quarter, and we ended the quarter with 330 communities, up 4% on a sequential basis and a record for the company. I would also like to point out that the net growth in our community count this quarter came in June, with our community count in April and May roughly in line with our first quarter ending community count of 316.

[Rob Francescon, CEO at Century Communities]

As a result, our orders in the second quarter did not see a significant benefit from the growth in our quarter end community count. Our traffic in the second quarter was roughly 9% higher than first quarter levels, while our traffic in June was 18% higher than April levels, demonstrating the solid demand and interest for new homes. Our cancellation rate of 13.2% in the second quarter decreased on a year-over-year basis, demonstrating the commitment of buyers once they have made the decision to purchase a new home. Order activity so far in July has been in line with typical seasonality.

[Rob Francescon, CEO at Century Communities]

We delivered 2,506 homes during the second quarter, a 25% sequential increase, and our incentives on these homes averaged 1,200 basis points, down approximately 50 basis points from first quarter 2026 levels and 100 basis points from fourth quarter 2025 levels. Similar to our order activity, our incentives on closed homes were also relatively consistent throughout the second quarter. Assuming current market conditions, we expect incentives on closed homes in the third quarter of 2026 to be consistent with levels experienced in the first half of this year. In the second quarter, adjustable rate mortgages accounted for nearly 35% of the mortgages that we originated by volume of principal, a further increase from first quarter 2026 levels of approximately 30% and well above first quarter 2025 levels of less than 5%.

[Rob Francescon, CEO at Century Communities]

Receptivity of our buyers to ARMs has been increasing, and this increased adoption of ARMs could help partially address the market's affordability challenges. While incentives remain a headwind to margins, our operations continued to perform extremely well in the second quarter. Our direct construction costs on the homes we delivered declined by 5% on a sequential basis. Our cycle times averaged 112 calendar days, down on both a year-over-year and sequential basis and a company record. Our finished lot costs in the second quarter were flat on a sequential basis, and we continue to expect our average finished lot costs for 2026 to only be 2%-3% higher than fourth quarter 2025 levels. In the second quarter, we started 2,841 homes and remained focused on managing our inventory levels, ending the quarter with approximately three finished specs per community.

[Rob Francescon, CEO at Century Communities]

We ended the second quarter with just over 60,000 owned and controlled lots with, on a sequential basis, our own lots down 2%, but our total lot count up 3% as we continue to proactively manage our land position. In 2026, we continue to expect our land acquisition and development expense to be in the range of $1 billion-$1.2 billion. We have the ability to accelerate this number if market conditions improve, given the strength of our balance sheet, or to reduce it if market conditions warrant without impacting our near-term growth prospects. We are optimistic about our results in the second quarter. We saw a healthy pickup in our activity accompanied by a decline in incentives and continued ability to control our costs and inventory levels. I'll now turn the call over to Scott to discuss our financial results in more detail.

[Scott Dixon, CFO at Century Communities]

Thank you, Rob. In the second quarter, pre-tax income was $49 million, and net income was $36 million, or $1.26 per diluted share, a 50% sequential increase. Home sales revenues for the second quarter were $898 million, with an average sales price of $358,000. Our deliveries of 2,506 homes increased 25% on a quarter-over-quarter basis compared to an average sequential increase of 11% over the previous five years and benefited from the strength in our order activity this quarter. For the third quarter 2026, we expect our deliveries to range from 2,500-2,700 homes, with a further sequential increase in the fourth quarter. Our second quarter 2026 GAAP home building gross margin of 18.1% and adjusted gross margin of 20%, both increased by 30 basis points over first quarter 2026 levels.

[Scott Dixon, CFO at Century Communities]

I would like to remind everyone that our first quarter gross margin and adjusted gross margin benefited by 90 basis points from a reduction to our warranty accrual and rebate collections in excess of previous estimates. While there was no impact from those two items in the second quarter. As a result, if we were to exclude this 90 basis point benefit from the first quarter, our second quarter gross margin would have increased by 120 basis points on a sequential basis, with the improvement driven by lower incentives and direct construction costs. For the third quarter 2026, we expect the most significant driver of our adjusted home building gross margin to continue to be incentives needed to generate an acceptable sales pace, which as Rob noted earlier, we currently expect to be consistent with levels experienced in the first half of this year.

[Scott Dixon, CFO at Century Communities]

SGA as a percent of home sales revenues was 14.2% in the second quarter. While lower home sales revenue and higher commissions and advertising expense continue to pressure this percentage, we are effectively managing our fixed costs with our SGA, excluding commissions and advertising down slightly on a year-over-year basis. Assuming the midpoint of our full year 2026 home sales revenue guidance, we expect our SGA as a percent of home sales revenue to be roughly 14% for the full year 2026, with SGA as a percentage of home sales revenue of 13.5% for the third quarter. Revenues from financial services were $25 million in the second quarter, and the business generated pre-tax income of $10 million. This segment benefited from both lower costs and a positive fair value adjustment.

[Scott Dixon, CFO at Century Communities]

Excluding the impact of any fair value adjustments, we expect the contribution margin percent from financial services in the second half of this year to be closer to full year 2025 levels. Our tax rate was 26.3% in the second quarter of 2026, and we expect our full year tax rate for 2026 to be in the range of 26%-27%. Our second quarter 2026 net home building debt to net capital ratio was 31.9%, and our home building debt to capital ratio was 34.2%, basically consistent with the prior year quarter. We ended the quarter with $2.6 billion in stockholders' equity and $802 million of equity.

[Scott Dixon, CFO at Century Communities]

During the quarter, we maintained our quarterly cash dividend of $0.32 per share and repurchased 353,000 shares of our common stock for $20 million at an average share price of $55.54, or a 38% discount to our book value per share of $90.24 as of the end of the second quarter. Through the first six months of the year, we have repurchased 970,000 shares of our common stock for $60 million, or over 3% of our shares outstanding at the beginning of the year at an average share price of $61.44, or a 32% discount to our second quarter ending book value. Turning to guidance. We are raising the midpoint and low end of our full year 2026 home delivery guidance and now expect our deliveries to range from 9,750-10,500 homes, and our home sales revenues to be in the range of $3.5 billion-$3.8 billion.

[Scott Dixon, CFO at Century Communities]

In closing, we are pleased with our performance in the current environment. We are effectively balancing pace and price and controlling our costs and inventory levels. We have bought back over 3% of our shares outstanding to date at a significant discount to book value while continuing to position Century for future growth. With that, I'll open the line for questions. Operator?

[Operator]

Your first question comes from the line of Alex Rygiel with Texas Capital. Your line is open. Please go ahead.

[Alex Rygiel, Analyst at Texas Capital]

Thank you. Good evening, gentlemen. Very nice performance there on the gross margin of 20% in the quarter. Clearly, your guidance would suggest that you should be able to hold that in the back half of the year. Can you talk about some of the variables that we should be looking for that might offer you opportunity to drive that margin a little bit higher, even in a flattish environment that we've got here?

[Rob Francescon, CEO at Century Communities]

Yeah. Sure, Alex, and good to talk to you. I think generally speaking from where we sit right now, a lot of the same drivers on the margin line that we've been experiencing for the last couple of quarters continue. The biggest driver is going to be incentives. We're very pleased with our ability here during the second quarter to pull back on incentives. A lot of that's been driven by our continued introduction of ARM product. Going forward, I think incentives is going to continue to be the largest driver of our margin profile. We've done a good job holding the line on direct cost of construction, and in lots of cases, getting direct cost of construction out. There's certainly a variable there, given the macro, that's a little bit difficult to predict how it's going to evolve over the back half of the year.

[Rob Francescon, CEO at Century Communities]

Those are really the two main drivers from our perspective. We feel good about where our finished lot cost is currently, and where it's projected to be in the back half of the year.

[Alex Rygiel, Analyst at Texas Capital]

I did notice that the number of selling communities in Texas actually picked up notably here. Can you talk a bit more about that market and the health of that market today?

[Rob Francescon, CEO at Century Communities]

Overall, Texas, we feel very good about. We feel like it's starting to come back from maybe the low that it was. It's starting to pick up a little bit. The open community counts, this is a reflection of our investment in the market as this has come to fruition with actually opening for sales and getting these communities started. When we look at it, we've got a very dominant position in Houston, and we feel good about that market. We are really catering to the more entry-level, first-time homebuyer in that market. It's incentive-driven, but it's actually doing quite well. San Antonio is another bright spot for us where operationally, that has actually been running better than we have in the last several years. It's actually done very well. Austin seems to be picking up.

[Rob Francescon, CEO at Century Communities]

Dallas, our operation in Dallas, we are really just getting going. We're not to scale yet there. There's a lot of VDLs on the ground there, we're hopeful for a bigger operation there. Overall, we like the Texas market, as you can see by our investment, and we believe it's a bright future in Texas.

[Alex Rygiel, Analyst at Texas Capital]

Very helpful. Thank you.

[Rob Francescon, CEO at Century Communities]

Thank you.

[Operator]

Your next question comes from the line of Natalie Kulasekere with Zelman & Associates. Your line is open. Please go ahead.

[Natalie Kulasekere, Senior Associate at Zelman & Associates]

Hey, good afternoon. Congrats on a good quarter. Just one from me.

[Rob Francescon, CEO at Century Communities]

Thank you.

[Natalie Kulasekere, Senior Associate at Zelman & Associates]

Have you also started seeing pressure from vendors about any potential price increases because of fuel costs and even commodity price increases like lumber? Could you maybe provide more detail about what you're seeing on this front and how you think it will impact margins going forward?

[Rob Francescon, CEO at Century Communities]

One, we're very pleased with the 5% reduction in directs on a quarter-over-quarter basis, and that's based on an initiative that we started company-wide with our team members at the end of last year, beginning of this year, that started to roll through the closings in Q2. Again, we feel very positive about where that's going. In terms of where we are today in the market, of course, like all the builders, with oil prices up, we're getting on the land development front for diesel, for asphalt, other things. We're getting some, what I would call requests. We are pushing back on those requests at this point in time. That is potential to have increases on land development on a go-forward basis, although we're trying to mute that, and so far, we've been able to do it.

[Rob Francescon, CEO at Century Communities]

On the lumber front, where we've experienced, what I would call tailwinds, that's probably ended, and so we're basically flat to up right now. Again, on a percentage basis, it's not a meaningful number, but we're watching it very closely.

[Natalie Kulasekere, Senior Associate at Zelman & Associates]

All right. Thank you.

[Rob Francescon, CEO at Century Communities]

Absolutely.

[Operator]

Your next question comes from Jay McCanless with Citizens. Your line is open. Please go ahead.

[Jay McCanless, Analyst at Citizens]

Hey, everybody. Thanks for taking my questions. Could you guys talk through again where the incentives are? I think you said 1,200 basis points for orders this quarter, and that was down 50 basis points sequentially. Is that correct?

[Rob Francescon, CEO at Century Communities]

That's correct.

[Jay McCanless, Analyst at Citizens]

Okay. Then I was going to ask you also, where is your sold and closed % now? Is it still running pretty high, or are you all trying to bring that down a little bit?

[Rob Francescon, CEO at Century Communities]

We're still running pretty consistently where we have been in terms of sold units into a quarter. That's generally been pretty consistent for us, Jay, over the last, I call it four to six quarters. Generally, we are selling and closing somewhere around 50%-60% of our units into a quarter.

[Jay McCanless, Analyst at Citizens]

Okay. Then the next one I had, with all the M&A going on in the industry right now, is this opening up some opportunities? You talk about VDLs in Dallas, are there some other opportunities that are opening up to maybe get some land, expand inside some of the geographies where you've already put a flag?

[Rob Francescon, CEO at Century Communities]

Jay, it's consistent with how we've always looked at M&A. We always look at transactions, and as I think you know, we have a solid track record in M&A. We've completed nine acquisitions since 2013. The team has done every one of them a great job on integration, and we will pursue M&A when it makes sense for our platform. Nothing's changed on that front. We're continuing to look at M&A in the marketplace.

[Jay McCanless, Analyst at Citizens]

All right. Then the other thing I did want to ask is the last one on the marketplace. I guess, what are you seeing, especially on entry level from competitive supply? One of your larger competitors this week talked about maybe slowing down the pace of starts to realize a little more gross margin, just wondering if you all are seeing that in the field, not only from some of the larger competitors, but maybe some of the midsize companies as well.

[Rob Francescon, CEO at Century Communities]

Yeah. As a general statement, this is our perspective, inventory levels are in normal ranges right now. They're not out of balance in our opinion. I think people are pretty judicious on how they're looking at starts and all. Regarding entry level, a lot of that's market by market, Jay. We've taken a closer pace versus price balance as you can see by how our margins changed. We're not seeing some of the crazy discounting that was happening even last year, early this year. So I think that's moderated a little bit. We'll see as there hasn't been that many builders come out yet on earnings, but it seems like the incentives hopefully have kind of bottomed, we'll see where this goes. All that's based on, though, of course, where interest rates and a variety of other things go from a macroeconomic standpoint.

[Rob Francescon, CEO at Century Communities]

We have not seen anything unusual recently.

[Jay McCanless, Analyst at Citizens]

Okay. That's great. Thanks for taking my question.

[Scott Dixon, CFO at Century Communities]

Jay, the one thing I would add real quick on that is, we mentioned it in our prepared remarks, we have been really focused on managing our QMI inventory. We're at three, slightly below three per community at the end of June. We like that amount. That allows us to really serve that buyer. From our perspective, we feel really in a good shape with where our inventory is in our specific communities and markets.

[Jay McCanless, Analyst at Citizens]

Okay. That's great. Thank you, Scott.

[Operator]

Your next question comes from the line of Rohit Seth with B. Riley Securities. Your line is opening.

[Rohit Seth, Analyst at B. Riley Securities]

Hey, thanks for taking my question. Just with the rise in rates over the last little while, just wondering how the traffic response has been in July.

[Rob Francescon, CEO at Century Communities]

Yeah, Rohit, great question. A little bit difficult for us to discern too much from July. July historically is one of our slower months of the year, along with January. It builds each week, which we certainly have seen it do so far. Coming off of the July 4th holiday, July typically is a little bit more muted from a pace perspective. It's following, so far, very seasonal trends as to what we've seen in previous Julys. A little bit too early to tell the recent rate increases in terms of how the consumer has responded directly to that.

[Rohit Seth, Analyst at B. Riley Securities]

Yeah. Thank you. The ARM trends. You reached 35% now. Do you see some headroom there to continue to push that higher?

[Rob Francescon, CEO at Century Communities]

We think we can push it higher. When you look at it on a year-over-year growth basis, it's actually gone up quite a bit. We went from 5% now sequentially quarter-over-quarter, 30-35, and we think we can push that in. That's candidly an affordable option, especially for the duration a lot of the people would stay in their homes. It makes a lot of sense.

[Rohit Seth, Analyst at B. Riley Securities]

All right. Okay. Just on the community count cadence, you mentioned 330 communities. The growth rate on the annual basis is at low to mid. Maybe you can talk through the cadence of how you see the back half playing out.

[Rob Francescon, CEO at Century Communities]

Rohit, great question. From the mid-digit increase that we had in our prepared remarks, that's an average year-over-year number, as opposed to an ending for where we think we will average throughout the entire year. We just think we have the ability to increase community count above the 330 as we move sequentially throughout the back half of the year. From an average perspective, we do believe we'll be up about mid-single digits over last year's average community count.

[Rohit Seth, Analyst at B. Riley Securities]

All right. Understood. Thank you, great quarter, guys.

[Rob Francescon, CEO at Century Communities]

Thank you.

[Operator]

Your next question comes from the line of Jay McCanless with Citizens. Your line is open. Please go ahead.

[Jay McCanless, Analyst at Citizens]

Thanks for taking my follow-up. I wanted to ask, in the mountain, looks like closings were up year-over-year, probably the first time in a few quarters. Since that's y'all's home market, could you maybe talk a little bit about what you're seeing there and what the competitive set's looking like in that segment?

[Rob Francescon, CEO at Century Communities]

Yeah. In the mountain region, when we look at Las Vegas, that's actually been a really strong division for the company, and that's holding up really well. There's been a lot of demand out of that. When we look at Colorado, where our home base is, it's still a challenging market. It's heavily incentivized. You look at the price points in Colorado for a non-coastal market, it's very expensive. That has not really recovered as much. Phoenix, we're getting some good traction in that, and also in Utah. We really like the Utah market. We like a lot of things about it, as well as the potential future growth within that market. That's actually been performing above our expectations.

[Jay McCanless, Analyst at Citizens]

Okay. That's great. Thanks, guys.

[Rob Francescon, CEO at Century Communities]

Thanks, Jay.

[Operator]

There are no further questions at this time. We will now turn the call back to Rob for brief closing remarks.

[Rob Francescon, CEO at Century Communities]

Thank you. To everyone on the call, thank you for your time today and interest in Century Communities. To our team members, thank you for your hard work, dedication to Century, and commitment to our valued home buyers.

[Operator]

This concludes today's call. Thank you for attending. You may now disconnect.

Participants

Executives

• Tyler Langton, SVP of Investor Relations
• Dale Francescon, Executive Chairman
• Rob Francescon, CEO
• Scott Dixon, CFO

Analysts

• Alex Rygiel, Analyst at Texas Capital
• Natalie Kulasekere, Senior Associate at Zelman & Associates
• Jay McCanless, Analyst at Citizens
• Rohit Seth, Analyst at B. Riley Securities