Company: LGIH
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001580670-25-000058
Chunk: 109

Company: LGI Homes, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 8
Chunk 109
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 a result of an increase in the rate for state income taxes, net of the federal benefit, the compensation cost in excess of deductions for share-based payments, and the compensation limitation under Section 162(m) of the Internal Revenue Code, as amended. 

Net Income. Net income for the six months ended June 30, 2025 was $35.5 million, a decrease of $40.1 million, or 53.0%, from $75.6 million for the six months ended June 30, 2024. The decrease in net income was primarily attributed to overall lower home sales revenues during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Non-GAAP Measures

In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”), we have provided information in this Quarterly Report on Form 10-Q relating to adjusted gross margin and EBITDA. 

Adjusted Gross Margin

Adjusted gross margin is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance. We define adjusted gross margin as gross margin less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales. Our management believes this information is useful because it isolates the impact that capitalized interest and purchase accounting adjustments have on gross margin. However, because adjusted gross margin information excludes capitalized interest and purchase accounting adjustments, which have real economic effects and could impact our results, the utility of adjusted gross margin information as a measure of our operating performance may be limited. In addition, other companies may not calculate adjusted gross margin information in the same manner that we do. Accordingly, adjusted gross margin information should be considered only as a supplement to gross margin information as a measure of our performance.

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The following table reconciles adjusted gross margin to gross margin, which is the GAAP financial measure that our management believes to be most directly comparable (dollars in thousands):

Three Months Ended June 30,Six Months Ended June 30,2025202420252024Home sales revenues$483,485 $602,497 $834,905 $993,348 Cost of sales372,877 451,613 650,584 751,063 Gross margin110,608 150,884 184,321 242,285 Capitalized interest charged to cost of sales11,836 10,632 20,103 17,233 Purchase accounting adjustments (1