Company: LGIH
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001580670-25-000058
Chunk: 149

Company: LGI Homes, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 2
Chunk 149
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 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)1,042 1,174 1,851 1,977 Adjusted gross margin$123,486 $162,690 $206,275 $261,495 Gross margin % (2)22.9 %25.0 %22.1 %24.4 %Adjusted gross margin % (2)25.5 %27.0 %24.7 %26.3 %

(1)Adjustments result from the application of purchase accounting for acquisitions and represent the amount of the fair value step-up adjustments included in cost of sales for real estate inventory sold after the acquisition dates. 

(2)Calculated as a percentage of home sales revenues.

EBITDA  

EBITDA is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance. We define EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization and (iv) capitalized interest charged to the cost of sales. Our management believes that the presentation of EBITDA provides useful information to investors regarding our results of operations because it assists both investors and management in analyzing and benchmarking the performance and value of our business. EBITDA provides an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization and items considered to be unusual or non-recurring. Accordingly, our management believes that this measure is useful for comparing general operating performance from period to period. Other companies may define this measure differently and, as a result, our measure of EBITDA