Company: LGIH
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001580670-25-000076
Chunk: 55

Company: LGI Homes, Inc.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 1
Chunk 55
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ations of purchase contracts at any time prior to closing. It is important to note that net orders, backlog and cancellation metrics are operational, rather than accounting data, and should be used only as a general gauge to evaluate performance. Backlog may be impacted by customer cancellations for various reasons that are beyond our control, and in light of our minimal required deposit, there is little negative impact to the potential homebuyer from the cancellation of the purchase contract. 

Our net orders decreased for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 primarily due to lower demand in the first six months of the year.  The number of homes in our backlog at September 30, 2025 increased 19.9% compared to September 30, 2024. The increase generally relates to management’s focus on newly implemented sales initiatives, an increase in sales personnel and an increase in community count, partially offset by ongoing affordability constraints and the limited use of incentives during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. 

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As of the dates set forth below, our net orders, cancellation rate and ending backlog homes and value were as follows (dollars in thousands):

Nine Months Ended September 30,Backlog Data2025 (4)2024 (5)Net orders (1)4,098 4,993 Cancellation rate (2)28.1 %21.6 %Ending backlog – homes (3)1,305 1,088 Ending backlog – value (3)$498,713 $417,798 

(1)Net orders are new (gross) orders for the purchase of homes during the period, less cancellations of existing purchase contracts during the period.

(2)Cancellation rate for a period is the total number of purchase contracts cancelled during the period divided by the total new (gross) orders for the purchase of homes during the period.

(3)Ending backlog consists of retail homes at the end of the period that are under a purchase contract that has been signed by homebuyers who have met our preliminary financing criteria but have not yet closed and wholesale contracts with varying terms.  Ending backlog is valued at the contract amount.

(4)As of September 30, 2025, we had 60 units related to bulk sales agreements associated with our wholesale business.

(5)As of September 30,