LGIHNasdaqOperative BuildersUS GAAP · USD

LGI Homes, Inc.

LGI Homes, Inc. designs, builds and sells new homes across a broad U.S. footprint, with a core focus on affordable entry-level housing and a smaller luxury brand, Terrata Homes. The company also supplements its homebuilding business with wholesale sales to institutional buyers, select build-to-rent activity, and joint ventures that provide mortgage and insurance services to homebuyers.

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Revenue1,706m USD
−22.6 %y/y
Operating profit (EBIT)79.8m USD
−62.4 %y/y
EBIT margin4.7%
−5.0 ppy/y
Net income72.6m USD
−63.0 %y/y
Free cash flow-141m USD
+3.3 %y/y

Fiscal year 2025 · change from previous year

Development 2020–2025

05001,0001,5002,0002,500m USD2020: 2,368 m USD2020: EBIT 365 m USD20202021: EBIT 548 m USD20212022: 2,304 m USD2022: EBIT 390 m USD20222023: 2,359 m USD2023: EBIT 233 m USD20232024: 2,203 m USD2024: EBIT 212 m USD20242025: 1,706 m USD2025: EBIT 80 m USD20251,70680
RevenueOperating profit (EBIT)

Business

Share of revenue
Entry-level homebuilding80 %

Affordable new homes sold under the LGI Homes brand to first-time and value-focused buyers.

Luxury homebuilding5 %

Move-in ready Terrata Homes communities with preselected luxury features and higher price points.

Wholesale and rental-related sales10 %

Bulk home sales to institutions and sales of previously leased homes from rental activities.

Build-to-rent and other real estate activities3 %

Single-family rental homes and related real estate projects in select communities.

Ancillary mortgage and insurance services2 %

Customer-facing financing and insurance services provided through joint ventures.

Products

Reported · share of revenue
86.5%13.5%FY2025100 %
  • Retail86.5 %
  • Wholesale13.5 %

Source: 10-K FY2025, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.

Customers

LGI Homes primarily serves renters and first-time or entry-level homebuyers who need a clear path to ownership, predictable pricing, and move-in ready product. A smaller but important customer base includes luxury buyers for Terrata Homes and institutional investors purchasing homes in bulk for single-family rental portfolios. The company also serves homebuyers who want bundled financing and insurance support through its joint ventures.

Entry-level homebuyers

Buyers of affordable LGI Homes product who want move-in ready homes and a guided purchase process.

Renters transitioning to ownership

Households currently renting apartments or homes that LGI targets with affordability messaging and incentives.

Institutional rental investors

Large institutions buying homes in bulk through wholesale agreements for single-family rental portfolios.

Luxury homebuyers

Customers buying Terrata Homes in select communities with higher average selling prices and upgraded features.

Ancillary service users

Homebuyers who use LGI-linked mortgage brokerage and insurance services to simplify closing and ownership.

Strategy

LGI Homes is focused on selling affordable, move-in ready homes to entry-level buyers while using incentives and a transparent sales process to reduce friction in the purchase decision. The company is also expanding selectively through new communities, a smaller luxury brand, wholesale sales and rental-related activities, which diversify demand channels and help absorb inventory. Its strategy is designed to keep homes accessible despite high mortgage rates and weak affordability, while preserving targeted margins.

Defend affordability for entry-level buyersShort term

High mortgage rates and weak sentiment reduce buyer capacity, so affordability is central to preserving demand.

Expand and optimize community footprintMedium term

More active communities support volume growth and market coverage, but require disciplined land and lot acquisition.

Diversify revenue streams beyond core home salesMedium term

Wholesale, build-to-rent and ancillary services can improve inventory monetization and customer capture.

Geography

LGI Homes operates across 21 U.S. states and 36 markets, with active communities concentrated in Texas, the Sun Belt, the Mountain West, the Southeast and selected Mid-Atlantic and West Coast markets. Its footprint is operationally important because land availability, local affordability, and mortgage demand vary materially by market, affecting community count, closings and margins. The company does not disclose a country revenue split because it is a U.S.-focused homebuilder with all disclosed operations in the United States.

Risks

LGI Homes is highly exposed to mortgage rates, affordability pressure and cyclical U.S. housing demand, which can quickly affect buyer traffic and closings. Its business also depends on land acquisition, construction labor and materials, and inventory management, so cost inflation or project delays can compress margins. Expansion into new markets, leverage, and regulatory or legal changes add further execution and balance-sheet risk.

Sorted by severity
LowMediumHighLowMediumHighImpact →Likelihood →Mortgage rate and financing pressure1Housing market cyclicality2Land and construction cost inflation3Leverage and financing availability4Expansion and execution risk5
Impact is the risk’s severity and likelihood how probable it is over the next few years, both assessed from the company’s reports. Numbers match the list.
  1. Mortgage rate and financing pressureImpact: HighLikelihood: High

    Higher rates and tighter lending standards reduce affordability for entry-level buyers, the company's core customer base.

    Exposure: Home closings and pricing

  2. Housing market cyclicalityImpact: HighLikelihood: High

    Demand, pricing and inventory values can weaken in a downturn, affecting margins and absorption.

    Exposure: Core homebuilding operations

  3. Land and construction cost inflationImpact: HighLikelihood: High

    The company must acquire finished lots and manage labor/material costs to deliver homes profitably.

    Exposure: Gross margin and project timing

  4. Leverage and financing availabilityImpact: MediumLikelihood: Medium

    The company relies on credit facilities and subsidiary distributions to fund operations and obligations.

    Exposure: Liquidity and financial flexibility

  5. Expansion and execution riskImpact: MediumLikelihood: Low

    New markets and product diversification can require capital and may not scale as expected.

    Exposure: Growth strategy and inventory

Accounting

Judgemental items
Point-in-time home sales revenue recognition

Revenue is recorded when homes close, so quarter-end closing volume drives reported sales.

Impact: Can create volatility in quarterly revenue and earnings

Land development cost estimates

Management estimates total development costs and allocates changes prospectively to unsold homes.

Impact: Affects cost of sales and gross margin

Real estate inventory impairment

Weak housing conditions can require write-downs of land, lots or homes held for sale.

Impact: Can reduce earnings and asset carrying values

Capitalized interest and carrying costs

Interest, property taxes and other costs are capitalized into inventory during development and construction.

Impact: Influences inventory balances and future cost of sales

Joint venture and wholesale structure accounting

Mortgage, insurance and real estate JVs require equity-method or unconsolidated treatment.

Impact: Affects revenue presentation and non-operating income

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Last updated: 24/09/2026