Meritage Homes (MTH) Q1 2026 Earnings Report

Overview of key quarterly metrics and YoY/QoQ changes:
- Revenue: $1.123B (YoY -33.99%, QoQ -17.71%)
- Gross Profit: $196.19M (YoY -56.37%, QoQ -35.12%)
- Gross Margin: 17.46% (vs. 22.0% in prior-year quarter)
- Operating Income: $65.32M (YoY -77.17%, QoQ -56.65%)
- Operating Margin: 5.81% (vs. prior-year level ~something around mid-teens for peers; see peer comparison below)
- Net Income: $55.31M (YoY -76.11%, QoQ -54.96%)
- EPS (Diluted): $0.82 (YoY -87.15%, QoQ -52.05%)
- Backlog: ~1,900 homes, backlog conversion 254% (vs. 7% YoY backlog decline headline; internally measured 254% conversion)
- Ending Backlog Value: ~$1.9K units (backlog units) as of 3/31/2026
- Community Count: 345 active communities at 3/31/2026, up 19% YoY; sequentially up 3% from 336 at 12/31/2025; 40 new communities added in Q1
- ASP on Orders: $382,000, down 5% YoY due to incentive-rich mix and regional differences
- Spec Inventory: ~4,700 spec homes, 14 specs per store (lowest since early 2022); ~6,600 spec+backlog units; 46% of total specs are completed specs (down from 50% in 4Q-2025)
- Land Spend: $326M in Q1, down 30% YoY; 2026 land spend guidance := up to $2.0B
- Liquidity & Leverage: cash $767M; net debt to cap 17.4% (ceiling mid-20s)
- Shareholder Returns: Buybacks $130M (1.8M shares, ~2.7% of shares outstanding) at ~6% discount to book value; dividend $0.48 per share (up 12% YoY); total capital returned $162M in Q1 (vs. $76M in 2025)
- Land Ownership & Off-Balance Sheet: ~38% of inventory control is off-book; of that, ~1/3 with land bankers (roughly 10% of total land supply is traditional land-bank financing); not cross-collateralized; walkaways possible (deposit-at-risk only)
- Forward Guidance: Q2 revenue $1.37–$1.47B; gross margin ~18%; tax rate 24.5–25%; diluted EPS $1.18–$1.46; full-year closings within 5% of 2025 results; 5–10% community count growth; long-term gross margin target 22.5%–23.5% with 4 net sales per month as a lever for margin expansion