Century Communities (NYSE:CCS) executives said the homebuilder finished 2025 ahead of its recent guidance across most operating and financial metrics, citing a record fourth-quarter order performance, improved build efficiency, and continued balance sheet de-leveraging despite a “challenging year for the new home market.”
Fourth-quarter deliveries and record orders
Executive Chairman Dale Francescon said the company delivered 3,435 residential units in the fourth quarter, including 3,030 new homes, 105 previously leased rental homes, and 300 multifamily units through Century Living, bringing full-year residential units delivered to 10,792.
Rob Francescon said absorption averaged 2.9 homes per community in the quarter, up 12% year-over-year and 16% sequentially. Entering 2026, the company said it plans to shift toward a more balanced approach between pace and price.
Incentives, mortgage trends, and early 2026 demand signals
Executives acknowledged that incentives increased during the quarter. Rob Francescon said incentives on closed homes rose by 200 basis points in the fourth quarter and averaged roughly 1,300 basis points, driven by the pace-focused strategy and competitive market dynamics tied to year-end closings. Since the beginning of 2024, Century’s incentives have ranged from 600 basis points up to the 1,300 basis-point level cited for the fourth quarter.
For the first quarter of 2026, the company expects incentives on closed homes to improve by up to 50 basis points from fourth-quarter 2025 levels, but management emphasized that incentives remain a key lever to maintain acceptable sales pace.
Century also pointed to increased use of adjustable rate mortgages. Rob Francescon said ARMs accounted for roughly 25% of originated mortgages in the fourth quarter, up from nearly 20% in the third quarter and less than 5% in the first quarter, calling buyer receptivity “increasing.”
During the Q&A, management said sales pace in January 2026 has been slower than the year-ago period, though order activity improved sequentially over the first three weeks of January and potential leads increased. Executives said those leads can take 15 to 45 days to convert. They expressed cautious optimism about spring selling trends compared with the prior year, noting that expectations for spring 2025 did not materialize. When asked about potential government actions to support housing demand, management said that would be “additional help” and not baked into guidance.
On mortgage pricing, management said the average rate originated over the last several quarters has been in the 5.25% to 5.5% range overall, noting that some “teaser” rates below 4% can be available, especially on ARM products, and citing 4.875% on a 30-year fixed as another commonly used offering to address affordability.
Operations: costs, cycle times, and community count
Century highlighted operational improvements as a key offset to margin pressure from incentives. Dale Francescon said direct construction costs on starts fell by an average of $13,000 per home in 2025, while cycle times improved by 13 days to a company record of 114 calendar days. The faster pace allowed Century to reduce finished spec inventory by nearly 30%, he said.
Rob Francescon added that direct construction costs on homes delivered in the fourth quarter declined 4% sequentially, and cycle times averaged 114 days versus 127 days in the year-ago quarter.
Century’s 2025 average community count increased 13% to 318, while the year-end community count was 305. Management said it had expected modest growth in ending community count but closed more communities than anticipated, particularly late in the fourth quarter due to increased sales pace. For 2026, the company expects average community count to rise in the low- to mid-single-digit percentage range year-over-year, with growth building through the middle and back half of the year.
Financial results, margins, and capital allocation
CFO Scott Dixon reported fourth-quarter pre-tax income of $47 million and net income of $36 million, or $1.21 per diluted share. Adjusted net income was $47 million, or $1.59 per diluted share.
Home sales revenue was $1.1 billion, up 16% sequentially, driven by a 22% sequential increase in deliveries to 3,030 homes. Average sales price was $367,000, down 5% quarter-over-quarter, which management attributed largely to higher incentives. Total revenues also benefited from the sale of a 300-unit multifamily community within Century Living for $97 million; Dixon clarified in Q&A that the Century Living sale was not included in homebuilding gross margin or the incentive commentary.
GAAP homebuilding gross margin was 15.4%, which included 100 basis points of inventory impairment and 10 basis points of purchase price accounting related to two 2024 acquisitions. The quarter included a $10.9 million impairment charge tied to several closeout communities. Adjusted homebuilding gross margin was 18.3%.
SG&A as a percentage of home sales revenue was 12.2% in the fourth quarter. For 2026, Dixon said the company expects SG&A to be roughly 13% for the full year (based on the midpoint of home sales revenue guidance), with first-quarter SG&A expected at 14.5%, which management said typically reflects seasonally lower first-quarter closings and factors related to backlog ASP and implied guidance.
The financial services segment generated $25 million of revenue and $8 million of pre-tax income in the quarter. Century reported a mortgage capture rate of 84% in both the fourth quarter and full year—records by the company’s account—and said it expects financial services contribution margin in 2026 to be similar to 2025 levels.
Balance sheet metrics improved during the quarter, with net homebuilding debt to net capital ratio at 25.9% versus 31.4% in the third quarter, and homebuilding debt to capital at 29.1% versus 34.5% in the prior quarter. Century ended the quarter with $2.6 billion in stockholders’ equity and $1.1 billion in liquidity. The company generated $153 million of cash flow from operations in 2025, following $126 million in 2024.
Century maintained its quarterly cash dividend of $0.29 per share and repurchased 334,000 shares for $20 million during the quarter at an average price of $59.90. For the full year, it repurchased 2.3 million shares, or 7% of shares outstanding at the start of the year, at an average price of $63.32. Management said it returned a record $178 million to shareholders in 2025 through dividends and repurchases, and noted approximately 1.5 million shares remained under the repurchase authorization.
Land position and 2026 outlook
Management said Century invested $1.2 billion in land acquisition and development in 2025 and ended the fourth quarter with roughly 61,000 owned and controlled lots. The company expects 2026 land acquisition and development spending to be roughly flat with 2025, with flexibility to reduce or accelerate depending on market conditions.
Rob Francescon said Century’s land strategy relies heavily on land options, describing it as flexible and risk-reducing. He noted the company had 26,000 option lots secured by non-refundable deposits totaling $74 million. He also said 43% of total owned land inventory at quarter-end was in finished lots, with another 32% in land under development. Finished lot costs were roughly flat sequentially in the fourth quarter, and management expects average finished lot cost in 2026 to be only 2% to 3% higher than fourth-quarter 2025 levels.
For 2026, management guided to new home deliveries of 10,000 to 11,000 and home sales revenue of $3.6 billion to $4.1 billion, assuming no significant changes to the current economic environment. The company expects first-quarter 2026 deliveries of 2,100 to 2,300 homes, which management characterized as the low point for the year as community count increases over 2026.
About Century Communities (NYSE:CCS)
Century Communities, Inc is a national homebuilder and land developer headquartered in Greenwood Village, Colorado. The company is engaged in the acquisition, development, construction and sale of single- and multi-family residential homes, offering a range of floor plans and design options to homebuyers. In addition to its core homebuilding activities, Century Communities provides ancillary services such as mortgage financing, title and closing services, and insurance products through its wholly owned subsidiaries, aiming to deliver a comprehensive homebuying experience.
Founded in 2009, Century Communities rapidly expanded through both organic growth and strategic land acquisitions, positioning itself in high-growth markets across the United States.
