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2026_GPTW_best-places-by-industry-Construction-PulteGroup,_Inc.

Employees say:"We have an amazing culture. Management inspires, leads by example, and leads with humility. Teams support one another, hold each other accountable, and have each other's backs. Individuals are committed to working hard, growing, and doing the right thing. We are recognized for our contributions and successes. My job is absolutely one of the best parts of my life."

Best Large Workplaces in Construction

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100 Best Places to Work 2026_PulteGroup, Inc.

Fortune 100 Best Companies to Work For

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2025 Best Large Workplaces for Women_PulteGroup, Inc._US1__68a71dfc383bc91cadd06a7f_3

Employees say:"Management consistently demonstrates adaptability to departmental needs and communicates company metrics and initiatives with clarity and transparency. Emotional wellbeing is a core part of our culture, and we're provided with ample opportunities to maintain a healthy work-life balance. Our team is incredibly supportive, always striving to do the right thing and ensuring our division's clients are satisfied. The collective effort and dedication truly make this a great place to work."

100 Best Large Workplaces for Women

2025_GPTW_Construction_Large_PulteGroup, Inc._US1__685d50c0023fa8a026342320_1

Employees say:"I believe Pulte has established a culture that recognizes people as its most valuable asset. The company provides excellent wellness coverage and programs, competitive pay, paid holidays, company-wide celebratory events, and various other initiatives that prioritize its employees."

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GPTW_100BestCompaniesToWorkFor_2025-PulteGroup, Inc._US1__20241210214006_4

Employees say: "This company provides opportunities for employees to grow and develop to be the best employee that they can be. PulteGroup has built a great work culture and team that empowers its employees. Some examples are teambuilding events, great communication, and holiday events."

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

GPTW_Women_Large_2024-PulteGroup, Inc._US1__20240830224000_3

Employees say:"The work like balance is unlike anything I have experienced before. You have enough PTO to not worry about using it all quickly. You do not feel like you have to miss moments in your kids/family life due to work."

GPTW-Construction-Large-2024-PulteGroup

Employees say:"I have worked in the new home sales business for 17 years and with 4 other home builders. Pulte has been beyond the best company to work for. Management truly wants you to succeed and is supportive. Everyone is welcoming and I feel as though I am really part of a team. They offer a leadership development program that I was invited to participate in. Upper management and the division president are approachable and easy to talk to, they ask for feedback and value my opinions. I genuinely ENJOY spending my free time with my co-workers and have cultivated many friendships."

Fortune partners with global people analytics firm Great Place to Work to analyze survey feedback representing employees from companies across the U.S.

GPTW Millennials 2024-Large-PulteGroup, Inc.

Employees say:"The people at Pulte are genuinely nice and compassionate. I've never felt so supported in my career as much as I do here. I feel at ease because I am not worried how I will be treated. I don't take for granted the excellence in behavior here."

100 Best Large Workplaces for Millennials

Industries included in the sector are construction and engineering services and homebuilders.

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100 Best Companies 2024-PulteGroup, Inc.

After weathering a difficult year in a nearly frozen housing market, PulteGroup fell seven places from its 2023 ranking. Yet it remains the third largest homebuilder in the U.S., with operations in more than 45 U.S. markets. PulteGroup aims to create affordable housing opportunities; provides mortgage-free homes to wounded veterans through its Built to Honor program; organizes food drives with local pantries; and launches fundraising initiatives for organizations employees care about.&nbsp; &nbsp;The PulteGroup Foundation launched Dollars for Doers in 2022: For every hour an employee volunteers, the foundation contributes the equivalent of up to $25 per hour, for up to 40 hours annually per employee.&nbsp; &nbsp;To bolster the success of its homebuilding operations team, which constitutes 75% of its workforce, PulteGroup offers mentorship and formal training programs, such as its Certified Field Trainer initiative to support trainees for up to six months.

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100 BEST COMPANIES 2023-PulteGroup

One of the largest homebuilders in the U.S. aims to continually improve the employee experience. As a result, nine out of 10 employees want to work at PulteGroup for “a long time.” 
<ul> 
 	<li>The diversity board’s outreach committee has enhanced PulteGroup’s recruitment, hiring, and onboarding efforts with a focus on identifying a large pool of diverse job candidates and building recruitment relationships with HBCUs.</li> 
 	<li>New hires are assigned an onboarding experience partner, responsible for ensuring new team members feel connected to the company.</li> 
 	<li>PulteGroup’s affordable housing committee is piloting a new program, Hope to Home, that will subsidize a percentage of the homes the company builds, offering them to first-time buyers in underserved groups.</li> 
 	<li>The company has a one-stop learning management system that provides employees with training, workshops, and developmental tools.</li> 
 	<li>PulteGroup’s new health and wellness program goes beyond physical and emotional health coverage to include financial and social wellness.</li> 
</ul>

GPTW Women 2023-PulteGroup, Inc.

Employees say: 
 
"Everyone on the team cares about doing a great job, taking care of each other, and doing what is right for our customers. There’s a high level of work ethic and pride from everyone."

Fortune partnered with Great Place to Work to analyze survey feedback representing nearly half a million U.S. employees.

GPTW Millennial Large 2023-PulteGroup

Employees say: 
 
"Every single employee seems genuinely happy to work at PulteGroup, Inc. I think I can speak for most, if not all, of us when I say we feel like this company and our superiors care about our happiness. I feel seen as something more than just an employee. My managers are happy in their roles and are great leaders. The opportunity to volunteer and have a day off to do so is so special. This company cares for our community, and I feel a massive sense of pride over it."

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

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When it comes to supporting employees, flexibility, diversity, and a few extra paid days off go a long way.

100 Best 2022 PulteGroup,-Inc._1274415-5

America’s third-largest homebuilder has a laser focus on diversity, equity, and inclusion. PulteGroup created internal committees to work on recruiting and training a diverse talent pool of employees and to sponsor cultural awareness programming with live, interactive webinars that spotlight the achievements of a diverse range of individuals. Externally, in keeping with the company’s values, PulteGroup is working to create homeowning opportunities for lower-income families and minorities through affordable housing and down payment assistance initiatives. Part of the company’s emphasis on inclusion includes a flexible workweek. Once fully implemented, employees will work in the office two days per week and remotely for the other three.

Great Places to Work in Construction Large-2022-PulteGroup, Inc._1274415-5

Employees say: 
 
“This team is like a big family, and it is a lot of fun to be able to work with all of them. We have a strong bond and its great to feel like my work makes a difference. This is the only place I have worked that truly shows how much they appreciate our hard work and what we do.”

GPTW Women 2022-PulteGroup, Inc

Employees say: 
 
“Pulte offers a lot of development and growth opportunities that help you grow and advance in your career. There is a large focus on recognition and connection, even in a hybrid environment. I have been impressed with our increased efforts on diversity and inclusion the past couple of years and the launch of our BRGs and women in leadership series.”

To determine millennials' workplace preferences, Fortune's research partner Great Place to Work analyzed feedback representing more than 6.1 million U.S. employees.

GPTW 2022 Millennials List Large-Pulte Group

Employees say: 
 
“I have said this before and I’ll say it again, I feel blessed to be with a company who is not always thinking of the bottom line. Keeping people safe when weather is bad, during a pandemic making sure we had the essentials, and listening to its employees when they chime in with ideas. I have several close friends working for other builders and they cannot say the same. I’m a proud Pulte employee!”

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100 Best Companies 2021-76-PulteGroup,-Inc.

The homebuilder was hit hard by the pandemic, which forced it to make painful staff reductions in the form of furloughs and layoffs. In response, PulteGroup CEO Ryan Marshall, his direct reports, and the entire board of directors took pay cuts, raising $400,000 for a relief fund aiding those who lost their jobs. In the end, the company was able to bring back 100% of furloughed employees within 60 days, and actively set about rehiring those who were laid off. Marshall has also made a commitment to improving PulteGroup’s diversity practices, forming an internal diversity and inclusion board meant to hold the organization accountable to its goals.

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Best-Workplaces-Women-2021-Large-PulteGroup,-Inc

Employees say: 
 
“The company is always making an effort to recognize its employees and show their appreciation. The CEO knows front-line employees by name and makes an effort to build relationships with employees at all levels of the organization.”

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-284-PulteGroup

Started by 18-year-old homebuilder Bill Pulte in 1950, PulteGroup is now the third-largest home construction company in the U.S. based on number of homes closed. Its brands include Del Webb and Centex.

We surveyed tens of thousands of employees to create this list of millennials’ favorite workplaces.

Best Large Workplaces Millennials 2021-PulteGroup,-Inc

Employees say: 
 
“My managers trust me to get the job done well, and as result, I have incredible opportunity and flexibility. I trust my team, and they too enjoy complete flexibility and opportunity. Together - we always WIN! This is truly a Great Place to Work!”

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

Best Workplaces Women 2020-PulteGroup

Employees say: 
 
“People are genuinely interested in my career advancement. I've been mentored and challenged, which directly resulted in several promotions. This is truly a team where people care for each other and look for ways to build them up to promote.”

This year's Fortune 500 marks the 66th running of the list.

F500-2020_309_PulteGroup

The Atlanta-based homebuilder, whose brands include Del Webb and Centex, is considered the third-largest home construction company in the U.S. based on the number of homes closed. It operates in more than 40 markets.

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Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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PulteGroup is one of the largest homebuilders in the U.S., having constructed over 800,000 homes since 1950. The company operates in more than 45 markets across 24 states through its portfolio of brands, including Centex, Pulte Homes, Del Webb, DiVosta Homes, American West, and John Wieland Homes and Neighborhoods.

Q2 2026

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PulteGroup (PHM): Company Profile, Stock Price, News, Rankings

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PulteGroup

pultegroup

Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin and I will be your conference operator today. At this time, I would like to welcome everyone to the PulteGroup, Inc. Q1 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to James Zeumer, Vice President of Investor Relations. Please go ahead.

Thank you, Kelvin, and good morning. I want to welcome everyone to today's call to review PulteGroup's operating and financial results for our first quarter ended March 31, 2026. Joining me on today's call are Ryan Marshall, President and CEO, Jim Ossowski, Executive Vice President and CFO, and David Carrier, Senior Vice President of Finance. In advance of this call, a copy of our Q1 earnings release and this morning's webcast presentation have been posted to our corporate website at pultegroup.com. We will also post an audio replay of this call later today. I would highlight that today's presentation includes forward-looking statements about the company's expected future performance. Actual results could differ materially from those suggested by our comments made today. The most significant risk factors that could affect future results are summarized as part of today's earnings release and within the accompanying presentation.

These risk factors and other key information are detailed in our SEC filings, including our annual and quarterly reports. Now let me turn the call over to Ryan. Ryan?

Thanks, Jim, and good morning. At last week's quarterly operations review meeting, I made the following statement to the senior leaders of PulteGroup's home building and financial services operations. In a quarter that grew increasingly more complicated, you delivered exceptional results both operationally and financially. I offer the same thoughts to open this call. In a period that saw every aspect of our consumers' lives impacted by domestic and global events, our discipline, focus, and proven business platform allowed us to deliver another quarter of strong business performance. Financially, our $3.3 billion in home sale revenues, 24.4% gross margins, and lower share count all contributed to driving earnings of $1.79 per share. Supported by the ongoing strength of our operations, we positioned the company for future growth by investing $1.3 billion in land acquisition and development while returning $360 million to shareholders through share repurchases and dividends.

After having allocated $1.7 billion to these activities, we ended the quarter with $1.8 billion of cash and a net debt to capital ratio of effectively zero. Operationally, we were successful in growing our community count, which was an important driver of our 3% increase in net new orders. As shown in this morning's release, our results benefited from 18% order growth in Florida as our diversified business platform and exceptional land positions continued to deliver strong results. As pleased as I am with the growth in orders, I'm even more encouraged with the fact that many of these homes are built-to-order homes. In the first quarter, built-to-order homes accounted for 43% of net new orders, up from 40% in Q1 of last year. On our last earnings call, we outlined our plans to shift our business back toward our historic mix of 60% built-to-order and 40% spec.

This quarter was just the first step in a process that will take several quarters to complete, but I am encouraged by such early success. Finally, I would highlight the progress we continue to make on lowering our spec inventory, particularly our finished inventory. Reflecting actions taken by our field teams, we ended the quarter with an average of 1.4 finished specs per community, which is inside our target range of 1-1.5 finished specs per community. This level of spec inventory allows us to effectively serve those home buyers needing quick move-in homes while supporting our strategic shift back to selling more built-to-order homes. Overall, I would say that the first quarter developed as a typical spring selling season, with orders increasing sequentially as we moved through the months.

It is difficult to determine what impact global events may have had, but appreciate consumers were facing higher rates and costs in March. Through the first few weeks of April, demand conditions have remained on track with typical seasonal trends. Still, in the quarter, we experienced strong buyer traffic to our communities and sold more than 8,000 homes, which says consumers remain actively engaged in home buying. Once again, our diversified business platform allowed us to capture the strongest segments of the business, namely the move-up and active adult buyers. Economic reports talk to the K-shaped economy and how lower and middle-income families are struggling much more than those in upper incomes. Housing demand over the past two years has been consistent with these dynamics.

We saw this play out again in our first quarter results, with both relative demand strength in our move-up and active adult businesses, and option and lot premium spend that continues to average over $100,000 per home. However, on the lower leg of the K, first-time buyers continue to struggle with the challenges of stretched affordability and fear of job loss. Our ability to offer low fixed-rate mortgages and other incentives is certainly helping solve the affordability riddle for some. This comes at a price, as incentives in the quarter reach 10.9% of gross sales price. Even at this level, I think we have done an excellent job of balancing the need to sell homes, particularly finished spec homes, and turn our inventory while maintaining higher margins in support of delivering strong returns on invested capital.

A critical support to this balance has been our ongoing willingness to adjust our starts pace in alignment with core demand. We again demonstrated such discipline as we started approximately 6,500 homes against orders of 8,000 homes in the quarter. This approach helped us to clear excess inventory and allow our communities to more easily sell from a position of strength while still providing sufficient production to achieve expected closing volumes for the full year. While there is uncertainty about how events will develop over the next few quarters, I remain optimistic about long-term housing demand and confident about the strength of our business model. I could draft a long list of our strengths, but would highlight the following three key points. We control approximately 230,000 lots, including 35,000 owned and finished lots.

We have a land pipeline that we believe can meet current sales and accelerate as buyer demand improves going forward. We have a strong market presence across the major markets and an unmatched ability to serve all buyer groups. We are benefiting currently from having 60% of our business among more affluent Pulte and Del Webb buyers, but we fully appreciate the importance of maintaining the presence of our Centex brand among first-time buyers. Finally, we have a culture that is committed to delivering superior build quality and buyer experience, and to raising that bar every day. Thank you, and let me turn the call over to Jim Ossowski for a review of our first quarter results. Jim?

Thank you, Ryan, and good morning. I look forward to providing a detailed review of PulteGroup's solid first quarter operating and financial results. On a year-over-year basis, the first quarter net new orders increased 3% to 8,034 homes with a value of $4.6 billion. Higher net new orders in the period benefited from a 9% increase in average community count to 1,043, while absorption paces decreased by 5% to 2.6 homes per month. I would highlight that the growth in our net new orders was driven by the ongoing strength of our Florida operations. I am pleased to report that orders increased in every Florida market and were up 18% statewide. In addition to gradual improvements in Florida's new and existing home inventories, our strong performance reflects PulteGroup's superior land positions, our ability to serve all buyer groups, and our outstanding leadership teams.

Our cancellation rate as a percentage of starting backlog in the quarter was 13%, compared with 11% last year. The percentage increase in our cancellation rate reflects the smaller starting backlog we had entering the period, as unit cancellations were actually slightly down in the quarter relative to last year. In the first quarter, net new orders among move-up and active adult buyers were higher by 3% and 14%, respectively, over the first quarter of last year. Net new orders among first-time buyers decreased by less than 1% from Q1 of last year. By buyer group, net new orders in the first quarter consisted of 38% first time, 39% move up, and 23% active adult. In the first quarter of 2025, our net new orders were 39% first time, 40% move up, and 21% active adult.

Net new orders benefited from land investments made in prior years as we grew community count across all buyer groups. Home sale revenues in the first quarter were $3.3 billion, compared with $3.7 billion last year. Lower home sale revenues for the period were the result of a 7% decrease in closings to 6,102 homes, in combination with a 5% decrease in average sales price to $542,000. ASP was down mid-single digits across each buyer group and reflects the generally competitive conditions and elevated incentives that exist in many markets across the country. By buyer group, closings in the first quarter break down as follows, 38% first time, 39% move up, and 23% active adult. This compares with a prior year closing mix of 38% first time, 41% move up, and 21% active adult.

Based on sales and closings in the period, at the end of Q1, our backlog was 10,427 homes with a value of $6.5 billion. We ended the first quarter with 14,090 homes in production, of which 6,349 were spec homes. As Ryan highlighted, and consistent with our stated objective, we lowered total spec inventory by almost 900 homes from the end of 2025. At quarter end, specs accounted for 45% of homes under construction. Of the specs under production, there were 1,515 finished spec homes, which is a decrease of nearly 500 homes or 24% in just the past 90 days. At this level, we are in our target range of having an average of 1-1.5 finished specs per community. Based on the homes under construction and their stage of production, we expect to close between 6,700 and 7,100 homes in the second quarter of 2026.

This keeps us on track with our previous guidance on closings in the range of 28,500-29,000 homes for full year 2026. Consistent with the guidance provided on our last earnings call, given land investments made in prior years, we expect year-over-year community count growth of 3%-5% in each of the remaining three quarters of 2026. Given competitive market conditions and our belief that incentives will remain elevated, we expect the average sales price of second quarter closings to be in the range of $540,000-$550,000. For the full year 2026, we reaffirm our previous guidance of ASP of $550,000-$560,000, as we expect a higher mix of build-to-order closings in the third and fourth quarters. For the first quarter, we reported gross margin of 24.4%, which is down from 27.5% in the first quarter of 2025.

The year-over-year decline in gross margin primarily reflects higher incentives, which were 10.9% of gross sales pricing, Q1 2026. This is an increase of 290 basis points from last year and is up 100 basis points sequentially from Q4 2025. As we're getting the question more frequently of late, I would note that within our Q1 home sale cost of revenues is approximately $6 million or 20 basis points associated with land impairments. Based on quarterly testing, impairments were triggered in two communities and are reflective of today's competitive market dynamics in combination with our ongoing efforts to clear excess spec inventory, particularly finished specs. I'm pleased to report that thanks to a lot of outstanding work by our construction and procurement teams, Q1 house costs were down 5% from the first quarter of last year to $75 per sq ft.

Savings were led by lower lumber costs, but we have also achieved savings across a wide array of building products and services. Based on anticipated closing mix and current selling conditions, we expect second quarter gross margin to be in the range of 24.1%-24.4%. I would note that we expect Q2 gross margins to be the low point for 2026. We are forecasting gross margins to recover in the back half of the year as we benefit from increased closings of higher margin, active adult, and build-to-order homes. As such, we maintain our guide for full year 2026 gross margin to be in the range of 24.5%-25.0%, although likely toward the lower end of the range. First quarter home building SG&A expense of $380 million, or 11.5% of home sale revenues, compared with $393 million, or 10.5% in Q1 of last year.

On a dollar basis, our SG&A expense in the quarter was down $13 million from last year, but we lost leverage given fewer home closings and revenues in the period. First quarter SG&A expense was in line with prior guidance, so we are maintaining our guidance for full year 2026 expense to be in the range of 9.5%-9.7% of home sale revenues. Pulte's financial services operations reported first quarter pre-tax income of $13 million, which is down from pre-tax income of $36 million in the first quarter of 2025. Financial services pre-tax income in the first quarter was impacted by lower home building volumes and reduced capture rate, along with lower net gains from the sale of mortgages. Mortgage capture rate in the period was 85%, compared with 86% last year. First quarter pre-tax income for PulteGroup was $449 million.

In the period, we recorded a tax expense of $102 million, or an effective tax rate of 22.8%. Our Q1 tax rate reflects the benefits of stock-based compensation and federal tax credits. Looking out to the remainder of the year, we continue to expect our tax rate to be approximately 24.5%. Our expected tax rate does not take into consideration any discrete, period-specific tax events that might occur. PulteGroup's net income for the first quarter was $347 million, or $1.79 per share. In the comparable prior year period, the company reported net income of $523 million, or $2.57 per share. Earnings per share for the first quarter was calculated based on 193 million diluted shares outstanding, which is down 5% from the prior year.

In the first quarter, we repurchased 2.4 million common shares for $308 million, which brings total repurchases for the trailing 12 months to 10.3 million common shares for $1.2 billion. In a separate press release we issued this morning, we announced that our board authorized an additional $1.5 billion for share repurchases, which brings total availability to $2.1 billion. Along with returning capital to shareholders, we continue to prioritize investing in the growth of our operations. In the first quarter, we invested $1.3 billion in land acquisition and development, which was evenly split between the two activities. We ended the first quarter with 229,000 lots under control, which is down approximately 5,000 lots from the end of 2025. We remain focused and disciplined in our land activities as we look for opportunities to grow our business while achieving acceptable risk-adjusted returns and managing overall portfolio risk.

After 24 months of variable housing demand and limited opportunities for price appreciation, land inflation has started to ease. We are seeing land prices stabilize in many parts of the country and even move lower in individual deals in a handful of markets. Every land deal is different, and A locations are still in demand, but we are finding more opportunities to negotiate improved land terms, be it the price, the timing, or both. In the first quarter, we issued $800 million of senior notes split equally in tranches of five and 10 years. We used approximately $600 million of the proceeds to repay existing notes, with the remaining $200 million to be used for general corporate purposes. Inclusive of these transactions, we ended the first quarter with a debt-to-capital ratio of 12.3%.

Adjusting for the $1.8 billion of cash we held at quarter-end, our net debt to capital ratio was effectively zero. Given current market dynamics and our expected 3%-5% growth in community count, we are projecting land acquisition and development spend of $5.4 billion in 2026. Assuming this level of land spend and the expectation that house inventory will increase commensurate with an increasing level of build to order home sales, we would expect 2026 cash flow generation to be approximately $1 billion. Overall, it was another very productive quarter for the company. Now, let me turn the call back to Ryan.

Thanks, Jim. Before opening the call to questions, I will offer a few additional comments on demand conditions in the quarter. Given everything that is happening in the world, demand has actually held up better than might be expected and could certainly improve if global tensions eased and interest rates came back towards 6%. This would be highly consistent with the increased buyer activity we saw developing early in the first quarter when mortgage rates dipped below 6%. Consistent with trends we experienced in the back half of 2025, the pockets of home buying demand strength and softness didn't change dramatically. Home buying demand in our Northeast, Southeast, and Florida markets generally remained positive. First quarter demand in the Midwest was more variable across the markets than we had been experiencing.

That being said, the weather conditions were a bit more extreme, so we'll have to see how the trends progress over the next couple of quarters. As I highlighted earlier, our Florida teams continue to operate at a high level as we benefit from a strong land pipeline and experienced leadership teams. Looking out to our Texas and West markets, overall demand trends remain slower relative to the rest of the country, but I would suggest they may be finding more stable footing. Between ongoing pricing actions and incentives, the markets are finding clearing prices where transactions can happen. We still have work to do in clearing some final spec inventory in California and Washington, but I am hopeful we are getting to the end of this tunnel. One final comment I would share on buyer demand.

Well-positioned communities that offer the right product and a compelling value equation to the consumer are selling homes. From Boston to Naples and Raleigh to San Jose, consumers are looking for the opportunity to buy homes that work for their stage of life and their financial capabilities. Our job is to make sure PulteGroup communities meet the requirements. Let me close by thanking the entire PulteGroup organization for the great first quarter operating and financial results the company delivered. I also want to recognize our team for their tireless efforts to deliver a superior home buying experience. I'm proud to report that our customer surveys are now showing PulteGroup's Net Promoter Score, as measured one full year after the initial delivery of the home, has risen to a score of 65.

To put this in perspective, these results place PulteGroup among such well-known service leaders as Apple, Google, and Chick-fil-A. It's this type of commitment to our customers and to each other that has PulteGroup again ranked among the Fortune 100 Best Companies to Work For. This marks PulteGroup's sixth year on this prestigious list. Our ranking on this list has never been a goal, but rather an outcome of the tremendous culture we work hard to maintain inside of our organization. Now, let me turn the call over to James Zeumer.

Great. Thanks, Ryan. We're now prepared to open the call for questions. We can get to as many questions as possible during the remaining time of this call, we ask that you limit yourself to one question and one follow-up. Kelvin, I now open the call to questions. Thank you.

Ladies and gentlemen, we will now begin the question and answer session. As we answer Q&A, we ask that you please limit your input to one question and one follow-up. As a reminder, to ask a question, please press the star button followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Your first question comes from the line of John Lovallo of UBS. Please go ahead.

Good morning, guys. Thanks for taking my questions. The first one is, can you just help us with some of the moving pieces in the gross margin walk from roughly 24.4% in the first half to 24.5%-25% for the full year? It certainly seems like closing mix is going to be a good guy.

Sticks and bricks could be a good buy. Land may be a little bit better than it had been. The incentive loader, you're still assuming sort of 10.9 carries throughout the year?

Yeah, John, I think you've got all the right pieces there. We are assuming a higher incentive load, but we'd expect it to likely come down, driven by a couple of factors. One would be more built to order and more move up in active adult business, where we tend to incentivize less. We've also cleared a lot of the finished spec inventory, which we're carrying higher incentive loads. So, while we'd expect the overall environment to remain competitive and the elevated incentive load to stay, the mix of product and consumers that we have coming through could potentially bring the overall number down, which is why we're guiding to the full year staying kind of within our range. You'll note that Q2 is going to be a low point for a couple of reasons.

One of the big reasons in that is that a lot of the spec inventory that we sold in Q1 at a higher incentive load are closing. Some closed in Q1. You got a bunch more that are closing in Q2.

Okay. Yeah, that's really helpful. Maybe just kind of echoing what you said, Ryan, before, it seems like the spring has actually been reasonably good considering a lot of factors in the market, and most builders have reported orders that are up year-over-year, so indicating a little bit of a better spring despite this macro and geopolitical headwinds. The question is, if we do in fact get some kind of resolution here to the conflict in the Middle East, do you think we could still have a really good spring selling season? On top of that, is there a chance that we could get extended a bit, maybe into June, just given shorter cycle times for many of the builders?

Yeah, hard to know whether it gets extended or not, John. I think ultimately the consumer will have to decide that. As I tried to highlight in my prepared remarks, when rates came down to 6, maybe even a touch below 6, things were moving along really well. Despite the things that are going on globally, it's still, I think, a very good spring selling season, and we're pretty pleased with what we've delivered and how it has set us up for the full year. I can promise you that we didn't have any of the current geopolitical disruption on our bingo card as we kind of laid out our full-year guide and set expectations for how the year would play out.

As we look at the actual numbers for Q1, we're in line with kind of where we wanted to be, where we thought we were going to be, which is the big reason that we're reaffirming kind of our full year. All things considered, John, I'm incredibly pleased with how we performed. I'm really pleased with how the consumer's behaving, and I think there's bias to the upside if things can get resolved, rates were to come down a little bit, I think, yeah, I think things could get even a little bit better.

Your next question comes from the line of Alan Ratner of Zelman. Please go ahead.

Hey, guys. Good morning. Thanks for all the

Detail and nice job in a tough market. Good morning.

Ryan, you alluded to this several times, but I was hoping to dig in a little bit deeper on the incentive trends. Specifically what I'm curious about is, do you have data or can you kind of talk through the difference in incentives you offer both across price points as well as BTO versus spec? I see obviously they were up sequentially and year-over-year across the averages, but I'm curious if there's any notable differences across those price points or BTO versus spec.

Yeah, Alan, there's definitely more incentive on spec broadly. There's more incentive as a percentage on first-time spec. I tried to provide some nuance around that in my comments around the K-shaped economy. That first-time entry-level buyer, they're the most challenged by affordability, and that's where we've tried to lean in more in order to solve the affordability equation. I think we've done it pretty effectively. When you move into the move-up and the active adult buyers, we're incenting there as well. The types of incentives vary. There's still a fair number of incentives that are going into a forward commitment program that's specifically targeted to dirt sales. It's not as low as a 30-year fixed-rate mortgage that we'd offer on a spec that's complete, but still in the kind of low-to-mid 5% range and materially below the current market.

It's locked in for the entire duration of the build cycle. There's a lot of value that we think is being offered there, and there's a cost to that, but that's factored in the incentive load. All things considered, Alan, as I said, we'd still expect incentives to remain higher. Given the mix shift in buyers as well as spec to build to order, we think the overall incentive load for us as a company will come down.

PulteGroup (PHM) Q1 2026 Earnings Call Transcript

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