Green Brick Q3 2026 Revenue Falls as Home Prices and Margins Decline

Green Brick Partners, Inc. (NYSE: GRBK) reported lower third-quarter revenue and earnings as a shift toward lower-priced homes and increased buyer incentives outweighed modest growth in deliveries. Residential unit revenue fell 9.7% year over year to $437.0 million, while net income attributable to the company declined 24.0% to $59.2 million.

Diluted earnings per share decreased 23.7% to $1.35. Green Brick delivered 978 homes during the quarter, up 2.6%, but the average sales price fell 12.1% to $447,000. The company attributed the price decline primarily to a larger share of closings from Trophy Signature Homes and higher incentives associated with increased mortgage rates.

Homebuilding gross margin remained relatively high at 28.0%, according to the presentation, but declined 410 basis points from 32.1% a year earlier. Incentives on third-quarter closings reached 9.9%, up 180 basis points year over year and 110 basis points from the second quarter of 2026.

Selling, general and administrative expense declined to $51.8 million from $55.2 million. However, SG&A represented 11.8% of residential unit revenue, compared with 11.4% in the prior-year quarter, reflecting the lower revenue base.

Orders rise as backlog contracts

Net new home orders increased 3.1% to 926, generating $429 million of order revenue. The monthly absorption rate declined 3% to 2.8 homes per community, while cancellations accounted for 8.2% of gross orders.

Green Brick ended the quarter with a backlog of 629 homes valued at $379.3 million. Backlog value was down 17.0% from $456.8 million a year earlier. Housing starts were nearly unchanged at 954, and units under construction declined 1.0% to 2,181.

The company continued to expand Trophy Signature Homes, which accounted for 45% of third-quarter home-closing revenue and 60% of closed units. Management’s priorities include further scaling the brand in Dallas-Fort Worth and expanding in Austin and Houston. Trophy opened its first Houston community in March 2026.

Dallas-Fort Worth and Atlanta generated about 88% of Green Brick’s third-quarter revenue. The company continues to focus on infill and infill-adjacent locations while extending its presence in additional Texas markets.

Land investment and liquidity

Green Brick’s total lots owned and under contract increased 25% year over year and 5% from the end of 2025 to 51,435. Of that total, 79% were owned and 21% were under contract.

During the first nine months of 2026, the company invested approximately $274 million in land and lot acquisitions and $323 million in land development, excluding reimbursements. For the full year, management expects about $350 million of land and lot acquisitions and approximately $430 million of land-development spending, also excluding reimbursements.

Inventory owned increased to $2.15 billion at September 30 from $1.94 billion at the end of 2025. Cash and equivalents declined to $100.0 million from $154.6 million, while total debt increased to $338.0 million from $320.3 million. Total liquidity stood at $325.0 million, including $225 million available under the revolving credit facility, compared with $519.6 million at year-end.

The homebuilding debt-to-total-capital ratio was 13.1%, versus 12.8% at the end of 2025, while the net homebuilding debt-to-total-capital ratio increased to 9.6% from 6.3%. Green Brick said its capital-allocation priorities include investing in land, maintaining liquidity and low leverage, and repurchasing shares. It targets debt-to-capital of up to 20% to support growth while maintaining what it describes as an investment-grade balance sheet.

Management also plans to expand Green Brick Mortgage and Green Brick Insurance across the company’s markets while continuing to balance pricing, sales pace and profitability on a community-by-community basis.

The company identified economic cyclicality, competition, mortgage-rate and financing volatility, inflation, labor and material costs, land availability, entitlement delays and geographic concentration among its principal risks. Severe weather, execution challenges in community development and Trophy’s expansion, and potential inventory write-downs could also cause actual results to differ from management’s expectations.