Key Highlights

  • Total revenue fell to USD 448.2 million from USD 491.6 million, and diluted EPS declined to USD 1.35.
  • Residential gross margin narrowed 410 basis points to 28.0%, driven by higher incentives, discounts and product mix.
  • Net new home orders rose 3.1% to 926, but backlog revenue decreased 17.0% to USD 379.3 million.
  • Financial services revenue grew 51.9% to USD 11.2 million, lifting segment pre-tax income by 68.9% to USD 5.6 million.

Green Brick Partners, Inc. (NYSE:GRBK) reported third-quarter 2026 total revenue of USD 448.2 million, down from USD 491.6 million a year earlier and below a consensus estimate of USD 464.52 million. Diluted earnings per share were USD 1.35, compared with USD 1.77 in the prior-year quarter and a consensus estimate of USD 1.44, so both lines came in below the consensus figures.

Net income attributable to the company was USD 59.2 million versus USD 77.9 million, and pre-tax income fell to USD 78.0 million from USD 106.6 million. Home deliveries increased 2.6% to 978, but the average sales price of homes delivered dropped 12.1% to USD 446.7 thousand, which the company attributed to incentives and product mix. Residential units revenue declined 9.7% to USD 437.0 million.

Margins, Orders and Financial Services

Residential units gross margin fell to 28.0% from 32.1% as cost of residential units declined only 4.3% against the 9.7% drop in revenue. Selling, general and administrative expense was USD 51.8 million, or 11.8% of revenue, up from 11.4%, mainly because of lower revenue. Net new orders rose 3.1% to 926 on a 5.8% increase in average active communities to 109, though the cancellation rate moved up to 8.2% from 6.7% on affordability pressure and financing-related cancellations. Order value of USD 428.9 million slipped 1.1%, with a higher mix from Trophy Signature Homes, the entry-level builder, lowering the average order price to USD 463.2 thousand.

Financial services revenue rose to USD 11.2 million, helped by 499 loans funded with USD 185.0 million of principal. The mortgage capture rate eased to 65.7% from 72.6% as the captive lender entered communities with existing outside lender relationships. Equity income from unconsolidated entities was USD 0.4 million, and other income fell to USD 1.2 million from USD 2.7 million on due diligence costs for terminated land and lot contracts.

Liquidity, Leverage and Risk Factors

The company held USD 100.0 million of unrestricted cash at September 30, 2026, versus USD 154.6 million at the end of 2025, and USD 225 million of revolver capacity with USD 105 million drawn, for total liquidity of about USD 325.0 million. The net debt to total capitalization ratio was 10.6%, and the homebuilding-only ratio was 9.6%. Operating activities used USD 5.1 million of cash over nine months as inventory grew USD 238.3 million.

In the quarter, the company repurchased 264,215 shares for roughly USD 17.9 million, and USD 132.7 million remained available under the repurchase plan. Management cited elevated mortgage interest rates and affordability pressure as the main constraints on buyers. It also noted that backlog may not indicate future revenue because contracts can be canceled before closing, including when buyers cannot obtain suitable financing.

Watch List for the Coming Quarter

Four datapoints frame the next report. The first is backlog, which stood at 629 units and USD 379.3 million, down 6.8% and 17.0%, with an average backlog price of USD 603.1 thousand. The second is residential gross margin, at 28.0% in the quarter and 29.0% for nine months, against 32.1% and 31.8% a year earlier. The third is the cancellation rate of 8.2%, still under the 10.0% level the company says it has stayed beneath since the end of 2022. The fourth is the active community count, 104 at quarter end versus 100 a year ago.