Lennar Corporation — Q3 2026 Form 10-Q
Reporting period: Three and nine months ended August 31, 2026; comparisons are with the corresponding 2025 periods unless otherwise noted. Figures below are in U.S. dollars. Interim results are unaudited and may vary with seasonality.
Business context and results
Lennar is principally a homebuilder, with Financial Services, Multifamily and Lennar Other operations. Management said housing demand remained steady but affordability pressures intensified as mortgage rates rose and competition from existing-home sales increased in some markets. The company continues to emphasize even-flow production and a land-light model.
| Metric | Q3 2026 | Q3 2025 | Nine months 2026 | Nine months 2025 |
|---|---|---|---|---|
| Total revenue | $8.05B | $8.81B | $22.61B | $24.82B |
| Net earnings attributable to Lennar | $284M | $591M | $818M | $1.588B |
| Diluted EPS | $1.19 | $2.29 | $3.36 | $6.06 |
| Operating cash flow | Not stated for the quarter | $(822)M | $(1.543)B |
- Homebuilding: Q3 revenue was $7.76B, down 6%; deliveries were 20,840, down 3%, and average delivered home price was $372,000, down 3%. Nine-month home revenue was $21.60B, down 7%; deliveries were 58,222, down 2%, and average price was $372,000 versus $393,000.
- Home-sale gross margin: 15.8% in Q3 versus 17.5%; 15.5% for nine months versus 18.0%. Lower revenue per square foot and higher land costs weighed on margin; lower construction costs partly offset the pressure. Q3 SG&A was 9.2% of home-sale revenue versus 8.2%; nine-month SG&A was 9.4% versus 8.5%.
- Other segments: Financial Services revenue was $226M in Q3 and $679M year to date, down from $314M and $889M. Multifamily revenue was $38M and $185M, down from $228M and $522M. Lennar Other recorded Q3 technology-investment mark-to-market losses of $53M, compared with gains of $99M a year earlier.
Financial position, cash flow and capital
- At August 31, cash and cash equivalents plus restricted cash totaled $1.50B, down from $3.83B at November 30, 2025. Homebuilding cash was $1.15B; management reported total liquidity of $3.6B.
- Homebuilding debt was $4.30B. Homebuilding debt to total capital was 16.6%, versus 15.7% at fiscal year-end; net Homebuilding debt to total capital was 12.7%, versus 2.8%. The company had $650M outstanding on its revolving credit facility and approximately $1.7B under its delayed-draw term loan facility. It reported compliance with debt covenants.
- Nine-month operating cash use improved to $822M from $1.54B. Inventory investment ($1.74B) and higher deposits and pre-acquisition costs ($795M) were major cash uses; loan sales, lower receivables and earnings partly offset them. Investing activities provided $114M; financing activities used $1.62B.
- The company repurchased $993M of stock and paid $366M in dividends during the nine months. Remaining repurchase authorization was approximately $751M. A quarterly dividend of $0.50 per share was declared after quarter-end.
- Total assets were $33.38B and total equity was $21.70B at August 31, 2026. Deposits and pre-acquisition costs on real estate were $7.33B.
Changes, outlook and management commentary
- Total revenue declined about 9% and Lennar-attributable earnings declined about 52% in both the quarter and year-to-date comparisons. Results also reflect differing technology-investment marks: Q3 2026 had a $53M loss versus a $99M gain in Q3 2025.
- Management reported Q3 deliveries of 20,840, within its guidance range, and new orders of 20,879, just below its range. Sales incentives per delivered home declined to $51,000 from $64,100. Construction cost per square foot was approximately $80, down 6% year over year; cycle time reached a record-low 116 days.
- Financial Services Q3 operating earnings included a $39.2M net benefit from one-time items, primarily a litigation-accrual reversal following a court judgment. Management said lower mortgage profit per locked loan and lower lock volume reduced underlying segment earnings.
- For Q4 2026, management expects 19,500–20,500 new orders, 22,000–23,000 deliveries, average delivered prices of $370,000–$380,000, gross margin of 15.5%–16.0%, and SG&A of 8.7%–9.0%. These are conditional on market conditions, which management said could change.
- Management cited rising mortgage rates (about 7% for 30-year fixed loans during the quarter), inflation and living costs, constrained labor availability, higher land costs and increased resale competition in some markets as pressures. It expects land costs tied to prior commitments to weigh on margins for a period, while maintaining that persistent housing supply constraints support longer-term demand.
Risks, contingencies and unusual items
- Inventory valuation adjustments and write-offs of option deposits and pre-acquisition costs totaled $224M for the nine months. The company recorded adjustments in 38 communities; actual values may differ if market conditions or assumptions change.
- Non-refundable option deposits and pre-acquisition costs were $7.24B, with $423M of letters of credit in lieu of cash deposits. Management highlighted land-option exposure and the possibility of forfeitures if options are not exercised.
- Outstanding performance and financial letters of credit were approximately $2.05B and $872M, respectively; surety bonds were $5.71B. The company did not anticipate material draws. Legal matters, warranty claims and mortgage-loan repurchase claims could nevertheless affect results or cash flows; management said reasonably possible legal losses were not expected to materially affect consolidated financial position.
- Principal risks include housing affordability and demand, interest rates, construction labor and materials costs, tariffs and other policy changes, land values, option takedowns, natural disasters, and capital-market conditions. The filing reported no material change in risk factors from the 2025 Form 10-K.
Important facts for investors to verify
- Whether Q4 orders, deliveries and margin guidance are achieved, and whether demand and cancellations remain consistent with management’s expectations.
- How higher rates, incentives, resale competition, land costs and labor constraints affect home-sale margins and SG&A.
- Cash use, borrowing levels, available liquidity, covenant headroom and upcoming debt or facility maturities.
- Recoverability of the $7.33B in real-estate deposits and pre-acquisition costs, inventory valuations and potential option forfeitures.
- The sustainability of earnings excluding technology-investment marks and the one-time Financial Services litigation benefit, along with any changes in legal, warranty or mortgage repurchase exposures.