PulteGroup builds and sells homes across the United States and provides mortgage, title, and insurance services to its buyers. In the third quarter ended September 30, 2026, fewer deliveries and smaller profits on each dollar of home sales pushed net income down 18.8%. The company reduced its stock of unsold homes, but continued land development and construction absorbed cash: operating cash flow fell 42.1% in the first nine months. PulteGroup still has substantial borrowing capacity, although its spending on land and shareholder payments is drawing down its cash cushion.
Information cutoff: October 22, 2026, New York time. Quarterly results below cover July–September; first-nine-month results cover January–September.
Source: PulteGroup third-quarter 2026 Form 10-Q, consolidated statements, pp. 3–7; management discussion, pp. 24–27 and 34–37.
1. More communities are producing fewer orders per community
PulteGroup’s larger backlog offers future work, while the pace of new sales has weakened. The company ended September with more homes under contract than a year earlier. That supports future deliveries, but it does not show that current demand is strengthening.
PulteGroup averaged 1,077 active communities in the quarter, compared with 1,002 a year earlier. Yet net new orders—new contracts after cancellations—fell from 6,638 to 6,208. Dividing orders by average communities and three months gives about 1.92 orders per community per month, down from 2.21. That calculated 13.0% decline shows why opening more communities has not translated into company-wide sales growth. Community age and location also affect this average; it is not a comparison of identical communities.
The longer history reinforces that finding. Deliveries and orders were below the same quarter in both 2024 and 2025. The profit retained from home sales also declined, even before administrative expenses and taxes.
| Homebuilding measure | Third quarter 2024 | Third quarter 2025 | Third quarter 2026 |
|---|---|---|---|
| Homes delivered to buyers | 7,924 | 7,529 | 6,876 |
| Net new orders, homes | 7,031 | 6,638 | 6,208 |
| Average active communities | 957 | 1,002 | 1,077 |
| Reported home-sale gross margin | 28.8% | 26.2% | 24.8% |
Sources: 2024 third-quarter Form 10-Q, management discussion, “Homebuilding Operations”; 2026 third-quarter Form 10-Q, pp. 25–27. Gross margin is home-sale revenue less the recorded cost of those homes, divided by home-sale revenue.
Orders were stronger earlier in the year, and some markets held up better. First-nine-month orders rose 1.4%, and the cancellation rate improved to 13% from 15%. September’s backlog reached 10,298 homes, up 4.1% from a year earlier, with a contract value of $6.44 billion. Florida contributed much of that improvement.
The quarter itself was weaker. Orders fell short of deliveries by 668 homes, reducing backlog from 10,966 at June 30 to 10,298 at September 30. The quarterly cancellation rate remained 16%, unchanged from a year earlier. PulteGroup therefore entered the next quarter with a larger backlog than last September, but a smaller one than three months earlier.
Sources: 2026 third-quarter Form 10-Q, pp. 25–27; July 22, 2026 second-quarter earnings release, backlog disclosure. Cancellation rates here use canceled orders divided by gross new orders.
Higher mortgage rates help explain the pressure on buyers. Freddie Mac’s national average for a 30-year fixed mortgage rose from 6.43% on July 2 to 7.03% on September 24. By October 22 it was 7.32%, despite easing from 7.40% the previous week. These are national application averages, not the subsidized rates PulteGroup may offer. They support management’s account that borrowing costs increasingly constrained customers during the quarter and remained a problem after quarter-end.
Sources: Freddie Mac 2026 weekly mortgage-rate archive, July 2 and September 24 observations; Freddie Mac Primary Mortgage Market Survey, October 22, 2026 release.
2. Discounts and land costs are squeezing profit faster than expenses can fall
The homebuilding business accounts for most of the earnings decline. PulteGroup delivered 8.7% fewer homes than in the prior-year quarter. Its average selling price also slipped to approximately $561,000 from $564,000, leaving home-sale revenue down 9.2%.
Management says the lower price reflected the types and locations of homes sold, sales incentives, and efforts to reduce homes built before finding buyers. Incentives include price discounts, help with closing costs, and payments that reduce a buyer’s mortgage rate. These measures help customers complete purchases, but reduce the money PulteGroup keeps from each sale.
At the same time, land acquisition and development costs increased. Those costs reach the income statement when the associated homes are delivered, often well after the land was purchased. Slowing construction today therefore does not immediately remove the cost pressure already built into future deliveries.
| Consolidated results, USD millions except EPS and margins | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Revenue | 4,404.8 | 3,973.8 | 12,701.2 | 11,365.4 |
| Income before tax | 767.8 | 625.2 | 2,256.1 | 1,697.0 |
| Net income | 585.8 | 475.7 | 1,717.1 | 1,294.7 |
| Net income as a share of revenue, calculated | 13.3% | 12.0% | 13.5% | 11.4% |
| Diluted earnings per share, USD | 2.96 | 2.53 | 8.55 | 6.79 |
Source: 2026 third-quarter Form 10-Q, consolidated statement of operations, p. 4; homebuilding discussion, pp. 25–26. These are reported consolidated results, without adjustments for exceptional items.
Home-sale gross profit fell by $157.7 million in the quarter. Selling, general, and administrative expenses fell by only $3.5 million. Management attributes the expense reduction mainly to lower costs linked to the number of closings and lower liability-insurance costs. The smaller expense saving could not offset the loss of gross profit. Administrative and selling expenses consequently consumed 10.3% of home-sale revenue, up from 9.4%.
The quarter also included a $21.4 million pretax gain from selling certain manufacturing assets. That helped reported profit, but is separate from selling homes. In the other direction, land impairments included in the cost of home sales increased to $25.8 million from $16.8 million. These charges recognize that particular land investments are expected to earn less than their recorded cost can support. They account for only part of the margin decline; the filing identifies incentives and higher land costs as its principal causes.
The effective quarterly tax rate changed only slightly, from 23.7% to 23.9%. Meanwhile, share repurchases helped reduce the average diluted share count by 5.2%. With profit divided among fewer shares, diluted EPS declined 14.5%, less than the 18.8% decline in total net income. The share-count benefit cushions per-share results without improving the profit earned from building homes.
Source: 2026 third-quarter Form 10-Q, pp. 4–5; Notes 1, 2, 5 and 6, pp. 8, 12 and 18; management discussion, p. 26. The manufacturing gain is a pretax accounting gain; the filing does not separately disclose its tax effect.
3. Florida provides support while Texas and the West require more attention
PulteGroup’s geographic spread is limiting the damage, but profits are falling in all six homebuilding regions. Florida’s third-quarter home-sale revenue rose slightly as higher average selling prices offset fewer closings. Its new orders rose 5.9%, and its September backlog increased 15.0% in homes from a year earlier.
Texas and the West moved in the opposite direction. Texas suffered fewer closings and lower selling prices, with management identifying Dallas and Central Texas as important sources of margin pressure. In the West, deliveries fell even though a larger contribution from California lifted the average selling price. The higher average therefore reflected which homes sold, even while sales volumes weakened.
| Homebuilding region | Third-quarter 2025 pretax income, USD millions | Third-quarter 2026 pretax income, USD millions | Third-quarter new-order change, calculated |
|---|---|---|---|
| Northeast | 65.5 | 45.3 | −14.8% |
| Southeast | 153.1 | 111.4 | −16.4% |
| Florida | 215.6 | 208.8 | +5.9% |
| Midwest | 147.9 | 131.3 | −1.2% |
| Texas | 38.2 | 14.1 | −8.1% |
| West | 92.7 | 39.4 | −14.9% |
Source: 2026 third-quarter Form 10-Q, Note 3 and management discussion, pp. 14–16 and 28–32. Regional profits include the company’s internal allocations. “Other homebuilding,” which includes eliminations and unallocated items, is required to reconcile these regions to total homebuilding profit.
Together, Texas and the West explain $77.5 million, or approximately 54%, of the $143.8 million decline in total homebuilding pretax income. They also hold $5.58 billion of inventory, about 40% of the consolidated total. Weak sales in these regions therefore matter beyond one quarter’s earnings: they affect how quickly a large part of PulteGroup’s invested money can come back as cash.
PulteGroup’s range of customers offers some protection. Its brands serve first-time buyers, people moving to another home, and active adults seeking communities with extensive amenities. Management said in the October 22 earnings release that move-up and active-adult buyers now account for more than 60% of its business and described these groups as more profitable. The filing does not separately quantify their profit contribution, but the strategy gives the company more ways to compete than relying on one buyer group.
Sources: 2026 third-quarter Form 10-Q, pp. 14–16 and 28–32; October 22 earnings release, pp. 1–3; 2025 Form 10-K, Item 1, “Homebuilding Operations.”
Competition still limits how far that customer mix can protect sales. Lennar reported a 9% decline in new orders for its quarter ended August 31, 2026, one month before PulteGroup’s quarter-end. It described using incentives and base-price adjustments to sustain sales volume. That response illustrates the broader pressure on selling prices: large builders are helping buyers afford homes, making it harder for PulteGroup to remove incentives quickly.
Source: Lennar third-quarter 2026 earnings release, September 16, 2026, highlights and management discussion.
PulteGroup’s mortgage, title, and insurance operations provided a small quarterly offset. Their pretax profit increased to $45.6 million from $44.4 million. Insurance commissions rose to $7.5 million from $4.4 million, helping alongside higher mortgage revenue. Across the first nine months, however, financial-services profit fell 22.4% to $95.5 million as homebuilding volumes declined. This business supports home sales, but is too closely tied to them to provide a broad escape from the slowdown.
Source: 2026 third-quarter Form 10-Q, pp. 33–34, “Financial Services Operations.”
4. Fewer unsold homes do not mean less money committed to future building
PulteGroup has fewer homes without buyers, while more money is invested in land development. At September 30, it had 6,627 unsold homes under construction or completed, down 10.1% from a year earlier. Completed unsold homes fell 16.3% to 1,696. Management attributes the reduction to its focus on these homes and faster construction cycles.
That reduces the number of finished homes waiting for buyers. It also reflects management’s effort to balance homes available for quick delivery with homes built after a buyer signs a contract. Sold homes in production increased to 7,972 from 7,727 a year earlier, providing more identified customers for construction already underway.
The dollar balances also include spending on future production. Compared with December 31, 2025, total house and land inventory grew $1.17 billion. Most of the increase came from land under development, followed by homes under construction. These balances include future communities and homes already sold under contract, not just unsold finished houses.
| Inventory recorded on the balance sheet, USD millions | December 31, 2025 | September 30, 2026 |
|---|---|---|
| Homes under construction | 5,192.7 | 5,667.1 |
| Land under development | 6,955.0 | 7,671.6 |
| Raw land | 637.9 | 575.9 |
| Other land inventory, including consolidated land not owned | 139.8 | 175.9 |
| Total house and land inventory | 12,925.4 | 14,090.5 |
Source: 2026 third-quarter Form 10-Q, Note 2, p. 11, and “Homes in production,” p. 27. Home counts above compare September with September; this dollar table compares September with the previous year-end. Other land inventory combines land held for sale and land subject to repurchase arrangements that accounting rules keep on the balance sheet.
The spending has an operating purpose. PulteGroup needs roads, utilities, prepared lots, and houses to keep communities selling. Its October presentation reported approximately $1.3 billion of third-quarter land acquisition and development investment, with 51% used to develop existing land assets. That spending prepares the lots needed for future home sales.
Source: PulteGroup October 22, 2026 earnings presentation, slide 8.
Management is also choosing where to expand. Its planned Florida Panhandle communities involve an initial 1,326 homesites with The St. Joe Company, with options that could increase the total to 2,653. First-phase development was expected to begin in 2027. Separately, the announced Explore by Del Webb Verona community has 843 planned homesites, with sales expected to begin in mid-2027. These projects show how the company intends to extend its Florida and lifestyle-community businesses. Their announced schedules place the main opportunity beyond the current quarter, while development requires money before closings generate revenue.
Sources: PulteGroup’s Florida Panhandle expansion announcement, August 3, 2026; Explore by Del Webb Verona announcement, June 29, 2026. Project timing and homesite counts are company plans, not completed sales.
Land options help limit the money committed before demand is clear. PulteGroup controlled 224,275 lots at September 30, down from 234,632 at year-end. It owned 101,760 and held options on 122,515. Thus, 55% remained optioned, although that share had fallen from 57%.
The remaining purchase price under those options was $9.44 billion. That amount is not equivalent to funded debt or an unavoidable immediate cash bill. The option structure generally allows PulteGroup to decline purchases, at the cost of losing deposits and related preparation spending. Its combined deposits and pre-acquisition costs were $1.25 billion. Actual deposits were $686.3 million, of which only $15.1 million was refundable.
Management says it is rechecking projects before buying additional land and has walked away from some agreements. It wrote off $23.1 million of deposits and preparation costs in the first nine months. Exercising that flexibility can prevent larger commitments to unsuitable projects, but already-owned land and development work continue to carry cash and pricing risk.
Source: 2026 third-quarter Form 10-Q, Notes 2–3, pp. 11–16; management discussion, pp. 24, 27 and 36.
5. Current cash generation does not cover shareholder payments
Land and construction spending absorbed more cash while profit supplied less. First-nine-month operating cash flow was $637.0 million, down from $1.10 billion. The company remained profitable, but cash invested in inventory had not yet returned through completed home sales.
The two largest downward changes were the $422.4 million reduction in net income and an additional $513.5 million absorbed by inventory. Payment and collection timing partly offset those declines. Changes in accounts payable, accrued expenses, and other liabilities added cash this year after using cash in the comparable period. Customer deposits also increased: buyers had paid more toward homes that PulteGroup still had to deliver.
Reported profit already deducts the cost of homes delivered. To find how much cash the business actually generated, the cash statement also accounts for money put into unfinished projects and the timing of other receipts and payments. The calculation notes show that reconciliation.
| Consolidated cash allocation, USD millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Operating cash flow | 1,100.1 | 637.0 |
| Capital expenditures, positive cash spending | 91.4 | 78.2 |
| Operating cash flow less capital expenditures, calculated | 1,008.7 | 558.7 |
| Share repurchases paid | 900.0 | 1,031.6 |
| Cash dividends paid | 133.7 | 150.8 |
| Cash shortfall after these capital expenditures and shareholder payments, calculated | 24.9 | 623.6 |
Source: 2026 third-quarter Form 10-Q, consolidated cash-flow statement, p. 7, and management discussion, pp. 36–37. The calculated remainder is a simple consolidated free-cash-flow measure. Land and home-construction spending is already included in operating cash flow and is not subtracted a second time. Repurchase taxes and employee share-withholding payments are additional financing outflows, excluded from the two shareholder-payment rows.
PulteGroup describes capital expenditures as investment in new communities, facilities, and information technology. It also invested $45.8 million in unconsolidated entities and received $21.6 million of capital distributions from them. Cash proceeds of $90.6 million from asset sales helped reduce total net investing outflow to just $8.8 million. That small net outflow therefore should not be read as evidence of little investment.
Mortgage funding also affects the cash comparison. Pulte Mortgage generally sells its newly originated loans within 30 days. Its inventory of mortgage loans fell by $179.7 million, releasing cash within operating activities. However, it repaid $149.1 million of the borrowing that financed those loans, recorded under financing activities. Much of that cash release therefore went back to mortgage lenders rather than becoming money available for other purposes.
Source: 2026 third-quarter Form 10-Q, p. 7; Notes 1 and 4, pp. 9 and 17; cash-flow discussion, pp. 36–37.
Management continued buybacks as part of its stated emphasis on shareholder payments while maintaining liquidity. Repurchases reduced the reported common-share count by more than new share issuance increased it. They also consumed $1.03 billion of cash in the first nine months, compared with $900.0 million a year earlier. Dividends paid increased as the quarterly dividend rose from $0.22 to $0.26 per share.
Cash including restricted balances declined by $600.7 million to $1.41 billion. Unrestricted cash alone declined by $611.0 million to $1.37 billion. Net debt issuance and asset sales helped fund the combination of investment and distributions, but did not prevent that decline. PulteGroup has room to adjust future repurchases; doing so would preserve cash without requiring an immediate cut to every development project.
Source: 2026 third-quarter Form 10-Q, pp. 3, 5, 7 and 42; Note 5, p. 18; management discussion, pp. 24 and 34–37. The remaining repurchase authorization was approximately $1.45 billion and had no expiration date; authorization is permission to spend, not a contractual payment obligation.
6. Refinancing has bought time, although mortgage funding needs annual attention
PulteGroup has removed near-term bond maturities and retains an unused homebuilding credit line. In February, it issued $800 million of notes due in 2031 and 2036. The proceeds repaid the $251.9 million March 2026 maturity and redeemed $337.3 million due in January 2027, with remaining proceeds available for general corporate purposes.
The company also extended its revolving credit facility to February 2031 and increased its committed size to $1.75 billion. At September 30, there were no borrowings on that line. Letters of credit used $368.3 million of capacity, leaving approximately $1.38 billion available. Combined with unrestricted cash, that represents roughly $2.75 billion of cash and unused general borrowing capacity, subject to the facility’s terms.
| Senior notes outstanding at September 30, 2026 | Principal, USD millions | Contractual annual interest, USD millions, calculated |
|---|---|---|
| March 2031, 4.250% | 400.0 | 17.000 |
| June 2032, 7.875% | 300.0 | 23.625 |
| May 2033, 6.375% | 400.0 | 25.500 |
| February 2035, 6.000% | 300.0 | 18.000 |
| March 2036, 4.900% | 400.0 | 19.600 |
| Total | 1,800.0 | 103.725 |
Source: 2026 third-quarter Form 10-Q, Note 4, pp. 16–17, and liquidity discussion, pp. 34–35. Annual interest is principal multiplied by the stated coupon, assuming each note remains outstanding for a full year. It excludes other borrowing, fees, and accounting amortization; it is not reported interest paid in 2026.
The small interest-expense line in the other-income note does not capture this financing cost. PulteGroup adds substantially all homebuilding interest to the cost of active inventory, then recognizes it as homes are sold. During the first nine months, it added $85.9 million of interest to inventory and charged $82.0 million from inventory to expense. This accounting delays recognition of some borrowing costs; it does not eliminate them.
The next important funding renewal is at Pulte Mortgage. Its $625 million secured facility expires August 10, 2027. It had $383.2 million outstanding at a 5.61% weighted-average rate, backed by mortgage loans awaiting sale. Management intends to refinance it. The short holding period of the loans helps, but disruption to either loan sales or the facility’s renewal would require alternative funding.
PulteGroup and Pulte Mortgage reported compliance with their loan conditions, called covenants. Homebuilding lenders require a minimum amount of owners’ capital after excluding intangible assets and limit debt relative to total capital. Mortgage lenders also set minimum capital, income, and cash requirements. PulteGroup’s company-defined, non-GAAP debt-to-capital ratio was 12.1%, meaning borrowing represented that share of debt plus owners’ equity under its definition. That measure excludes mortgage debt; consolidated financing debt including mortgage borrowing was $2.19 billion.
Source: 2026 third-quarter Form 10-Q, Note 2, p. 11; Note 4, pp. 16–17; liquidity discussion, pp. 34–35. Consolidated financing debt combines notes payable of $1,808.9 million and financial-services debt of $383.2 million.
Other obligations are smaller but still use cash. Land-secured notes totaled $25.4 million, with maturities extending through 2029. Recorded lease liabilities were $123.2 million; undiscounted future payments totaled $141.2 million, including $26.8 million in 2027. The senior notes and homebuilding revolver begin concentrating refinancing needs in 2031, giving management several years to manage that schedule. The more immediate financial task is matching development and shareholder spending to the cash that home deliveries produce.
Source: 2026 third-quarter Form 10-Q, Notes 4 and 8, pp. 16–17 and 22–23; debt maturity schedule, p. 40.
7. Land estimates and construction claims can change the profit left from past decisions
The final costs of land projects and construction claims can take years to become clear. Inventory represented approximately 76% of total assets at September 30. If expected selling prices weaken or development costs rise, the company may have to reduce the recorded value of additional communities.
Third-quarter land-related charges totaled $37.5 million, up from $27.6 million. Texas and the West accounted for $29.4 million of the current-quarter total. Yet first-nine-month charges were $65.0 million, slightly below $69.8 million a year earlier. The evidence therefore points to a tougher latest quarter and concentrated regional stress, rather than a uniform increase in charges throughout 2026.
Source: 2026 third-quarter Form 10-Q, pp. 3 and 12–16. Land-related charges combine inventory impairments, reductions in the value of land held for sale, and abandoned option costs; these affect different income-statement lines.
Construction obligations also outlast a home closing. Warranty liabilities ended September at $123.6 million, while broader self-insurance reserves were $259.8 million. Approximately 71% of general-liability reserves concerned claims not yet reported or later changes in reported claims. Those estimates are especially sensitive to the eventual frequency and cost of construction defects.
During the first nine months, PulteGroup reduced previously recorded self-insurance reserves by $13.5 million, versus $8.7 million a year earlier. Those favorable estimate changes lowered selling and administrative expenses. They are distinct from cash payments to settle claims and from the new reserves recorded for current activity. Neither the third quarter of 2026 nor the third quarter of 2025 included such a reduction. The end notes reconcile both reserve balances so that a falling balance is not mistaken for an earnings benefit.
Source: 2026 third-quarter Form 10-Q, Note 8, pp. 20–22.
The company also had $3.0 billion of surety bonds supporting obligations such as roads and utilities. Their face amount exceeds the estimated remaining work because completed projects can await formal acceptance. They are therefore contingent performance obligations, rather than another $3.0 billion of ordinary borrowing. Nevertheless, a claim against a bond could require reimbursement to its issuer.
PulteGroup’s litigation disclosures cover construction defects and other legal or regulatory matters. Management does not expect their resolution to materially harm the business, but warns that losses beyond recorded estimates could be significant. The filing provides no numerical range for additional reasonably possible losses. Potential tax benefits that remained too uncertain to recognize in the accounts totaled $29.1 million, compared with $29.9 million at year-end. These exposures reinforce the value of keeping liquidity available while the company works through slower sales.
Sources: 2026 third-quarter Form 10-Q, Notes 6 and 8, pp. 18 and 20–22, and Part II, Item 1, p. 41; 2025 Form 10-K, Item 3, “Legal Proceedings.”
8. The next test is turning contracted homes into cash without deeper discounts
PulteGroup has the financial capacity to keep building, but its outlook still points to pressure on margins and cash allocation. Management’s October 22 guidance called for 7,000–7,500 fourth-quarter closings at an average price of $550,000–$560,000. It expected home-sale gross margin of 24.0%–24.5%, below the third quarter’s 24.8%.
The full-year plan included approximately $5.3 billion of land acquisition and development spending and $1.0 billion of operating cash flow. The cash forecast implies approximately $363 million from the fourth quarter, after the $637 million already generated. It would still leave full-year operating cash below the $1.18 billion of dividends and buybacks paid in the first nine months, before capital expenditures or any further shareholder payments.
Sources: PulteGroup October 22, 2026 earnings presentation, slide 4; 2026 third-quarter Form 10-Q, p. 7. Guidance is management’s forecast. The implied fourth-quarter cash generation and comparison with cash already paid are calculations, not company forecasts of future distributions.
Reducing unsold homes and moving debt maturities outward have improved PulteGroup’s ability to manage a slower market. Florida and a broader range of buyer groups provide operating support. Those strengths have not yet offset weaker sales per community, higher land costs included in delivered homes, and the cash committed to future development.
Improvement would come from delivering the contracted backlog, keeping completed unsold homes under control, and winning enough new orders without deeper incentives. Continued weakness in Texas and the West would make that harder because so much inventory is concentrated there. PulteGroup’s flexibility gives management time to respond; whether it uses that time to preserve cash as well as production will help determine how comfortably it can finance the next stage of growth.
Source: 2026 third-quarter Form 10-Q, pp. 16, 24–32 and 34–37; October 22 earnings presentation, slide 4.
Reporting basis and calculation notes
Reporting basis: The principal source is PulteGroup, Inc.’s unaudited consolidated Form 10-Q for the quarter ended September 30, 2026, filed October 22, 2026, accession 0000822416-26-000043, CIK 0000822416. It includes subsidiaries and uses U.S. GAAP. The separate guarantor-company summaries on pages 38–39 are not the consolidated reporting basis used here. Income comparisons match either three months or nine months; balance-sheet comparisons use September 30, 2026 and December 31, 2025 unless otherwise stated.
Reporting basis: The research cutoff is October 22, 2026, New York time. The analysis incorporates the company’s earnings release and presentation that day, Freddie Mac observations through that date, and the dated historical and project sources cited locally. The findings are limited to these reviewed sources.
Sources: SEC filing metadata; selected Form 10-Q; SEC company financial facts. Selected consolidated facts were cross-checked by accession, start and end dates, and units. The filing presents most dollar amounts in thousands; tables above convert them to millions. EPS remains dollars per share, and share counts are identified separately.
A. How profit becomes operating cash
Calculation notes: The following table checks all reconciling amounts in the nine-month cash statement. Positive figures add cash relative to reported profit; negative figures use cash. “Other reconciliation items” combines noncash expenses and the other adjustments listed below.
| Profit-to-cash reconciliation, USD millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Net income | 1,717.115 | 1,294.726 |
| Noncash and other reconciliation items | 239.490 | 194.730 |
| Cash absorbed by inventory | −635.860 | −1,149.355 |
| Decrease in mortgage loans awaiting sale | 143.516 | 179.718 |
| Cash absorbed by other assets | −203.007 | −127.060 |
| Changes in accounts payable, accrued and other liabilities | −161.132 | 244.207 |
| Operating cash flow | 1,100.122 | 636.966 |
Calculation notes: Some expenses reduce reported profit without a cash payment in the same period. For example, depreciation spreads the cost of equipment over its useful life, while share compensation pays employees with share awards. The cash statement reverses those profit effects and separately records actual receipts and payments. These are the inputs to the reconciliation subtotal above.
| Noncash and other reconciliation items, USD millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Deferred tax expense, reflecting differences in tax timing | 51.921 | 24.524 |
| Land-related accounting charges | 69.811 | 65.030 |
| Loss on early debt retirement | 0.000 | 2.637 |
| Depreciation and amortization | 75.549 | 76.626 |
| Removal of profit recorded from unconsolidated investments | −3.333 | −2.069 |
| Cash distributions of income from those investments | 3.060 | 4.758 |
| Share-based compensation | 43.221 | 44.718 |
| Other adjustments, net | −0.739 | −21.494 |
| Total | 239.490 | 194.730 |
Calculation notes: This table checks where the change in cash came from. It includes restricted cash, which is held for specified purposes and is not freely available for general spending.
| Cash reconciliation, USD millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Opening cash, including restricted cash | 1,653.680 | 2,008.776 |
| Cash generated by operations | 1,100.122 | 636.966 |
| Cash used in investing | −64.104 | −8.843 |
| Cash used in financing | −1,210.141 | −1,228.872 |
| Closing cash, including restricted cash | 1,479.557 | 1,408.027 |
Calculation notes: At September 30, 2026, unrestricted cash of $1,369.902 million plus restricted cash of $38.125 million equals the $1,408.027 million closing total.
Calculation notes: Free cash flow here means consolidated operating cash flow less the cash-flow statement’s capital expenditures: $636.966 million − $78.221 million = $558.745 million in 2026; $1,100.122 million − $91.401 million = $1,008.721 million in 2025. The 2026 shortfall after dividends and buybacks is $1,031.567 million + $150.780 million − $558.745 million = $623.602 million. The corresponding 2025 shortfall is $24.937 million. This measure includes mortgage-loan movements and excludes other investing transactions; it is not a separately reported homebuilding cash measure.
Source: 2026 third-quarter Form 10-Q, consolidated cash-flow statement, p. 7.
B. What changed in assets, liabilities, and owners’ capital
Calculation notes: Assets are what the company owns; liabilities are what it owes; equity is the amount left for owners. The balance sheet reconciles assets to liabilities plus equity: $18,484.906 million = $5,388.945 million + $13,095.961 million at September 30, 2026. At December 31, 2025, the check is $18,048.423 million = $5,062.981 million + $12,985.442 million.
Beyond the inventory, cash, and mortgage-loan movements discussed above, other assets increased $85.555 million. That last category includes receivables and property, as well as land-option costs and financial instruments; the interim filing does not provide a complete separate balance for every component.
Disclosed components help explain its movement. Mortgage-related derivative assets rose from $4.799 million to $80.305 million, while related derivative liabilities rose from $24.321 million to $99.010 million. These mostly offsetting changes concern protection against interest-rate movements, not unpaid home-sale bills. Estimated future insurance-renewal commissions increased from $82.6 million to $90.0 million. Goodwill remained $40.377 million; other intangible assets declined from $26.210 million to $21.973 million, matching $4.237 million of amortization.
PulteGroup generally records home revenue and receives the closing proceeds when the home transfers to its buyer. Customer deposits before that transfer are obligations to deliver homes, not earned revenue. They rose $128.049 million to $515.886 million. Accounts payable rose $22.272 million and accrued and other liabilities rose $126.252 million. These operating obligations should be distinguished from the financing debt discussed in section 6.
Calculation notes: Equity rose by $110.519 million despite net income of $1,294.726 million, because most of that profit was offset by distributions and share-related payments.
| Equity reconciliation, USD millions | First nine months 2026 |
|---|---|
| Opening shareholders’ equity | 12,985.442 |
| Net income | 1,294.726 |
| Share-based compensation | 44.718 |
| Dividends declared | −148.128 |
| Share repurchases | −1,031.567 |
| Repurchase excise tax recorded in equity | −9.670 |
| Employee shares withheld for taxes | −39.557 |
| Net accounting effect of share issuances | −0.003 |
| Closing shareholders’ equity | 13,095.961 |
Calculation notes: Shareholders’ equity has three reported components. Most buyback spending reduces retained earnings, the accumulated profit left after distributions and other charges. Share compensation increases paid-in capital. The common-stock account records the shares’ small stated legal value.
| Equity account, USD millions | December 31, 2025 | September 30, 2026 |
|---|---|---|
| Paid-in capital | 3,488.924 | 3,533.634 |
| Retained earnings | 9,494.591 | 9,560.478 |
| Common-stock stated value | 1.927 | 1.849 |
| Total equity | 12,985.442 | 13,095.961 |
Calculation notes: Paid-in capital increased by the $44.718 million compensation entry, less $0.008 million related to share issuance. Of the $1,031.567 million repurchase entry, $1,031.484 million reduced retained earnings and $0.083 million reduced common stock. Profit and the other deductions in the preceding reconciliation complete the retained-earnings movement. Issuance added $0.005 million to common stock. The statement presents no separate treasury-share balance or accumulated gains and losses recorded outside net income.
Calculation notes: Reported common shares reconcile in millions: opening 192.725 + issued 0.508 − repurchased 8.352 = closing 184.881. This is a period-end share count; it differs from the weighted-average diluted count used for EPS. Dividends declared and excise taxes recorded in equity differ from cash paid because recognition and payment dates differ.
Source: 2026 third-quarter Form 10-Q, pp. 3–7; Notes 1, 2, 5 and 8, pp. 8–12, 18 and 22.
C. Operating calculations and reserve checks
Calculation notes: Growth rates use the current-period amount divided by the same prior-year period, minus one. Net margins use consolidated net income divided by consolidated revenue. Home-sale margins use home-sale revenue less the cost of those homes, divided by home-sale revenue.
Calculation notes: The filing does not separately label consolidated operating income. A calculation using revenue less homebuilding costs, financial-services expenses, and selling and administrative expenses gives $608.278 million for the third quarter of 2026 and $763.611 million for 2025. Adding equity income or loss and other income reconciles to pretax profit: $608.278 million − $2.772 million + $19.700 million = $625.206 million; $763.611 million + $2.422 million + $1.755 million = $767.788 million. This calculated subtotal is not company-reported adjusted earnings.
Calculation notes: Orders per community per month equal 6,208 ÷ 1,077 ÷ 3 = 1.92 in 2026 and 6,638 ÷ 1,002 ÷ 3 = 2.21 in 2025, a 13.0% decline using unrounded results. Backlog reconciles in homes: June 30 backlog of 10,966 + quarterly net orders of 6,208 − deliveries of 6,876 = September 30 backlog of 10,298. Backlog is contracted future work, subject to cancellation, rather than recorded revenue.
Calculation notes: The inventory balance increase is $14,090.509 million − $12,925.413 million = $1,165.096 million. This is a balance-sheet movement, not the cash-flow statement’s $1,149.355 million cash use. Noncash inventory transactions, including $34.2 million acquired through seller financing, and accounting charges prevent treating the two as interchangeable.
Calculation notes: Reserves estimate what PulteGroup will have to pay for covered claims. Payments reduce both cash and the obligation. A reduction in an earlier cost estimate instead lowers expense and increases profit. The two tables distinguish those movements.
| Warranty reserves, USD millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Opening obligation | 130.538 | 128.717 |
| New cost estimates recorded | 73.455 | 64.212 |
| Payments | −75.763 | −73.453 |
| Other adjustments | 4.099 | 4.142 |
| Closing obligation | 132.329 | 123.618 |
| Self-insurance reserves, USD millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Opening obligation | 267.474 | 259.410 |
| New cost estimates recorded | 36.363 | 32.889 |
| Reductions in earlier estimates | −8.666 | −13.514 |
| Net payments | −13.149 | −18.975 |
| Closing obligation | 282.022 | 259.810 |
Source: 2026 third-quarter Form 10-Q, pp. 3–7, 11, 17, 20–22 and 25–27. Calculations retain the filing’s underlying precision before rounding for presentation.
This analysis is for general information and does not provide investment advice or a recommendation to trade any security.