Forestar Group Inc. ("Forestar") (NYSE:FOR), a leading national residential lot developer, today reported financial results for its third fiscal quarter ended June 30, 2026.

Fiscal 2026 Third Quarter Highlights

As of or for the quarter ended June 30, 2026, unless otherwise noted

All comparisons to the prior year quarter

Net income attributable to Forestar increased 9% to $35.9 million or $0.70 per diluted share
Pre-tax income increased 12% to $48.7 million, with a pre-tax profit margin of 12.0%
Consolidated revenues increased 4% to $407.0 million on 3,659 lots sold
Owned and controlled 91,700 lots
23,500 lots contracted for sale representing $2.3 billion of future revenue
Real estate of $2.7 billion
Total liquidity of $1.1 billion
Net debt to total capital ratio of 17.7%
Return on equity of 9.6% for the trailing twelve months ended June 30, 2026
Book value per share increased 10% to $36.40

Financial Results

Net income attributable to Forestar for the third quarter of fiscal 2026 increased 9% to $35.9 million, or $0.70 per diluted share, compared to $32.9 million, or $0.65 per diluted share, in the same quarter of fiscal 2025. Pre-tax income for the quarter increased 12% to $48.7 million from $43.6 million in the same quarter of fiscal 2025. Revenues for the third quarter increased 4% to $407.0 million from $390.5 million in the same quarter of fiscal 2025.

For the nine months ended June 30, 2026, net income attributable to Forestar increased 3% to $83.5 million, or $1.63 per diluted share, compared to $81.0 million, or $1.59 per diluted share, in the same period of fiscal 2025. Pre-tax income for the nine months ended June 30, 2026 increased 7% to $113.5 million from $106.2 million in the same period of fiscal 2025. Revenues for the first nine months of fiscal 2026 increased 6% to $1.1 billion from $1.0 billion in the same period of fiscal 2025.

The Company’s return on equity was 9.6% for the trailing twelve months ended June 30, 2026. Return on equity is calculated as net income attributable to Forestar for the trailing twelve months divided by average stockholders’ equity, where average stockholders’ equity is the sum of ending stockholders’ equity balances of the trailing five quarters divided by five.

Operational Results

Lots sold during the third quarter increased 1% to 3,659 lots compared to 3,605 lots in the same quarter of fiscal 2025. During the third quarter of fiscal 2026, Forestar sold 289 lots to customers other than D.R. Horton, Inc. ("D.R. Horton") compared to 530 lots in the prior year quarter. Lots sold to customers other than D.R. Horton in the prior year quarter included 331 lots that were sold to a lot banker who expects to sell those lots to D.R. Horton at a future date.

Lots sold during the nine months ended June 30, 2026 decreased 9% to 8,541 lots compared to 9,349 lots in the same period of fiscal 2025. During the nine months ended June 30, 2026, 1,094 lots were sold to customers other than D.R. Horton compared to 1,661 lots in the same period of fiscal 2025. Lots sold to customers other than D.R. Horton in the current year nine-month period included 146 lots that were sold to a lot banker who expects to sell those lots to D.R. Horton at a future date compared to 693 lots in the prior year period.

The Company’s lot position at June 30, 2026 was 91,700 lots, of which 62,200 were owned and 29,500 were controlled through land and lot purchase contracts. Lots owned at June 30, 2026 included 9,600 that were fully developed. Of the Company’s owned lot position at June 30, 2026, 23,500 lots, or 38%, were under contract to be sold, representing approximately $2.3 billion of future revenue. Another 19,200 lots, or 31%, of the Company’s owned lots were subject to a right of first offer to D.R. Horton based on executed purchase and sale agreements at June 30, 2026.

Capital Structure, Leverage and Liquidity

Forestar ended the quarter with $394.9 million of unrestricted cash and $669.9 million of available borrowing capacity on its senior unsecured revolving credit facility for total liquidity of $1.1 billion. Debt at June 30, 2026 totaled $793.8 million, with no senior note maturities in the next twelve months. The Company’s net debt to total capital ratio at the end of the quarter was 17.7%. Net debt to total capital consists of debt net of unrestricted cash divided by stockholders’ equity plus debt net of unrestricted cash.

Outlook

Donald J. Tomnitz, Chairman of the Board, said, "The Forestar team delivered solid third quarter results, including a 4% increase in revenues to $407.0 million and a 12% increase in pre-tax income to $48.7 million. Our liquidity increased to $1.1 billion, reflecting our disciplined approach to capital management amid continued affordability constraints and cautious consumer sentiment. We remain focused on maximizing returns across our projects by aligning the pace and price of lot sales with the timing of our investments and market demand.

"Based on our fiscal year-to-date results and current market conditions, we are maintaining our fiscal 2026 lot delivery guidance of 14,000 to 14,500 lots and our revenue guidance of $1.6 billion to $1.7 billion.

"Forestar is well positioned to continue supplying finished lots that are essential to the homebuilding industry. Our strong balance sheet and liquidity provide flexibility to navigate changing market conditions and capitalize on opportunities. We expect to continue aggregating market share, supported by our financial strength, broad operating platform, strategic relationship with D.R. Horton and $2.3 billion of contracted future revenue. We remain committed to disciplined capital allocation while positioning Forestar for growth and long-term shareholder value."

Conference Call and Webcast Details

The Company will host a conference call today (Tuesday, July 21) at 11:00 a.m. Eastern Time. The dial-in number is 888-506-0062, the entry code is 153808, and the call will also be webcast from the Company’s website at investor.forestar.com.

Fourth Quarter Conference Call

The Company plans to release financial results for its fourth quarter and fiscal year ended September 30, 2026 on October 29, 2026 before the market opens. The Company will host a conference call that morning at 11:00 a.m. Eastern Time. Details on how to access the conference call will be available at a later date.

About Forestar Group Inc.

Forestar Group Inc. is a residential lot development company with operations in 65 markets and 24 states. Based in Arlington, Texas, the Company delivered more than 13,400 residential lots during the twelve-month period ended June 30, 2026. Forestar is a majority-owned subsidiary of D.R. Horton, the largest homebuilder by volume in the United States since 2002.

Forward-Looking Statements

Portions of this document may constitute "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Although Forestar believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to Forestar on the date this release was issued. Forestar does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include we expect to deliver between 14,000 and 14,500 lots, generating $1.6 billion to $1.7 billion of revenue; Forestar is well positioned to continue supplying finished lots that are essential to the homebuilding industry; our strong balance sheet and liquidity provide flexibility to navigate changing market conditions and capitalize on opportunities; we expect to continue aggregating market share, supported by our financial strength, broad operating platform, strategic relationship with D.R. Horton and $2.3 billion of contracted future revenue; and we remain committed to disciplined capital allocation while positioning Forestar for growth and long-term shareholder value.

Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: the effect of D.R. Horton’s controlling level of ownership on us and the holders of our securities; our ability to realize the potential benefits of the strategic relationship with D.R. Horton; the effect of our strategic relationship with D.R. Horton on our ability to maintain relationships with our customers; the cyclical nature of the homebuilding and lot development industries and changes in economic, real estate or other conditions; the impact of significant inflation, higher interest rates or deflation; supply shortages and other risks of acquiring land, construction materials and skilled labor; the effects of public health issues such as a major epidemic or pandemic on the economy and our business; the effects of weather conditions and natural disasters on our business and financial results; health and safety incidents relating to our operations; our ability to obtain or the availability of surety bonds to secure our performance related to construction and development activities and the pricing of bonds; the effects of information technology failures, cybersecurity incidents and the failure to satisfy privacy and data protection laws and regulations; the impact of governmental policies, laws or regulations and actions or restrictions of regulatory agencies; the effects of changes in income tax and securities law; our ability to achieve our strategic initiatives; continuing liabilities related to assets that have been sold; the cost and availability of property suitable for residential lot development; general economic, market or business conditions where our real estate activities are concentrated; our dependence on relationships with national, regional and local homebuilders; competitive conditions in our industry; obtaining reimbursements and other payments from governmental districts and other agencies and timing of such payments; our ability to succeed in new markets; the conditions of the capital markets and our ability to raise capital to fund expected growth; our ability to manage and service our debt and comply with our debt covenants, restrictions and limitations; the volatility of the market price and trading volume of our common stock; and our ability to hire and retain key personnel. Additional information about issues that could lead to material changes in performance is contained in Forestar’s annual report on Form 10-K and its most recent quarterly report on Form 10-Q, both of which are filed with the Securities and Exchange Commission.


FORESTAR GROUP INC. Consolidated Balance Sheets (Unaudited)

	June 30, 2026		September 30, 2025
	(In millions, except share data)
ASSETS
Cash and cash equivalents	$	394.9	$	379.2
Real estate		2,711.5		2,645.1
Property and equipment, net		7.3		8.1
Other assets		106.9		104.6
Total assets	$	3,220.6	$	3,137.0
LIABILITIES
Accounts payable	$	65.3	$	71.0
Accrued development costs		120.1		131.8
Earnest money on sales contracts		202.2		193.3
Deferred tax liability, net		92.8		86.2
Accrued expenses and other liabilities		88.6		83.1
Debt		793.8		802.7
Total liabilities		1,362.8		1,368.1
EQUITY
Common stock, par value $1.00 per share, 200,000,000 authorized shares, 51,008,733 and 50,833,171 shares issued and outstanding at June 30, 2026 and September 30, 2025, respectively		51.0		50.8
Additional paid-in capital		676.1		671.0
Retained earnings		1,129.5		1,046.1
Stockholders' equity		1,856.6		1,767.9
Noncontrolling interests		1.2		1.0
Total equity		1,857.8		1,768.9
Total liabilities and equity	$	3,220.6	$	3,137.0

FORESTAR GROUP INC. Consolidated Statements of Operations (Unaudited)

	Three Months Ended June 30,						Nine Months Ended June 30,
		2026			2025			2026			2025
	(In millions, except per share amounts)
Revenues	$	407.0		$	390.5		$	1,054.3		$	991.9
Cost of sales		322.9			310.8			835.0			778.0
Selling, general and administrative expense		38.3			37.4			112.6			111.8
Equity in earnings of unconsolidated ventures		—			—			—			(0.6	)
Interest and other income		(2.9	)		(1.3	)		(6.8	)		(4.6	)
Loss on extinguishment of debt		—			—			—			1.1
Income before income taxes		48.7			43.6			113.5			106.2
Income tax expense		12.7			10.7			29.8			25.2
Net income		36.0			32.9			83.7			81.0
Net income attributable to noncontrolling interests		0.1			—			0.2			—
Net income attributable to Forestar Group Inc.	$	35.9		$	32.9		$	83.5		$	81.0

Basic net income per common share	$	0.70		$	0.65		$	1.63		$	1.59
Weighted average number of common shares		51.1			50.9			51.0			50.8

Diluted net income per common share	$	0.70		$	0.65		$	1.63		$	1.59
Adjusted weighted average number of common shares		51.3			51.0			51.2			51.0

FORESTAR GROUP INC. Revenues, Residential Lots Sold and Lot Position

	REVENUES
	Three Months Ended June 30,						Nine Months Ended June 30,
		2026			2025			2026			2025
	(In millions)
Residential lot sales:
Development projects	$	396.0		$	373.4		$	956.5		$	953.3
Lot banking projects		2.0			10.9			8.0			24.1
Increase in contract liabilities		(0.6	)		(1.3	)		(0.6	)		(0.1	)
		397.4			383.0			963.9			977.3
Tract sales and other		9.6			7.5			90.4			14.6
Total revenues	$	407.0		$	390.5		$	1,054.3		$	991.9


	RESIDENTIAL LOTS SOLD
	Three Months Ended June 30,						Nine Months Ended June 30,
		2026			2025			2026			2025
Development projects		3,635			3,524			8,449			9,149
Lot banking projects		24			81			92			200
		3,659			3,605			8,541			9,349

Average sales price per lot ⁽¹⁾	$	108,800		$	106,600		$	113,000		$	104,500


							LOT POSITION
							June 30, 2026			September 30, 2025
Lots owned								62,200			65,100
Lots controlled through land and lot purchase contracts								29,500			34,700
Total lots owned and controlled								91,700			99,800

Owned lots under contract to sell to D.R. Horton								21,800			22,800
Owned lots under contract to customers other than D.R. Horton								1,700			1,000
Total owned lots under contract								23,500			23,800

Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale agreements								19,200			17,600
Owned lots fully developed								9,600			8,900

_____________
⁽¹⁾		Excludes any impact from change in contract liabilities.

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Chris Hibbetts, 817-769-1860

Vice President of Finance & Investor Relations

InvestorRelations@forestar.com