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Call sheet · Q2'26

Green Brick Partners (GRBK)

Q2'26 earnings call · held July 30, 2026 · compared with the Q1'26 call · management-credibility review
5/12
Disclosure score
3 high, 3 medium, 1 low flags
Financial quality
Bottom line
Trophy's 84-day cycle time at 6 sales per month is creating a cash velocity advantage nobody's modeling, but management is using warranty reversals and spec inventory burns to mask underlying margin pressure. The real binding constraint isn't demand, it's cash generation: LTM operating cash flow collapsed 42% to $117M while they're committed to $425M+ in land spending for H2 alone. Most revealing quote: 'Atlanta has been very slow in July' after calling it 'steady' for years, confirming the H-1B visa impact is structural. My view changes if Q3 shows positive operating cash flow above $100M without further warranty reversals.

The 30-second version

  • Trophy's velocity is creating a stealth cash flow machine while Street obsesses over margin compression
  • Gross margin 'beat' at 29.8% masks massive quality degradation: warranty reserve release added 60bps
  • Atlanta's collapse from 'steady' to 'very slow' reveals H-1B dependency nobody's modeling

What changed this quarter

MetricQ1'26Q2'26Change
Revenue$465M (-14% YoY)$494M (-11% YoY)+6% sequential acceleration
EPS$1.39 (-17% YoY)$1.70 (-8% YoY)+900bps YoY improvement
Net Income$61M (-19% YoY)$74M (-10% YoY)+900bps YoY improvement
Gross Margin28.9%29.8%+90bps sequential (but 60bps from warranty reversal)
Net New Orders1,037 (-6% YoY)1,079 (+19% YoY)+2500bps YoY swing
Backlog Units649 units681 units+5% sequential growth
Backlog ASP$587K$569K-3% sequential erosion
Trophy Backlog Mix40% of units44% of units+400bps mix shift
Sales Pace3.4/month3.3/month-3% sequential but +10% YoY
Incentives on Orders9.9%9.1%-80bps sequential improvement

Accountability tracked

6 new promises made4 narrative shifts flagged5 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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