> ## Content Index
> Fetch the complete content index at: https://www.bullished.co/llms.txt
> Use this file to discover other available public pages before exploring further.

# Green Brick's Homebuilding Margin Drops 410 Basis Points To 28.0% As Operating Cash Turns Negative
- URL: https://www.bullished.co/green-bricks-homebuilding-margin-drops-410-basis-points-to-28-0-as-operating-cash-turns-a92f6075/
- Published: 2026-10-28T21:51:47.000Z
- Updated: 2026-10-28T21:51:47.000Z
- Description: The Texas builder drew $105 million on its revolver as incentives cut prices, cancellations rose to 8.2% and liquidity shrank to about $325.0 million.
- Author: Matteo Parrino
- Tags: SEC Filings, GRBK, Industry: Consumer Discretionary

[Green Brick Partners](https://www.bullished.co/tag/grbk/)' homebuilding gross margin fell to [28.0% from 32.1%](https://www.sec.gov/Archives/edgar/data/0001373670/000162828026067949/grbk-20260930.htm?ref=bullished.co) a year earlier, a drop of 410 basis points (4.1 percentage points), according to its third-quarter 10-Q filed Wednesday. The builder, which sells homes in Texas, Atlanta and on Florida's Treasure Coast, also used $5.1 million in operating cash over nine months and borrowed on its revolver.

## Discounts eat into price and margin

The company blamed higher incentives and discounts for the margin slide. Deliveries rose 2.6% to [978 homes](https://www.businesswire.com/news/home/20261028045386/en/Green-Brick-Partners-Inc.-Reports-Third-Quarter-2026-Results?ref=bullished.co), but the average sales price of homes delivered fell 12.1% to $446.7 thousand, and home closings revenue fell 9.8% to $436.9 million.

The prior quarter's [10-Q](https://www.sec.gov/Archives/edgar/data/0001373670/000162828026050640/grbk-20260630.htm?ref=bullished.co) showed a 150 basis point decline to 29.8%, so the squeeze has widened. For the nine months, margin fell 280 basis points to 29.0% from 31.8%.

Backlog revenue fell 17.0% to $379.3 million from $456.8 million, on [629 homes](https://www.businesswire.com/news/home/20261028045386/en/Green-Brick-Partners-Inc.-Reports-Third-Quarter-2026-Results?ref=bullished.co) against 675\. Cancellations rose to 8.2% from 6.7%, which the filing ties to affordability pressure from elevated mortgage rates and more financing-related cancellations. The company notes the rate has stayed under 10.0% since December 31, 2022.

Jim Brickman, Co-CEO and Co-Founder, said in the earnings release that the company continues "to respond to deteriorating market conditions to maintain sales pace." Incentives on new orders were 11%, he said.

## A revolver draw and negative cash flow

Operating activities used $5.1 million over nine months, against $133.3 million provided a year earlier. Inventory rose $238.3 million, and the filing says that reflects continued investment in land and development.

The company drew $105.0 million on its unsecured revolver, which had nothing outstanding at the end of 2025\. It also spent $34.8 million on share repurchases and repaid $75.0 million of senior notes over the nine months. Cash was $100.0 million and total liquidity was about $325.0 million, versus $461.6 million at the end of June.

Homebuilding debt to total capitalization was 13.1%, and the company targets up to about 20%.

## Mortgage arm offsets some of the pain

Green Brick, which builds homes through seven brands and also offers mortgage, title and insurance services, now reports financial services as its own segment. Its quarterly pretax income rose 68.9% to $5.6 million on revenue up 51.9% to $11.2 million. The mortgage capture rate fell to 65.7% from 72.6%, which the filing attributes to expansion into communities with existing outside lender relationships.

The Trophy Signature Homes brand, aimed at first-time buyers at lower prices, drove a heavier mix of orders. Net income attributable to the company was [$59.2 million](https://www.wusa9.com/article/syndication/associatedpress/green-brick-partners-q3-earnings-snapshot/616-3861e5b5-2c31-4ef8-88cd-179ad76db5cc?ref=bullished.co), or $1.35 per diluted share, from $77.9 million, or $1.77.

Near-term debt maturities are set: $25.0 million of the 2028 Notes is due February 25, 2027, and the $37.5 million 2027 Notes mature August 26, 2027\. The company holds its earnings call Thursday at noon Eastern.

### Sources

- [10-Q Filing — Green Brick Partners (GRBK)](https://www.sec.gov/Archives/edgar/data/0001373670/000162828026067949/grbk-20260930.htm?ref=bullished.co) — SEC EDGAR
- [10-Q Filing — Green Brick Partners (GRBK), Q2 FY2026 filed 2026-07-29 (comparison basis)](https://www.sec.gov/Archives/edgar/data/0001373670/000162828026050640/grbk-20260630.htm?ref=bullished.co) — SEC EDGAR
- [8-K Filing — Green Brick Partners, filed 2026-10-26 (Items 5.02)](https://www.sec.gov/Archives/edgar/data/0001373670/000162828026067320/grbk-20261022.htm?ref=bullished.co) — SEC EDGAR
- [8-K Filing — Green Brick Partners, filed 2026-10-28 (Items 2.02, 8.01, 9.01)](https://www.sec.gov/Archives/edgar/data/0001373670/000162828026067938/grbk-20261028.htm?ref=bullished.co) — SEC EDGAR
- [Earnings release (8-K Item 2.02, a2q32026ex99earningsrelease.htm) — Green Brick Partners, filed 2026-10-28](https://www.sec.gov/Archives/edgar/data/0001373670/000162828026067938/a2q32026ex99earningsrelease.htm?ref=bullished.co) — SEC EDGAR
- [Green Brick Partners: Q3 Earnings Snapshot | wusa9.com](https://www.wusa9.com/article/syndication/associatedpress/green-brick-partners-q3-earnings-snapshot/616-3861e5b5-2c31-4ef8-88cd-179ad76db5cc?ref=bullished.co) — Associated Press
- [Green Brick Partners GAAP EPS of $1.35 misses by $0.06, revenue of $448.2M misses by $18.82M (NYSE:GRBK)](https://seekingalpha.com/news/4659594-green-brick-partners-gaap-eps-of-1%5F35-misses-by-0%5F06-revenue-of-448%5F2m-misses-by-18%5F82m?ref=bullished.co) — seekingalpha.com
- [Green Brick Partners, Inc. Reports Third Quarter 2026 Results](https://www.businesswire.com/news/home/20261028045386/en/Green-Brick-Partners-Inc.-Reports-Third-Quarter-2026-Results?ref=bullished.co) — businesswire.com

### More on Green Brick Partners

- [Green Brick Profit Falls 24% As Home Prices Drop 12% And Incentives Hit 11%](https://www.bullished.co/green-brick-profit-falls-24-as-home-prices-drop-12-and-incentives-hit-11-a59487f1/)
- [Green Brick Partners Puts Co-CEO Jed Dolson On Its Board, Now Seven Directors](https://www.bullished.co/green-brick-partners-puts-co-ceo-jed-dolson-on-its-board-now-seven-directors-6e342f5e/)

[All Green Brick Partners (GRBK) coverage →](https://www.bullished.co/tag/grbk/)