Employee Benefit Plans

12 Months Ended

Sep. 30, 2025

Employee Benefit Plans

Retirement Plans

The Company has a 401(k) plan for all employees who have been with the Company for a period of six months or more. The Company matches portions of employees’ voluntary contributions. The Company recorded expense of $1.6 million, $1.1 million and $1.0 million for matching contributions in fiscal 2025, 2024 and 2023, respectively, which is included in selling, general and administrative expense in the Company's consolidated statements of operations.

In fiscal 2024, the Compensation Committee approved the participation of certain Company employees in D.R. Horton's Supplemental Executive Retirement Plan (SERP). This plan is a non-qualified deferred compensation program that provides benefits payable to certain management employees upon retirement, death or termination of employment. Under the SERP, the Company accrues an unfunded benefit based on a percentage of the eligible employees’ salaries, as well as an interest factor based upon a predetermined formula. The Company’s liability related to the SERP was $1.9 million at September 30, 2025. The Company recorded $0.6 million and $0.1 million of expense for this plan in fiscal 2025 and 2024, respectively.

Employee Stock Purchase Plan

In October 2022, the Company’s Board of Directors adopted and, in January 2023, the Company’s shareholders approved the 2022 Employee Stock Purchase Plan ("ESPP"). The ESPP allows eligible employees the opportunity to purchase common stock of the Company at a discount at 6-month intervals through accumulated payroll deductions. Eligible employees purchase common stock of the Company during a purchase period at a discounted price of 85% of the fair market value of the stock on the designated dates of purchase. The price to eligible employees may be further discounted depending on the average fair market value of the stock during the period and certain other criteria. Under the terms of the plan, the total fair market value of common stock that an eligible employee may purchase each year is limited to the lesser of 15% of the employee’s annual compensation or $25,000. Under the plan, employees purchased 14,822 shares and 6,941 shares for $0.3 million and $0.2 million in fiscal 2025 and 2024, respectively. No shares were purchased under the ESPP in fiscal 2023. The aggregate number of shares of the Company's stock reserved for issuance under the plan is 2.5 million.

Incentive Bonus Plan

The Company’s Incentive Bonus Plan, which began in fiscal 2025, provides for the Compensation Committee to award short-term performance bonuses to senior management based upon the level of achievement of certain criteria. For fiscal 2025, the Compensation Committee approved awards whereby certain executive officers could earn performance bonuses based upon percentages of the Company’s pre-tax income. Compensation expense related to this plan was $3.1 million in fiscal 2025.

Stock-Based Compensation

The Company’s Stock Incentive Plan provides for the granting of equity awards, such as performance stock units (PSUs) and restricted stock units (RSUs), to executive officers, other key employees and non-management directors. PSUs are earned by achieving key performance criteria and RSUs are earned through continued employment with the Company over a requisite time period. Each stock unit represents the contingent right to receive one share of the Company’s common stock if the performance criteria and/or vesting conditions are satisfied. The stock units have no dividend or voting rights until vested. At September 30, 2025, the Company had 2.1 million shares of common stock reserved for issuance and 1.1 million shares available for future grants under the Stock Incentive Plan.

Time-Based Restricted Stock Unit Equity Awards (RSUs)

During fiscal 2025, 2024 and 2023, the Company granted time-based RSUs that vest annually in equal installments over periods of three to five years. The following table provides additional information related to time-based RSU activity during those periods. The number of RSUs vested included shares of common stock withheld by the Company on behalf of the employees to satisfy the tax withholding requirements.


	Year Ended September 30,
	2025			2024			2023
	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value		Number of Restricted Stock Units	Weighted Average Grant Date Fair Value		Number of Restricted Stock Units	Weighted Average Grant Date Fair Value
Outstanding at beginning of year	715,875	$	21.63	885,094	$	16.63	621,951	$	18.94
Granted	306,300	29.00		178,035	37.94		511,698	14.76
Vested	(238,328)	20.82		(293,253)	17.07		(186,812)	18.88
Cancelled	(25,096)	23.02		(54,001)	18.18		(61,743)	17.63
Outstanding at end of year	758,751	$	24.81	715,875	$	21.63	885,094	$	16.63

The total fair value of shares vested on the vesting date was $5.3 million, $10.5 million and $3.5 million during fiscal 2025, 2024 and 2023, respectively. Stock-based compensation expense related to the Company's restricted stock units for fiscal 2025, 2024 and 2023 was $6.1 million, $5.3 million and $4.3 million, respectively. These expenses are included in selling, general and administrative expense in the Company's consolidated statements of operations. At September 30, 2025, there was $12.8 million of unrecognized compensation expense related to unvested time-based RSU awards. This expense is expected to be recognized over a weighted average period of 2.5 years.

Performance-Based Restricted Stock Unit Equity Awards (PSUs)

During fiscal 2025, PSUs that vest at the end of a three-year performance period were granted to the Company's executive officers. The number of units that ultimately vest depends on the achievement of three performance criteria which are (i) relative total stockholder return, (ii) return on inventory and (iii) market share goals, and can range from 0% to 200% of the number of units granted. The three performance criteria are weighted equally. Compensation expense related to these grants is based on an estimate of the Company's achievement of the three performance criteria, the elapsed portion of the performance period and the grant date fair value of the award. No PSUs were granted in fiscal 2024 or 2023.

The following table provides additional information related to the PSUs outstanding at September 30, 2025.


Grant Date	Vesting Date	Target Number of Performance Units	Grant Date Fair Value per Unit		Compensation Expense
					Year Ended September 30,
					2025		2024		2023
					(In millions)
October 2024	September 2027	99,097	$	35.20	$	1.2	$	—	$	—