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Toll Brothers Reports FY 2025 Second Quarter Results

/EIN News/ -- FORT WASHINGTON, Pa., May 20, 2025 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL) (TollBrothers.com), the nation’s leading builder of luxury homes, today announced results for its second quarter ended April 30, 2025.

FY 2025’s Second Quarter Financial Highlights (Compared to FY 2024s Second Quarter):

  • Net income and earnings per share were $352.4 million and $3.50 per diluted share, compared to net income of $481.6 million and $4.55 per diluted share in FY 2024’s second quarter. Fiscal 2024 net income and earnings per diluted share included $124.1 million and $1.17, respectively, related to the sale of a parcel of land to a commercial developer. Excluding these gains, net income was $357.5 million and earnings per diluted share were $3.38 in FY 2024’s second quarter.
  • Pre-tax income was $477.5 million, compared to $649.8 million in FY 2024’s second quarter.
  • Home sales revenues were $2.71 billion, up 2% compared to FY 2024’s second quarter; delivered homes were 2,899, up 10%.
  • Net signed contract value was $2.60 billion, down 11% compared to FY 2024’s second quarter; contracted homes were 2,650, down 13%.
  • Backlog value was $6.84 billion at second quarter end, down 7% compared to FY 2024’s second quarter; homes in backlog were 6,063, down 15%.
  • Home sales gross margin was 26.0%, compared to FY 2024’s second quarter home sales gross margin of 25.8%.
  • Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 27.5%, compared to FY 2024’s second quarter adjusted home sales gross margin of 28.2%.
  • SG&A, as a percentage of home sales revenues, was 9.5%, compared to 9.0% in FY 2024’s second quarter.
  • Income from operations was $449.7 million.
  • Other income, income from unconsolidated entities, and gross margin from land sales and other was $29.0 million.
  • The Company repurchased approximately 1.6 million shares at an average price of $107.84 per share for a total purchase price of $177.4 million.

Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “We are pleased with our second quarter results, as we delivered earnings that significantly exceeded expectations. Despite a softer demand environment, we generated record second quarter home sales revenues of $2.71 billion, well above our guidance of $2.47 billion, and beat both our adjusted gross margin and SG&A guidance. We believe these results highlight the strength of our broadly diversified luxury product offerings, price points and geographies, our balanced portfolio of build-to-order and spec homes, and our strategy of prioritizing sales price and margin over pace in the current environment. Based on our first half results and the strength of our backlog, we are reaffirming our full year guidance.

“Given the shortage of housing and favorable demographics, we continue to believe the long-term outlook for the new home market remains positive, particularly for our luxury niche. With our balanced operating platform, disciplined underwriting, financial strength and healthy cash flows, we are well positioned to adapt to changing market conditions and to continue delivering value to our stockholders.”

Third Quarter and FY 2025 Financial Guidance:
  Third Quarter   Full Fiscal Year
Deliveries 2,800 to 3,000 units     11,200 to 11,600 units  
Average Delivered Price per Home $965,000 to $985,000     $945,000 to $965,000  
Adjusted Home Sales Gross Margin 27.25 %   27.25 %
SG&A, as a Percentage of Home Sales Revenues 9.2 %   9.4% to 9.5 %
Period-End Community Count 430     440 to 450  
Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other $— million     $110 million  
Tax Rate 26.0 %   25.5 %
           


Financial Highlights for the three months ended April 30, 2025 and 2024 (unaudited):
  2025   2024
Net Income $352.4 million, or $3.50 per share diluted     $481.6 million, or $4.55 per share diluted  
Pre-Tax Income $477.5 million     $649.8 million  
Pre-Tax Inventory Impairments included in Home Sales Costs of Revenues $9.8 million     $28.4 million  
Home Sales Revenues $2.71 billion and 2,899 units     $2.65 billion and 2,641 units  
Net Signed Contracts $2.60 billion and 2,650 units     $2.94 billion and 3,041 units  
Net Signed Contracts per Community 6.4 units     8.0 units  
Quarter-End Backlog $6.84 billion and 6,063 units     $7.38 billion and 7,093 units  
Average Price per Home in Backlog $1,128,100     $1,040,200  
Home Sales Gross Margin 26.0 %   25.8 %
Adjusted Home Sales Gross Margin 27.5 %   28.2 %
Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues 1.1 %   1.3 %
SG&A, as a percentage of Home Sales Revenues 9.5 %   9.0 %
Income from Operations $449.7 million, or 16.4% of total revenues     $623.5 million, or 22.0% of total revenues  
Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other $29.0 million     $203.7 million  
Pre-Tax Land and Other Impairments included in Land Sales and Other Costs of Revenues $— million     $0.6 million  
Pre-tax Other Asset Write-offs included in Other Income - net $— million     $4.9 million  
Quarterly Cancellations as a Percentage of Beginning-Quarter Backlog 2.8 %   2.8 %
Quarterly Cancellations as a Percentage of Signed Contracts in Quarter 6.2 %   5.7 %
           


Financial Highlights for the six months ended April 30, 2025 and 2024 (unaudited):
  2025     2024  
Net Income $530.2 million, or $5.24 per share diluted     $721.2 million, or $6.80 per share diluted  
Pre-Tax Income $698.9 million     $960.9 million  
Pre-Tax Inventory Impairments included in Home Sales Costs of Revenues $26.2 million     $29.9 million  
Home Sales Revenues $4.55 billion and 4,890 units     $4.58 billion and 4,568 units  
Net Signed Contracts $4.91 billion and 4,957 units     $5.01 billion and 5,083 units  
Home Sales Gross Margin         25.6 %   26.6 %
Adjusted Home Sales Gross Margin         27.3 %   28.5 %
Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues         1.1 %   1.3 %
SG&A, as a percentage of Home Sales Revenues         10.9 %   10.2 %
Income from Operations $668.8 million, or 14.5% of total revenues     $931.9 million, or 19.5% of total revenues  
Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other $31.5 million     $212.3 million  
Pre-Tax Land and Other Impairments included in Land Sales and Other Costs of Revenues $1.8 million     $0.6 million  
Pre-tax Other Asset Write-offs included in Other Income - net $4.4 million     $4.9 million  
       

Additional Information:

  • The Company ended its FY 2025 second quarter with $686.5 million in cash and cash equivalents, compared to $1.30 billion at FYE 2024 and $574.8 million at FY 2025’s first quarter. At FY 2025 second quarter end, the Company also had $2.19 billion available under its $2.35 billion senior unsecured revolving credit facility.
  • On February 7, 2025, the Company extended the maturity date of the senior unsecured revolving credit facility from February 14, 2028 to February 7, 2030 and increased the total amount of revolving loans and commitments available under the facility from $1.96 billion to $2.35 billion. The Company also extended the maturity of all $650 million of loans outstanding under its term loan credit facility to February 7, 2030.
  • On March 11, 2025, the Company announced a 9% increase in its quarterly cash dividend from $0.23 to $0.25 per share. On April 25, 2025, the Company paid its quarterly dividend of $0.25 per share to shareholders of record at the close of business on April 11, 2025.
  • Stockholders’ equity at FY 2025 second quarter end was $7.95 billion, compared to $7.67 billion at FYE 2024.
  • FY 2025’s second quarter-end book value per share was $80.84 per share, compared to $76.87 at FYE 2024.
  • The Company ended its FY 2025’s second quarter with a debt-to-capital ratio of 26.1%, compared to 26.0% at FY 2025’s first quarter end and 27.0% at FYE 2024. The Company ended FY 2025’s second quarter with a net debt-to-capital ratio(1) of 19.8%, compared to 21.1% at FY 2025’s first quarter end, and 15.2% at FYE 2024.
  • The Company ended FY 2025’s second quarter with approximately 78,600 lots owned and optioned, compared to 77,700 one quarter earlier, and 71,800 one year earlier. Approximately 42% or 32,800, of these lots were owned, of which approximately 19,300 lots, including those in backlog, were substantially improved.
  • In the second quarter of FY 2025, the Company spent approximately $723.0 million on land to purchase approximately 4,380 lots.
  • The Company ended FY 2025’s second quarter with 421 selling communities, compared to 406 at FY 2025’s first quarter end and 386 at FY 2024’s second quarter end.
(1) See “Reconciliation of Non-GAAP Measures” below for more information on the calculation of the Company’s net debt-to-capital ratio.
   

Toll Brothers will be broadcasting live via the Investor Relations section of its website, investors.TollBrothers.com, a conference call hosted by chairman and chief executive officer Douglas C. Yearley, Jr. at 8:30 a.m. (ET) Wednesday, May 21, 2025, to discuss these results and its outlook for the third quarter and FY 2025. To access the call, enter the Toll Brothers website, click on the Investor Relations page, and select “Events & Presentations.” Participants are encouraged to log on at least fifteen minutes prior to the start of the presentation to register and download any necessary software.

The call can be heard live with an online replay which will follow.

ABOUT TOLL BROTHERS

Toll Brothers, Inc., a Fortune 500 Company, is the nation’s leading builder of luxury homes. The Company was founded 58 years ago in 1967 and became a public company in 1986. Its common stock is listed on the New York Stock Exchange under the symbol “TOL.” The Company serves first-time, move-up, empty-nester, active-adult, and second-home buyers, as well as urban and suburban renters. Toll Brothers builds in over 60 markets in 24 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Indiana, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington, as well as in the District of Columbia. The Company operates its own architectural, engineering, mortgage, title, land development, insurance, smart home technology, and landscape subsidiaries. The Company also develops master-planned and golf course communities as well as operates its own lumber distribution, house component assembly, and manufacturing operations.

Toll Brothers has been one of Fortune magazine's World’s Most Admired Companies™ for 10+ years in a row, and in 2024 the Company’s Chairman and CEO Douglas C. Yearley, Jr. was named one of 25 Top CEOs by Barron’s magazine. Toll Brothers has also been named Builder of the Year by Builder magazine and is the first two-time recipient of Builder of the Year from Professional Builder magazine. For more information visit TollBrothers.com.

Toll Brothers discloses information about its business and financial performance and other matters, and provides links to its securities filings, notices of investor events, and earnings and other news releases, on the Investor Relations section of its website (investors.TollBrothers.com).

From Fortune, ©2025 Fortune Media IP Limited. All rights reserved. Used under license.

FORWARD-LOOKING STATEMENTS

Information presented herein for the second quarter ended April 30, 2025 is subject to finalization of the Company’s regulatory filings, related financial and accounting reporting procedures and external auditor procedures.

This release contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. One can identify these statements by the fact that they do not relate to matters of a strictly historical or factual nature and generally discuss or relate to future events. These statements contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “can,” “could,” “might,” “should,” “likely,” “will,” and other words or phrases of similar meaning. Such statements may include, but are not limited to, information and statements regarding: expectations regarding inflation and interest rates; the markets in which we operate or may operate; our strategic priorities; our land acquisition, land development and capital allocation priorities; market conditions; demand for our homes; our build-to-order and spec home strategy; anticipated operating results and guidance; home deliveries; financial resources and condition; changes in revenues; changes in profitability; changes in margins; changes in accounting treatment; cost of revenues, including expected labor and material costs; selling, general, and administrative expenses; interest expense; inventory write-downs; home warranty and construction defect claims; unrecognized tax benefits; anticipated tax refunds; sales paces and prices; effects of home buyer cancellations; growth and expansion; joint ventures in which we are involved; anticipated results from our investments in unconsolidated entities; our ability to acquire or dispose of land and pursue real estate opportunities; our ability to gain approvals and open new communities; our ability to market, construct and sell homes and properties; our ability to deliver homes from backlog; our ability to secure materials and subcontractors; our ability to produce the liquidity and capital necessary to conduct normal business operations or to expand and take advantage of opportunities; and the outcome of legal proceedings, investigations, and claims.

Any or all of the forward-looking statements included in this release are not guarantees of future performance and may turn out to be inaccurate. This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties. The major risks and uncertainties – and assumptions that are made – that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:

  • the effect of general economic conditions, including employment rates, housing starts, inflation rates, interest and mortgage rates, availability of financing for home mortgages and strength of the U.S. dollar;
  • market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
  • the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such land;
  • access to adequate capital on acceptable terms;
  • geographic concentration of our operations;
  • levels of competition;
  • the price and availability of lumber, other raw materials, home components and labor;
  • the effect of U.S. trade policies, including the imposition of tariffs and duties on home building products and retaliatory measures taken by other countries;
  • the effects of weather and the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, unavailability of insurance, and shortages and price increases in labor or materials associated with such natural disasters;
  • risks arising from acts of war, terrorism or outbreaks of contagious diseases, such as Covid-19;
  • federal and state tax policies;
  • transportation costs;
  • the effect of land use, environment and other governmental laws and regulations;
  • legal proceedings or disputes and the adequacy of reserves;
  • risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, indebtedness, financial condition, losses and future prospects;
  • the effect of potential loss of key management personnel;
  • changes in accounting principles;
  • risks related to unauthorized access to our computer systems, theft of our and our homebuyers’ confidential information or other forms of cyber-attack; and
  • other factors described in “Risk Factors” included in our Annual Report on Form 10-K for the year ended October 31, 2024 and in subsequent filings we make with the Securities and Exchange Commission (“SEC”).

Many of the factors mentioned above or in other reports or public statements made by us will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements.

Forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.

For a further discussion of factors that we believe could cause actual results to differ materially from expected and historical results, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K filed with the SEC and in subsequent reports filed with the SEC. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995, and all of our forward-looking statements are expressly qualified in their entirety by the cautionary statements contained or referenced in this section.

 
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
       
  April 30,
2025
  October 31,
2024
  (Unaudited)    
ASSETS      
Cash and cash equivalents $ 686,466     $ 1,303,039  
Inventory   10,994,873       9,712,925  
Property, construction and office equipment - net   450,024       453,007  
Receivables, prepaid expenses and other assets   583,422       590,611  
Mortgage loans held for sale   195,651       191,242  
Customer deposits held in escrow   113,086       109,691  
Investments in unconsolidated entities   1,172,302       1,007,417  
  $ 14,195,824     $ 13,367,932  
       
LIABILITIES AND EQUITY      
Liabilities:      
Loans payable $ 1,052,710     $ 1,085,817  
Senior notes   1,597,544       1,597,102  
Mortgage company loan facility   150,000       150,000  
Customer deposits   514,965       488,690  
Accounts payable   666,488       492,213  
Accrued expenses   2,088,588       1,752,848  
Income taxes payable   161,114       114,547  
Total liabilities   6,231,409       5,681,217  
       
Equity:      
Stockholders’ Equity      
Common stock, 112,937 shares issued at April 30, 2025 and October 31, 2024   1,129       1,129  
Additional paid-in capital   679,434       694,713  
Retained earnings   8,634,857       8,153,356  
Treasury stock, at cost — 14,612 and 13,149 shares at April 30, 2025 and October 31, 2024, respectively   (1,394,825 )     (1,209,547 )
Accumulated other comprehensive income   28,130       31,277  
Total stockholders’ equity   7,948,725       7,670,928  
Noncontrolling interest   15,690       15,787  
Total equity   7,964,415       7,686,715  
  $ 14,195,824     $ 13,367,932  
               


TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data and percentages)
(Unaudited)
       
  Three Months Ended
April 30,
  Six Months Ended
April 30,
    2025       2024       2025       2024  
  $ %   $ %   $ %   $ %
Revenues:                      
Home sales $ 2,706,453       $ 2,647,020       $ 4,547,229       $ 4,578,856    
Land sales and other   32,624         190,466         50,979         206,478    
    2,739,077         2,837,486         4,598,208         4,785,334    
                       
Cost of revenues:                      
Home sales   2,002,218   74.0 %     1,963,283   74.2 %     3,383,698   74.4 %     3,362,509   73.4 %
Land sales and other   31,421   96.3 %     12,979   6.8 %     49,527   97.2 %     23,140   11.2 %
    2,033,639         1,976,262         3,433,225         3,385,649    
                       
Gross margin - home sales   704,235   26.0 %     683,737   25.8 %     1,163,531   25.6 %     1,216,347   26.6 %
Gross margin - land sales and other   1,203   3.7 %     177,487   93.2 %     1,452   2.8 %     183,338   88.8 %
                       
Selling, general and administrative expenses   255,760   9.5 %     237,698   9.0 %     496,174   10.9 %     467,744   10.2 %
Income from operations   449,678         623,526         668,809         931,941    
                       
Other:                      
Income (loss) from unconsolidated entities   11,489         5,887         2,746         (3,285 )  
Other income - net   16,336         20,366         27,330         32,284    
Income before income taxes   477,503         649,779         698,885         960,940    
Income tax provision   125,056         168,162         168,735         239,765    
Net income $ 352,447       $ 481,617       $ 530,150       $ 721,175    
Per share:                      
Basic earnings $ 3.53       $ 4.60       $ 5.28       $ 6.87    
Diluted earnings $ 3.50       $ 4.55       $ 5.24       $ 6.80    
Cash dividend declared $ 0.25       $ 0.23       $ 0.48       $ 0.44    
Weighted-average number of shares:                      
Basic   99,890         104,794         100,360         104,958    
Diluted   100,585         105,803         101,208         106,034    
                       
Effective tax rate   26.2 %       25.9 %       24.1 %       25.0 %  
                                       


TOLL BROTHERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA
(Amounts in thousands)
(unaudited)
       
  Three Months Ended
April 30,
  Six Months Ended
April 30,
    2025       2024     2025     2024
Inventory impairments and write-offs included in home sales cost of revenues:              
Pre-development costs and option write offs $ 1,674     $ 1,288   $ 5,631   $ 2,759
Land owned for operating communities   8,125       27,140     20,585     27,140
  $ 9,799     $ 28,428   $ 26,216   $ 29,899
               
Land and other impairments included in land sales and other cost of revenues $     $ 600   $ 1,841   $ 600
               
Other asset write-offs (recoveries) included in Other income - net $ (42 )   $ 4,900   $ 4,405   $ 4,900
               
Depreciation and amortization $ 20,775     $ 19,590   $ 37,940   $ 35,283
Interest incurred $ 31,603     $ 27,405   $ 61,438   $ 56,164
Interest expense:              
Charged to home sales cost of revenues $ 30,311     $ 34,740   $ 50,387   $ 58,318
Charged to land sales and other cost of revenues   623       726     638     1,020
  $ 30,934     $ 35,466   $ 51,025   $ 59,338
               
Home sites controlled:         April 30,
2025
  April 30,
2024
Owned           32,763     36,985
Optioned           45,843     34,779
            78,606     71,764
                   
                   

Inventory at April 30, 2025 and October 31, 2024 consisted of the following (amounts in thousands):

  April 30,
2025
  October 31,
2024
Land deposits and costs of future communities $ 781,280   $ 620,040
Land and land development costs   2,992,183     2,532,221
Land and land development costs associated with homes under construction   3,785,095     3,617,266
Total land and land development costs   7,558,558     6,769,527
       
Homes under construction   2,946,464     2,458,541
Model homes (1)   489,851     484,857
  $ 10,994,873   $ 9,712,925


(1) Includes the allocated land and land development costs associated with each of our model homes in operation.
   

Toll Brothers operates in the following five geographic segments, with operations generally located in the states listed below:

  • North: Connecticut, Delaware, Illinois, Massachusetts, Michigan, New Jersey, New York and Pennsylvania
  • Mid-Atlantic: Georgia, Maryland, North Carolina, Tennessee and Virginia
  • South: Florida, South Carolina and Texas
  • Mountain: Arizona, Colorado, Idaho, Nevada and Utah
  • Pacific: California, Oregon and Washington

  Three Months Ended
April 30,
  Units   $ (Millions)   Average Price Per Unit $
  2025   2024     2025       2024       2025     2024
REVENUES                      
North 389   349   $ 378.5     $ 335.2     $ 973,000   $ 960,500
Mid-Atlantic 379   378     321.8       376.1     $ 849,000   $ 995,000
South 928   804     758.6       658.4     $ 817,500   $ 818,900
Mountain 856   686     755.9       603.6     $ 883,000   $ 879,800
Pacific 347   424     492.2       674.7     $ 1,418,400   $ 1,591,200
Home Building 2,899   2,641     2,707.0       2,648.0     $ 933,700   $ 1,002,600
Corporate and other           (0.5 )     (1.0 )        
Total home sales 2,899   2,641     2,706.5       2,647.0     $ 933,600   $ 1,002,300
Land sales and other           32.6       190.5          
Total Consolidated         $ 2,739.1     $ 2,837.5          
                       
CONTRACTS                      
North 372   412   $ 386.9     $ 422.1     $ 1,039,900   $ 1,024,600
Mid-Atlantic 407   376     378.7       348.9     $ 930,500   $ 928,000
South 753   892     636.8       746.8     $ 845,700   $ 837,200
Mountain 776   944     695.5       814.6     $ 896,300   $ 862,900
Pacific 342   417     506.5       608.6     $ 1,480,900   $ 1,459,400
Total Consolidated 2,650   3,041   $ 2,604.4     $ 2,941.0     $ 982,800   $ 967,100
                       
BACKLOG                      
North 909   1,055   $ 1,028.5     $ 1,108.0     $ 1,131,500   $ 1,050,300
Mid-Atlantic 906   912     987.4       900.8     $ 1,089,900   $ 987,700
South 1,932   2,344     1,774.7       2,120.2     $ 918,600   $ 904,500
Mountain 1,480   1,891     1,563.9       1,836.2     $ 1,056,700   $ 971,000
Pacific 836   891     1,484.9       1,412.8     $ 1,776,100   $ 1,585,600
Total Consolidated 6,063   7,093   $ 6,839.4     $ 7,378.0     $ 1,128,100   $ 1,040,200
                                   

Note: Due to rounding, amounts in the geographic tables may not add.

  Six Months Ended
April 30,
  Units   $ (Millions)   Average Price Per Unit $
  2025   2024     2025       2024       2025     2024
REVENUES                      
North 636   638   $ 633.2     $ 607.9     $ 995,600   $ 952,800
Mid-Atlantic 645   655     558.0       640.3     $ 865,100   $ 977,600
South 1,524   1,435     1,264.9       1,191.3     $ 830,000   $ 830,200
Mountain 1,519   1,171     1,312.6       1,056.9     $ 864,100   $ 902,600
Pacific 566   669     779.3       1,083.7     $ 1,376,900   $ 1,619,900
Home Building 4,890   4,568     4,548.0       4,580.1     $ 930,100   $ 1,002,600
Corporate and other           (0.8 )     (1.2 )        
Total home sales 4,890   4,568     4,547.2       4,578.9     $ 929,900   $ 1,002,400
Land sales and other           51.0       206.5          
Total Consolidated         $ 4,598.2     $ 4,785.3          
                       
CONTRACTS                      
North 690   737   $ 723.6     $ 751.0     $ 1,048,700   $ 1,019,000
Mid-Atlantic 765   622     720.2       587.6     $ 941,400   $ 944,700
South 1,453   1,467     1,230.0       1,216.7     $ 846,500   $ 829,400
Mountain 1,404   1,485     1,229.6       1,313.4     $ 875,800   $ 884,400
Pacific 645   772     1,008.2       1,137.1     $ 1,563,100   $ 1,472,900
Total Consolidated 4,957   5,083   $ 4,911.6     $ 5,005.8     $ 990,800   $ 984,800
                                   

Unconsolidated entities:

Information related to revenues and contracts of entities in which we have an interest for the three-month and six-month periods ended April 30, 2025 and 2024, and for backlog at April 30, 2025 and 2024 is as follows:

  Units   $ (Millions)   Average Price Per Unit $
  2025   2024     2025     2024     2025     2024
Three months ended April 30,                      
Revenues 24   40   $ 36.9   $ 40.9   $ 1,535,600   $ 1,021,400
Contracts 18   33   $ 27.5   $ 43.9   $ 1,527,200   $ 1,328,900
                       
Six months ended April 30,                      
Revenues 39   40   $ 57.8   $ 40.9   $ 1,482,800   $ 1,021,400
Contracts 36   55   $ 53.4   $ 65.4   $ 1,483,500   $ 1,189,700
                       
Backlog at April 30, 9   164   $ 13.0   $ 184.5   $ 1,440,100   $ 1,125,200
                               
                               

RECONCILIATION OF NON-GAAP MEASURES

This press release contains, and Company management’s discussion of the results presented in this press release may include, information about the Company’s adjusted home sales gross margin, adjusted net income, adjusted diluted earnings per share and the Company’s net debt-to-capital ratio.

These four measures are non-GAAP financial measures which are not calculated in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures should not be considered a substitute for, or superior to, the comparable GAAP financial measures, and may be different from non-GAAP measures used by other companies in the home building business.

The Company’s management considers these non-GAAP financial measures as we make operating and strategic decisions and evaluate our performance, including against other home builders that may use similar non-GAAP financial measures. The Company’s management believes these non-GAAP financial measures are useful to investors in understanding our operations and leverage and may be helpful in comparing the Company to other home builders to the extent they provide similar information.

Adjusted Home Sales Gross Margin
The following table reconciles the Company’s home sales gross margin as a percentage of home sales revenues (calculated in accordance with GAAP) to the Company’s adjusted home sales gross margin (a non-GAAP financial measure). Adjusted home sales gross margin is calculated as (i) home sales gross margin plus interest recognized in home sales cost of revenues plus inventory write-downs recognized in home sales cost of revenues divided by (ii) home sales revenues.

Adjusted Home Sales Gross Margin Reconciliation
(Amounts in thousands, except percentages)
         
    Three Months Ended
April 30,
  Six Months Ended
April 30,
      2025       2024       2025       2024  
Revenues - home sales $ 2,706,453     $ 2,647,020     $ 4,547,229     $ 4,578,856  
Cost of revenues - home sales   2,002,218       1,963,283       3,383,698       3,362,509  
Home sales gross margin   704,235       683,737       1,163,531       1,216,347  
Add:  Interest recognized in cost of revenues - home sales   30,311       34,740       50,387       58,318  
  Inventory impairments and write-offs in cost of revenues - home sales   9,799       28,428       26,216       29,899  
Adjusted home sales gross margin $ 744,345     $ 746,905     $ 1,240,134     $ 1,304,564  
               
Home sales gross margin as a percentage of home sale revenues   26.0 %     25.8 %     25.6 %     26.6 %
                 
Adjusted home sales gross margin as a percentage of home sale revenues   27.5 %     28.2 %     27.3 %     28.5 %
                                 
                                 

The Company’s management believes adjusted home sales gross margin is a useful financial measure to investors because it allows them to evaluate the performance of our home building operations without the often varying effects of capitalized interest costs and inventory impairments. The use of adjusted home sales gross margin also assists the Company’s management in assessing the profitability of our home building operations and making strategic decisions regarding community location and product mix.

Forward-looking Adjusted Home Sales Gross Margin
The Company has not provided projected third quarter and full FY 2025 home sales gross margin or a GAAP reconciliation for forward-looking adjusted home sales gross margin because such measure cannot be provided without unreasonable efforts on a forward-looking basis, since inventory write-downs are based on future activity and observation and therefore cannot be projected for the third quarter and full FY 2025. The variability of these charges may have a potentially unpredictable, and potentially significant, impact on our third quarter and full FY 2025 home sales gross margin.

Adjusted Net Income and Diluted Earnings Per Share Reconciliation

The following table reconciles the Company’s net income and earnings per share (calculated in accordance with GAAP) to the Company’s adjusted net income and diluted earnings per share (a non-GAAP financial measure).

Adjusted Net Income and Diluted Per Share Reconciliation
(Amounts in thousands, except per share data)
         
    Three Months Ended
April 30,
  Six Months Ended
April 30,
      2025     2024       2025     2024  
Net income $ 352,447   $ 481,617     $ 530,150   $ 721,175  
Subtract: Net income resulting from the sale of a parcel of land to a commercial developer       (124,119 )         (124,119 )
Adjusted net income $ 352,447   $ 357,498     $ 530,150   $ 597,056  
                 
Diluted earnings per share $ 3.50   $ 4.55     $ 5.24   $ 6.80  
Subtract: Diluted earnings per share resulting from the sale of a parcel of land to a commercial developer       (1.17 )         (1.17 )
Adjusted diluted earnings per share $ 3.50   $ 3.38     $ 5.24   $ 5.63  
                           
                           

Net Debt-to-Capital Ratio
The following table reconciles the Company’s ratio of debt to capital (calculated in accordance with GAAP) to the Company’s net debt-to-capital ratio (a non-GAAP financial measure). The net debt-to-capital ratio is calculated as (i) total debt minus mortgage warehouse loans minus cash and cash equivalents divided by (ii) total debt minus mortgage warehouse loans minus cash and cash equivalents plus stockholders’ equity.

Net Debt-to-Capital Ratio Reconciliation
(Amounts in thousands, except percentages)
             
    April 30,
2025
  January 31,
2025
  October 31,
2024
Loans payable $ 1,052,710     $ 1,058,765     $ 1,085,817  
Senior notes   1,597,544       1,597,316       1,597,102  
Mortgage company loan facility   150,000       89,958       150,000  
Total debt   2,800,254       2,746,039       2,832,919  
Total stockholders’ equity   7,948,725       7,795,606       7,670,928  
Total capital $ 10,748,979     $ 10,541,645     $ 10,503,847  
Ratio of debt-to-capital   26.1 %     26.0 %     27.0 %
             
Total debt $ 2,800,254     $ 2,746,039     $ 2,832,919  
Less: Mortgage company loan facility   (150,000 )     (89,958 )     (150,000 )
  Cash and cash equivalents   (686,466 )     (574,834 )     (1,303,039 )
Total net debt   1,963,788       2,081,247       1,379,880  
Total stockholders’ equity   7,948,725       7,795,606       7,670,928  
Total net capital $ 9,912,513     $ 9,876,853     $ 9,050,808  
Net debt-to-capital ratio   19.8 %     21.1 %     15.2 %
                       
                       

The Company’s management uses the net debt-to-capital ratio as an indicator of its overall leverage and believes it is a useful financial measure to investors in understanding the leverage employed in the Company’s operations.

CONTACT: Gregg Ziegler (215) 478-3820
  gziegler@tollbrothers.com
   

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/5a08df21-b279-4122-8614-64608117cdeb


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