Toll Brothers Reports FY 2025 Third Quarter Results

Benzinga
August 19, 2025

FORT WASHINGTON, Pa., Aug. 19, 2025 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL) (TollBrothers.com), the nation's leading builder of luxury homes, today announced results for its third quarter ended July 31, 2025.

FY 2025's Third Quarter Financial Highlights (Compared to FY 2024's Third Quarter):

Net income and earnings per share were $369.6 million and $3.73 per diluted share, compared to net income of $374.6 million and $3.60 per diluted share in FY 2024's third quarter.

Pre-tax income was $499.5 million, compared to $503.6 million in FY 2024's third quarter.

Home sales revenues were $2.88 billion, up 6% compared to FY 2024's third quarter; delivered homes were 2,959, up 5%.

Net signed contract value was $2.41 billion, flat compared to FY 2024's third quarter; contracted homes were 2,388, down 4%.

Backlog value was $6.38 billion at third quarter end, down 10% compared to FY 2024's third quarter; homes in backlog were 5,492, down 19%.

Home sales gross margin was 25.6%, compared to FY 2024's third quarter home sales gross margin of 27.4%.

Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 27.5%, compared to FY 2024's third quarter adjusted home sales gross margin of 28.8%.

SG&A, as a percentage of home sales revenues, was 8.8%, compared to 9.0% in FY 2024's third quarter.

Income from operations was $487.7 million.

Other income, income from unconsolidated entities, and gross margin from land sales and other was $15.0 million.

The Company repurchased approximately 1.8 million shares at an average price of $112.40 per share for a total purchase price of $201.4 million.

Douglas C. Yearley, Jr., chairman and chief executive officer, stated: "We are pleased to report another strong quarter. We delivered 2,959 homes at an average price of $974,000, generating record third quarter home sales revenues of $2.9 billion, a 6% increase over last year. We achieved an adjusted gross margin of 27.5%, or 25 basis points above guidance, and our SG&A margin of 8.8% was 40 basis points better than guidance. We earned $370 million after taxes, or $3.73 per diluted share, and returned $226 million to stockholders through share repurchases and dividends, positioning us for another year of healthy profitability and solid returns.

"We signed 2,388 net contracts for $2.4 billion in our third quarter. The average sales price of new contracts was $1.0 million, up 4.5% year-over-year. Contract dollars were flat despite a 4% decline in units. While affordability pressures and uncertain economic conditions persist, we are pleased with the resilience of our luxury business and more affluent customer base. In this environment, we continue to focus on strategically balancing price and pace in order to maximize profitability and returns. Additionally, we are actively managing our spec starts on a community-by-community basis to best match local demand.

"Our financial position remains solid, with significant cash flows and liquidity and a strong balance sheet. We also control sufficient land to support continued community count growth over the next several years, allowing us to be highly selective and disciplined in our land acquisition. As we enter the fourth quarter, we remain focused on executing at a high level, delivering value to our stockholders, and positioning our Company for success in fiscal 2026 and beyond."

Fourth Quarter and FY 2025 Financial Guidance:

Fourth Quarter

Full Fiscal Year

Deliveries

3,350 units

11,200 units

Average Delivered Price per Home

$970,000 to $980,000

$950,000 to $960,000

Adjusted Home Sales Gross Margin

27.00

%

27.25

%

SG&A, as a Percentage of Home Sales Revenues

8.3

%

9.4 to 9.5

%

Period-End Community Count

440 to 450

440 to 450

Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other

$65 million

$110 million

Tax Rate

25.5

%

25.1

%

Financial Highlights for the three months ended July 31, 2025 and 2024 (unaudited):

2025

2024

Net Income

$369.6 million, or $3.73 per share diluted

$374.6 million, or $3.60 per share diluted

Pre-Tax Income

$499.5 million

$503.6 million

Pre-Tax Inventory Impairments included in Home Sales Costs of Revenues

$23.3 million

$5.5 million

Home Sales Revenues

$2.88 billion and 2,959 units

$2.72 billion and 2,814 units

Net Signed Contracts

$2.41 billion and 2,388 units

$2.41 billion and 2,490 units

Net Signed Contracts per Community

5.6 units

6.2 units

Quarter-End Backlog

$6.38 billion and 5,492 units

$7.07 billion and 6,769 units

Average Price per Home in Backlog

$1,161,000

$1,044,000

Home Sales Gross Margin

25.6

%

27.4

%

Adjusted Home Sales Gross Margin

27.5

%

28.8

%

Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues

1.1

%

1.2

%

SG&A, as a percentage of Home Sales Revenues

8.8

%

9.0

%

Income from Operations

$487.7 million, or 16.6% of total revenues

$497.2 million, or 18.2% of total revenues

Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other

$15.0 million

$1.1 million

Quarterly Cancellations as a Percentage of Beginning-Quarter Backlog

3.2

%

2.4

%

Quarterly Cancellations as a Percentage of Signed Contracts in Quarter

7.5

%

6.4

%

Financial Highlights for the nine months ended July 31, 2025 and 2024 (unaudited):

2025

2024

Net Income

$899.8 million, or $8.95 per share diluted

$1.10 billion, or $10.40 per share diluted

Pre-Tax Income

$1.20 billion

$1.46 billion

Pre-Tax Inventory Impairments included in Home Sales Costs of Revenues

$49.5 million

$35.4 million

Home Sales Revenues

$7.43 billion and 7,849 units

$7.30 billion and 7,382 units

Net Signed Contracts

$7.32 billion and 7,345 units

$7.41 billion and 7,573 units

Home Sales Gross Margin

25.6

%

26.9

%

Adjusted Home Sales Gross Margin

27.4

%

28.6

%

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

10.1

%

9.8

%

Income from Operations

$1.16 billion, or 15.3% of total revenues

$1.43 billion, or 19.0% of total revenues

Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other

$46.5 million

$213.5 million

Additional Information:

The Company ended its FY 2025 third quarter with $852.3 million in cash and cash equivalents, compared to $1.30 billion at FYE 2024 and $686.5 million at FY 2025's second quarter. At FY 2025 third quarter end, the Company also had $2.19 billion available under its $2.35 billion senior unsecured revolving credit facility.

In June 2025, the Company issued $500.0 million of 5.600% senior notes due June 15, 2035 and, in July 2025, redeemed its $350.0 million of 4.875% senior notes due November 15, 2025.

On July 25, 2025, the Company paid its quarterly dividend of $0.25 per share to shareholders of record at the close of business on July 11, 2025.

Stockholders' equity at FY 2025 third quarter end was $8.10 billion, compared to $7.67 billion at FYE 2024.

FY 2025's third quarter-end book value per share was $83.85 per share, compared to $76.87 at FYE 2024.

The Company ended its FY 2025's third quarter with a debt-to-capital ratio of 26.7%, compared to 26.1% at FY 2025's second quarter end and 27.0% at FYE 2024. The Company ended FY 2025's third quarter with a net debt-to-capital ratio(1) of 19.3%, compared to 19.8% at FY 2025's second quarter end, and 15.2% at FYE 2024.

The Company ended FY 2025's third quarter with approximately 76,800 lots owned and optioned, compared to 78,600 one quarter earlier, and 72,700 one year earlier. Approximately 43% or 32,800, of these lots were owned, of which approximately 19,000 lots, including those in backlog, were substantially improved.

In the third quarter ended July 31, 2025, the Company spent approximately $432.7 million on land to purchase approximately 2,755 lots.

The Company ended FY 2025's third quarter with 420 selling communities, compared to 421 at FY 2025's second quarter end and 404 at FY 2024's third 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, August 20, 2025, to discuss these results and its outlook for the fourth 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 BROTHERSToll 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 STATEMENTSInformation presented herein for the third quarter ended July 31, 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: market conditions; mortgage rates; inflation rates; demand for our homes; our build- to-order and quick move-in home strategy; sales paces and prices; effects of home buyer cancellations; our strategic priorities; growth and expansion; our land acquisition, land development and capital allocation priorities; anticipated operating results; home deliveries; financial resources and condition; changes in revenues, profitability, margins and returns; changes in accounting treatment; cost of revenues, including expected labor and material costs; availability of labor and materials; selling, general and administrative expenses; interest expense; inventory write-downs; home warranty and construction defect claims; unrecognized tax benefits; anticipated tax refunds; joint ventures in which we are involved; anticipated results from our investments in unconsolidated entities; our ability to acquire 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; the outcome of legal proceedings, investigations, and claims; management succession plans; and the impact of public health or other emergencies.

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 or unsuccessful management transitions;

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 SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands)

July 31,2025

October 31,2024

(Unaudited)

ASSETS

Cash and cash equivalents

$

852,311

$

1,303,039

Inventory

11,071,549

9,712,925

Property, construction and office equipment - net

448,822

453,007

Receivables, prepaid expenses and other assets

602,623

590,611

Mortgage loans held for sale

185,127

191,242

Customer deposits held in escrow

113,969

109,691

Investments in unconsolidated entities

1,122,420

1,007,417

$

14,396,821

$

13,367,932

LIABILITIES AND EQUITY

Liabilities:

Loans payable

$

1,051,495

$

1,085,817

Senior notes

1,741,024

1,597,102

Mortgage company loan facility

150,000

150,000

Customer deposits

483,890

488,690

Accounts payable

619,648

492,213

Accrued expenses

2,082,387

1,752,848

Income taxes payable

157,170

114,547

Total liabilities

6,285,614

5,681,217

Equity:

Stockholders' Equity

Common stock, 112,937 shares issued at July 31, 2025 and October 31, 2024

1,129

1,129

Additional paid-in capital

683,692

694,713

Retained earnings

8,980,140

8,153,356

Treasury stock, at cost, 16,383 and 13,149 shares at July 31, 2025 and October 31, 2024, respectively

(1,595,159

)

(1,209,547

)

Accumulated other comprehensive income

25,770

31,277

Total stockholders' equity

8,095,572

7,670,928

Noncontrolling interest

15,635

15,787

Total equity

8,111,207

7,686,715

$

14,396,821

$

13,367,932

TOLL BROTHERS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Amounts in thousands, except per share data and percentages)(Unaudited)

Three Months Ended July 31,

Nine Months Ended July 31,

2025

2024

2025

2024

$

%

$

%

$

%

$

%

Revenues:

Home sales

$

2,880,975

$

2,724,472

$

7,428,204

$

7,303,328

Land sales and other

64,142

3,472

115,121

209,950

2,945,117

2,727,944

7,543,325

7,513,278

Cost of revenues:

Home sales

2,142,768

74.4

%

1,977,162

72.6

%

5,526,466

74.4

%

5,339,671

73.1

%

Land sales and other

60,958

95.0

%

8,778

252.8

%

110,485

96.0

%

31,918

15.2

%

2,203,726

1,985,940

5,636,951

5,371,589

Gross margin - home sales

738,207

25.6

%

747,310

27.4

%

1,901,738

25.6

%

1,963,657

26.9

%

Gross margin - land sales and other

3,184

5.0

%

(5,306

)

(152.8

)%

4,636

4.0

%

178,032

84.8

%

Selling, general and administrative expenses

253,672

8.8

%

244,813

9.0

%

749,846

10.1

%

712,557

9.8

%

Income from operations

487,719

497,191

1,156,528

1,429,132

Other:

(Loss) income from unconsolidated entities

(1,012

)

(10,514

)

1,734

Toll Brothers Reports FY 2025 Third Quarter Results

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