Toll Brothers Reports FY 2025 First Quarter Results

Toll Brothers, Inc. (TollBrothers.com), the nation’s leading builder of luxury homes, announced results for its first quarter ended January 31, 2025.

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

• Net income and earnings per share were $177.7 million and $1.75 per diluted share, compared to net income of $239.6 million and $2.25 per diluted share in FY 2024’s first quarter.
• Pre-tax income was $221.4 million, compared to $311.2 million in FY 2024’s first quarter.
• Home sales revenues were $1.84 billion, down 5% compared to FY 2024’s first quarter; delivered homes were 1,991, up 3%.
• Net signed contract value was $2.31 billion, up 12% compared to FY 2024’s first quarter; contracted homes were 2,307, up 13%.
• Backlog value was $6.94 billion at first quarter end, down 2% compared to FY 2024’s first quarter; homes in backlog were 6,312, down 6%.
• Home sales gross margin was 25.0%, compared to FY 2024’s first quarter end home sales gross margin of 27.6%.
• Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 26.9%, compared to FY 2024’s first quarter adjusted home sales gross margin of 28.9%.
• SG&A, as a percentage of home sales revenues, was 13.1%, compared to 11.9% in FY 2024’s first quarter.
• Income from operations was $219.1 million.
• Other income, loss from unconsolidated entities, and gross margin from land sales and other was $2.5 million.
• Overall, impairments were $22.6 million compared to $1.5 million in FY 2024’s first quarter. Impairments included in home sales cost of sales, land sales and other cost of sales and in other income – net were $16.4 million, $1.8 million and $4.4 million, respectively.
• The Company repurchased approximately 0.2 million shares at an average price of $127.02 per share for a total purchase price of $23.7 million.

Douglas C. Yearley , Jr., chairman and chief executive officer, stated: “In our first quarter, we delivered 1,991 homes at an average price of approximately $925,000, generating home sales revenues of $1.84 billion. Our adjusted gross margin was 26.9% in the quarter, or 65 basis points better than guidance, and our SG&A expense, as a percentage of homebuilding revenues, was 13.1%, or 40 basis points above guidance. While our net income and earnings per share came in below expectations, this was due primarily to impairments and a delay in the sale of a stabilized apartment property in one of our joint ventures. Our core homebuilding operations met expectations in the quarter.

“We signed 2,307 net contracts for $2.31 billion in our first quarter, up 13% in units and 12% in dollars compared to last year’s very strong first quarter, when net signed contracts were up approximately 40% in both units and dollars. While demand was solid in our first quarter, we have seen mixed results so far this spring selling season. Although demand has remained healthy in many of our markets and particularly at the higher end, affordability constraints and growing inventories in certain markets are pressuring sales – especially at the lower end. We continue to strategically manage our pricing, incentives and spec starts on a community-by-community basis to best match local selling conditions and to appropriately balance pace and price. Based on our first quarter results, the gross margin embedded in our backlog and the trends we are seeing early in the spring selling season, we are reaffirming all key homebuilding guidance for the full year, including deliveries, average price, adjusted gross margin, SG&A margin and community count growth. We continue to expect another year of solid results.

“At the end of our first quarter we owned or controlled approximately 77,700 lots, 56% of which were controlled, providing us with sufficient land for growth over the next several years. In February, we improved our already strong balance sheet and liquidity by extending the maturity dates of our term loan and revolving credit facilities to February 2030 and increasing the capacity of our revolver by nearly $400 million. With a solid balance sheet, ample liquidity, no significant debt maturities in fiscal 2025, and strong projected cash flows from operations this year, we are well positioned to continue investing in our business while also returning cash to stockholders throughout the year.

“We believe the long-term outlook for the new home market remains very positive and continues to be supported by strong fundamentals. These include favorable demographics, the structural undersupply of millions of homes in the U.S., the aging stock of existing homes, and the accumulated wealth built up from years of stock market and home price appreciation. With our industry leading brand, well-located communities at the corner of Main & Main, and our affluent customer base, our unique niche in the luxury market positions us well for continued success.”

Additional Information:

• The Company ended its FY 2025 first quarter with $574.8 million in cash and cash equivalents, compared to $1.30 billion at FYE 2024 and $754.8 million at FY 2024’s first quarter. At FY 2025 first quarter end, the Company also had $1.77 billion available under its $1.96 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 January 24, 2025, the Company paid its quarterly dividend of $0.23 per share to shareholders of record at the close of business on January 10, 2025.
• Stockholders’ equity at FY 2025 first quarter end was $7.80 billion, compared to $7.67 billion at FYE 2024.
• FY 2025’s first quarter-end book value per share was $77.98 per share, compared to $76.87 at FYE 2024.
• The Company ended its FY 2025’s first quarter with a debt-to-capital ratio of 26.0%, compared to 27.0% at FY 2024’s fourth quarter end and 28.0% at FY 2024’s first quarter end. The Company ended FY 2025’s first quarter with a net debt-to-capital ratio⁽¹⁾ of 21.1%, compared to 15.2% at FY 2024’s fourth quarter end, and 21.4% at FY 2024’s first quarter end.
• The Company ended FY 2025’s first quarter with approximately 77,700 lots owned and optioned, compared to 74,700 one quarter earlier, and 70,400 one year earlier. Approximately 44% or 33,900, of these lots were owned, of which approximately 20,300 lots, including those in backlog, were substantially improved.
• In the first quarter of FY 2025, the Company spent approximately $360.6 million on land to purchase approximately 2,307 lots.
• The Company ended FY 2025’s first quarter with 406 selling communities, compared to 408 at FY 2024’s fourth quarter end and 377 at FY 2024’s first quarter end.

For full results click here.

About Toll Brothers

Toll Brothers, Inc., a Fortune 500 Company, is the nation’s leading builder of luxury homes. The Company was founded 57 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.

In 2024, Toll Brothers marked 10 years in a row being named to the Fortune World’s Most Admired Companies™ list and 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).

Source: Toll Brothers, Inc.