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Toll Brothers, Inc. SEC 10-Q Report

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Toll Brothers, Inc., a leading builder of luxury homes, has released its Form 10-Q report for the second quarter of fiscal year 2025. The report provides a comprehensive overview of the company's financial and operational performance, reflecting the challenges and opportunities faced in the current market environment.

Financial Highlights

  • Total Revenue: $2,739.1 million, a decrease of 3% compared to the prior-year period, primarily due to a significant drop in land sales and other revenues.
  • Income from Operations: $449.7 million, a decrease of 28% from the prior-year period, reflecting higher selling, general, and administrative expenses.
  • Net Income: $352.4 million, a decrease of 27% from the prior-year period, impacted by lower revenues and higher costs.
  • Diluted EPS: $3.50, reflecting a decrease in net income and a reduction in the weighted-average number of shares.

Business Highlights

  • Geographical Performance: The North region saw a revenue increase to $378.5 million from $335.2 million, while the Mid-Atlantic region experienced a decline to $321.8 million from $376.1 million. The South and Mountain regions showed strong performance with revenues of $758.6 million and $755.9 million, respectively, reflecting growth from the previous year. The Pacific region, however, saw a decrease in revenue to $492.2 million from $674.7 million.
  • Sales Units: The company delivered 2,899 homes in the three months ended April 30, 2025, a 10% increase from 2,641 homes in the same period in 2024. This increase was driven by more operating communities and higher backlog conversion due to improved construction cycle times.
  • Backlog: As of April 30, 2025, the company had a backlog of 6,063 homes valued at $6.84 billion, compared to 7,093 homes valued at $7.38 billion in the previous year. The average contracted price in the backlog increased by 8% to $1,128,100.
  • Future Outlook: The company anticipates a reduction in the pace of spec home starts in the near term due to recent demand trends. However, the long-term outlook remains positive, supported by strong fundamentals such as favorable demographics and a structural undersupply of homes in the U.S.
  • Operational Strategy: The company continues to strategically manage pricing, incentives, and home starts on a community-by-community basis to balance sales price and margin with pace, aligning inventory levels with local sales environments.
  • Community Count: At April 30, 2025, the company was selling from 421 communities, an increase from 408 at October 31, 2024, and 386 at April 30, 2024, indicating an expansion in operational capacity.
  • Spec Home Strategy: The company has increased the number of spec homes, which are generally built faster than build-to-order homes, to attract buyers looking for quicker move-in options. This strategy has contributed to the increase in home deliveries.
  • Land Sales: The decrease in land sales and other revenues was primarily due to a significant land sale in the prior year that did not recur in the current period. The fiscal 2024 period included a $185.0 million land sale in the Mid-Atlantic segment.

SEC Filing: Toll Brothers, Inc. [ TOL ] - 10-Q - May. 29, 2025