Core Viewpoint - Toll Brothers is considered a strong buy-and-hold stock due to its operational quality, cash flow, capital return, and long-term supply-demand outlook, but faces risks in 2025 due to macroeconomic conditions impacting the housing market [1] Group 1: Financial Performance - The company reported a strong FQ3 with robust profitability and ample capital returns, but guidance for deliveries fell short, indicating potential changes in Q4 and early Q1 [2][7] - The capital return is deemed safe in 2025, with cash flow sufficient to cover dividend payments while maintaining financial health, despite increased liabilities [9] - The annual dividend is $1.00, with a dividend yield of 0.76% and a payout ratio of 7.42% [9] Group 2: Market Conditions - The market reaction suggests it may be peaking, with stock price declining nearly 3.0% in pre-opening trading, indicating resistance at critical levels around the low-$130s [2] - Leading indicators show weakness, including a 4% decline in signed contracts, a 10% decline in backlog, and a 19% contraction in backlog value [8] - The Federal Open Market Committee (FOMC) is unlikely to make aggressive interest rate cuts to spur housing demand, with only an 82% chance for a 25-basis point cut at the September meeting [5][7] Group 3: Stock Performance and Analyst Sentiment - Analysts maintain a Moderate Buy rating with a 65% bullish bias, but price target uptrend has stalled, suggesting potential downward pressure on stock action [11] - Stock repurchases reduced the count by an average of 4.6% for the quarter, although the pace may slow in the future [10] - Toll Brothers was not included in a list of top stocks recommended by leading analysts, indicating a preference for other investment opportunities [12]

Core Insights - Toll Brothers, Inc. reported strong third-quarter fiscal 2025 results, with adjusted earnings and total revenues exceeding the Zacks Consensus Estimate, showing year-over-year growth in both metrics [1][3] Financial Performance - Adjusted earnings per share (EPS) for the quarter were $3.73, surpassing the Zacks Consensus Estimate of $3.59 by 3.9% and reflecting a 3.6% increase from the previous year [3][9] - Total revenues reached $2,945.1 million, beating the consensus mark of $2,852 million, and increased by 8% year-over-year [3][4] Home Sales and Deliveries - Total home sales revenues rose by 6% year-over-year to $2.9 billion, while home deliveries increased by 5% to 2,959 units [4] - The average selling price (ASP) of homes delivered was $973,600, up 0.5% from $968,200 in the prior year [4] Contracts and Backlog - Net-signed contracts decreased to 2,388 units from 2,490 units year-over-year, with a constant value of $2.4 billion [5] - The backlog at the end of the quarter was 5,492 homes, down 19% year-over-year, with potential revenues from the backlog declining 10% to $6.38 billion [6] Margins and Expenses - Adjusted home sales gross margin contracted to 27.5%, a decrease of 130 basis points year-over-year [7][9] - Selling, general and administrative (SG&A) expenses as a percentage of home sales revenues were 8.8%, down 20 basis points from the previous year [7] Balance Sheet and Cash Flow - Cash and cash equivalents stood at $852.3 million, down from $1.3 billion at the end of fiscal 2024, while the debt-to-capital ratio improved to 26.7% [8] - The company had $2.19 billion available under its revolving credit facility, maturing in February 2030 [8] Guidance - For Q4, Toll Brothers expects home deliveries of 3,350 units at an average price of $970,000-$980,000, with an adjusted home sales gross margin projected at 27% [11] - For fiscal 2025, home deliveries are anticipated to be around 11,200 units, with an average price of delivered homes expected to be $950,000-$960,000 [12]

Financial Data and Key Metrics Changes - The company delivered 2,959 homes at an average price of $974,000, generating record third-quarter home sale revenues of $2,900,000,000, which represents a 5% increase in units and a 6% increase in dollars compared to the previous year's third quarter [6][14]. - Adjusted gross margin for the quarter was 27.5%, exceeding guidance by 25 basis points, while SG&A expenses were 8.8% of home sales revenues, 40 basis points better than guidance [6][16]. - Earnings for the quarter were $370,000,000, or $3.73 per diluted share, with a return of approximately $226,000,000 to stockholders through dividends and share repurchases [6][19]. Business Line Data and Key Metrics Changes - The company signed 2,388 net contracts for $2,400,000,000, reflecting a 4% decline in units but flat in dollars due to an increase in average sales price to just over $1,000,000 [6][15]. - The average price of contracts signed in the quarter was $1,010,000, while the average price in the backlog was $1,160,000, indicating strong financial profiles of buyers [16][9]. - The cancellation rate was 3.2% of the beginning backlog, compared to 2.4% in the previous year's third quarter, reflecting the financial strength of buyers [10]. Market Data and Key Metrics Changes - The company ended the third quarter with 420 active selling communities and expects to reach 440 to 450 communities by the end of the fiscal year, representing 8% to 10% year-over-year growth [11][12]. - The company has 3,200 spec homes at various stages of construction and another 1,800 building permits ready to go, allowing for quick ramp-up in production as market conditions improve [8][9]. Company Strategy and Development Direction - The company continues to prioritize price and margin over pace, actively managing spec starts and inventory levels on a community-by-community basis to match local market conditions [7][11]. - The strategy of selling spec homes at various stages of construction allows buyers to personalize their homes while providing a faster construction schedule [8][9]. - The company remains focused on capital-efficient deal structures and maintaining a strong land position to support long-term growth [12][19]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a full-year adjusted gross margin of 27.25% and expects to deliver approximately 11,200 homes for the full year [21][22]. - The management noted that building costs are beginning to come down modestly, with no significant impact from tariffs expected this fiscal year [10][11]. - There is optimism regarding community count growth and sales pace for fiscal year 2026, with expectations of 20 to 30 openings in Q4 [34][39]. Other Important Information - The company issued $500,000,000 of ten-year senior notes at a 5.6% coupon and called $350,000,000 of senior notes scheduled to mature in November, extending the weighted average years to maturity of senior notes [19]. - The company spent $433,000,000 on new land acquisitions during the quarter, maintaining a disciplined approach to underwriting [12][19]. Q&A Session Summary Question: Cash flow from operations guidance - The company expects to generate over $1,000,000,000 in cash flow from operations, with year-to-date cash flow around $400 million [27][28]. Question: Sales pace and incentives - Sales pace improved from May to August, with incentives increasing from 7% to 8% primarily due to discounting on finished spec homes [48][49]. Question: Order picture for Q4 - Management is optimistic about community count growth in Q4, with new openings expected to drive orders [60][61]. Question: Development costs and cycle times - The company has not seen much relief on land development costs, and cycle times vary across communities, with efforts ongoing to improve efficiency [68][77]. Question: Spec mix and margin differentials - The current spec mix is around 50%, compared to 10-15% pre-COVID, with margins on build-to-order homes being higher than spec homes [88][89].

Financial Data and Key Metrics Changes - The company delivered 2,959 homes at an average price of $974,000, generating record third-quarter home sale revenues of $2,900,000,000, which represents a 5% increase in units and a 6% increase in dollars compared to the previous year [5][15] - Adjusted gross margin was 27.5%, exceeding guidance by 25 basis points, while SG&A expense was 8.8% of home sales revenues, 40 basis points better than guidance [5][16] - Third-quarter earnings were $370,000,000 or $3.73 per diluted share, with a cancellation rate of 3.2%, which remains the lowest in the industry [10][15] Business Line Data and Key Metrics Changes - The company signed 2,388 net contracts for $2,400,000,000, with units down approximately 4% year over year, but dollars flat due to an increase in average sales price to just over $1,000,000 [5][15] - The average sales price (ASP) was up 4.5% versus 2024 and up 3% versus the last quarter, indicating resilience in the luxury business [5][15] - The backlog stood at 5,492 homes valued at $6,376,000,000, with an average sales price in the backlog of $1,160,000 [9] Market Data and Key Metrics Changes - The company ended the third quarter with 420 active selling communities and expects to end the fiscal year with 440 to 450 communities, representing 8% to 10% year-over-year growth [11][12] - The company has 3,200 spec homes at various stages of completion and another 1,800 building permits ready to go, allowing for quick ramp-up of spec production as market conditions improve [7][9] Company Strategy and Development Direction - The company continues to prioritize price and margin over pace, actively managing spec starts and inventory levels on a community-by-community basis to match local market conditions [6][11] - The strategy of selling spec homes at various stages of construction allows buyers to personalize their homes while providing a faster construction schedule [8][9] - The company remains disciplined in its land acquisition strategy, focusing on high-quality land at attractive returns while keeping land off balance sheet as long as practical [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a full-year adjusted gross margin of 27.25% and expects to deliver approximately 11,200 homes for the full year [6][23] - The company anticipates a modest decline in build costs and has not seen significant impacts from tariffs, with expectations for build costs to come down in the foreseeable future [10][11] - Management highlighted the importance of community openings and spec strategy to drive growth in fiscal year 2026, with optimism about market conditions improving [36][41] Other Important Information - The company returned approximately $226,000,000 to stockholders through dividends and share repurchases in the quarter [5] - The company issued $500,000,000 of ten-year senior notes at a 5.6% coupon and called $350,000,000 of senior notes scheduled to mature in November [20][21] Q&A Session Summary Question: Cash flow from operations guidance - The year-to-date cash flow from operations is approximately $400 million, with expectations to reach over $1,000,000,000 by year-end [29][30] Question: Construction costs expectations - Management expects construction costs to be flat to modestly down in the short term, with some progress in negotiating better pricing for materials [31][32] Question: Sales pace and community growth - Management confirmed no change in the sales pace target of two homes per community per month and expressed excitement about community count growth in fiscal year 2026 [35][36] Question: Incentives and sales trends - Incentives increased to 8% due to more discounting on finished specs, but management noted that incentives have stabilized recently [50][51] Question: Development costs and community count guidance - Management has not seen much relief on land development costs but expects community count growth to be spread throughout the quarter without significant regional concentration [69][72]

Market Position and Strategy - Public homebuilders have increased their market share from 27% in 2012 to approximately 53% in 2024[15] - The company focuses on capital efficiency in land acquisition through optioned land, land banking, joint ventures, rolling takedowns, and seller financing[45] - The company is strategically focused on driving shareholder returns through land acquisition, improved operations, and buybacks & dividends[39] Financial Performance - The company's diluted earnings per share (EPS) has grown at a compound annual growth rate (CAGR) of 28%, reaching $1501 in FY 2024[54] - The company has repurchased approximately 52% of its shares since 2016, totaling 91 million shares at an average price of $50, and has paid approximately $644 million in dividends[63] - The company's revenue from home sales increased from $6937357000 in FY 2020 to $10563332000 in FY 2024[66] - The company's return on beginning equity was 231% in FY 2024[66] Industry Trends - The new home premium has compressed from a historical 17% to 3% in 2025, making the value proposition of a new home compelling compared to a used home[23] - The median age of owner-occupied U S homes is over 40 years, compared to 32 years in 2005[27] - Housing starts have not kept pace with household growth, indicating an undersupplied market[20] Land and Operations - The company operates in 24 states and over 60 markets[33] - The company's total addressable market (TAM) consists of approximately 575000 housing transactions with buyers having income greater than $200K[73]

Shares of Toll Brothers (NYSE: TOL ) have essentially tread water this year, missing out on a meaningful market rally. While still well below their 52-week high, the stock has rebounded more than 30% from its lows, and its focus on the higher-end of the housingOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an ar ...

Group 1: Earnings Performance - Toll Brothers reported quarterly earnings of $3.73 per share, exceeding the Zacks Consensus Estimate of $3.59 per share, and up from $3.6 per share a year ago, representing an earnings surprise of +3.90% [1] - The company posted revenues of $2.95 billion for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 3.25%, compared to revenues of $2.73 billion in the same quarter last year [2] - Over the last four quarters, Toll Brothers has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Group 2: Stock Performance and Outlook - Toll Brothers shares have increased by approximately 4.2% since the beginning of the year, while the S&P 500 has gained 9.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $5.24 on revenues of $3.48 billion, and for the current fiscal year, it is $13.95 on revenues of $10.93 billion [7] Group 3: Industry Context - The Building Products - Home Builders industry, to which Toll Brothers belongs, is currently ranked in the bottom 8% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5] - The Zacks Rank for Toll Brothers is currently 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6]

Market Overview - The Nasdaq experienced a significant drop, shedding -314 points (-1.46%), while the Dow and S&P 500 showed minor fluctuations, closing up +10 points (+0.02%) and down -37 points (-0.59%) respectively [1] - The decline in tech stocks has been a continuing trend, with Palantir (PLTR) falling -9.3% on the day and -16.5% over the past five sessions [2] Company Earnings - Toll Brothers (TOL) reported fiscal Q3 earnings of $3.73 per share, exceeding the Zacks consensus estimate of $3.59, with revenues of $2.88 billion, surpassing the projected $2.85 billion [3] - The company achieved its fourth earnings beat in the last five quarters, although gross margins remained steady at +27.5% [4] - Orders for Toll Brothers were down -4% compared to expectations of flat, and the average home sold was $974K, slightly below analyst expectations [4] Upcoming Earnings Reports - Anticipation is building for retail earnings reports from Target (TGT), TJX Stores (TJX), Lowe's (LOW), and Estee Lauder (EL), with expected year-over-year earnings changes of -18.7%, +5%, +3.2%, and -87.5% respectively [5] Federal Reserve Insights - The Federal Open Market Committee (FOMC) minutes will be released, highlighting that the Fed has maintained rates at 4.25-4.50% for the fifth consecutive meeting, with notable dissent from two voting members for the first time in over 30 years [6]

[Q3 FY2025 Earnings Overview](index=1&type=section&id=Toll%20Brothers%20Reports%20FY%202025%20Third%20Quarter%20Results) [Q3 FY2025 Financial Highlights](index=1&type=section&id=FY%202025's%20Third%20Quarter%20Financial%20Highlights) The company achieved record Q3 revenues of $2.9 billion, though net income slightly declined and backlog value fell 10% Q3 FY2025 vs Q3 FY2024 Key Metrics | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | **Net Income** | $369.6 million | $374.6 million | -1.3% | | **Diluted EPS** | $3.73 | $3.60 | +3.6% | | **Home Sales Revenues** | $2.88 billion | $2.72 billion (approx.) | +6% | | **Homes Delivered** | 2,959 units | 2,814 units | +5% | | **Net Signed Contract Value** | $2.41 billion | $2.41 billion | Flat | | **Contracted Homes** | 2,388 units | 2,490 units | -4% | | **Quarter-End Backlog Value** | $6.38 billion | $7.07 billion | -10% | | **Adjusted Gross Margin** | 27.5% | 28.8% | -130 bps | | **SG&A as % of Revenue** | 8.8% | 9.0% | -20 bps | - The company repurchased approximately **1.8 million shares** for a total of **$201.4 million** during the quarter[7](index=7&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted record Q3 revenues and strong margins, citing the resilience of its luxury business - Delivered 2,959 homes at an average price of $974,000, resulting in record Q3 home sales revenues of **$2.9 billion**, a **6% increase YoY**[4](index=4&type=chunk) - **Adjusted gross margin of 27.5%** and **SG&A margin of 8.8%** both beat company guidance[4](index=4&type=chunk) - The average sales price of new contracts rose **4.5% YoY to $1.0 million**, offsetting a 4% decline in contract units and keeping contract dollar value flat[5](index=5&type=chunk) - The company maintains a solid financial position with significant cash flow and liquidity, and controls sufficient land for community count growth over the next several years, allowing for selective land acquisition[6](index=6&type=chunk) [Financial Guidance for Q4 and Full Year FY2025](index=2&type=section&id=Fourth%20Quarter%20and%20FY%202025%20Financial%20Guidance) The company projects delivering 11,200 homes for the full year with an adjusted gross margin of 27.25% Q4 and Full Year FY2025 Guidance | Metric | Fourth Quarter Guidance | Full Fiscal Year Guidance | | :--- | :--- | :--- | | **Deliveries** | 3,350 units | 11,200 units | | **Avg. Delivered Price** | $970,000 - $980,000 | $950,000 - $960,000 | | **Adj. Gross Margin** | 27.00% | 27.25% | | **SG&A % of Revenue** | 8.3% | 9.4% - 9.5% | | **Period-End Community Count** | 440 - 450 | 440 - 450 | | **Tax Rate** | 25.5% | 25.1% | [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) [Q3 & YTD FY2025 Financial Performance](index=2&type=section&id=Q3%20%26%20YTD%20FY2025%20Financial%20Performance) Q3 home sales revenue grew 6%, while nine-month pre-tax income declined due to lower land sales income Financial Highlights for the three months ended July 31 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Net Income** | $369.6M | $374.6M | | **Home Sales Revenues** | $2.88B | $2.72B | | **Net Signed Contracts** | $2.41B (2,388 units) | $2.41B (2,490 units) | | **Quarter-End Backlog** | $6.38B (5,492 units) | $7.07B (6,769 units) | | **Adjusted Gross Margin** | 27.5% | 28.8% | | **Cancellations as % of Beginning Backlog** | 3.2% | 2.4% | Financial Highlights for the nine months ended July 31 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Net Income** | $899.8M | $1.10B | | **Home Sales Revenues** | $7.43B | $7.30B | | **Net Signed Contracts** | $7.32B | $7.41B | | **Adjusted Gross Margin** | 27.4% | 28.6% | | **Income from Operations** | $1.16B | $1.43B | [Financial Position and Liquidity](index=3&type=section&id=Financial%20Position%20and%20Liquidity) The company maintained strong liquidity, managed its capital structure, and increased book value per share to $83.85 - Ended Q3 with **$852.3 million in cash** and cash equivalents and **$2.19 billion available** under its revolving credit facility[13](index=13&type=chunk) - Issued **$500.0 million of 5.600% senior notes** due 2035 and redeemed **$350.0 million of 4.875% senior notes** due 2025[13](index=13&type=chunk) - **Book value per share increased to $83.85** at quarter-end, up from $76.87 at FYE 2024[13](index=13&type=chunk) - The **net debt-to-capital ratio was 19.3%** at the end of Q3 FY2025, compared to 19.8% at the end of Q2 FY2025 and 15.2% at FYE 2024[13](index=13&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) Financial statements show increased assets from inventory and a decline in net income for Q3 and the nine-month period [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $14.40 billion, driven by a significant increase in inventory Balance Sheet Highlights (in millions) | Account | July 31, 2025 | October 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $852.3 | $1,303.0 | | **Inventory** | $11,071.5 | $9,712.9 | | **Total Assets** | $14,396.8 | $13,367.9 | | **Total Liabilities** | $6,285.6 | $5,681.2 | | **Total Stockholders' Equity** | $8,095.6 | $7,670.9 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 revenue rose 6% while net income slightly fell; nine-month net income saw a more significant decline Statement of Operations Highlights (Q3, in millions) | Account | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | **Home Sales Revenue** | $2,881.0 | $2,724.5 | | **Gross Margin - Home Sales** | $738.2 (25.6%) | $747.3 (27.4%) | | **Income from Operations** | $487.7 | $497.2 | | **Net Income** | $369.6 | $374.6 | | **Diluted EPS** | $3.73 | $3.60 | Statement of Operations Highlights (Nine Months, in millions) | Account | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | **Home Sales Revenue** | $7,428.2 | $7,303.3 | | **Gross Margin - Home Sales** | $1,901.7 (25.6%) | $1,963.7 (26.9%) | | **Income from Operations** | $1,156.5 | $1,429.1 | | **Net Income** | $899.8 | $1,095.8 | | **Diluted EPS** | $8.95 | $10.40 | [Supplemental and Segment Data](index=9&type=section&id=Supplemental%20and%20Segment%20Data) This section details inventory, impairments, and geographic segment performance, with the Pacific region showing the highest prices [Supplemental Financial Data](index=9&type=section&id=Supplemental%20Financial%20Data) Inventory grew to $11.07 billion, and inventory impairments increased significantly to $23.3 million in Q3 Home Sites Controlled | Type | July 31, 2025 | July 31, 2024 | | :--- | :--- | :--- | | **Owned** | 32,761 | 36,345 | | **Optioned** | 43,990 | 36,384 | | **Total** | 76,751 | 72,729 | - Inventory impairments and write-offs charged to home sales cost of revenues increased to **$23.3 million in Q3 2025**, compared to $5.5 million in Q3 2024[30](index=30&type=chunk) [Geographic Segment Performance](index=10&type=section&id=Geographic%20Segment%20Performance) The South segment led in revenue and deliveries, while the Pacific segment had the highest average contract price Q3 2025 Performance by Geographic Segment | Segment | Revenues ($M) | Contracts ($M) | Backlog ($M) | | :--- | :--- | :--- | :--- | | **North** | $438.7 | $431.3 | $1,021.2 | | **Mid-Atlantic** | $400.7 | $369.0 | $956.2 | | **South** | $757.9 | $524.2 | $1,543.3 | | **Mountain** | $730.2 | $575.6 | $1,410.8 | | **Pacific** | $553.1 | $511.9 | $1,444.7 | - The average price per unit in backlog at quarter-end was **$1,161,000**, a significant increase from $1,044,000 in the prior year, driven largely by a substantial price increase in the Pacific segment's backlog[31](index=31&type=chunk) [Reconciliation of Non-GAAP Measures](index=12&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20MEASURES) This section reconciles non-GAAP measures like adjusted gross margin and net debt-to-capital ratio to their GAAP equivalents [Adjusted Home Sales Gross Margin](index=12&type=section&id=Adjusted%20Home%20Sales%20Gross%20Margin) The adjusted home sales gross margin of 27.5% excludes interest and inventory write-downs from the GAAP margin Adjusted Home Sales Gross Margin Reconciliation (Q3) | Metric | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | **Home Sales Gross Margin (GAAP)** | 25.6% | 27.4% | | Add: Interest | 1.1% (approx.) | 1.2% (approx.) | | Add: Inventory Impairments | 0.8% (approx.) | 0.2% (approx.) | | **Adjusted Home Sales Gross Margin (Non-GAAP)** | 27.5% | 28.8% | - Management believes this non-GAAP measure allows investors to evaluate the performance of home building operations without the often varying effects of capitalized interest costs and inventory impairments[41](index=41&type=chunk) [Net Debt-to-Capital Ratio](index=14&type=section&id=Net%20Debt-to-Capital%20Ratio) The net debt-to-capital ratio, an indicator of leverage, stood at 19.3% at the end of Q3 Net Debt-to-Capital Ratio Reconciliation | Metric | July 31, 2025 | April 30, 2025 | Oct 31, 2024 | | :--- | :--- | :--- | :--- | | **Debt-to-Capital Ratio (GAAP)** | 26.7% | 26.1% | 27.0% | | **Net Debt-to-Capital Ratio (Non-GAAP)** | 19.3% | 19.8% | 15.2% | - Management uses the net debt-to-capital ratio as an indicator of its overall leverage and believes it is a useful financial measure for investors to understand the leverage employed in the Company's operations[48](index=48&type=chunk) [Company Information and Disclosures](index=3&type=section&id=Company%20Information%20and%20Disclosures) [About Toll Brothers](index=4&type=section&id=About%20Toll%20Brothers) Toll Brothers is a leading U.S. luxury home builder operating in over 60 markets across 24 states - Toll Brothers is the nation's leading builder of luxury homes, serving various buyer segments including first-time, move-up, active-adult, and second-home buyers[16](index=16&type=chunk) - The company operates in **over 60 markets in 24 states** and the District of Columbia and has been recognized as one of Fortune magazine's World's Most Admired Companies for over 10 consecutive years[16](index=16&type=chunk)[17](index=17&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section outlines risks and uncertainties that could cause future results to differ from forward-looking statements - The release contains forward-looking statements regarding future events and performance, which are not guarantees and are subject to risks and uncertainties[20](index=20&type=chunk)[21](index=21&type=chunk) - Major risks that could affect future results include general economic conditions, interest rates, market demand, land availability, competition, and the price of raw materials and labor[21](index=21&type=chunk)

Core Insights - Toll Brothers, Inc. reported strong financial results for the third quarter of FY 2025, with home sales revenues reaching $2.9 billion, a 6% increase compared to the same period in FY 2024 [3][6] - The company delivered 2,959 homes at an average price of $974,000, reflecting a resilient luxury market despite economic pressures [3][4] - The adjusted gross margin was 27.5%, slightly above guidance, while the SG&A margin improved to 8.8% [3][6] Financial Performance - Net income for the third quarter was $369.6 million, or $3.73 per diluted share, compared to $374.6 million, or $3.60 per diluted share in the same quarter last year [6][10] - Home sales revenues increased to $2.88 billion, up from $2.72 billion, with delivered homes rising by 5% [6][10] - The backlog value at the end of the quarter was $6.38 billion, down 10% year-over-year, with homes in backlog decreasing by 19% [6][10] Sales and Contracts - The company signed 2,388 net contracts valued at $2.4 billion, with an average sales price of $1.0 million, a 4.5% increase year-over-year [4][10] - Contracted homes decreased by 4% compared to the previous year, indicating challenges in unit sales despite stable contract dollar value [4][10] Guidance and Outlook - For the fourth quarter, Toll Brothers expects to deliver 3,350 units at an average price between $970,000 and $980,000, with an adjusted home sales gross margin of 27.00% [9] - The company maintains a solid financial position with significant cash flows and liquidity, controlling sufficient land for future growth [5][16] Shareholder Returns - The company returned $226 million to shareholders through share repurchases and dividends, indicating a commitment to shareholder value [3][6] - Approximately 1.8 million shares were repurchased at an average price of $112.40 per share [6][10]