Last chance to own a luxury home in three exclusive collections, including one home remaining in the Summit CollectionVENICE, Fla., Sept. 11, 2025 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL), the nation’s leading builder of luxury homes, today announced the final opportunity to purchase a new home at its Solstice at Wellen Park community in Venice, Florida. Solstice at Wellen Park offers luxury Toll Brothers homes in three collections: the Sunrise Collection with just six homes remaining, the Sunbeam ...

New luxury home community features 90-foot-wide home sites nestled in north central San AntonioSAN ANTONIO, Sept. 11, 2025 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL), the nation’s leading builder of luxury homes, today announced the opening of a new phase of home sites at a new home community nestled in the Shavano Park area of San Antonio, Texas. Shavano Highlands offers luxury single-family homes on 90-foot-wide home sites with access to the Salado Creek Greenway hiking and biking trails. Shavano ...

RENO, Nev., Sept. 10, 2025 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL), the nation’s leading builder of luxury homes, today announced that the first new home collections are now open for sale at its highly anticipated Quilici master-planned community in Reno, Nevada. The Quilici - Palovista Collection and Quilici - Treeside Collection offer luxury one- and two-story single-family homes with stunning architecture and exceptional personalization options, as well as future onsite amenities. Home shopper ...

PARKLAND, Fla., Sept. 10, 2025 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL), the nation’s leading builder of luxury homes, today announced the groundbreaking of its newest Southeast Florida community, Saltgrass at Heron Bay, coming soon to the Heron Bay master plan in Parkland, Florida. This premier community of new construction homes, located at 11773 NW 70th Place in Parkland, is scheduled to open for sale in spring 2026. “We thank the City of Parkland Commissioners and staff who joined our Toll Bro ...

Core Viewpoint - Toll Brothers, Inc. has experienced a significant stock rally, outperforming both its peers and the broader market, driven by strong fundamentals in the luxury homebuilding segment and effective operational strategies [1][5][21] Performance Overview - The stock has risen 29.3% over the past three months, exceeding the gains of the Zacks Building Products – Home Builders industry (27.9%), the Zacks Construction sector (11.3%), and the S&P 500 (8.6%) [1] - As of September 9, 2025, the stock price is $144.82, which is 14.6% below its 52-week high of $169.52 but represents a 67.1% premium to its 52-week low of $86.67 [2] Technical Analysis - The stock's current price is above both its 50-day simple moving average (SMA) of $127.43 and its 200-day SMA of $120.02, indicating a bullish trend [3] - Recent trading volume has been strong, with over 2.3 million shares traded, suggesting institutional interest [3] Driving Factors - Toll Brothers has a strong position in the luxury homebuilding market, with an average selling price (ASP) of $974,000 and a backlog averaging $1.16 million per home, indicating customer willingness to pay premiums [6][7] - The company has a robust land pipeline with 76,800 lots, 57% of which are controlled, and plans to increase its community count from 420 to 440-450 by year-end [7] - A balanced approach of 50% spec homes and 50% build-to-order homes has provided strategic flexibility and contributed to an adjusted gross margin of 27.5% in Q3 [8][9] Financial Strength - Toll Brothers ended Q3 with $852 million in cash and a net debt-to-capital ratio of 19.3%, highlighting its strong financial position [10] - The company returned $226 million to shareholders through dividends and buybacks and plans to repurchase $600 million of stock in fiscal 2025 [10] Challenges - Despite record revenues, net contracts fell 4% year-over-year, indicating a softer housing market [11] - Incentives for new contracts have increased to an average of 8%, reflecting pressure on margins [13] - Gross margins have decreased from 28.8% to 27.5%, influenced by higher incentives and market pressures [14] Market Conditions - Elevated mortgage rates around 6.5% continue to constrain affordability for many buyers, impacting sales decisions [16] - Broader economic uncertainty and inflationary pressures may affect consumer sentiment and demand [16] Valuation - Toll Brothers is trading at a forward 12-month P/E of 10.34X, below the industry average of 13.35X, suggesting it is undervalued relative to peers [18][19] - The stock's current pricing indicates potential for upside if fundamentals remain strong [18] Conclusion - Toll Brothers has shown strong performance driven by luxury market strength and operational efficiency, but faces challenges from softer sales volumes and margin pressures [21] - The company remains a stable investment within the homebuilder sector, with a Zacks Rank 3 (Hold), and should be monitored for future demand trends [21]

New luxury community offers 204 fully furnished student residences, upscale amenities, and easy access to the University of Central Florida campusORLANDO, Fla., Sept. 09, 2025 (GLOBE NEWSWIRE) -- Toll Brothers Campus Living, a division of Toll Brothers, Inc. (NYSE: TOL), the nation’s leading builder of luxury homes, and joint venture partner The Davis Companies today announced the opening of Aperture, an elevated student apartment community in Orlando, Florida. Strategically located near the University of C ...

Key Takeaways Toll Brothers' Q3 adjusted home sales gross margin fell 130 bps year over year to 27.5%.Incentives, especially on spec homes, are pressuring margins while aiding sales volumes.Backlog revenues dropped 10% to $6.38B, though average sales price rose to $1.16M.Toll Brothers, Inc. (TOL) continues to navigate a complex housing market where affordability challenges, shifting buyer preferences and volatile mortgage rates are shaping demand. While the company benefits from a resilient luxury segment, ...

Core Insights - Toll Brothers, Inc. has launched a new luxury home community named Boxwood in Collegeville, Pennsylvania, featuring 10 exclusive homes priced starting at $1 million [1][2]. Company Overview - Toll Brothers, Inc. is recognized as the nation's leading builder of luxury homes and is a Fortune 500 Company, founded in 1967 and publicly traded since 1986 [5][6]. - The company operates in over 60 markets across 24 states and the District of Columbia, offering a variety of housing options for different buyer segments [5][6]. Community Features - Boxwood consists of 4- to 5-bedroom single-family homes designed with modern living in mind, including open-concept floor plans and high-end personalization options [2][3]. - The community is located near Rambo Park, providing recreational amenities, and is served by the Perkiomen Valley School District, enhancing its appeal to families [3][4]. Accessibility and Convenience - The community offers easy access to major commuter routes, including the Pennsylvania Turnpike and Routes 202 and 422, facilitating convenient travel to shopping, dining, and entertainment [4][3]. Customer Experience - Toll Brothers provides a one-stop shopping experience at its Design Studio, allowing customers to personalize their homes with the help of professional Design Consultants [3][4]. - Quick move-in homes are available, catering to buyers looking for immediate occupancy [3].

Key Takeaways Toll Brothers now builds about 50% of homes on spec, up from just 10-15% historically.Spec homes improve efficiency and help TOL meet demand shifts without sacrificing premium appeal.TOL's 2025 EPS estimate fell to $13.86 from $13.95, with revenue growth projected at 0.2%.Toll Brothers, Inc. (TOL) continues to refine its operating strategy as the housing market navigates affordability challenges, shifting buyer preferences, and fluctuating mortgage rates. At the center of its approach lies a s ...

[Statement on Forward-Looking Information](index=3&type=section&id=Statement%20on%20Forward-Looking%20Information) This section clarifies that forward-looking statements are subject to risks and uncertainties, and the company does not commit to updating them publicly - Forward-looking statements are identified by words like "anticipate," "estimate," "expect," and relate to future events, not historical facts[11](index=11&type=chunk) - Major risks include general economic conditions (employment, interest rates, inflation), market demand, land availability, capital access, competition, material/labor costs, natural disasters, and tax policies[13](index=13&type=chunk)[17](index=17&type=chunk) - The company does not undertake to publicly update any forward-looking statements[14](index=14&type=chunk) [PART I. Financial Information](index=5&type=section&id=PART%20I.%20Financial%20Information) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive income, statements of changes in equity, and statements of cash flows, along with their accompanying notes, providing a detailed financial overview for the reported interim periods [Condensed Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This statement provides a snapshot of the company's assets, liabilities, and equity at specific interim dates, reflecting its financial position Condensed Consolidated Balance Sheets (Amounts in thousands) | ASSETS | July 31, 2025 (unaudited) | October 31, 2024 | | :----------------------------------- | :------------------------ | :----------------- | | Cash and cash equivalents | $ 852,311 | $ 1,303,039 | | Inventory | 11,071,549 | 9,712,925 | | Total Assets | $ 14,396,821 | $ 13,367,932 | | **LIABILITIES AND EQUITY** | | | | Total Liabilities | 6,285,614 | 5,681,217 | | Total Equity | 8,111,207 | 7,686,715 | | Total Liabilities and Equity | $ 14,396,821 | $ 13,367,932 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Unaudited)) This statement details the company's revenues, costs, and net income over specific interim periods, along with earnings per share data Condensed Consolidated Statements of Operations and Comprehensive Income (Amounts in thousands, except per share data) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $ 2,945,117 | $ 2,727,944 | $ 7,543,325 | $ 7,513,278 | | Cost of revenues | 2,203,726 | 1,985,940 | 5,636,951 | 5,371,589 | | Income from operations | 487,719 | 497,191 | 1,156,528 | 1,429,132 | | Net income | $ 369,621 | $ 374,611 | $ 899,771 | $ 1,095,786 | | Basic earnings per share | $ 3.76 | $ 3.64 | $ 9.02 | $ 10.51 | | Diluted earnings per share | $ 3.73 | $ 3.60 | $ 8.95 | $ 10.40 | [Condensed Consolidated Statements of Changes in Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Unaudited)) This statement outlines the changes in the company's equity components, including net income, treasury stock transactions, and dividends, over interim periods Key Changes in Equity (Nine months ended July 31, 2025 vs. October 31, 2024) | Item | Balance, October 31, 2024 (thousands) | Net Income (thousands) | Purchase of Treasury Stock (thousands) | Dividends Declared (thousands) | Balance, July 31, 2025 (thousands) | | :-------------------------- | :------------------------------------ | :--------------------- | :----------------------------------- | :----------------------------- | :--------------------------------- | | Total Equity | $ 7,686,715 | $ 899,771 | $ (402,468) | $ (72,987) | $ 8,111,207 | - Total stockholders' equity increased from **$7.67 billion** at October 31, 2024, to **$8.10 billion** at July 31, 2025[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This statement reports the cash generated and used by operating, investing, and financing activities, showing the net change in cash over interim periods Condensed Consolidated Statements of Cash Flows (Amounts in thousands) | Cash Flow Activity | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $ 312,381 | $ 327,656 | | Net cash used in investing activities | (240,169) | (116,034) | | Net cash used in financing activities | (504,356) | (592,689) | | Net decrease in cash, cash equivalents, and restricted cash | (432,144) | (381,067) | | Cash, cash equivalents, and restricted cash, end of period | $ 938,291 | $ 963,274 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed disclosures and explanations for the figures presented in the condensed consolidated financial statements, covering significant accounting policies, inventory, investments, debt, equity, and other financial instruments [1. Significant Accounting Policies](index=10&type=section&id=1.%20Significant%20Accounting%20Policies) This section outlines the key accounting principles and methods used in preparing the financial statements, including revenue recognition and recent pronouncements - The financial statements are prepared in accordance with SEC rules for interim information and U.S. GAAP, with October 31, 2024, balance sheet amounts derived from audited statements[31](index=31&type=chunk) - Home sales revenue is recognized upon home delivery and title transfer; contract liabilities (customer deposits) were **$483.9 million** at July 31, 2025[33](index=33&type=chunk) - Recent accounting pronouncements include ASU 2023-05 (Joint Venture Formations, adopted Jan 1, 2025), ASU 2023-07 (Segment Reporting, effective FY2025), ASU 2023-09 (Income Tax Disclosures, effective FY2026), and ASU 2024-03 (Expense Disaggregation, effective FY2028)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [2. Inventory](index=12&type=section&id=2.%20Inventory) This section details the composition of inventory, including land and homes under construction, and reports any impairment charges recognized during the periods Major Components of Inventory (Amounts in thousands) | Component | July 31, 2025 | October 31, 2024 | | :------------------------------------------------- | :-------------- | :--------------- | | Land deposits and costs of future communities | $ 866,503 | $ 620,040 | | Land and land development costs | 2,982,669 | 2,532,221 | | Land and land development costs (homes under construction) | 3,828,611 | 3,617,266 | | Homes under construction | 2,851,445 | 2,458,541 | | Model homes | 542,321 | 484,857 | | **Total Inventory** | **$ 11,071,549** | **$ 9,712,925** | Inventory Impairment Charges (Amounts in thousands) | Category | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Land controlled for future communities | $ 15,815 | $ 1,759 | $ 21,446 | $ 4,518 | | Operating communities | 7,500 | 3,700 | 28,085 | 30,840 | | **Total** | **$ 23,315** | **$ 5,459** | **$ 49,531** | **$ 35,358** | - At July 31, 2025, the company identified **335 land purchase contracts** with an aggregate purchase price of **$7.07 billion** as Variable Interest Entities (VIEs), on which **$755.4 million** in deposits had been made, but the company was not the primary beneficiary of any[46](index=46&type=chunk) [3. Investments in Unconsolidated Entities](index=13&type=section&id=3.%20Investments%20in%20Unconsolidated%20Entities) This section provides information on the company's equity method investments in joint ventures, including their types, total investment, and remaining funding commitments - The company has investments in **63 active unconsolidated joint ventures** (20 Land Development, 1 Home Building, 40 Rental Property, 2 Other) as of July 31, 2025, with a total investment of **$1.12 billion**[49](index=49&type=chunk) - Remaining funding commitment to unconsolidated entities was **$353.8 million** at July 31, 2025[49](index=49&type=chunk) Unconsolidated Entities Debt Financing (Amounts in thousands) | Category | Aggregate Loan Commitments (July 31, 2025) | Amounts Borrowed (July 31, 2025) | | :-------------------- | :----------------------------------- | :------------------------------- | | Land Development JVs | $ 839,043 | $ 542,394 | | Home Building JVs | 63,500 | 5,904 | | Rental Property JVs | 3,448,201 | 2,836,479 | | **Total** | **$ 4,350,744** | **$ 3,384,777** | - The company's maximum estimated exposure under repayment and carry cost guarantees for unconsolidated entities' debt was **$523.0 million** at July 31, 2025, for borrowed obligations[62](index=62&type=chunk) [4. Receivables, Prepaid Expenses, and Other Assets](index=17&type=section&id=4.%20Receivables%2C%20Prepaid%20Expenses%2C%20and%20Other%20Assets) This section details the various components of current and non-current assets, including expected insurance recoveries, properties held for development, and right-of-use assets Receivables, Prepaid Expenses, and Other Assets (Amounts in thousands) | Component | July 31, 2025 | October 31, 2024 | | :------------------------------------------ | :-------------- | :--------------- | | Expected recoveries from insurance carriers | $ 104,194 | $ 109,569 | | Properties held for rental/commercial development | 118,822 | 116,802 | | Right-of-use assets | 109,565 | 108,311 | | **Total** | **$ 602,623** | **$ 590,611** | [5. Loans Payable, Senior Notes, and Mortgage Company Loan Facilities](index=17&type=section&id=5.%20Loans%20Payable%2C%20Senior%20Notes%2C%20and%20Mortgage%20Company%20Loan%20Facilities) This section outlines the company's debt structure, including term loans, revolving credit facilities, and senior notes, detailing their terms, interest rates, and recent changes Loans Payable (Amounts in thousands) | Component | July 31, 2025 | October 31, 2024 | | :-------------------------- | :-------------- | :--------------- | | Senior unsecured term loan | $ 650,000 | $ 650,000 | | Loans payable – other | 404,726 | 437,969 | | Deferred issuance costs | (3,231) | (2,152) | | **Total Loans Payable** | **$ 1,051,495** | **$ 1,085,817** | - The **$650.0 million** senior unsecured term loan facility's maturity date was extended to February 7, 2030, with an interest rate of **5.20%** per annum at July 31, 2025[68](index=68&type=chunk) - The senior unsecured revolving credit facility was increased from **$1.96 billion** to **$2.35 billion** and extended to February 7, 2030; no outstanding borrowings at July 31, 2025[70](index=70&type=chunk)[72](index=72&type=chunk) - In June 2025, the company issued **$500.0 million** of **5.600% Senior Notes** due 2035 and redeemed **$350.0 million** of **4.875% Senior Notes** due November 2025[75](index=75&type=chunk) [6. Accrued Expenses](index=19&type=section&id=6.%20Accrued%20Expenses) This section details the various accrued liabilities, including land development, construction, compensation, self-insurance, and warranty obligations, along with their changes Accrued Expenses (Amounts in thousands) | Component | July 31, 2025 | October 31, 2024 | | :------------------------------------------ | :-------------- | :--------------- | | Land development and construction | $ 280,427 | $ 356,613 | | Liabilities related to consolidated inventory not owned | 762,934 | 388,778 | | Compensation and employee benefits | 196,663 | 208,394 | | Self-insurance | 253,736 | 242,306 | | Warranty | 195,393 | 189,258 | | **Total Accrued Expenses** | **$ 2,082,387** | **$ 1,752,848** | Warranty Accrual Reconciliation (Amounts in thousands) | Item | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Balance, beginning of period | $ 189,258 | $ 206,171 | | Additions – homes closed | 31,550 | 24,714 | | Charges incurred | (31,185) | (38,182) | | **Balance, end of period** | **$ 195,393** | **$ 210,980** | [7. Income Taxes](index=19&type=section&id=7.%20Income%20Taxes) This section presents the income tax provisions and effective tax rates for the reported periods, including details on state income tax rates Income Tax Provisions and Effective Rates | Period | Income Tax Provision (thousands) | Effective Tax Rate | | :----------------------------------- | :------------------------------- | :----------------- | | Three months ended July 31, 2025 | $ 129,879 | 26.0% | | Three months ended July 31, 2024 | $ 129,016 | 25.6% | | Nine months ended July 31, 2025 | $ 298,614 | 24.9% | | Nine months ended July 31, 2024 | $ 368,781 | 25.2% | - The estimated state income tax rate for fiscal year 2025 is approximately **5.6%**, down from **6.3%** in fiscal year 2024[80](index=80&type=chunk) [8. Stock-Based Benefit Plans](index=20&type=section&id=8.%20Stock-Based%20Benefit%20Plans) This section reports the stock-based compensation expense and related tax benefits, along with the unamortized value of unvested awards Stock-Based Compensation Expense and Tax Benefit (Amounts in thousands) | Item | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Total stock-based compensation expense | $ 4,315 | $ 3,812 | $ 27,110 | $ 25,951 | | Income tax benefit recognized | $ 1,072 | $ 986 | $ 6,837 | $ 6,662 | - The aggregate unamortized value of unvested stock-based compensation awards was approximately **$27.2 million** at July 31, 2025, up from **$21.8 million** at October 31, 2024[82](index=82&type=chunk) [9. Stockholders' Equity](index=20&type=section&id=9.%20Stockholders'%20Equity) This section details changes in stockholders' equity, including share repurchase authorizations, actual repurchases, and dividend declarations - The Board of Directors renewed authorization to repurchase **20 million shares** of common stock on December 13, 2023, with no expiration date[83](index=83&type=chunk) Share Repurchase Program (Shares in thousands) | Period | Shares Purchased | Average Price Per Share | Remaining Authorization at July 31 | | :-------------------------- | :--------------- | :---------------------- | :------------------------------- | | Three months ended July 31, 2025 | 1,791 | $ 112.40 | 11,464 | | Nine months ended July 31, 2025 | 3,623 | $ 111.08 | 11,464 | - Quarterly cash dividend increased from **$0.23 to $0.25 per share** on March 11, 2025[85](index=85&type=chunk) [10. Earnings per Share Information](index=21&type=section&id=10.%20Earnings%20per%20Share%20Information) This section provides the calculation of basic and diluted earnings per share, including net income and weighted-average shares outstanding Earnings Per Share Calculation (Amounts in thousands, except per share data) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net income | $ 369,621 | $ 374,611 | $ 899,771 | $ 1,095,786 | | Basic weighted-average shares | 98,434 | 102,980 | 99,718 | 104,299 | | Diluted weighted-average shares | 99,170 | 104,014 | 100,529 | 105,361 | [11. Fair Value Disclosures](index=22&type=section&id=11.%20Fair%20Value%20Disclosures) This section provides fair value measurements for financial instruments, including mortgage loans held for sale, interest rate swaps, and debt, categorized by valuation hierarchy Financial Instruments Measured at Fair Value (Amounts in thousands) | Financial Instrument | Fair Value Hierarchy | July 31, 2025 | October 31, 2024 | | :----------------------------------- | :------------------- | :-------------- | :--------------- | | Mortgage Loans Held for Sale | Level 2 | $ 185,127 | $ 191,242 | | Interest Rate Swap Contracts | Level 2 | $ 4,081 | $ 15,283 | - The fair value of interest rate swap contracts is classified as **Level 2**, with credit valuation adjustments utilizing Level 3 inputs, though their impact was not significant[90](index=90&type=chunk) Debt Book Value vs. Estimated Fair Value (Amounts in thousands) | Debt Type | Fair Value Hierarchy | Book Value (July 31, 2025) | Estimated Fair Value (July 31, 2025) | Book Value (October 31, 2024) | Estimated Fair Value (October 31, 2024) | | :----------------------------------- | :------------------- | :--------------------------- | :----------------------------------- | :---------------------------- | :------------------------------------ | | Loans payable | Level 2 | $ 1,054,726 | $ 1,042,520 | $ 1,087,969 | $ 1,069,577 | | Senior notes | Level 1 | 1,750,000 | 1,739,160 | 1,600,000 | 1,572,580 | | Mortgage company loan facility | Level 2 | 150,000 | 150,000 | 150,000 | 150,000 | | **Total** | | **$ 2,954,726** | **$ 2,931,680** | **$ 2,837,969** | **$ 2,792,157** | [12. Other Income – Net](index=23&type=section&id=12.%20Other%20Income%20%E2%80%93%20Net) This section details the components of other income, including interest income, ancillary business income, and management fees, explaining significant changes Components of Other Income – Net (Amounts in thousands) | Component | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Interest income | $ 6,955 | $ 9,033 | $ 22,978 | $ 28,508 | | Income from ancillary businesses | 6,548 | 5,405 | 14,737 | 11,152 | | Management fee income | 925 | 985 | 2,696 | 3,291 | | Other | (1,635) | 1,527 | (288) | 6,283 | | **Total other income – net** | **$ 12,793** | **$ 16,950** | **$ 40,123** | **$ 49,234** | - Income from ancillary businesses increased due to higher mortgage operations closing volume and reduced write-offs in Apartment Living operations, partially offset by lower management fees from high-rise urban luxury condominium operations[96](index=96&type=chunk)[97](index=97&type=chunk) [13. Commitments and Contingencies](index=24&type=section&id=13.%20Commitments%20and%20Contingencies) This section discusses legal claims, land purchase contracts, surety bonds, and sales backlog, assessing their potential financial impact on the company - The company is involved in various legal claims and litigation, but believes adequate provision has been made and disposition will not materially adversely affect financial condition[99](index=99&type=chunk) Land Purchase Contracts (Amounts in thousands) | Item | July 31, 2025 | October 31, 2024 | | :----------------------------------- | :-------------- | :--------------- | | Aggregate purchase price | $ 7,404,921 | $ 6,100,630 | | Deposits against aggregate purchase price | 782,200 | 549,195 | | Additional cash required to acquire land | 6,622,721 | 5,551,435 | - At July 31, 2025, outstanding surety bonds totaled **$852.5 million** for community improvements and **$397.1 million** for other obligations, with no probable draws expected[104](index=104&type=chunk) - Backlog at July 31, 2025, consisted of **5,492 homes** with an aggregate sales value of **$6.38 billion**[107](index=107&type=chunk) [14. Information on Segments](index=25&type=section&id=14.%20Information%20on%20Segments) This section provides financial data broken down by the company's five geographic operating segments, including revenues and income before income taxes - The company operates in **five geographic segments**: North, Mid-Atlantic, South, Mountain, and Pacific[111](index=111&type=chunk)[112](index=112&type=chunk) Total Consolidated Revenues by Segment (Amounts in thousands) | Segment | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | North | $ 438,698 | $ 375,119 | $ 1,071,899 | $ 982,991 | | Mid-Atlantic | 400,718 | 335,721 | 958,715 | 975,985 | | South | 757,881 | 776,262 | 2,022,789 | 1,967,522 | | Mountain | 730,250 | 670,027 | 2,042,828 | 1,726,976 | | Pacific | 553,067 | 566,336 | 1,332,415 | 1,650,015 | | **Total home building** | **$ 2,880,614** | **$ 2,723,465** | **$ 7,428,646** | **$ 7,303,489** | Total Consolidated Income (Loss) Before Income Taxes by Segment (Amounts in thousands) | Segment | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | North | $ 97,016 | $ 64,615 | $ 207,377 | $ 149,058 | | Mid-Atlantic | 71,328 | 73,470 | 167,985 | 377,513 | | South | 146,869 | 161,177 | 400,127 | 386,072 | | Mountain | 137,949 | 113,785 | 356,617 | 275,899 | | Pacific | 106,006 | 145,911 | 233,822 | 420,445 | | **Total home building** | **$ 559,168** | **$ 558,958** | **$ 1,365,928** | **$ 1,608,987** | [15. Supplemental Disclosure to Condensed Consolidated Statements of Cash Flows](index=28&type=section&id=15.%20Supplemental%20Disclosure%20to%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section provides additional details on cash flow activities, including income taxes paid, inventory acquired through financing, and the composition of cash and restricted cash Supplemental Cash Flow Information (Amounts in thousands) | Item | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Income tax paid – net | $ 256,513 | $ 397,666 | | Cost of inventory acquired through seller financing, municipal bonds, or included in accrued expenses - net | $ 441,821 | $ 228,660 | | Increase in inventory due to consolidation of joint ventures | $ 69,277 | $ — | Cash, Cash Equivalents, and Restricted Cash (Amounts in thousands) | Item | At July 31, 2025 | At July 31, 2024 | | :----------------------------------- | :--------------- | :--------------- | | Cash and cash equivalents | $ 852,311 | $ 893,422 | | Restricted cash | 85,980 | 69,852 | | **Total** | **$ 938,291** | **$ 963,274** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, discussing key trends, operational highlights, and factors influencing revenues, costs, and profitability, along with an analysis of liquidity and capital resources [OVERVIEW](index=29&type=section&id=OVERVIEW) This section provides a high-level summary of market conditions, sales trends, and the company's strategic responses, including its long-term outlook for the new home market - Net contracts signed decreased **4.1% in units** but increased **0.2% in value** for the three months ended July 31, 2025, compared to the prior year, attributed to affordability pressures and volatile economic conditions[122](index=122&type=chunk) - The company strategically manages pricing and incentives to balance sales pace and margin, and reduced spec home starts due to weaker demand[122](index=122&type=chunk)[123](index=123&type=chunk) - Long-term outlook for the new home market remains positive due to favorable demographics, structural undersupply, aging existing homes, and wealth appreciation[122](index=122&type=chunk) [Financial and Operational Highlights](index=30&type=section&id=Financial%20and%20Operational%20Highlights) This section summarizes key financial and operational metrics, including revenues, net income, contracts signed, and liquidity position, for the reported periods Key Financial Highlights (Amounts in millions, except units) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $ 2,945.1 | $ 2,727.9 | $ 7,543.3 | $ 7,513.3 | | Net income | $ 369.6 | $ 374.6 | $ 899.8 | $ 1,095.8 | | Net contracts signed – value | $ 2,412.0 | $ 2,407.5 | $ 7,323.6 | $ 7,413.3 | | Net contracts signed – units | 2,388 | 2,490 | 7,345 | 7,573 | - Backlog value decreased **10% to $6.38 billion** (**5,492 homes**) at July 31, 2025, compared to **$7.07 billion** (**6,769 homes**) at July 31, 2024[127](index=127&type=chunk) - At July 31, 2025, the company had **$852.3 million** in cash and cash equivalents and **$2.19 billion** available under its **$2.35 billion** revolving credit facility[128](index=128&type=chunk) [RESULTS OF OPERATIONS – OVERVIEW](index=31&type=section&id=RESULTS%20OF%20OPERATIONS%20%E2%80%93%20OVERVIEW) This section provides a consolidated summary of the company's financial performance, including home sales, land sales, net income, and key operational metrics like deliveries and contracts signed Consolidated Financial Performance Summary (Amounts in millions, except percentages and units) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | % Change | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | % Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | Home sales revenue | $ 2,881.0 | $ 2,724.5 | 6 % | $ 7,428.2 | $ 7,303.3 | 2 % | | Land sales and other revenue | 64.1 | 3.5 | NM | 115.1 | 210.0 | (45)% | | Net income | $ 369.6 | $ 374.6 | (1)% | $ 899.8 | $ 1,095.8 | (18)% | | Deliveries – units | 2,959 | 2,814 | 5 % | 7,849 | 7,382 | 6 % | | Deliveries – average delivered price (in '000s) | $ 973.6 | $ 968.2 | 1 % | $ 946.4 | $ 989.3 | (4)% | | Net contracts signed – units | 2,388 | 2,490 | (4)% | 7,345 | 7,573 | (3)% | | Net contracts signed – average contracted price (in '000s) | $ 1,010.1 | $ 966.9 | 4 % | $ 997.1 | $ 978.9 | 2 % | [Home Sales Revenues and Home Sales Cost of Revenues](index=32&type=section&id=Home%20Sales%20Revenues%20and%20Home%20Sales%20Cost%20of%20Revenues) This section analyzes the drivers of home sales revenue and cost of revenues, including delivery volumes, average prices, product mix shifts, and impairment charges - Home sales revenues increased **6%** for the three months ended July 31, 2025, driven by a **5% increase in deliveries** and a **1% increase in average delivered price**, due to more operating communities, spec home deliveries, and improved construction cycle times[135](index=135&type=chunk) - Home sales cost of revenues as a percentage of home sales revenues increased due to a shift to lower-margin products/regions (notably Pacific) and higher inventory impairment charges, along with increased sales incentives[136](index=136&type=chunk)[138](index=138&type=chunk) - For the nine months ended July 31, 2025, home sales revenues increased **2%**, with a **6% rise in deliveries** offset by a **4% decrease in average delivered price**, mainly due to a mix shift to less expensive product types/regions[137](index=137&type=chunk) [Land Sales and Other Revenues and Land Sales and Other Cost of Revenues](index=32&type=section&id=Land%20Sales%20and%20Other%20Revenues%20and%20Land%20Sales%20and%20Other%20Cost%20of%20Revenues) This section explains the fluctuations in land sales and other revenues and their associated costs, highlighting the impact of significant non-recurring land sales and impairment charges - Land sales and other revenues decreased significantly for the nine months ended July 31, 2025, primarily due to the non-recurrence of a **$180.7 million land parcel sale** in Q2 2024 that generated a **$175.2 million pre-tax gain**[139](index=139&type=chunk) - Land sales and other cost of revenues as a percentage of revenues increased for the nine months ended July 31, 2025, influenced by the low-basis 2024 land sale and higher impairment charges (**$2.6 million** in 2025 vs. **$4.4 million** in 2024)[140](index=140&type=chunk) [Selling, General and Administrative Expenses ("SG&A")](index=34&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses%20(%22SG%26A%22)) This section analyzes changes in SG&A expenses, attributing increases to factors like payroll, insurance, and marketing costs, and noting its percentage of home sales revenues - SG&A expenses increased by **$8.9 million (4%)** for the three months ended July 31, 2025, primarily due to higher payroll, insurance, and marketing costs, partially offset by lower selling commissions[141](index=141&type=chunk) - For the nine months ended July 31, 2025, SG&A increased by **$37.3 million (5%)**, mainly due to higher payroll, marketing, and insurance costs, with SG&A as a percentage of home sales revenues rising to **10.1%** from **9.8%**[142](index=142&type=chunk) [Income from Unconsolidated Entities](index=34&type=section&id=Income%20from%20Unconsolidated%20Entities) This section discusses the changes in income or loss from unconsolidated entities, highlighting the impact of increased earnings from specific joint ventures and rental property sales - The loss from unconsolidated entities decreased from **$10.5 million** in Q3 2024 to **$1.0 million** in Q3 2025, primarily due to increased earnings from a Home Building Joint Venture and a Land Development Joint Venture[143](index=143&type=chunk) - For the nine months ended July 31, 2025, the company recognized income of **$1.7 million** from unconsolidated entities, a significant improvement from a **$13.8 million loss** in the prior year, driven by gains from rental property sales and increased JV earnings, partially offset by higher losses from other JVs[144](index=144&type=chunk) [Other Income – Net](index=34&type=section&id=Other%20Income%20%E2%80%93%20Net) This section analyzes the components of other income, including interest income, ancillary business performance, and non-recurring gains, explaining period-over-period changes Components of Other Income – Net (Amounts in thousands) | Component | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Interest income | $ 6,955 | $ 9,033 | $ 22,978 | $ 28,508 | | Income from ancillary businesses | 6,548 | 5,405 | 14,737 | 11,152 | | Management fee income | 925 | 985 | 2,696 | 3,291 | | Other | (1,635) | 1,527 | (288) | 6,283 | | **Total other income – net** | **$ 12,793** | **$ 16,950** | **$ 40,123** | **$ 49,234** | - Income from ancillary businesses increased due to higher mortgage operations closing volume and reduced net write-offs in Apartment Living operations, partially offset by decreased management fees from high-rise urban luxury condominium operations[146](index=146&type=chunk) - The decrease in "other" income for the nine-month period was primarily due to the non-recurrence of a **$5.0 million gain** from a privately held company investment and a **$4.4 million gain** from a bulk sale of security monitoring accounts in fiscal 2024[148](index=148&type=chunk)[214](index=214&type=chunk) [Income Before Income Taxes](index=35&type=section&id=Income%20Before%20Income%20Taxes) This section presents the company's income before income taxes for the reported periods, highlighting the percentage change year-over-year Income Before Income Taxes (Amounts in millions) | Period | 2025 | 2024 | % Change | | :----------------------------------- | :------- | :------- | :------- | | Three months ended July 31, | $ 499.5 | $ 503.6 | (1)% | | Nine months ended July 31, | $ 1,200.0 | $ 1,460.0 | (18)% | [Income Tax Provision](index=35&type=section&id=Income%20Tax%20Provision) This section details the income tax provision and effective tax rates for the reported periods, explaining factors influencing rate changes Income Tax Provisions and Effective Rates | Period | Income Tax Provision (millions) | Effective Tax Rate | | :----------------------------------- | :------------------------------ | :----------------- | | Three months ended July 31, 2025 | $ 129.9 | 26.0% | | Three months ended July 31, 2024 | $ 129.0 | 25.6% | | Nine months ended July 31, 2025 | $ 298.6 | 24.9% | | Nine months ended July 31, 2024 | $ 368.8 | 25.2% | - The decrease in the effective tax rate for the nine months ended July 31, 2025, was primarily due to an increase in excess tax benefits related to stock-based compensation[151](index=151&type=chunk) [Contracts](index=35&type=section&id=Contracts) This section analyzes net contracts signed, including value, units, and average contracted price, explaining the impact of demand environment on these metrics Net Contracts Signed (Value in millions, Units) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | % Change (Value) | % Change (Units) | | :----------------------------------- | :------------------------------- | :------------------------------- | :--------------- | :--------------- | | Net contract value | $ 2,412.0 | $ 2,407.5 | 0.2% | | | Net contracted units | 2,388 | 2,490 | | (4.1)% | | Average contracted price (in '000s) | $ 1,010.1 | $ 966.9 | 4.5% | | Net Contracts Signed (Value in millions, Units) | Metric | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | % Change (Value) | % Change (Units) | | :----------------------------------- | :------------------------------- | :------------------------------- | :--------------- | :--------------- | | Net contract value | $ 7,323.6 | $ 7,413.3 | (1.2)% | | | Net contracted units | 7,345 | 7,573 | | (3.0)% | | Average contracted price (in '000s) | $ 997.1 | $ 978.9 | 1.9% | | - The decrease in net contracts signed in both periods was primarily due to a softer overall demand environment in fiscal 2025 compared to fiscal 2024[152](index=152&type=chunk)[153](index=153&type=chunk) [Backlog](index=35&type=section&id=Backlog) This section provides a summary of the company's sales backlog, including value, units, and average contracted price, and explains factors influencing changes in backlog units Backlog Summary | Metric | July 31, 2025 | July 31, 2024 | % Change | | :----------------------------------- | :-------------- | :-------------- | :------- | | Backlog value (millions) | $ 6,376.2 | $ 7,066.6 | (10)% | | Backlog units | 5,492 | 6,769 | (19)% | | Average contracted price (in '000s) | $ 1,161.0 | $ 1,044.0 | 11 % | - The decrease in backlog units was primarily due to spec homes representing a larger portion of net signed contracts and deliveries, as these are typically contracted and delivered within a quarter and thus not included in quarter-end backlog[154](index=154&type=chunk) [CAPITAL RESOURCES AND LIQUIDITY](index=35&type=section&id=CAPITAL%20RESOURCES%20AND%20LIQUIDITY) This section discusses the company's funding sources, liquidity position, and expected sufficiency of capital for future operations, debt, share repurchases, and dividends - Funding is primarily from operating activities, credit arrangements, and public capital markets, with sufficient liquidity expected for foreseeable future operations, debt repayment, share repurchases, and dividends[156](index=156&type=chunk)[158](index=158&type=chunk) - At July 31, 2025, the company had **$852.3 million** in cash and cash equivalents and approximately **$2.19 billion** available under its **$2.35 billion** revolving credit facility, which matures on February 7, 2030[159](index=159&type=chunk) - In Q3 2025, the company issued **$500.0 million** of **5.600% Senior Notes** due 2035 and redeemed **$350.0 million** of **4.875% Senior Notes** due November 2025[160](index=160&type=chunk) [Short-term Liquidity and Capital Resources](index=37&type=section&id=Short-term%20Liquidity%20and%20Capital%20Resources) This section identifies the principal short-term demands for funds, such as inventory additions and operating expenses, and outlines how these liquidity needs will be met - Principal short-term demands for funds include inventory additions (land acquisition, development, home construction), operating expenses, capital improvements, investments in joint ventures, debt repayment, stock repurchases, and dividends[161](index=161&type=chunk) - Short-term liquidity will be met primarily through cash on hand and net cash flows from operations, supplemented by joint venture distributions and revolving credit facility capacity[161](index=161&type=chunk) [Long-term Liquidity and Capital Resources](index=37&type=section&id=Long-term%20Liquidity%20and%20Capital%20Resources) This section outlines the company's long-term funding requirements, including debt payments, growth investments, and shareholder returns, and potential sources for additional capital - Long-term demands for funds include principal payments on long-term debt, land purchases and inventory additions for growth, capital investments, joint venture investments, stock repurchases, and dividend payments[163](index=163&type=chunk) - Additional long-term capital may be sourced through public offerings, debt refinancing, or asset disposals if current sources are insufficient[164](index=164&type=chunk) [Material Cash Requirements](index=37&type=section&id=Material%20Cash%20Requirements) This section details significant contractual obligations, including long-term debt, land purchase agreements, operating leases, and commitments to unconsolidated entities - Contractual obligations include long-term debt, mortgage company loan facility payments, land purchase and development agreements, operating leases, and deferred compensation plans[165](index=165&type=chunk) - At July 31, 2025, investments in unconsolidated entities totaled **$1.12 billion**, with commitments to invest an additional **$353.8 million**[166](index=166&type=chunk) - The company had guaranteed debt of unconsolidated entities with loan commitments aggregating **$2.65 billion**, with an estimated maximum exposure of **$574.8 million** for repayment and carry cost guarantees if fully borrowed[168](index=168&type=chunk) [Debt Service Requirements](index=38&type=section&id=Debt%20Service%20Requirements) This section outlines the company's financing strategy, focusing on liquidity and capital market access, and confirms compliance with all financial covenants - The company's financing strategy focuses on liquidity, access to capital markets, balanced debt maturities, and managing floating interest rate volatility[170](index=170&type=chunk) - As of July 31, 2025, the company was in compliance with all financial covenants and requirements on its term loan, revolving credit facility, and other loans payable[171](index=171&type=chunk) [Operating Activities](index=38&type=section&id=Operating%20Activities) This section analyzes cash flows from operating activities, detailing the primary sources and uses of cash, and the overall change in cash and restricted cash - Cash provided by operating activities was **$312.4 million** for the nine months ended July 31, 2025, primarily from net income adjustments and increases in accounts payable/accrued expenses, offset by inventory increases[172](index=172&type=chunk) - Cash, cash equivalents, and restricted cash decreased from **$1.37 billion** at October 31, 2024, to **$938.3 million** at July 31, 2025[172](index=172&type=chunk) [Investing Activities](index=39&type=section&id=Investing%20Activities) This section details cash used in investing activities, primarily for investments in unconsolidated entities and property/equipment purchases, partially offset by returns from JVs - Cash used in investing activities was **$240.2 million** for the nine months ended July 31, 2025, mainly for investments in unconsolidated entities (**$250.4 million**) and property/equipment purchases (**$58.4 million**), partially offset by returns from unconsolidated entities (**$64.9 million**)[175](index=175&type=chunk) [Financing Activities](index=39&type=section&id=Financing%20Activities) This section outlines cash used in financing activities, including stock repurchases, debt redemptions, and loan payments, partially offset by proceeds from new senior notes - Cash used in financing activities was **$504.4 million** for the nine months ended July 31, 2025, primarily for common stock repurchases (**$404.3 million**), senior notes redemption (**$350.0 million**), and loan payments, partially offset by proceeds from new senior notes (**$498.2 million**)[177](index=177&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=39&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section confirms that there have been no material changes to the company's critical accounting estimates since the last fiscal year-end report - No material changes to critical accounting estimates (inventory, cost of revenue recognition, warranty and self-insurance, investments in unconsolidated entities) since October 31, 2024[179](index=179&type=chunk) [SUPPLEMENTAL GUARANTOR INFORMATION](index=39&type=section&id=SUPPLEMENTAL%20GUARANTOR%20INFORMATION) This section provides summarized financial data for the guarantor subsidiaries, detailing their assets, liabilities, and operating results related to outstanding senior notes - Toll Brothers Finance Corp. (Subsidiary Issuer) has **$1.75 billion** in outstanding senior notes, guaranteed jointly and severally by Toll Brothers, Inc. and its 100%-owned home building subsidiaries (Guarantors)[180](index=180&type=chunk) Summarized Balance Sheet Data (Guarantors, amounts in millions) | Assets | July 31, 2025 | | :----------------------------------- | :-------------- | | Cash | $ 686.5 | | Inventory | $ 10,911.8 | | Amount due from Non-Guarantor Subsidiaries | $ 882.0 | | **Total assets** | **$ 13,225.4** | | Liabilities & Stockholders' Equity | | | Loans payable | $ 933.1 | | Senior notes | $ 1,741.0 | | **Total liabilities** | **$ 5,550.5** | | **Stockholders' equity** | **$ 7,674.9** | Summarized Statement of Operations Data (Guarantors, amounts in millions) | Metric | For the nine months ended July 31, 2025 | | :----------------------------------- | :-------------------------------------- | | Revenues | $ 7,441.0 | | Cost of revenues | $ 5,566.2 | | Selling, general and administrative | $ 746.7 | | Income before income taxes | $ 1,146.0 | | **Net income** | **$ 860.4** | [SEGMENTS](index=41&type=section&id=SEGMENTS) This section provides a detailed analysis of the financial performance of each of the company's geographic operating segments, including revenues, contracts, and income before taxes [North](index=44&type=section&id=North) This segment analysis highlights revenue growth, increased contracts signed, and improved income before taxes, driven by higher deliveries and better product mix - North region home sales revenues increased **17% (QoQ)** and **9% (YoY)** for the three and nine months ended July 31, 2025, respectively, driven by increased spec home deliveries and a higher mix of homes in more expensive areas/products[194](index=194&type=chunk) - Net contracts signed increased **24% (QoQ)** and **3% (YoY) in units**, and **29% (QoQ)** and **6% (YoY) in value**, due to increased demand and more selling communities[195](index=195&type=chunk) - Income before income taxes increased **50% (QoQ)** and **39% (YoY)**, benefiting from higher revenue, lower home sales cost of revenues as a percentage of revenue, and increased income from unconsolidated entities[196](index=196&type=chunk) [Mid-Atlantic](index=45&type=section&id=Mid-Atlantic) This segment analysis shows revenue growth quarter-over-quarter but a year-over-year decline in income before taxes, impacted by a non-recurring land sale gain in the prior year - Mid-Atlantic home sales revenues increased **19% (QoQ)** but decreased **2% (YoY)** for the three and nine months ended July 31, 2025, respectively, with average delivered price decreasing **8% YoY** due to a shift to less expensive areas[197](index=197&type=chunk)[198](index=198&type=chunk) - Net contracts signed increased **9% (QoQ)** and **18% (YoY) in units**, mainly due to an increase in the average number of selling communities[199](index=199&type=chunk) - Income before income taxes decreased **3% (QoQ)** and **55% (YoY)**, with the nine-month decline primarily due to a non-recurring **$175.2 million pre-tax gain** from a land sale in fiscal 2024[200](index=200&type=chunk)[201](index=201&type=chunk) [South](index=46&type=section&id=South) This segment analysis indicates a slight revenue decrease quarter-over-quarter but overall growth year-over-year, with income before taxes impacted by product mix and higher impairment charges - South region home sales revenues decreased **2% (QoQ)** but increased **3% (YoY)** for the three and nine months ended July 31, 2025, respectively, with deliveries flat QoQ and up **4% YoY** due to higher backlog conversion and spec home deliveries[202](index=202&type=chunk)[203](index=203&type=chunk) - Net contracts signed decreased **14% (QoQ)** and **5% (YoY) in units**, primarily due to softer demand and fewer selling communities[204](index=204&type=chunk) - Income before income taxes decreased **9% (QoQ)** but increased **4% (YoY)**, with the QoQ decline attributed to lower revenues and higher home sales cost of revenues (due to product mix shift and increased impairment charges of **$8.5 million** vs. **$2.3 million**)[205](index=205&type=chunk)[206](index=206&type=chunk) [Mountain](index=47&type=section&id=Mountain) This segment analysis shows strong revenue and income growth, driven by increased deliveries, backlog conversion, and lower inventory impairment charges - Mountain region home sales revenues increased **9% (QoQ)** and **18% (YoY)** for the three and nine months ended July 31, 2025, respectively, driven by higher backlog conversion, increased spec home deliveries, and a larger backlog[207](index=207&type=chunk) - Net contracts signed decreased **9% (QoQ)** and **7% (YoY) in units**, primarily due to softer demand and fewer selling communities[208](index=208&type=chunk) - Income before income taxes increased **21% (QoQ)** and **29% (YoY)**, mainly due to higher revenues and lower home sales cost of revenues as a percentage of revenue, with the nine-month period benefiting from lower inventory impairment charges (**$15.3 million** vs. **$25.7 million**)[209](index=209&type=chunk) [Pacific](index=48&type=section&id=Pacific) This segment analysis indicates revenue and income declines due to lower backlog and a shift to lower-margin areas, despite an increase in average contracted price - Pacific region home sales revenues decreased **2% (QoQ)** and **19% (YoY)** for the three and nine months ended July 31, 2025, respectively, due to lower backlog and backlog conversion, though Q3 saw a slight increase in deliveries from spec homes[210](index=210&type=chunk) - Net contracts signed decreased **12% (QoQ)** and **15% (YoY) in units** due to softer demand, but average contracted price increased **30% (QoQ)** and **13% (YoY)** due to a shift to more expensive areas/products[211](index=211&type=chunk) - Income before income taxes decreased **27% (QoQ)** and **44% (YoY)**, mainly due to lower revenues and higher home sales cost of revenues as a percentage of revenue, driven by a shift to lower-margin areas and increased inventory impairment charges (**$5.4 million** vs. **$0.1 million QoQ**, **$7.0 million** vs. **$0.1 million YoY**)[212](index=212&type=chunk) [Corporate and Other](index=48&type=section&id=Corporate%20and%20Other) This section explains the increased loss before income taxes, attributing it to higher SG&A, increased losses from unconsolidated entities, and the non-recurrence of prior-year gains - Loss before income taxes increased to **$59.6 million (QoQ)** and **$167.5 million (YoY)** for the three and nine months ended July 31, 2025, respectively[213](index=213&type=chunk)[214](index=214&type=chunk) - The increase in loss was primarily due to higher SG&A costs, higher losses from unconsolidated entities (lower gains from rental property sales YoY), and lower interest income[213](index=213&type=chunk)[214](index=214&type=chunk) - Fiscal 2024 benefited from non-recurring gains, including a **$5.0 million gain** from a privately held company investment and a **$4.4 million gain** from a bulk sale of security monitoring accounts, which did not recur in fiscal 2025[214](index=214&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily interest rate fluctuations, and how it manages these risks through a mix of fixed-rate and variable-rate debt and interest rate swap transactions - The company is exposed to market risk primarily from fluctuations in interest rates, utilizing both fixed-rate and variable-rate debt[217](index=217&type=chunk) - For variable-rate debt, a **1% increase in interest rates** would increase annual interest incurred by approximately **$9.1 million**, without considering interest rate swaps[218](index=218&type=chunk) - The company uses interest rate swap transactions to hedge **$400.0 million** of its **$650.0 million Term Loan Facility**, effectively fixing the interest cost on that portion[219](index=219&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and states that there have been no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of July 31, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[221](index=221&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended July 31, 2025[222](index=222&type=chunk) [PART II. Other Information](index=52&type=section&id=PART%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is involved in various claims and litigation in the ordinary course of business, but believes adequate provisions have been made and that these matters will not materially adversely affect its financial condition or results of operations - The company is involved in various claims and litigation in the ordinary course of business[225](index=225&type=chunk) - Management believes adequate provision has been made for current claims and litigation, and their disposition will not materially adversely affect results of operations, liquidity, or financial condition[225](index=225&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the company's most recent Annual Report on Form 10-K - No material changes in risk factors have occurred since the disclosure in the 2024 Form 10-K[226](index=226&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activities during the quarter and information regarding dividend payments, noting that contractual limitations did not significantly restrict dividend payments Issuer Purchases of Equity Securities (Three months ended July 31, 2025) | Period | Total number of shares purchased (thousands) | Average price paid per share | Maximum number of shares that may yet be purchased (thousands) | | :-------------------------- | :----------------------------------- | :--------------------------- | :------------------------------------------------------------- | | May 1, 2025 to May 31, 2025 | 288 | $ 104.53 | 12,967 | | June 1, 2025 to June 30, 2025 | 915 | $ 109.32 | 12,052 | | July 1, 2025 to July 31, 2025 | 588 | $ 117.70 | 11,464 | | **Total** | **1,791** | | | - The Board of Directors authorized the repurchase of **20 million shares** of common stock on December 13, 2023, with no expiration date[229](index=229&type=chunk) - Cash dividends of **$0.73 per share** were paid during the nine months ended July 31, 2025, and contractual limitations on dividends did not meaningfully restrict payments[230](index=230&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) This section confirms that no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the reporting period - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the period[231](index=231&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including supplemental indentures, authorizing resolutions, certifications, and XBRL financial statements - Exhibits include the Thirty-Seventh Supplemental Indenture, Authorizing Resolution for Senior Notes, Section 302 and 906 certifications, and iXBRL formatted financial statements[232](index=232&type=chunk) [SIGNATURES](index=54&type=section&id=SIGNATURES) This section confirms the official signing of the report by the company's Senior Vice President and Chief Financial Officer and Senior Vice President and Chief Accounting Officer - The report is duly signed on behalf of Toll Brothers, Inc. by Martin P. Connor (Senior Vice President and Chief Financial Officer) and Michael J. Grubb (Senior Vice President and Chief Accounting Officer) on August 28, 2025[235](index=235&type=chunk)