Toll Brothers Reports FY 2025 Second Quarter Results

Core Insights - Toll Brothers, Inc. reported strong second quarter results for FY 2025, with home sales revenues reaching a record $2.71 billion, exceeding guidance and reflecting the strength of its diversified luxury offerings [3][4][5] - The company reaffirmed its full-year guidance based on robust first-half results and a strong backlog, despite a softer demand environment [3][4] Financial Performance - Net income for the second quarter was $352.4 million, or $3.50 per diluted share, down from $481.6 million, or $4.55 per diluted share in the same quarter of FY 2024 [5][8] - Home sales revenues increased by 2% year-over-year, with 2,899 homes delivered, a 10% increase from the previous year [5][8] - The backlog value at the end of the quarter was $6.84 billion, down 7% from the previous year, with 6,063 homes in backlog, a 15% decrease [5][8] Margins and Costs - Home sales gross margin improved to 26.0%, compared to 25.8% in FY 2024's second quarter, while adjusted home sales gross margin was 27.5%, down from 28.2% [5][8] - Selling, general, and administrative expenses as a percentage of home sales revenues increased to 9.5% from 9.0% in the prior year [5][8] Guidance and Outlook - For the third quarter, the company expects deliveries between 2,800 to 3,000 units and an average delivered price per home of $965,000 to $985,000 [4] - Full fiscal year guidance remains at 11,200 to 11,600 units delivered, with an average delivered price of $945,000 to $965,000 [4] Cash and Capital Structure - The company ended the quarter with $686.5 million in cash and cash equivalents, down from $1.30 billion at the end of FY 2024 [19] - Stockholders' equity increased to $7.95 billion from $7.67 billion at the end of FY 2024, with a book value per share of $80.84 [19][27] Market Position and Strategy - The company maintains a positive long-term outlook for the new home market, particularly in the luxury segment, supported by favorable demographics and a housing shortage [4] - Toll Brothers continues to adapt to changing market conditions with a balanced operating platform and disciplined underwriting [4]