Toll Brothers Inc
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +4.50%.
Did TOL Beat Earnings? Q3 2025 Results
Toll Brothers delivered a solid fiscal third quarter, posting earnings per share of $3.73 on record home sales revenue of $2.88 billion, with total revenue reaching $2.95 billion as the luxury homebuilder benefited from 2,959 deliveries at an average price of $973,600. While net income edged down slightly to $369.62 million from $374.61 million a year ago, diluted EPS climbed from $3.60 to $3.73 as share repurchases, totaling $201.40 million in the quarter, reduced the outstanding count meaningfully. The headline numbers came in ahead of expectations, though gross margin compression proved the quarter's sharpest blemish, with the adjusted home sales gross margin narrowing to 27.5% from 28.8% a year earlier amid rising inventory impairments of $23.32 million. Backlog contracted 10% in value to $6.38 billion and 19% in units to 5,492 homes, a trend that colored management's Q4 guidance of 3,350 deliveries, a figure that fell short of analyst expectations, even as CEO Douglas Yearley pointed to the resilience of the luxury buyer and maintained a full-year delivery target of 11,200 homes.
- Record third quarter home sales revenues of $2.9 billion, up 6% YoY
- 5% increase in delivered homes to 2,959 units
- Average sales price of new contracts up 4.5% YoY to $1.0 million
- SG&A improved to 8.8% of revenues from 9.0% a year ago
- Adjusted home sales gross margin of 27.5%, 25 basis points above guidance
- Community count grew to 420 from 404 a year ago
“We are pleased to report another strong quarter. We delivered 2,959 homes at an average price of $974,000, generating record third quarter home sales revenues of $2.9 billion, a 6% increase over last year. We achieved an adjusted gross margin of 27.5%, or 25 basis points above guidance, and our SG&A margin of 8.8% was 40 basis points better than guidance. We earned $370 million after taxes, or $3.73 per diluted share, and returned $226 million to stockholders through share repurchases and dividends, positioning us for another year of healthy profitability and solid returns.”
Toll Brothers CEO, on the earnings call
Forward Guidance & Outlook
For fiscal Q4 2025, Toll Brothers guided deliveries of 3,350 units at an average delivered price of $970,000 to $980,000, adjusted home sales gross margin of 27.00%, SG&A as a percentage of home sales revenues of 8.3%, period-end community count of 440 to 450, other income/income from unconsolidated entities/gross margin from land sales and other of $65 million, and a tax rate of 25.5%. For full fiscal year 2025, guidance includes 11,200 deliveries at an average price of $950,000 to $960,000, adjusted home sales gross margin of 27.25%, SG&A of 9.4% to 9.5%, period-end community count of 440 to 450, other income/income from unconsolidated entities/gross margin from land sales and other of $110 million, and a tax rate of 25.1%. Management noted continued affordability pressures and uncertain economic conditions but emphasized the resilience of its luxury customer base and focus on balancing price and pace to maximize profitability.
TOL YoY Financials
TOL Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.