Toll Brothers (TOL) investor relations material

Executive summary

• Q3 net income was $280.1 million ($2.97 per diluted share), down from $369.6 million ($3.73 per share) year-over-year, with revenues of $2.65 billion on 2,662 homes delivered, compared to $2.88 billion and 2,959 homes last year.

• Net signed contracts increased 5% year-over-year, driven by resilient luxury buyer demand and expanded community count, though per-community sales pace declined.

• Maintained price discipline and margin focus, prioritizing luxury move-up and build-to-order segments.

• Returned $231 million to shareholders via dividends and buybacks in Q3, with full-year repurchase guidance raised to $700 million.

• Community count increased to 471, with 75,486 lots controlled as of July 31, 2026.

Financial highlights

• Home sales revenue for Q3 was $2.65 billion, with an average delivered price of $996,000, above guidance but down 8–10% year-over-year.

• Adjusted gross margin was 25.6%, exceeding guidance by 35 basis points, though down from 27.5% a year ago.

• SG&A expense was 10.0% of revenue, up from 8.8% last year.

• Net income for the quarter was $280.1 million, with diluted EPS of $2.97.

• Book value per share was $92.36 at quarter-end, up from $87.25 at prior year-end.

Outlook and guidance

• Reaffirmed full-year guidance: adjusted gross margin of 26.1% and home sales revenue of ~$10.5 billion.

• Projecting Q4 deliveries of 3,450–3,550 homes at an average price of $995,000–$1,005,000.

• Full-year deliveries expected between 10,500 and 10,600 homes, with average price $995,000–$1 million.

• Community count growth of 8–10% expected for fiscal 2026, supported by robust land pipeline.

• Management expects near-term demand softness to persist due to elevated mortgage rates and weak consumer confidence.