Taylor Morrison Home (TMHC) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw 3,200 home closings at an average price of $600,000, with adjusted EPS of $1.97 and adjusted gross margin of 23.9%.

• Net sales orders increased 3% year-over-year to 3,111, with a monthly absorption pace of 3 per community and a 6% increase in community count.

• Home closings revenue was $1.9 billion, down 4% year-over-year due to a 6% drop in average closing price, partially offset by higher closings.

• Book value per share grew to $52, and backlog at quarter end was 6,256 homes valued at $4.2 billion.

• Repurchased 1.7 million shares for $105 million in Q2; total liquidity stood at $1.3 billion.

Financial highlights

• Total Q2 2024 revenue was $1.99 billion, down 3.4% year-over-year; adjusted net income was $211 million, and adjusted diluted EPS was $1.97.

• Home closings gross margin was 23.8% reported, 23.9% adjusted for inventory impairment.

• SG&A as a percentage of home closings revenue increased to 10.2% from 9.2% a year ago.

• EBITDA for Q2 2024 was $303 million (15.2% of revenue); adjusted EBITDA was $325 million (16.3% of revenue).

• Net homebuilding debt to capitalization was 22.8%, up from 15.4% a year ago.

Outlook and guidance

• Full-year 2024 home closings expected between 12,600 and 12,800 at a gross margin of ~24%.

• Average closing price for 2024 forecasted at $600,000–$610,000; SG&A as a percentage of revenue expected in the high-9% range.

• Land and development spend projected at $2.3–$2.5 billion; share repurchases to total ~$300 million.

• Q3 2024 guidance: ~3,200 home closings, average price ~$600,000, gross margin ~24%, effective tax rate ~25%.

• Long-term targets include 10%+ annual home closings growth, low-to-mid 20% gross margins, and mid-to-high teens ROE.