Taylor Morrison Home (TMHC) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered record profitability with net income of $251 million ($2.37 EPS), up 54% year-over-year, driven by 3,394 home closings at an average price of $598,000 and a gross margin of 24.8%.

• Net sales orders rose 9% to 2,830, with strong demand in East and Central regions and mixed results in the West.

• Book value per share increased 15% to ~$54; backlog at quarter end was 5,692 homes valued at $3.8 billion.

• Diversified consumer and geographic strategy, digital sales innovation, and resilience amid interest rate volatility and hurricane disruptions supported results.

• Expanded Build-to-Rent business and recognized as America's Most TrustedⓇ Builder for the ninth consecutive year.

Financial highlights

• Q3 2024 total revenue rose 27% year-over-year to $2.12 billion; home closings revenue up 26% to $2.03 billion.

• Home closings gross margin improved to 24.8% from 23.1% year-over-year; adjusted EBITDA margin reached 17.6%.

• EPS grew 54% to $2.37; adjusted EBITDA for Q3 was $374.3 million.

• SG&A as a percentage of home closings revenue decreased to 9.8% from 10.4% year-over-year.

• Financial services revenue reached $50 million with a gross margin of 45%; mortgage capture rate steady at 88%.

Outlook and guidance

• Expect to deliver ~3,400 homes in Q4 and ~12,725 homes for the full year, with an average closing price of ~$600,000 and Q4 at ~$610,000.

• Full-year home closings gross margin projected at ~24.3%, with SG&A ratio in the high 9% range.

• Land and development spend anticipated at ~$2.5 billion for 2024; share repurchases to total ~$300 million.

• Confident in meeting or exceeding long-term targets: 10% annual home closings growth, low-three absorption pace, low- to mid-20% gross margins, and mid- to high-teens ROE.

• Management expects continued strong demand, supported by improved buyer confidence and stable macroeconomic factors.