Toll Brothers (TOL) Q3 2024 earnings summary

Executive summary

• Delivered 2,814 homes in Q3 FY24, up 11% year-over-year, with record home sales revenue of $2.73 billion and an average price of $968,000.

• Net income for Q3 2024 was $374.6 million ($3.60 per diluted share), down 10% year-over-year; pre-tax income was $503.6 million.

• Net contracts signed rose 11% to 2,490 units ($2.41 billion), reflecting strong demand and increased community count.

• Backlog at quarter end was $7.07 billion (6,769 homes), down 10% in value and 7% in units year-over-year.

• Spec homes represented 54% of orders and 49% of deliveries, with a targeted long-term mix of 50% spec.

Financial highlights

• Q3 home sales revenues increased 2% year-over-year to $2.73 billion; delivered homes up 11%.

• Adjusted gross margin was 28.8% in Q3, exceeding guidance by 110 basis points; home sales gross margin was 27.4%.

• SG&A expense was 9.0% of home sale revenues in Q3; 9.4% expected for the year.

• Cash and cash equivalents stood at $893.4 million, with $1.77 billion available under the revolving credit facility.

• Year-to-date share repurchases totaled $427 million; $70 million paid in dividends.

Outlook and guidance

• Full-year deliveries guidance raised to 10,650–10,750 homes, with average delivered price guidance increased to $975,000.

• Homebuilding revenue projected at $10.4–$10.5 billion for the year.

• Full-year adjusted gross margin guidance raised to 28.3%; Q4 margin projected at 27.5%.

• EPS guidance for fiscal 2024 is $14.50–$14.75; ROE expected at 22.5%.

• Community count expected to reach 410 by year-end, up 11% from the start of the year.