FORT WASHINGTON, PA — Toll Brothers, Inc. (NYSE: TOL) reported solid fiscal third-quarter results for the period ending July 31, 2025, highlighted by record revenues and continued profitability despite signs of moderating demand and ongoing affordability pressures.
Financial Performance
Toll Brothers posted net income of $369.6 million for the quarter, or $3.73 per diluted share, slightly down from $374.6 million, or $3.60 per share, in the same period last year. Pre-tax income totaled $499.5 million, compared to $503.6 million a year earlier.
Home sales revenue reached a record $2.88 billion, up 6% year-over-year, supported by the delivery of 2,959 homes — a 5% increase. The average delivered home price remained elevated at $974,000, underscoring the company’s strength in the high-end housing segment.
Contracts and Backlog
The company reported net signed contracts worth $2.41 billion, flat compared to last year, while the number of contracted homes slipped 4% to 2,388 units.
The backlog value declined 10% to $6.38 billion, with 5,492 homes in backlog — a sharp 19% drop from the prior year. The figures suggest a decelerating pace of new orders, even as pricing resilience continues to offset volume declines.
Margins and Operational Highlights
- Home sales gross margin narrowed to 25.6% from 27.4% last year.
- Adjusted gross margin, excluding interest and inventory write-downs, fell to 27.5% from 28.8%.
- SG&A expenses improved slightly, accounting for 8.8% of home sales revenue, down from 9.0% a year ago.
Toll Brothers also repurchased 1.8 million shares during the quarter at an average price of $112.40, returning $201.4 million to shareholders. Combined with dividends, the company returned $226 million in total during the period.
CEO Commentary
Douglas C. Yearley, Jr., chairman and chief executive officer, emphasized the company’s strong results and strategic focus:
“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,” said Yearley. “While affordability pressures and uncertain economic conditions persist, we are pleased with the resilience of our luxury business and more affluent customer base.”
He noted that Toll Brothers is balancing pricing strategies and construction pacing on a community-by-community basis to align with market demand, while maintaining a disciplined approach to land acquisition.
Balance Sheet and Liquidity
Toll Brothers ended the quarter with $852.3 million in cash and equivalents, compared to $1.30 billion at fiscal year-end 2024, and maintained $2.19 billion available under its $2.35 billion revolving credit facility.
In June, the company issued $500 million of senior notes due 2035 and, in July, redeemed $350 million in senior notes due later this year. Stockholders’ equity rose to $8.10 billion, up from $7.67 billion at fiscal year-end 2024, with book value per share climbing to $83.85.
Toll Brothers also reported owning or controlling approximately 76,800 lots, positioning the company for future community growth while retaining flexibility in land investments.
Outlook
Management expressed confidence heading into the fourth quarter, citing a solid liquidity position, a disciplined development pipeline, and a resilient luxury buyer base.
“As we enter the fourth quarter, we remain focused on executing at a high level, delivering value to our stockholders, and positioning our Company for success in fiscal 2026 and beyond,” Yearley stated.
While the company faces headwinds from affordability challenges and economic uncertainty, its strong balance sheet and strategic land management are expected to support continued growth in the luxury housing market.
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