Toll Brothers, Inc. (NYSE:TOL), the nation's premier builder of luxury homes, unveiled its fourth-quarter financial results for fiscal year 2025, which ended on October 31, 2025. The company reported a net income of $446.7 million, translating to earnings of $4.58 per diluted share, slightly below the net income of $475.4 million and earnings of $4.63 per diluted share recorded in the fourth quarter of the previous year.

Despite this slight dip in earnings, Toll Brothers demonstrated resilience in a challenging market with an increase in home sales revenues, which reached $3.41 billion compared to $3.26 billion in Q4 FY 2024. The number of homes delivered also saw a marginal increase, totaling 3,443 units against 3,431 units in the same quarter of the previous year.

2. Key Financial Highlights

Fourth Quarter Highlights

Net Income: $446.7 million; down from $475.4 million in Q4 FY 2024.

Earnings Per Diluted Share: $4.58; compared to $4.63 in the previous year.

Home Sales Revenues: $3.41 billion; up from $3.26 billion.

Delivered Homes: 3,443; slightly higher than 3,431 last year.

Net Signed Contract Value: $2.53 billion; down from $2.66 billion.

Backlog Value: $5.5 billion; a decrease from $6.5 billion.

Full Fiscal Year Highlights

For the entire fiscal year 2025, Toll Brothers reported:

Net Income: $1.35 billion; down from $1.57 billion in FY 2024.

Earnings Per Diluted Share: $13.49; compared to $15.01 in the previous year.

Home Sales Revenues: $10.84 billion; a slight increase from $10.56 billion in FY 2024.

Delivered Homes: 11,292; an increase from 10,813 in FY 2024.

3. Operational Insights

The company’s home sales gross margin for Q4 was 25.5%, slightly down from 26.0% in Q4 FY 2024. The adjusted home sales gross margin, which excludes interest and inventory write-downs, decreased to 27.1% from 27.9% in the prior year. Selling, general, and administrative expenses remained steady at 8.3% as a percentage of home sales revenues.

In terms of cash flow, Toll Brothers generated strong operating cash flows of $1.1 billion and returned approximately $750 million to shareholders through share repurchases and dividends. The company repurchased approximately 1.8 million shares this quarter for a total purchase price of $249.1 million.

Strategic Moves

In a significant strategic shift, Toll Brothers announced an agreement to sell its interests in about half of its Apartment Living portfolio to Kennedy Wilson for $380 million. This decision aligns with the company’s long-term objective to exit the multifamily development sector and focus more on its core luxury home building business.

4. CEO Commentary

Douglas C. Yearley, Jr., the chairman and CEO of Toll Brothers, expressed confidence in the company’s performance despite soft demand in several markets. He noted, "Fiscal 2025 proved to be another strong year for Toll Brothers, as we executed well in a choppy environment." Yearley emphasized the company’s commitment to maximizing shareholder returns while navigating the current market conditions.

5. Outlook for FY 2026

Looking ahead, Toll Brothers provided guidance for the first quarter and the entire fiscal year 2026. The company expects to deliver between 1,800 and 1,900 homes in Q1 and between 10,300 and 10,700 homes for the full fiscal year. The average delivered price per home is projected to be between $985,000 and $995,000 in Q1, with expectations for a similar range throughout FY 2026.

Conclusion

Toll Brothers has shown resilience in a challenging housing market, recording solid revenues and maintaining a robust operational performance. With strategic divestments set to streamline its focus on luxury home building, the company is poised for continued growth and profitability in the upcoming fiscal year. Investors and stakeholders will be keenly watching how the company navigates these transitions in the evolving real estate landscape.

Original press release