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Toll Brothers
🇺🇸 NYSE:TOL
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Apr 30, 2023

Toll Brothers Q2 2023 Earnings Report

Toll Brothers reported strong Q2 2023 results, exceeding guidance due to improved demand and operational efficiency.

Key Takeaways

Toll Brothers reported record second quarter net income of $320.2 million, driven by increased demand, strategic spec home supply, and operational efficiency. The company is raising its full year guidance for almost every metric.

Net income reached $320.2 million, or $2.85 per share diluted, up 46% and 54%, respectively, compared to Q2 2022.

Home sales revenues increased by 14% to $2.5 billion with 2,492 homes delivered, a 4% increase.

Adjusted home sales gross margin exceeded guidance by 130 basis points, and SG&A expenses were 9.1% of home sales revenues, 200 basis points lower than last year.

The company retired $400 million of senior notes, extended credit facilities, repurchased $84 million of common stock, and paid $23 million in dividends.

Total Revenue
$2.51B
Previous year: $2.28B
+10.1%
EPS
$2.85
Previous year: $1.85
+54.1%
Backlog Value
$8.38B
Previous year: $11.7B
-28.4%
Net Contracts Signed Value
$2.28B
Previous year: $3.09B
-26.2%
Backlog Number of Units
7.57K
Previous year: 11.77K
-35.6%
Gross Profit
$653M
Previous year: $525M
+24.4%
Cash and Equivalents
$762M
Previous year: $535M
+42.4%
Free Cash Flow
$484M
Previous year: $55.1M
+778.2%
Total Assets
$12B
Previous year: $11.5B
+3.9%

Toll Brothers

Toll Brothers

Toll Brothers Revenue by Segment

Forward Guidance

Toll Brothers provided financial guidance for the third quarter and full fiscal year 2023, including projections for deliveries, average delivered price per home, adjusted home sales gross margin, SG&A expenses, other income, and tax rate.

Positive Outlook

  • Deliveries for Q3 are expected to be between 2,350 and 2,450 units.
  • Deliveries for the full fiscal year are projected to be between 8,900 and 9,500 units.
  • The average delivered price per home is anticipated to be between $1,005,000 and $1,025,000 for Q3.
  • The average delivered price per home for the full fiscal year is expected to be between $975,000 and $995,000.
  • Adjusted home sales gross margin is projected to be 27.7% for Q3 and 27.8% for the full fiscal year.

Challenges Ahead

  • SG&A, as a percentage of home sales revenues, is expected to be 9.7% for Q3 and 10.0% for the full fiscal year.
  • Other income, income from unconsolidated entities, and gross margin from land sales and other is projected at $25 million for Q3.
  • Other income, income from unconsolidated entities, and gross margin from land sales and other is projected at $125 million for the full fiscal year.
  • The tax rate is expected to be 26.0% for Q3 and 25.7% for the full fiscal year.
  • Period-end community count is expected to be 360 for Q3 and 385 for the full fiscal year.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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