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Toll Brothers
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Updated Aug 28, 2026
Toll Brothers Q3 FY2026: Volume Decline Deepens as Incentive Costs Compress Margin to 23.9%, Contracts Growth Masks Per-Community Softness
Toll Brothers delivered 2,662 homes in Q3 FY2026, a 10% unit decline year-over-year, driving home sales revenue to $2.65 billion versus $2.88 billion in the prior year period, with gross margin compressing 170 basis points to 23.9% as spec home incentives intensified. Net contracts signed rose 5% in units and 4% in value to $2.52 billion, but this growth is entirely explained by a 12% community count expansion — on a per-community basis, signed contracts fell approximately 5% year-over-year, a direct read on underlying demand weakness. Management explicitly attributes softness to elevated mortgage rates, weak consumer confidence, and geopolitical volatility, and guides to near-term persistence of elevated incentive levels and slower sales paces.
Tone: cautiousRevenue
$11B
TOL 10-K · FY 2025
Employees
4,900
Revenue FY2024
$10.8B
Founded
1967
Profile
TOL 10-K Item 1 · Dec 19, 2025Toll Brothers is the leading U.S. luxury home builder, designing, building, marketing, and selling single-family detached homes, attached homes, and urban high-rise condominiums across 24 states and the District of Columbia. The company serves luxury first-time, move-up, empty-nester, active-adult, and second-home buyers, operating under a broadened strategy that now emphasizes affordable luxury, spec homes, and expanded geographic footprint. It also operates ancillary subsidiaries in mortgage, title, architecture, land development, insurance, smart home technology, and landscaping.
Read filing description ↓ Collapse description ↑
We design, build, market, sell, and arrange financing for an array of luxury residential single-family detached home, attached home, master-planned, and urban low-, mid-, and high-rise communities. In recent years, we have pursued a strategy of broadening our product lines, price points and geographic footprint, as well as increasing the number of quick move-in (or 'spec') homes that we sell relative to our traditional build-to-order homes. We cater to luxury first-time, move-up, empty-nester (move-down), active-adult and second-home buyers in the United States. We also design, build, market, and sell high-density, high-rise urban luxury condominiums with third-party joint venture partners through Toll Brothers City Living. At October 31, 2025, we were operating in 24 states and in the District of Columbia. In the five years ended October 31, 2025, we delivered 52,203 homes from 1,061 communities, including 11,292 homes from 556 communities in fiscal 2025. At October 31, 2025, we had 1,137 communities in various stages of planning, development or operations containing approximately 76,100 home sites that we owned or controlled through options. At fiscal year-end, we were selling from 446 of these communities. We operate our own architectural, engineering, mortgage, title, land development, insurance, smart home technology and landscaping subsidiaries. We also develop master-planned and golf course communities as well as operate, in certain regions, our own lumber distribution, house component assembly and manufacturing operations. In addition to our residential for-sale business, we also develop and operate urban and suburban for-rent apartment and student housing communities primarily through joint ventures. On September 18, 2025, we announced our intention to exit the multifamily development business, beginning with the sale of our interests in approximately half of our portfolio, as well as our operating platform, to Kennedy Wilson for a purchase price of approximately $380 million.
Primary products
- Luxury single-family detached homes
- Attached homes
- Master-planned communities
- Urban low-, mid-, and high-rise condominiums
- Toll Brothers City Living urban luxury condominiums
- For-rent apartment and student housing communities (Apartment Living)
Business segments
End markets
Geographies
“We believe our financial stability, relative to many other home builders in our industry, is a favorable competitive factor.” Competitive position, as stated in the filing
Revenue commentary · FY 2025
Total revenues increased from $10.85 billion in fiscal 2024 to $10.97 billion in fiscal 2025, driven by higher home sales revenues partially offset by a significant decline in land sales and other revenues, which in fiscal 2024 included a $185.0 million sale of a single parcel of land to a commercial developer.
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