Toll Brothers, Inc.

Previous wording

In the three months ended April 30, 2025, we signed 2,650 net contracts for an aggregate value of $2.60 billion, a decrease of 13% in units and 11% in dollars compared to the prior-year period, and a 21% decrease on a per-community basis. Demand in the second quarter of fiscal 2025 was softer compared to the prior year period due in part to ongoing affordability challenges caused by elevated mortgage rates and higher housing costs, as well as increased economic uncertainty and a decline in consumer confidence in the quarter. We continue to strategically manage our pricing, incentives and home starts on a community-by-community basis to appropriately balance sales price and margin with pace, and to align our inventory levels with local sales environments. Notwithstanding a softer near-term demand outlook, we believe the long-term outlook for thenew home market remains positive, as it is supported by strong fundamentals including favorable demographics, the structural undersupply of homes in the U.S. caused by over a decade of underproduction, the aging stock of existing homes, and accumulated wealth built up from years of stock market and home price appreciation.

Current wording

In the three months ended July 31, 2025, we signed 2,388 net contracts for an aggregate value of $2.41 billion, a decrease of 4.1% in units but an increase of 0.2% in dollars compared to the prior year period, as our average sales price in the quarter increased by 4.5%. On a per-community basis, contracts were down 10% year-over-year. In the quarter, the overall weakness in demand that we experienced in our second quarter continued, which we attribute to ongoing affordability pressures, especially at the lower end of the market, and volatile economic conditions that have negatively impacted consumer confidence. We have responded to these conditions by strategically managing our pricing, including by increasing incentives where necessary, to appropriately balance sales price and margin with pace, and to align our inventory levels with local sales environments. We anticipate that, in the near term, overall housing demand may remain soft, which would likely result in a continuation of the elevated incentive levels and slower sales paces that have characterized our past two quarters. However, overall economic conditions and the near-term trajectory of new home demand remain uncertain and subject to a variety of unpredictable factors. Over the long term, we continue to believe the outlook for thenew home market remains positive, as it is supported by strong fundamentals including favorable demographics, the structural undersupply of homes in the U.S. caused by over a decade of underproduction, the aging stock of existing homes, and wealth built up from years of stock market and home price appreciation.

Previous wording

In the three months ended April 30, 2025, we delivered 2,899 homes with an average delivered price of $933,600, as compared to 2,641 delivered homes at an average price of $1,002,300 in the three months ended April 30, 2024. The year-over-year increase in the number of homes delivered was primarily the result of the increase in the number of communities we were operating from during the second quarter of fiscal 2025, and a higher backlog conversion ratio due in part to reductions in our construction cycle times. The year-over-year decline in average delivered price was due primarily to changes in the mix of products and locations of delivered homes, reflective of our strategy in recent years to expand our geographies, price points and product types and to increase spec home production. Historically, most of our homes have been sold on a build-to-order basis, where we do not begin construction of the home until we have a signed contract with a customer. In recent years we have increased the number of homes that we start without a buyer (a spec home), which we generally build faster than build-to-order homes and which allow us to attract buyers who are looking for quicker move-in homes. We determine how many such homes to start within each community based on local market conditions, our current and planned sales pace, and construction cadence for the community. In light of recent demand trends, we expect to reduce the pace of our overall spec home starts in the near term.

Current wording

Historically, most of our homes have been sold on a build-to-order basis, where we do not begin construction of the home until we have a signed contract with a customer. In recent years, we have strategically increased the number of homes that we start without a buyer (a spec home), which we generally build faster than build-to-order homes and which allow us to attract buyers who are looking for quicker move-in homes. We determine how many such homes to start within each community based on local market conditions, our current and planned sales pace, and our backlog and construction cadence for the community. As a result of weaker demand, we reduced the pace of our overall spec home starts over the past two quarters. We continue to monitor demand and other factors on a community-by-community basis and will make appropriate adjustments to our spec starts as market conditions evolve over the coming months.

Previous wording

In the three-month period ended April 30, 2025, we recognized $2.74 billion of revenues, consisting of $2.71 billion of home sales revenue and $32.6 million of land sales and other revenue, and net income of $352.4 million, as compared to $2.84 billion of revenues, consisting of $2.65 billion of home sales revenue and $190.5 million of land sales and other revenue, and net income of $481.6 million in the three-month period ended April 30, 2024. Land sales and other revenue and net income in the fiscal 2024 period included $185.0 million and $124.1 million, respectively, related to the sale of a single parcel of land in northern Virginia to a commercial developer.

Current wording

In the three-month period ended July 31, 2025, we recognized $2.95 billion of revenues, consisting of $2.88 billion of home sales revenue and $64.1 million of land sales and other revenue, and net income of $369.6 million, as compared to $2.73 billion of revenues, consisting of $2.72 billion of home sales revenue and $3.5 million of land sales and other revenue, and net income of $374.6 million in the three-month period ended July 31, 2024.

Previous wording

In the six-month period ended April 30, 2025, we recognized $4.60 billion of revenues, consisting of $4.55 billion of home sales revenues and $51.0 million of land sales and other revenues, and net income of $530.2 million, as compared to $4.79 billion of revenues, consisting of $4.58 billion of home sales revenues and $206.5 million of land sales and other revenues, and net income of $721.2 million in the six-month period ended April 30, 2024. Land sales and other revenue and net income in the fiscal 2024 period included $185.0 million and $124.1 million, respectively, related to the sale of a single parcel of land in northern Virginia to a commercial developer.

Current wording

In the nine-month period ended July 31, 2025, we recognized $7.54 billion of revenues, consisting of $7.43 billion of home sales revenues and $115.1 million of land sales and other revenues, and net income of $899.8 million, as compared to $7.51 billion of revenues, consisting of $7.30 billion of home sales revenues and $210.0 million of land sales and other revenues, and net income of $1.10 billion in the nine-month period ended July 31, 2024. Land sales and other revenue and net income in the nine-month period ended July 31, 2024 included $185.0 million and $124.1 million, respectively, related to the sale of a single parcel of land in northern Virginia to a commercial developer.

Previous wording

The value of our backlog at April 30, 2025 was $6.84 billion (6,063 homes), as compared to our backlog at April 30, 2024 of $7.38 billion (7,093 homes). Our backlog at October 31, 2024 was $6.47 billion (5,996 homes), as compared to backlog of $6.95 billion (6,578 homes) at October 31, 2023.

Current wording

The value of our backlog at July 31, 2025 was $6.38 billion (5,492 homes), as compared to our backlog at July 31, 2024 of $7.07 billion (6,769 homes). Our backlog at October 31, 2024 was $6.47 billion (5,996 homes), as compared to backlog of $6.95 billion (6,578 homes) at October 31, 2023.

Previous wording

At April 30, 2025, we had $686.5 million of cash and cash equivalents and approximately $2.19 billion available under our $2.35 billion revolving credit facility (the “Revolving Credit Facility”). At April 30, 2025, we had no borrowings and we had approximately $159.0 million of outstanding letters of credit under the Revolving Credit Facility.

Current wording

At July 31, 2025, we had $852.3 million of cash and cash equivalents and approximately $2.19 billion available under our $2.35 billion revolving credit facility (the “Revolving Credit Facility”). At July 31, 2025, we had no borrowings and we had approximately $158.5 million of outstanding letters of credit under the Revolving Credit Facility.

Previous wording

At April 30, 2025, we owned or controlled through options approximately 78,600 home sites, as compared to approximately 74,700 at October 31, 2024; and approximately 70,700 at October 31, 2023. Of the approximately 78,600 total home sites that we owned or controlled through options at April 30, 2025, we owned approximately 32,800 and controlled approximately 45,800 through options. Of the 32,800 home sites owned, approximately 19,300 were substantially improved. In addition, as of April 30, 2025, we expect to purchase approximately 10,500 additional home sites over several years from certain of the joint ventures in which we have interests, at prices to be determined.

Current wording

At July 31, 2025, we owned or controlled through options approximately 76,800 home sites, as compared to approximately 74,700 at October 31, 2024; and approximately 70,700 at October 31, 2023. Of the approximately 76,800 total home sites that we owned or controlled through options at July 31, 2025, we owned approximately 32,800 and controlled approximately 44,000 through options. Of the 32,800 home sites owned, approximately 19,000 were substantially improved. In addition, as of July 31, 2025, we expect to purchase approximately 10,700 additional home sites over several years from certain of the joint ventures in which we have interests, at prices to be determined.

Previous wording

At April 30, 2025, we were selling from 421 communities, compared to 408 at October 31, 2024; and 386 at April 30, 2024.

Current wording

At July 31, 2025, we were selling from 420 communities, compared to 408 at October 31, 2024; and 404 at July 31, 2024.

Previous wording

At April 30, 2025, our total stockholders’ equity and our debt to total capitalization ratio were $7.95 billion and 0.26 to 1.00, respectively.

Current wording

At July 31, 2025, our total stockholders’ equity and our debt to total capitalization ratio were $8.10 billion and 0.27 to 1.00, respectively.

Previous wording

The following table compares certain items in our Condensed Consolidated Statements of Operations and Comprehensive Income and other supplemental information for the three months and six months ended April 30, 2025 and 2024 ($ amounts in millions, unless otherwise stated). For more information regarding results of operations by segment, see “Segments” in this MD&A.

Current wording

The following table compares certain items in our Condensed Consolidated Statements of Operations and Comprehensive Income and other supplemental information for the three months and nine months ended July 31, 2025 and 2024 ($ amounts in millions, unless otherwise stated). For more information regarding results of operations by segment, see “Segments” in this MD&A.

Previous wording

The increase in home sale revenues for thethree months ended April 30, 2025, as compared to thethree months ended April 30, 2024, was primarily attributable to a 10% increase in the number of homes delivered offset by a 7% decrease in the average price of homes delivered. The increase in the number of homes delivered in the three months ended April 30, 2025 was primarily due to an increase in operating communities, more deliveries of spec homes, and a higher backlog conversion in the three months ended April 30, 2025 compared to the three months ended April 30, 2024, primarily as a result of improvement in construction cycle times. These factors were offset, in part, by a decrease in the number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023, most significantly in the Mountain and Pacific regions. The decrease in the average delivered home price was mainly due to an increase in homes delivered in less expensive product types/geographic regions, most notably in the Mid-Atlantic and Pacific regions.

Current wording

The increase in home sale revenues for thethree months ended July 31, 2025, as compared to thethree months ended July 31, 2024, was primarily attributable to a 5%increase in the number of homes delivered and a 1% increase in the average price of homes delivered. The increase in the number of homes delivered in the three months ended July 31, 2025 was primarily due to an increase in operating communities, more deliveries of spec homes, and a higher backlog conversion in the three months ended July 31, 2025 compared to the three months ended July 31, 2024, primarily as a result of improvement in construction cycle times. These factors were offset, in part, by a decrease in the number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023, most significantly in the North, Mid-Atlantic, and South regions. The slight increase in the average delivered home price was mainly due to the mix of deliveries in the quarter, with an increased number of more expensive product types being delivered in our North region, offset, in part, by an increase in the number of less expense product types delivered in our Pacific region.

Previous wording

The decrease in home sales cost of revenues, as a percentage of home sales revenues, in thethree months ended April 30, 2025, as compared to thethree months ended April 30, 2024, was principally due to a shift in the mix of revenues to higher margin products/areas, most notably in the North and Mountain regions, and higher inventory impairment charges in the fiscal 2024 period.

Current wording

The increase in home sales cost of revenues, as a percentage of home sales revenues, in thethree months ended July 31, 2025, as compared to thethree months ended July 31, 2024, was principally due to a shift in the mix of revenues to lower margin products/geographic regions, most notably in the Pacific region, and higher inventory impairment charges in the fiscal 2025 period. In addition, the fiscal 2025 period was impacted by an increase in sales incentives.

Previous wording

Home sale revenues for the six months ended April 30, 2025 were flat when compared to the six months ended April 30, 2024. In the period, a 7% increase in the number of homes delivered was offset by a 7% decrease in the average price of homes delivered. The increase in the number of homes delivered in the six months ended April 30, 2025 was primarily due to an increase in operating communities, more deliveries of spec homes, and a higher backlog conversion in the six months ended April 30, 2025, primarily as a result of improvement in build times. These factors were offset, in part, by a decrease in the number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023, most significantly in the North, Mid-Atlantic, and South regions. The decrease in the average delivered home price was mainly due to an increase in homes delivered in less expensive product types/geographic regions, including spec homes, most notably from fewer deliveries in the Pacific region and greater deliveries in the Mountain region.

Current wording

Home sale revenues for the nine months ended July 31, 2025 increased 2% when compared to the nine months ended July 31, 2024. In the period, a 6% increase in the number of homes delivered was offset by a 4% decrease in the average price of homes delivered. The increase in the number of homes delivered in the nine months ended July 31, 2025 was primarily due to an increase in operating communities, more deliveries of spec homes, and a higher backlog conversion in the nine months ended July 31, 2025, primarily as a result of improvement in build times. These factors were offset, in part, by a decrease in the number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023, most significantly in the North, Mid-Atlantic, and South regions. The decrease in the average delivered home price was mainly due to an increase in homes delivered in less expensive product types/geographic regions, including spec homes, most notably from fewer deliveries in the Pacific region and greater deliveries in the Mountain region.

Previous wording

The increase in home sales cost of revenues, as a percentage of home sales revenues, for the six months ended April 30, 2025, as compared to the six months ended April 30, 2024, was principally due toa shift in the mix of revenues to lower margin products/areas, partially offset by lower inventory impairment charges in the fiscal 2025 period and lower interest expense as a percentage of home sales revenues. In the six months ended April 30, 2025 and 2024, interest expense, as a percentage of home sales revenues, was 1.1% and 1.3%, respectively.

Current wording

The increase in home sales cost of revenues, as a percentage of home sales revenues, for the nine months ended July 31, 2025, as compared to the nine months ended July 31, 2024, was principally due toa shift in the mix of revenues to lower margin products/geographic regions and higher inventory impairment charges in the fiscal 2025 period, partially offset bylower interest expense as a percentage of home sales revenues. In the nine months ended July 31, 2025 and 2024, interest expense, as a percentage of home sales revenues, was 1.1% and 1.2%, respectively. In addition, the fiscal 2025 period was impacted by an increase in sales incentives.

Previous wording

Our revenues from land sales and other generally consist of the following: (1) land sales to joint ventures in which we retain an interest; (2) lot sales to third-party builders within our master-planned communities; (3) bulk sales to third parties of land we have decided no longer meets our development criteria; (4) sales of land parcels to third parties (typically because there is a superior economic use of the property); and (5) sales of commercial and retail properties generally located at our urban luxury condominium communities. Land sales to joint ventures in which we retain an interest are generally sold at our land basis and therefore little to no gross margin is earned on these sales. The decreases in land sales and other revenues during the three and six months ended April 30, 2025 compared to the three and six months ended April 30, 2024 were primarily due to the sale of a land parcel in the fiscal 2024 periods to a commercial developer for net cash proceeds of $180.7 million which resulted in a pre-tax gain of $175.2 million, and which did not recur in the fiscal 2025 periods.

Current wording

Our revenues from land sales and other generally consist of the following: (1) land sales to joint ventures in which we retain an interest; (2) lot sales to third-party builders within our master-planned communities; (3) bulk sales to third parties of land we have decided no longer meets our development criteria; (4) sales of land parcels to third parties (typically because there is a superior economic use of the property); and (5) sales of commercial and retail properties generally located at our urban luxury condominium communities. Land sales to joint ventures in which we retain an interest are generally sold at our land basis and therefore little to no gross margin is earned on these sales. The decrease in land sales and other revenues during the nine months ended July 31, 2025 compared to the nine months ended July 31, 2024 were primarily due to the sale of a land parcel in the second quarter of 2024 to a commercial developer for net cash proceeds of $180.7 million which resulted in a pre-tax gain of $175.2 million, and which did not recur in the fiscal 2025 periods.

Previous wording

Land sales and other cost of revenues as a percentage of land sales and other revenues can vary period to period depending on the mix of sales to joint ventures versus third parties. The increase in land sales and other cost of revenues, as a percentage of land sales and other revenues, in the three and six months ended April 30, 2025 was primarily impacted by the $180.7 million land parcel sale in the fiscal 2024 periods described above, which carried a low basis. In addition, we recognized $1.8 million of impairment charges in the six-month period ended April 30, 2025 in connection with planned land sales. This compares to $0.6 million of land sales and other impairment charges recognized in the three and six months ended April 30, 2024. No impairment charges on land sales and other were recognized in the three months ended April 30, 2025.

Current wording

Land sales and other cost of revenues as a percentage of land sales and other revenues can vary period to period depending on the mix of sales to joint ventures versus third parties. The increase in land sales and other cost of revenues, as a percentage of land sales and other revenues, in the nine months ended July 31, 2025 was primarily impacted by the $180.7 million land parcel sale in the second quarter of 2024 described above, which carried a low basis. In addition, we recognized $0.7 million and $2.6 million of impairment charges in the three-month and nine-month periods ended July 31, 2025, respectively, in connection with planned land sales, respectively. This compares to $3.8 million and $4.4 million of land sales and other impairment charges recognized in the three and nine months ended July 31, 2024, respectively.

Previous wording

SG&A expenditures increased by $18.1 million in the three-month period ended April 30, 2025, as compared to the three-month period ended April 30, 2024. As a percentage of home sales revenues, SG&A expenditures were 9.5% of home sales revenues in the three months ended April 30, 2025, as compared to 9.0% in the three months ended April 30, 2024. The dollar increase in SG&A expenditures was due primarily to higher internal commissions, marketing spend from increased community count and higher payroll costs. These increases were offset, in part, by reduced external broker commissions.

Current wording

SG&A expenditures increased by $8.9 million in the three-month period ended July 31, 2025, as compared to the three-month period ended July 31, 2024. As a percentage of home sales revenues, SG&A expenditures were 8.8% of home sales revenues in the three months ended July 31, 2025, as compared to 9.0% in the three months ended July 31, 2024. The dollar increase in SG&A expenditures was due primarily to higher payroll, insurance and marketing costs. These increases were offset, in part, by modestly lower selling commissions.

Previous wording

SG&A expenditures increased by $28.4 million in the fiscal 2025 six-month period, as compared to the fiscal 2024 six-month period. As a percentage of home sales revenues, SG&A expense was 10.9% in the fiscal 2025 period versus 10.2% in the fiscal 2024 period. The dollar increase in SG&A expenditures was primarily due to higher internal commissions, marketing spend from increased community count and higher payroll costs. These increases were offset, in part, by reduced external broker commissions. The increase in SG&A expense as a percentage of revenues was due to revenues decreasing 1% year-over-year in the fiscal 2025 period, while SG&A expenditures increased 6%.

Current wording

SG&A expenditures increased by $37.3 million in the fiscal 2025 nine-month period, as compared to the fiscal 2024 nine-month period. As a percentage of home sales revenues, SG&A expense was 10.1% in the fiscal 2025 period versus 9.8% in the fiscal 2024 period. The dollar increase in SG&A expenditures was primarily due to higher payroll, marketing and insurance costs. These increases were offset, in part, by modestly lower selling commissions.

Previous wording

In the three-month period ended April 30, 2025, we recognized income from unconsolidated entities of $11.5 million as compared to income of $5.9 million in the prior year period. The increase was primarily due to a $15.5 million gain in the fiscal 2025 period related to our share of the gain from the sale of a stabilized rental property by one of our Rental Property Joint Ventures, increased earnings at one of our Home Building Joint Ventures due to higher settlement volume, and increased earnings at one of our Land Development Joint Ventures. In the fiscal 2024 period, we recognized $21.0 million related to our share of the gain from a property sale by one of our Rental Property Joint Ventures.

Current wording

In the nine-month period ended July 31, 2025, we recognized income from unconsolidated entities of $1.7 million, as compared to a loss of $13.8 million in the prior year period. The increase was primarily due to a $15.5 million gain in the fiscal 2025 period related to our share of the gain from the sale of a stabilized rental property by one of our Rental Property Joint Ventures, increased earnings at one of our Home Building Joint Ventures, and increased earnings at one of our Land Development Joint Ventures. These increases were offset, in part, by higher losses from certain Rental Property Joint Ventures and two Home Building Joint Ventures. Additionally, in the fiscal 2024 period, we recognized $21.0 million related to our share of the gain from a property sale by one of our Rental Property Joint Ventures.

Previous wording

The decreases in interest income in the three-month and six-month periods ended April 30, 2025 was primarily due to lower average cash balances in the fiscal 2025 periods.

Current wording

The decreases in interest income in the three-month and nine-month periods ended July 31, 2025 was primarily due to lower average cash balances in the fiscal 2025 periods.

Previous wording

The increases in income from ancillary businesses were mainly due to increased earnings from our mortgage operations due to higher closing volume and $5.0 million of net write-offs related to our Apartment Living operations in both the three-month and six-month periods ended April 30, 2024 compared to $4.4 million of net write-offs related to our Apartment Living operations in the six-month period ended April 30, 2025. No similar net write-offs were incurred in the three-month period ended April 30, 2025. Furthermore, the fiscal 2024 periods included a $4.4 million gain from a bulk sale of security monitoring accounts by our smart home technology business that did not recur in fiscal 2025.

Current wording

The increases in income from ancillary businesses in the three-month and nine-month periods ended July 31, 2025 were mainly due to increased earnings from our mortgage operations due to higher closing volume and a reduction in net write-offs in our Apartment Living operations in the 2025 periods. In the three- and nine-month periods ended July 31, 2024, we recognized $1.8 million and $6.7 million, respectively, of net write-offs in Apartment Living as compared to $0.1 million and $4.5 million in the corresponding periods in 2025, respectively. These positives were offset, in part, by reduced management fees related to our high-rise urban luxury condominium operations as a result of decreased closing volume. Further, the nine-month period ended July 31, 2024 included a $4.4 million gain from a bulk sale of security monitoring accounts by our smart home technology business that did not recur in fiscal 2025.

Previous wording

The decreases in management fee income earned by our home building operations in the three-month and six-month periods ended April 30, 2025 were primarily related to a decrease in fees from certain of our Rental Property Joint Ventures.

Current wording

The decreases in management fee income earned by our home building operations in the three-month and nine-month periods ended July 31, 2025 were primarily related to a decrease in fees from certain of our Home Building Joint Ventures.

Previous wording

The decreases in “other” in the three-month and six-month periods ended April 30, 2025 was primarily due to a $5.0 million gain related to an investment we held in a privately held company which sold substantially all of its assets to a third party in the fiscal 2024 periods, which did not recur in fiscal 2025.

Current wording

The decrease in “other” in the nine-month period ended July 31, 2025 was primarily due to a $5.0 million gain related to our investment in a privately held company that sold substantially all of its assets to a third party in the fiscal 2024 period, which did not recur in fiscal 2025.

Previous wording

For the three-month period ended April 30, 2025, we reported income before income taxes of $477.5 million, as compared to $649.8 million in the three-month period ended April 30, 2024.

Current wording

For the three-month period ended July 31, 2025, we reported income before income taxes of $499.5 million, as compared to $503.6 million in the three-month period ended July 31, 2024.

Previous wording

For the six-month period ended April 30, 2025, we reported income before income taxes of $698.9 million, as compared to $960.9 million in the six-month period ended April 30, 2024.

Current wording

For the nine-month period ended July 31, 2025, we reported income before income taxes of $1.20 billion, as compared to $1.46 billion in the nine-month period ended July 31, 2024.

Previous wording

In the three-month periods ended April 30, 2025 and 2024, we recognized income tax provisions of $125.1 million and $168.2 million, respectively. Based upon the federal statutory rate of 21.0% for the fiscal 2025 and 2024 periods, our federal tax provisions would have been $100.3 million and $136.5 million, in the three-month periods ended April 30, 2025 and 2024, respectively. The difference between the tax provisions recognized and the tax provision based on the federal statutory rate was mainly due to the provision for state income taxes and permanent differences.

Current wording

In the three-month periods ended July 31, 2025 and 2024, we recognized income tax provisions of $129.9 million and $129.0 million, respectively. Based upon the federal statutory rate of 21.0% for the fiscal 2025 and 2024 periods, our federal tax provisions would have been $104.9 million and $105.8 million in the three-month periods ended July 31, 2025 and 2024, respectively. The difference between the tax provisions recognized and the tax provision based on the federal statutory rate was mainly due to the provision for state income taxes and permanent differences.

Previous wording

We recognized income tax provisions of $168.7 million and $239.8 million in the six-month periods ended April 30, 2025 and 2024, respectively. The effective tax rate was 24.1% for the six months ended April 30, 2025, compared to 25.0% for the six months ended April 30, 2024. Based upon the federal statutory rate of 21.0% for each period, our federal tax provisions would have been $146.8 million and $201.8 million, in the six-month periods ended April 30, 2025 and 2024, respectively. The difference between the tax provisions recognized and the tax provision based on the federal statutory rate was mainly due to the provision for state income taxes and other permanent differences, offset, in part, by excess tax benefits related to stock-based compensation. The decrease in the effective tax rate for the six months ended April 30, 2025 compared to the six months ended April 30, 2024 was primarily due to an increase in excess tax benefits related to stock-based compensation.

Current wording

We recognized income tax provisions of $298.6 million and $368.8 million in the nine-month periods ended July 31, 2025 and 2024, respectively. The effective tax rate was 24.9% for the nine months ended July 31, 2025, compared to 25.2% for the nine months ended July 31, 2024. Based upon the federal statutory rate of 21.0% for each period, our federal tax provisions would have been $251.7 million and $307.6 million in the nine-month periods ended July 31, 2025 and 2024, respectively. The difference between the tax provisions recognized and the tax provision based on the federal statutory rate was mainly due to the provision for state income taxes and other permanent differences, offset, in part, by excess tax benefits related to stock-based compensation. The decrease in the effective tax rate for the nine months ended July 31, 2025 compared to the nine months ended July 31, 2024 was primarily due to an increase in excess tax benefits related to stock-based compensation.

Previous wording

In the three-month periods ended April 30, 2025 and 2024, the value of net contracts signed was $2.60 billion (2,650 homes) and $2.94 billion (3,041 homes), respectively. The aggregate value of net contracts signed decreased $336.6 million, or 11.4%, in the three-month period ended April 30, 2025, as compared to the three-month period ended April 30, 2024. The decrease in the aggregate value of net contracts signed was due to a 12.9% decrease in the number of net contracts signed partially offset by a 1.6% increase in the average value attributed to each signed contract. The decrease in the number of net contracts signed was primarily due to a softer overall demand environment in fiscal 2025 compared to fiscal 2024. The average value of each signed contract in the three-months ended April 30, 2025 was essentially flat compared to the prior year period.

Current wording

In the three-month periods ended July 31, 2025 and 2024, the value of net contracts signed was $2.41 billion (2,388 homes) and $2.41 billion (2,490 homes), respectively. The aggregate value of net contracts signed increased $4.5 million, or 0.2%, in the three-month period ended July 31, 2025, as compared to the three-month period ended July 31, 2024. The increase in the aggregate value of net contracts signed was due to a 4.5% increase in the average value of each signed contract partially offset by a 4.1% decrease in the number of net contracts signed. The decrease in the number of net contracts signed was primarily due to a softer overall demand environment in fiscal 2025 compared to fiscal 2024.

Previous wording

In the six-month periods ended April 30, 2025 and 2024, the value of net contracts signed was $4.91 billion (4,957 homes) and $5.01 billion (5,083 homes), respectively. The aggregate value of net contracts signed decreased $94.2 million, or 1.9%, in the six-month period ended April 30, 2025, as compared to the six-month period ended April 30, 2024. The decrease in the aggregate value of net contracts signed was due to a 2.5% decrease in the number of net contracts signed partially offset by a 0.6% increase in the average value attributed to each signed contract. The decrease in the number of net contracts signed primarily reflects a softer overall demand environment in fiscal 2025 compared to fiscal 2024. The average value of each signed contract in the six-months ended April 30, 2025 was essentially flat compared to the prior year period.

Current wording

In the nine-month periods ended July 31, 2025 and 2024, the value of net contracts signed was $7.32 billion (7,345 homes) and $7.41 billion (7,573 homes), respectively. The aggregate value of net contracts signed decreased $89.7 million, or 1.2%, in the nine-month period ended July 31, 2025, as compared to the nine-month period ended July 31, 2024. The decrease in the aggregate value of net contracts signed was due to a 3.0% decrease in the number of net contracts signed partially offset by a 1.9% increase in the average value attributed to each signed contract. The decrease in the number of net contracts signed primarily reflects a softer overall demand environment in fiscal 2025 compared to fiscal 2024.

Previous wording

The value of our backlog at April 30, 2025 decreased 7% to $6.84 billion (6,063 homes), as compared to $7.38 billion (7,093 homes) at April 30, 2024. Our backlog at October 31, 2024 and 2023 was $6.47 billion (5,996 homes) and $6.95 billion (6,578 homes), respectively. The decrease in the value of our backlog at April 30, 2025 as compared to April 30, 2024, was due to a 15% decrease in the number of homes in backlog partially offset by an 8% increase in the average contracted price per home. The decrease in the number of homes in backlog was primarily attributable to spec homes representing a larger portion of our net signed contracts and homes delivered.

Current wording

The value of our backlog at July 31, 2025 decreased 10% to $6.38 billion (5,492 homes), as compared to $7.07 billion (6,769 homes) at July 31, 2024. Our backlog at October 31, 2024 and 2023 was $6.47 billion (5,996 homes) and $6.95 billion (6,578 homes), respectively. The decrease in the value of our backlog at July 31, 2025 as compared to July 31, 2024, was due to a 19% decrease in the number of homes in backlog partially offset by an 11% increase in the average contracted price per home. The decrease in the number of homes in backlog was primarily attributable to spec homes representing a larger portion of our net signed contracts and homes delivered, as a much larger percentage of spec homes are contracted for and delivered within a quarter (and therefore are not included in our quarter-end backlog) as compared to build-to-order homes.

Previous wording

At April 30, 2025, we had $686.5 million of cash and cash equivalents on hand and approximately $2.19 billion available for borrowing under our Revolving Credit Facility. At quarter-end, the Revolving Credit Facility provided us with a committed borrowing capacity of $2.35 billion, which we had the ability to increase to up to $3.00 billion with the consent of lenders, and was scheduled to mature on February 7, 2030. Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries are guarantors of the borrower’s obligations under the Revolving Credit Facility. We are also a party to a $650.0 million unsecured Term Loan Facility which matures February 7, 2030.

Current wording

At July 31, 2025, we had $852.3 million of cash and cash equivalents on hand and approximately $2.19 billion available for borrowing under our Revolving Credit Facility. The Revolving Credit Facility, which is scheduled to mature on February 7, 2030, provides us with a committed borrowing capacity of $2.35 billion, which we have the ability to increase to up to $3.00 billion with the consent of lenders. Under the Revolving Credit Facility, up to 50% of the commitment is available for letters of credit. Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries are guarantors of the borrower’s obligations under the Revolving Credit Facility. Our $650.0 million Term Loan Facility is also scheduled to mature on February 7, 2030 and is also guaranteed by Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries.

Previous wording

For the next twelve months, we expect our principal demand for funds will be for inventory additions (in the form of land acquisition, land development, home construction costs, and deposits to control land, which could occur directly or indirectly through builder acquisitions), operating expenses, including our selling, general and administrative expenses, investments and funding of capital improvements, investments in existing and future unconsolidated joint ventures, repayment of community-level borrowings, common stock repurchases, and dividend payments. Demand for funds include interest and principal payments on current and future debt, including $350.0 million of 4.875% Senior Notes due November 15, 2025. We expect to meet our short-term liquidity requirements primarily through our cash and cash equivalents on hand and net cash flows provided by operations, although we may from time to time access other sources. Additional sources of funds include distributions from our unconsolidated joint ventures, borrowing capacity under our Revolving Credit Facility, and other borrowings from banks and other lenders.

Current wording

For the next twelve months, we expect our principal demand for funds will be for inventory additions (in the form of land acquisition, land development, home construction costs, and deposits to control land, which could occur directly or indirectly through builder acquisitions), operating expenses, including our selling, general and administrative expenses, investments and funding of capital improvements, investments in existing and future unconsolidated joint ventures, repayment of community-level borrowings, common stock repurchases, and dividend payments. Demand for funds also includes interest and principal payments on current and future debt. We expect to meet our short-term liquidity requirements primarily through our cash and cash equivalents on hand and net cash flows provided by operations, although we may from time to time access other sources. Additional sources of funds include distributions from our unconsolidated joint ventures, borrowing capacity under our Revolving Credit Facility, and other borrowings from banks and other lenders.

Previous wording

We are a party to many agreements that include contractual obligations and commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Condensed Consolidated Balance Sheet as of April 30, 2025, while others are considered future commitments. Our contractual obligations primarily consist of long-term debt and related interest payments, payments due on our mortgage company loan facility, purchase obligations related to expected acquisition of land under purchase agreements and land development agreements (many of which are secured by letters of credit or surety bonds), operating leases, obligations under our deferred compensation plan, and obligations under our supplemental executive retirement plans. We also enter into certain short-term lease commitments, commitments to fund our existing or future unconsolidated joint ventures, letters of credit and other purchase obligations in the normal course of business. For more information regarding our primary obligations, refer to Note 5, “Loans Payable, Senior Notes, and Mortgage Company Loan Facilities,” and Note 13, “Commitments and Contingencies,” in the Notes to the Condensed Consolidated Financial Statements for amounts outstanding as of April 30, 2025, related to debt and commitments and contingencies, respectively.

Current wording

We are a party to many agreements that include contractual obligations and commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Condensed Consolidated Balance Sheet as of July 31, 2025, while others are considered future commitments and not included. Our contractual obligations primarily consist of long-term debt and related interest payments, payments due on our mortgage company loan facility, purchase obligations related to expected acquisition of land under purchase agreements and land development agreements (many of which are secured by letters of credit or surety bonds), operating leases, obligations under our deferred compensation plan, and obligations under our supplemental executive retirement plans. We also enter into certain short-term lease commitments, commitments to fund our existing or future unconsolidated joint ventures, letters of credit and other purchase obligations in the normal course of business. For more information regarding our primary obligations, refer to Note 5, “Loans Payable, Senior Notes, and Mortgage Company Loan Facilities,” and Note 13, “Commitments and Contingencies,” in the Notes to the Condensed Consolidated Financial Statements for amounts outstanding as of July 31, 2025, related to debt and commitments and contingencies, respectively.

Previous wording

We also operate through a number of joint ventures and have undertaken various commitments as a result of those arrangements. At April 30, 2025, we had investments in these entities of $1.17 billion and were committed to invest or advance up to an additional $349.3 million to these entities if they require additional funding. At April 30, 2025, we had agreed to terms for the acquisition of 705 home sites from four joint ventures for an estimated aggregate purchase price of $76.1 million. We also expect to purchase approximately 10,500 additional home sites over a number of years from several joint ventures in which we have interests. The purchase price of these home sites will be determined at a future date.

Current wording

We also operate through a number of joint ventures and have undertaken various commitments as a result of those arrangements. At July 31, 2025, we had investments in these entities of $1.12 billion and were committed to invest or advance up to an additional $353.8 million to these entities if they require additional funding. At July 31, 2025, we had agreed to terms for the acquisition of 924 home sites from five joint ventures for an estimated aggregate purchase price of $123.9 million. We also expect to purchase approximately 10,700 additional home sites over a number of years from several joint ventures in which we have interests. The purchase price of these home sites will be determined at a future date.

Previous wording

In situations where we have joint and several guarantees with our joint venture partner, we generally seek to implement a reimbursement agreement with our partner that provides that neither party is responsible for more than its proportionate share or agreed-upon share of the guarantee; however, we are not always successful. In addition, if the joint venture partner does not have adequate financial resources to meet its obligations under such a reimbursement agreement, we may be liable for more than our proportionate share. We believe that, as of April 30, 2025, in the event we become legally obligated to perform under a guarantee of the obligation of an unconsolidated entity due to a triggering event, the collateral in such entity should be sufficient to repay all or a significant portion of the obligation. If it is not, we and our partners would need to contribute additional capital to the entity. At April 30, 2025, we had guaranteed the debt of certain unconsolidated entities that have loan commitments aggregating $2.68 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $581.8 million to be our maximum exposure related to repayment and carry cost guarantees. At April 30, 2025, the unconsolidated entities had borrowed an aggregate of $1.92 billion, of which we estimate $523.0 million to be our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 1 month to 8.7 years. These maximum exposure estimates do not take into account any recoveries from the underlying collateral or any reimbursement from our partners, nor do they include any potential exposures related to project completion guarantees or the other (non-carry cost/repayment) indemnities noted above, which are not estimable.

Current wording

In situations where we have joint and several guarantees with our joint venture partner, we generally seek to implement a reimbursement agreement with our partner that provides that neither party is responsible for more than its proportionate share or agreed-upon share of the guarantee; however, we are not always successful. In addition, if the joint venture partner does not have adequate financial resources to meet its obligations under such a reimbursement agreement, we may be liable for more than our proportionate share. We believe that, as of July 31, 2025, in the event we become legally obligated to perform under a guarantee of the obligation of an unconsolidated entity due to a triggering event, the collateral in such entity should be sufficient to repay all or a significant portion of the obligation. If it is not, we and our partners would need to contribute additional capital to the entity. At July 31, 2025, we had guaranteed the debt of certain unconsolidated entities that have loan commitments aggregating $2.65 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $574.8 million to be our maximum exposure related to repayment and carry cost guarantees. At July 31, 2025, the unconsolidated entities had borrowed an aggregate of $1.94 billion, of which we estimate $523.0 million to be our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 1 month to 8.4 years. These maximum exposure estimates do not take into account any recoveries from the underlying collateral or any reimbursement from our partners, nor do they include any potential exposures related to project completion guarantees or the other (non-carry cost/repayment) indemnities noted above, which are not estimable.

Previous wording

At April 30, 2025 and October 31, 2024, we had $761.7 million and $1.37 billion, respectively, of cash, cash equivalents, and restricted cash. Cash used in operating activities during the six-month period ended April 30, 2025 was $57.9 million. Cash used in operating activities during the fiscal 2025 period was primarily related to an increase in inventory. This activity was offset, in part, by net income (adjusted for depreciation and amortization, impairments, stock-based compensation, losses and distributions of earnings from unconsolidated entities, and deferred taxes); an increase in accounts payable and accrued expenses; an increase in current income taxes – net; and an increase in customer deposits – net.

Current wording

At July 31, 2025 and October 31, 2024, we had $938.3 million and $1.37 billion, respectively, of cash, cash equivalents, and restricted cash. Cash provided by operating activities during the nine-month period ended July 31, 2025 was $312.4 million. Cash provided by operating activities during the fiscal 2025 period was primarily related to net income (adjusted for depreciation and amortization, impairments, stock-based compensation, income and distributions of earnings from unconsolidated entities, and deferred taxes); an increase in accounts payable and accrued expenses; an increase in current income taxes – net and mortgage loans sold, net of mortgage loans originated. This activity is offset, in part, by an increase in inventory, an increase in receivables, prepaid expenses, and other assets, and a decrease in customer deposits – net.

Previous wording

At April 30, 2024 and October 31, 2023, we had $1.09 billion and $1.34 billion, respectively, of cash and cash equivalents, and restricted cash. Cash provided by operating activities during the six-month period ended April 30, 2024 was $152.0 million. Cash provided by operating activities during the fiscal 2024 period was primarily related to net income (adjusted for stock-based compensation, depreciation and amortization, losses and distributions of earnings from unconsolidated entities, deferred taxes, impairments and gain on sale of assets); increases in accounts payable and accrued expenses, and current income taxes – net. This activity was offset, in part, by an increase in inventory; mortgage loans originated, net of mortgage loans sold, a decrease in customer deposits – net; and an increase in receivables, prepaid expenses, and other assets.

Current wording

At July 31, 2024 and October 31, 2023, we had $963.3 million and $1.34 billion, respectively, of cash, cash equivalents, and restricted cash. Cash provided by operating activities during the nine-month period ended July 31, 2024 was $327.7 million. Cash provided by operating activities during the fiscal 2024 period was primarily related to net income (adjusted for depreciation and amortization, impairments, stock-based compensation, losses and distributions of earnings from unconsolidated entities, deferred taxes, and gain on sale of assets); and increases in accounts payable and accrued expenses. This activity was offset, in part, by an increase in inventory; mortgage loans originated, net of mortgage loans sold, a decrease in customer deposits – net; an increase in prepaid expenses, receivables and other assets; and a decrease in current income taxes – net.

Previous wording

In the six-month period ended April 30, 2025, cash used in investing activities was $187.8 million, which was primarily related to $179.9 million used to fund our investments in unconsolidated entities and $32.9 million used for the purchase of property and equipment. This activity was offset, in part, by $28.2 million of cash received as returns from our investments in unconsolidated entities.

Current wording

In the nine-month period ended July 31, 2025, cash used in investing activities was $240.2 million, which was primarily related to $250.4 million used to fund our investments in unconsolidated entities and $58.4 million used for the purchase of property and equipment. This activity was offset, in part, by $64.9 million of cash received as returns from our investments in unconsolidated entities.

Previous wording

In the six-month period ended April 30, 2024, cash used in investing activities was $100.7 million, which was primarily related to $99.6 million used to fund our investments in unconsolidated entities and $29.7 million used for the purchase of property and equipment. This activity was offset, in part, by $29.3 million of cash received as returns from our investments in unconsolidated entities.

Current wording

In the nine-month period ended July 31, 2024, cash used in investing activities was $116.0 million, which was primarily related to $134.5 million used to fund our investments in unconsolidated entities and $55.5 million used for the purchase of property and equipment. This activity was offset, in part, by $74.3 million of cash received as returns from our investments in unconsolidated entities.

Previous wording

We used $363.1 million of cash in financing activities in the six-month period ended April 30, 2025, primarily for the repurchase of $204.9 million of our common stock, payments of $66.3 million of loans payable, net of borrowings, the payment of dividends on our common stock of $49.0 million, $35.0 million of payments related to repurchases from land bank programs, and $22.2 million of payments related to stock-based benefit plans - net. This activity was offset, in part, by $22.1 million of proceeds related to sales to land bank programs.

Current wording

We used $504.4 million of cash in financing activities in the nine-month period ended July 31, 2025, primarily for the repurchase of $404.3 million of our common stock, $350.0 million for the redemption of senior notes, payments of $100.9 million of loans payable, net of borrowings, the payment of dividends on our common stock of $73.3 million, $62.3 million of payments related to repurchases from land bank programs, $21.3 million of payments related to stock-based benefit plans - net and $13.1 million of debt issuance costs. This activity was offset, in part, by $498.2 million of proceeds from the issuance of senior notes and $22.1 million of proceeds related to sales to land bank programs.