The following is a summary of the Toll Brothers, Inc. (TOL) Q4 2024 Earnings Call Transcript:

Financial Performance:

• Toll Brothers reported Q4 2024 home sales revenues of $3.3 billion, a 10% increase from the previous year, and full-year sales revenues reaching a record $10.6 billion.

• Adjusted gross margin for Q4 was 27.9%, exceeding guidance by 40 basis points, with a full-year adjusted gross margin of 28.4%.

• Net income for Q4 was $475 million, resulting in earnings of $4.63 per diluted share, showing a 7% and 13% increase respectively compared to last year's Q4. Full-year net income was over $1.5 billion with earnings of $15.01 per diluted share.

Business Progress:

• Toll Brothers saw a strong finish to 2024 with a 30% increase in both dollars and units of contracts in Q4.

• The company grew its community count by 10% to 408 communities, driven by expanding geographies, price points, and product lines.

• Focused on capital efficiency, Toll Brothers has a strategic approach to land acquisition and development, adhering to high underwriting standards for both margin and returns.

Opportunities:

• With favorable demographics including millennials buying homes later in life and baby boomers moving during retirement, Toll Brothers experiences continued market support.

• Significant equity in existing homes and a generational wealth transfer are assisting many buyers, particularly in securing down payments, enhancing purchasing power.

Risks:

• Mortgage rate fluctuations posed challenges, but stabilization post-election has been beneficial. Additionally, the shift towards higher incentives in the fourth quarter to maintain sales velocity showcases adaptability to economic conditions.

More details: Toll Brothers IR

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