Toll Brothers, Inc. (NYSE:TOL), a prominent builder of luxury homes in the United States, reported its second quarter results for fiscal year 2025, ending April 30, 2025. The company experienced a stable performance characterized by measured revenue growth despite a challenging market backdrop.

In the second quarter, Toll Brothers delivered 2,899 homes, achieving home sales revenues of $2.71 billion, reflecting an increase of 2% year-over-year. The average price of homes delivered was approximately $934,000. The company signed 2,650 net agreements valued at $2.6 billion, representing a decline of 13% in units and 11% in dollar value from the same period last year. The average contract price for homes sold was $983,000, an increase of 1.6% compared to the previous year.

Toll Brothers reported net income of $352.4 million, translating to $3.50 per diluted share. This marks a decline from net income of $481.6 million, or $4.55 per diluted share, during the same quarter last year; however, after adjusting for a $124.1 million gain in fiscal 2024 related to a land sale, the adjusted earnings were a record. The adjusted gross margin for the second quarter was 27.5%, a slight improvement over previous guidance. The company also reported selling, general and administrative expenses (SG&A) at 9.5% of home sales revenue.

As of quarter-end, Toll Brothers’ backlog stood at $6.84 billion, equating to 6,063 homes, down 7% in value and 15% in volume compared to the prior year. The average price of homes in backlog reached $1,130,000—a new company record.

In terms of guidance, Toll Brothers reaffirmed its expectations for full fiscal year 2025, projecting home sales revenue at $10.9 billion, an adjusted gross margin of 27.25%, and earnings of approximately $14 per diluted share. For the third quarter, the company anticipates delivering between 2,800 and 3,000 homes, maintaining an average delivered price of $965,000 to $985,000.

As for financial stability, at the end of the quarter, Toll Brothers reported holding $686 million in cash and cash equivalents, with a net debt-to-capital ratio of 19.8%. During the quarter, the company also repurchased $177 million of its common stock, increasing its planned share repurchases for the fiscal year from $500 million to $600 million.

In summary, the second-quarter performance of Toll Brothers illustrates stable operational metrics, with a focus on maintaining pricing power and profitability amid a fluctuating housing market. The guidance and outlook remain consistent with prior projections, showcasing the company’s prudent financial management.