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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)

☑ |  | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended April 30, 2025
or

☐ |  | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to
Commission file number 001-09186
Toll Brothers, Inc.
(Exact name of registrant as specified in its charter)

Delaware |  |  | 23-2416878
(State or other jurisdiction of incorporation or organization) |  |  | (I.R.S. Employer Identification No.)
1140 Virginia Drive | Fort Washington | Pennsylvania | 19034
(Address of principal executive offices) |  |  | (Zip Code)

(215) 938-8000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common Stock, par value $0.01 per share | TOL | New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐
Smaller reporting company | ☐ | Emerging growth company | ☐ |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
At May 27, 2025, there were approximately 98,181,000 shares of Common Stock, par value $0.01 per share, outstanding.

TOLL BROTHERS, INC.
TABLE OF CONTENTS

| Page No.
Statement on Forward-Looking Information | 1
PART I. Financial Information |
Item 1. Financial Statements |
Condensed Consolidated Balance Sheets (Unaudited) | 2
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) | 3
Condensed Consolidated Statements of Changes in Equity (Unaudited) | 4
Condensed Consolidated Statements of Cash Flows (Unaudited) | 6
Notes to Condensed Consolidated Financial Statements (Unaudited) | 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 44
Item 4. Controls and Procedures | 45
PART II. Other Information |
Item 1. Legal Proceedings | 46
Item 1A. Risk Factors | 46
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 46
Item 6. Exhibits | 47
SIGNATURES | 48

STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information included in this report or in other materials we have filed or will file with the Securities and Exchange Commission (“SEC”) (as well as information included in oral statements or other written statements made or to be made by us) contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). One can identify these statements by the fact that they do not relate to matters of a strictly historical or factual nature and generally discuss or relate to future events. These statements contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “can,” “could,” “might,” “should,” “likely”, “will” and other words or phrases of similar meaning. Such statements may include, but are not limited to, information related to: market conditions; mortgage rates; inflation rates; demand for our homes; our build-to-order and quick move-in home strategy; sales paces and prices; effects of home buyer cancellations; our strategic priorities; growth and expansion; our land acquisition, land development and capital allocation priorities; anticipated operating results; home deliveries; financial resources and condition; changes in revenues, profitability, margins and returns; changes in accounting treatment; cost of revenues, including expected labor and material costs; availability of labor and materials; selling, general and administrative expenses; interest expense; inventory write-downs; home warranty and construction defect claims; unrecognized tax benefits; anticipated tax refunds; joint ventures in which we are involved; anticipated results from our investments in unconsolidated entities; our ability to acquire land and pursue real estate opportunities; our ability to gain approvals and open new communities; our ability to market, construct and sell homes and properties; our ability to deliver homes from backlog; our ability to secure materials and subcontractors; our ability to produce the liquidity and capital necessary to conduct normal business operations or to expand and take advantage of opportunities; the outcome of legal proceedings, investigations, and claims; and the impact of public health or other emergencies.
From time to time, forward-looking statements also are included in other reports on Forms 10-K, 10-Q, and 8-K; in press releases; in presentations; on our website; and in other materials released to the public. These statements may include guidance regarding our future performance, such as our anticipated annual revenue, home deliveries, and margins, that represents management’s estimates as of the date of publication. Guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change.
Any or all of the forward-looking statements included in this report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements. This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties. Therefore, we caution you not to place undue reliance on our forward-looking statements. The major risks and uncertainties – and assumptions that are made – that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:
•the effect of general economic conditions, including employment rates, housing starts, interest and mortgage rates, home affordability, inflation, consumer sentiment, availability of financing for home mortgages and strength of the U.S. dollar;
•market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
•the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such land;
•access to adequate capital on acceptable terms;
•geographic concentration of our operations;
•levels of competition;
•the price and availability of lumber, other raw materials, and home components;
•the impact of labor shortages, including on our subcontractors, supply chain and municipalities;
•the effect of U.S. trade policies, including the imposition of tariffs and duties on home building products and retaliatory measures taken by other countries;
•the effects of weather and the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, unavailability of insurance, and shortages and price increases in labor or materials associated with such natural disasters;
•risks arising from acts of war, terrorism or outbreaks of contagious diseases, such as COVID-19;
•federal and state tax policies;
•transportation costs;
•the effect of land use, environmental and other governmental laws and regulations;
•legal proceedings or disputes and the adequacy of reserves;
•risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, indebtedness, financial condition, losses and future prospects;
•the effect of potential loss of key management personnel;
•changes in accounting principles; and
•risks related to unauthorized access to our computer systems, theft of our and our homebuyers’ confidential information or other forms of cyber-attack.
Forward-looking statements. including any guidance, speak only as of the date they are made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.
For a further discussion of factors that we believe could cause our actual results to differ materially from expected and historical results, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K filed with the SEC and in this report.
When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Toll Brothers, Inc. and its subsidiaries, unless the context otherwise requires. References herein to fiscal year refer to our fiscal years ended or ending October 31.
1

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TOLL BROTHERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

| April 30, 2025 |  | October 31, 2024
| (unaudited) |  |
ASSETS |  |  |
Cash and cash equivalents | $ | 686,466 |  |  | $ | 1,303,039 |
Inventory | 10,994,873 |  |  | 9,712,925 |
Property, construction, and office equipment – net | 450,024 |  |  | 453,007 |
Receivables, prepaid expenses, and other assets (1) | 583,422 |  |  | 590,611 |
Mortgage loans held for sale – at fair value | 195,651 |  |  | 191,242 |
Customer deposits held in escrow | 113,086 |  |  | 109,691 |
Investments in unconsolidated entities (1) | 1,172,302 |  |  | 1,007,417 |
| $ | 14,195,824 |  |  | $ | 13,367,932 |
LIABILITIES AND EQUITY |  |  |
Liabilities |  |  |
Loans payable | $ | 1,052,710 |  |  | $ | 1,085,817 |
Senior notes | 1,597,544 |  |  | 1,597,102 |
Mortgage company loan facility | 150,000 |  |  | 150,000 |
Customer deposits | 514,965 |  |  | 488,690 |
Accounts payable | 666,488 |  |  | 492,213 |
Accrued expenses | 2,088,588 |  |  | 1,752,848 |
Income taxes payable | 161,114 |  |  | 114,547 |
Total liabilities | 6,231,409 |  |  | 5,681,217 |
Equity |  |  |
Stockholders’ equity |  |  |
Preferred stock, none issued | — |  |  | — |
Common stock, 112,937 shares issued at April 30, 2025 and October 31, 2024 | 1,129 |  |  | 1,129 |
Additional paid-in capital | 679,434 |  |  | 694,713 |
Retained earnings | 8,634,857 |  |  | 8,153,356 |
Treasury stock, at cost —14,612 and 13,149 shares at April 30, 2025 and October 31, 2024, respectively | (1,394,825) |  |  | (1,209,547) |
Accumulated other comprehensive income ("AOCI") | 28,130 |  |  | 31,277 |
Total stockholders’ equity | 7,948,725 |  |  | 7,670,928 |
Noncontrolling interest | 15,690 |  |  | 15,787 |
Total equity | 7,964,415 |  |  | 7,686,715 |
| $ | 14,195,824 |  |  | $ | 13,367,932 |

(1) As of April 30, 2025 and October 31, 2024, Receivables, prepaid expenses, and other assets and Investments in unconsolidated entities include $117.3 million and $105.3 million, respectively, of assets related to consolidated variable interest entities (“VIEs”). See Note 3, “Investments in Unconsolidated Entities” for additional information regarding VIEs.
See accompanying notes.
2

TOLL BROTHERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in thousands, except per share data)
(Unaudited)

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Revenues: |  |  |  |  |  |  |
Home sales | $ | 2,706,453 |  |  | $ | 2,647,020 |  |  | $ | 4,547,229 |  |  | $ | 4,578,856 |
Land sales and other | 32,624 |  |  | 190,466 |  |  | 50,979 |  |  | 206,478 |
| 2,739,077 |  |  | 2,837,486 |  |  | 4,598,208 |  |  | 4,785,334 |
Cost of revenues: |  |  |  |  |  |  |
Home sales | 2,002,218 |  |  | 1,963,283 |  |  | 3,383,698 |  |  | 3,362,509 |
Land sales and other | 31,421 |  |  | 12,979 |  |  | 49,527 |  |  | 23,140 |
| 2,033,639 |  |  | 1,976,262 |  |  | 3,433,225 |  |  | 3,385,649 |
Selling, general and administrative | 255,760 |  |  | 237,698 |  |  | 496,174 |  |  | 467,744 |
Income from operations | 449,678 |  |  | 623,526 |  |  | 668,809 |  |  | 931,941 |
Other: |  |  |  |  |  |  |
Income (loss) from unconsolidated entities | 11,489 |  |  | 5,887 |  |  | 2,746 |  |  | (3,285) |
Other income – net | 16,336 |  |  | 20,366 |  |  | 27,330 |  |  | 32,284 |
Income before income taxes | 477,503 |  |  | 649,779 |  |  | 698,885 |  |  | 960,940 |
Income tax provision | 125,056 |  |  | 168,162 |  |  | 168,735 |  |  | 239,765 |
Net income | $ | 352,447 |  |  | $ | 481,617 |  |  | $ | 530,150 |  |  | $ | 721,175 |
Other comprehensive (loss) income – net of tax | (2,242) |  |  | 2,815 |  |  | (3,147) |  |  | (1,083) |
Total comprehensive income | $ | 350,205 |  |  | $ | 484,432 |  |  | $ | 527,003 |  |  | $ | 720,092 |
Per share: |  |  |  |  |  |  |
Basic earnings | $ | 3.53 |  |  | $ | 4.60 |  |  | $ | 5.28 |  |  | $ | 6.87 |
Diluted earnings | $ | 3.50 |  |  | $ | 4.55 |  |  | $ | 5.24 |  |  | $ | 6.80 |
Weighted-average number of shares: |  |  |  |  |  |  |
Basic | 99,890 |  |  | 104,794 |  |  | 100,360 |  |  | 104,958 |
Diluted | 100,585 |  |  | 105,803 |  |  | 101,208 |  |  | 106,034 |

See accompanying notes.
3

TOLL BROTHERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands)
(Unaudited)
For the three months ended April 30, 2025 and 2024:

| Common Stock |  | Addi- tional Paid-in Capital |  | Retained Earnings |  | Treasury Stock |  | AOCI |  | Non-controlling Interest |  | Total Equity
Balance, January 31, 2025 | $ | 1,129 |  |  | $ | 674,492 |  |  | $ | 8,307,555 |  |  | $ | (1,217,942) |  |  | $ | 30,372 |  |  | $ | 15,888 |  |  | $ | 7,811,494 |
Net income |  |  |  |  | 352,447 |  |  |  |  |  |  |  |  | 352,447 |
Purchase of treasury stock |  |  |  |  |  |  | (177,362) |  |  |  |  |  |  | (177,362) |
Exercise of stock options, stock based compensation issuances, and employee stock purchase plan issuances |  |  | 169 |  |  |  |  | 479 |  |  |  |  |  |  | 648 |
Stock-based compensation |  |  | 4,773 |  |  |  |  |  |  |  |  |  |  | 4,773 |
Dividends declared |  |  |  |  | (25,145) |  |  |  |  |  |  |  |  | (25,145) |
Other comprehensive loss |  |  |  |  |  |  |  |  | (2,242) |  |  |  |  | (2,242) |
Loss attributable to non-controlling interest |  |  |  |  |  |  |  |  |  |  | (240) |  |  | (240) |
Capital contributions – net |  |  |  |  |  |  |  |  |  |  | 42 |  |  | 42 |
Balance, April 30, 2025 | $ | 1,129 |  |  | $ | 679,434 |  |  | $ | 8,634,857 |  |  | $ | (1,394,825) |  |  | $ | 28,130 |  |  | $ | 15,690 |  |  | $ | 7,964,415 |
Balance, January 31, 2024 | $ | 1,129 |  |  | $ | 685,941 |  |  | $ | 6,892,821 |  |  | $ | (597,632) |  |  | $ | 37,012 |  |  | $ | 16,374 |  |  | $ | 7,035,645 |
Net income |  |  |  |  | 481,617 |  |  |  |  |  |  |  |  | 481,617 |
Purchase of treasury stock |  |  |  |  |  |  | (181,156) |  |  |  |  |  |  | (181,156) |
Exercise of stock options, stock based compensation issuances, and employee stock purchase plan issuances |  |  | (571) |  |  |  |  | 6,312 |  |  |  |  |  |  | 5,741 |
Stock-based compensation |  |  | 3,889 |  |  |  |  |  |  |  |  |  |  | 3,889 |
Dividends declared |  |  |  |  | (24,203) |  |  |  |  |  |  |  |  | (24,203) |
Other comprehensive income |  |  |  |  |  |  |  |  | 2,815 |  |  |  |  | 2,815 |
Loss attributable to non-controlling interest |  |  |  |  |  |  |  |  |  |  | (238) |  |  | (238) |
Capital contributions – net |  |  |  |  |  |  |  |  |  |  | 84 |  |  | 84 |
Balance, April 30, 2024 | $ | 1,129 |  |  | $ | 689,259 |  |  | $ | 7,350,235 |  |  | $ | (772,476) |  |  | $ | 39,827 |  |  | $ | 16,220 |  |  | $ | 7,324,194 |

See accompanying notes.
4

For the six months ended April 30, 2025 and 2024:

| Common Stock |  | Addi- tional Paid-in Capital |  | Retained Earnings |  | Treasury Stock |  | AOCI |  | Non-controlling Interest |  | Total Equity
Balance, October 31, 2024 | $ | 1,129 |  |  | $ | 694,713 |  |  | $ | 8,153,356 |  |  | $ | (1,209,547) |  |  | $ | 31,277 |  |  | $ | 15,787 |  |  | $ | 7,686,715 |
Net income |  |  |  |  | 530,150 |  |  |  |  |  |  |  |  | 530,150 |
Purchase of treasury stock |  |  |  |  |  |  | (201,110) |  |  |  |  |  |  | (201,110) |
Exercise of stock options, stock based compensation issuances, and employee stock purchase plan issuances |  |  | (38,074) |  |  |  |  | 15,832 |  |  |  |  |  |  | (22,242) |
Stock-based compensation |  |  | 22,795 |  |  |  |  |  |  |  |  |  |  | 22,795 |
Dividends declared |  |  |  |  | (48,649) |  |  |  |  |  |  |  |  | (48,649) |
Other comprehensive loss |  |  |  |  |  |  |  |  | (3,147) |  |  |  |  | (3,147) |
Loss attributable to non-controlling interest |  |  |  |  |  |  |  |  |  |  | (498) |  |  | (498) |
Capital contributions - net |  |  |  |  |  |  |  |  |  |  | 401 |  |  | 401 |
Balance, April 30, 2025 | $ | 1,129 |  |  | $ | 679,434 |  |  | $ | 8,634,857 |  |  | $ | (1,394,825) |  |  | $ | 28,130 |  |  | $ | 15,690 |  |  | $ | 7,964,415 |
Balance, October 31, 2023 | $ | 1,129 |  |  | $ | 698,548 |  |  | $ | 6,675,719 |  |  | $ | (619,150) |  |  | $ | 40,910 |  |  | $ | 16,046 |  |  | $ | 6,813,202 |
Net income |  |  |  |  | 721,175 |  |  |  |  |  |  |  |  | 721,175 |
Purchase of treasury stock |  |  |  |  |  |  | (181,212) |  |  |  |  |  |  | (181,212) |
Exercise of stock options, stock based compensation issuances, and employee stock purchase plan issuances |  |  | (31,428) |  |  |  |  | 27,886 |  |  |  |  |  |  | (3,542) |
Stock-based compensation |  |  | 22,139 |  |  |  |  |  |  |  |  |  |  | 22,139 |
Dividends declared |  |  |  |  | (46,659) |  |  |  |  |  |  |  |  | (46,659) |
Other comprehensive loss |  |  |  |  |  |  |  |  | (1,083) |  |  |  |  | (1,083) |
Loss attributable to non-controlling interest |  |  |  |  |  |  |  |  |  |  | (440) |  |  | (440) |
Capital contributions - net |  |  |  |  |  |  |  |  |  |  | 614 |  |  | 614 |
Balance, April 30, 2024 | $ | 1,129 |  |  | $ | 689,259 |  |  | $ | 7,350,235 |  |  | $ | (772,476) |  |  | $ | 39,827 |  |  | $ | 16,220 |  |  | $ | 7,324,194 |

See accompanying notes.
5

TOLL BROTHERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

| Six months ended April 30,
| 2025 |  | 2024
Cash flow (used in) provided by operating activities: |  |  |
Net income | $ | 530,150 |  |  | $ | 721,175 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |  |  |
Depreciation and amortization | 37,940 |  |  | 35,283 |
Stock-based compensation | 22,795 |  |  | 22,139 |
(Income) loss from unconsolidated entities | (2,746) |  |  | 3,285 |
Distributions of earnings from unconsolidated entities | 9,041 |  |  | 25,412 |
Deferred tax provision | 5,001 |  |  | 7,216 |
Impairment charges and write-offs | 32,462 |  |  | 35,400 |
Gain on sale of assets | — |  |  | (5,042) |
Other - net | 648 |  |  | (973) |
Changes in operating assets and liabilities: |  |  |
Inventory | (900,631) |  |  | (679,337) |
Origination of mortgage loans | (1,112,249) |  |  | (876,125) |
Sale of mortgage loans | 1,110,378 |  |  | 851,846 |
Receivables, prepaid expenses, and other assets | 4,670 |  |  | (24,817) |
Current income taxes – net | 42,631 |  |  | 41,722 |
Customer deposits – net | 22,880 |  |  | (21,832) |
Accounts payable and accrued expenses | 139,101 |  |  | 16,692 |
Net cash (used in) provided by operating activities | (57,929) |  |  | 152,044 |
Cash flow used in investing activities: |  |  |
Purchase of property, construction, and office equipment – net | (32,916) |  |  | (29,701) |
Investments in unconsolidated entities | (179,890) |  |  | (99,568) |
Return of investments in unconsolidated entities | 28,179 |  |  | 29,302 |
Other – net | (3,130) |  |  | (719) |
Net cash used in investing activities | (187,757) |  |  | (100,686) |
Cash flow used in financing activities: |  |  |
Proceeds from loans payable | 2,107,956 |  |  | 1,693,383 |
Debt issuance costs | (7,996) |  |  | — |
Principal payments of loans payable | (2,174,265) |  |  | (1,771,103) |
Proceeds related to sales to land bank programs | 22,071 |  |  | — |
Payments related to repurchases from land bank programs | (35,034) |  |  | — |
Payments related to stock-based benefit plans – net | (22,241) |  |  | (3,540) |
Purchase of treasury stock and excise tax payment | (204,905) |  |  | (180,083) |
Dividends paid | (49,046) |  |  | (47,069) |
Receipts related to noncontrolling interest – net | 386 |  |  | 167 |
Net cash used in financing activities | (363,074) |  |  | (308,245) |
Net decrease in cash, cash equivalents, and restricted cash | (608,760) |  |  | (256,887) |
Cash, cash equivalents, and restricted cash, beginning of period | 1,370,435 |  |  | 1,344,341 |
Cash, cash equivalents, and restricted cash, end of period | $ | 761,675 |  |  | $ | 1,087,454 |

See accompanying notes.
6

TOLL BROTHERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Significant Accounting Policies
Basis of Presentation
Our condensed consolidated financial statements include the accounts of Toll Brothers, Inc. (the “Company,” “we,” “us,” or “our”), a Delaware corporation, and its majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Investments in 50% or less owned partnerships and affiliates are accounted for using the equity method unless it is determined that we have effective control of the entity, in which case we would consolidate the entity.
Our unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The October 31, 2024 balance sheet amounts and disclosures have been derived from our October 31, 2024 audited financial statements. Since the condensed consolidated financial statements do not include all the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements, they should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024 (“2024 Form 10-K”). In the opinion of management, the unaudited condensed consolidated financial statements include all recurring adjustments necessary to present fairly our financial position as of April 30, 2025; the results of our operations and changes in equity for the three-month and the six-month periods ended April 30, 2025 and 2024; and our cash flows for the six-month periods ended April 30, 2025 and 2024. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates and assumptions may prove to be incorrect for a variety of reasons, whether as a result of the risks and uncertainties our business is subject to or for other reasons. In times of economic disruption when uncertainty regarding future economic conditions is heightened, our estimates and assumptions are subject to greater variability. Actual results could differ from the estimates and assumptions we make, and such differences may be material.
Revenue Recognition
Home sales revenues: Revenues and cost of revenues from home sales are recognized at the time each home is delivered and title and possession are transferred to the buyer. For the majority of our home closings, our performance obligation to deliver a home is satisfied in less than one year from the date a binding sale agreement is signed. In certain states where we build, we may not be able to complete certain outdoor features prior to the closing of the home. To the extent these separate performance obligations are not complete upon the home closing, we defer a portion of the home sales revenues related to these obligations and subsequently recognize the revenue upon completion of such obligations. As of April 30, 2025, the home sales revenues and related costs we deferred related to these obligations were immaterial. Our contract liabilities, consisting of deposits received from customers for sold but undelivered homes, totaled $515.0 million and $488.7 million at April 30, 2025 and October 31, 2024, respectively. Of the outstanding customer deposits held as of October 31, 2024, we recognized $145.1 million and $265.3 million in home sales revenues during the three months and six months ended April 30, 2025, respectively. Of the outstanding customer deposits held as of October 31, 2023, we recognized $153.1 million and $290.3 million in home sales revenues during the three months and six months ended April 30, 2024, respectively.
Land sales and other revenues: Our revenues from land sales and other generally consist of: (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 lot 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 high-rise urban luxury condominium projects. In general, our performance obligation for each of these land sales is fulfilled upon the delivery of the land, which generally coincides with the receipt of cash consideration from the counterparty. For land sale transactions that contain repurchase options, revenues and related costs are not recognized until the repurchase option expires. In addition, when we sell land to a joint venture in which we retain an interest, we do not recognize revenue or gains on the sale to the extent of our retained interest in such joint venture.
In February 2024, we sold a parcel of land to a commercial developer for net cash proceeds of $180.7 million, which resulted in a pre-tax gain of $175.2 million during the three and six months ended April 30, 2024.
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Forfeited Customer Deposits: Forfeited customer deposits are recognized in “Home sales revenues” in our Condensed Consolidated Statements of Operations and Comprehensive Income in the period in which the customer defaults on or cancels the contract and we have the right to retain the deposit.
Sales Incentives: In order to promote sales of our homes, we may offer our home buyers sales incentives. These incentives vary by type of incentive and by amount on a community-by-community and home-by-home basis. Incentives are reflected as a reduction in home sales revenues. Incentives are recognized at the time the home is delivered to the home buyer and we receive the sales proceeds.
Recent Accounting Pronouncements
In August 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-05, “Business Combinations - Joint Venture Formations” (“ASU 2023-05”), which addresses the accounting for contributions made to a joint venture. ASU 2023-05 requires joint ventures to measure all assets and liabilities upon formation at fair value. This guidance is to be applied prospectively for all joint venture formations with a formation date on or after January 1, 2025. We adopted ASU 2023-05 effective January 1, 2025. The adoption of ASU 2023-05 impacted our disclosures only and has been applied to all joint venture formations in our current fiscal year.
In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM. The amendments in this update also expand the interim segment disclosure requirements. ASU 2023-07 will be effective for our fiscal year ending October 31, 2025 and for interim periods starting in our first quarter of fiscal 2026. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. We are currently evaluating the impact this standard will have on our disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires expanded disclosure of our income tax rate reconciliation and income taxes paid. ASU 2023-09 will be effective for our fiscal year ending October 31, 2026 and may be applied either retrospectively or prospectively. We are currently evaluating the impact this standard will have on our disclosures.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. ASU 2024-03 will be effective for our fiscal year 2028. The amendments in this update are to be applied on a prospective basis, with the option for retrospective application. Early adoption is permitted. We are currently evaluating the impact this standard will have on our disclosures.
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2. Inventory
Major components of inventory at April 30, 2025 and October 31, 2024 were (amounts in thousands):

| April 30, 2025 |  | October 31, 2024
Land deposits and costs of future communities | $ | 781,280 |  |  | $ | 620,040 |
Land and land development costs | 2,992,183 |  |  | 2,532,221 |
Land and land development costs associated with homes under construction | 3,785,095 |  |  | 3,617,266 |
Total land and land development costs | 7,558,558 |  |  | 6,769,527 |
Homes under construction | 2,946,464 |  |  | 2,458,541 |
Model homes (1) | 489,851 |  |  | 484,857 |
| $ | 10,994,873 |  |  | $ | 9,712,925 |

(1) Includes the allocated land and land development costs associated with each of our model homes in operation.
The following table provides a summary of the composition of our inventory based on community status at April 30, 2025 and October 31, 2024 (amounts in thousands):

| April 30, 2025 |  | October 31, 2024
Land controlled for future communities | $ | 242,738 |  |  | $ | 200,166 |
Land owned for future communities | 442,008 |  |  | 353,030 |
Operating communities | 10,310,127 |  |  | 9,159,729 |
| $ | 10,994,873 |  |  | $ | 9,712,925 |

Operating communities include communities offering homes for sale; communities that have sold all available home sites but have not completed delivery of the homes; and communities preparing to open for sale. The carrying value attributable to operating communities includes the cost of homes under construction, land and land development costs, the carrying cost of home sites in current and future phases of these communities, and the carrying cost of model homes.
Backlog consists of homes under contract but not yet delivered to our home buyers (“backlog”).
The amounts we have provided for inventory impairment charges and the expensing of costs that we believed not to be recoverable, included in home sales cost of revenues, are shown in the table below (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Land controlled for future communities | $ | 1,674 |  |  | $ | 1,288 |  |  | $ | 5,631 |  |  | $ | 2,759 |
Operating communities | 8,125 |  |  | 27,140 |  |  | 20,585 |  |  | 27,140 |
| $ | 9,799 |  |  | $ | 28,428 |  |  | $ | 26,216 |  |  | $ | 29,899 |

We recognized $1.8 million of impairment charges on land held for sale included in land sales and other cost of revenues during the six-month period ended April 30, 2025. No impairment charges on land held for sale were recognized in the three-month period ended April 30, 2025. We recognized $0.6 million of similar impairment charges during the three-month and six-month period ended April 30, 2024.
See Note 13, “Commitments and Contingencies,” for information regarding land purchase commitments.
At April 30, 2025, we evaluated our land purchase contracts, including those to acquire land for apartment developments, to determine whether any of the selling entities were variable interest entities (“VIEs”) and, if they were, whether we were the primary beneficiary of any of them. Under these land purchase contracts, we do not possess legal title to the land; our maximum exposure to loss is generally limited to deposits paid to the sellers and predevelopment costs incurred; and the creditors of the sellers generally have no recourse against us. At April 30, 2025, we determined that 334 land purchase contracts, with an aggregate purchase price of $6.74 billion, on which we had made aggregate deposits totaling $659.5 million, were VIEs, and that we were not the primary beneficiary of any VIE related to our land purchase contracts. At October 31, 2024, we determined that 297 land purchase contracts, with an aggregate purchase price of $5.59 billion, on which we had made aggregate deposits
9

totaling $522.1 million, were VIEs and that we were not the primary beneficiary of any VIE related to our land purchase contracts. However, at April 30, 2025 and October 31, 2024, certain contracts were accrued as we concluded we were economically compelled to purchase the land. See Note 6, “Accrued Expenses,” for information regarding liabilities related to consolidated inventory not owned.
Interest incurred, capitalized, and expensed, for the periods indicated, were as follows (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Interest capitalized, beginning of period | $ | 192,317 |  |  | $ | 198,291 |  |  | $ | 179,797 |  |  | $ | 190,550 |
Interest incurred | 35,653 |  |  | 32,481 |  |  | 69,855 |  |  | 66,440 |
Interest expensed to home sales cost of revenues | (30,311) |  |  | (34,740) |  |  | (50,387) |  |  | (58,318) |
Interest expensed to land sales and other cost of revenues | (624) |  |  | (726) |  |  | (638) |  |  | (1,020) |
Interest capitalized on investments in unconsolidated entities | (1,581) |  |  | (2,219) |  |  | (3,284) |  |  | (4,707) |
Previously capitalized interest on investments in unconsolidated entities transferred to inventory | 569 |  |  | 391 |  |  | 680 |  |  | 533 |
Interest capitalized, end of period | $ | 196,023 |  |  | $ | 193,478 |  |  | $ | 196,023 |  |  | $ | 193,478 |

3. Investments in Unconsolidated Entities
We have investments in various unconsolidated entities and our ownership interest in these investments ranges from 2.5% to 50%. These entities are structured as joint ventures and either: (i) develop land for the joint venture participants and for sale to outside builders (“Land Development Joint Ventures”); (ii) develop for-sale homes (“Home Building Joint Ventures”); or (iii) develop luxury for-rent residential apartments and single family homes, commercial space, and a hotel (“Rental Property Joint Ventures”).
The table below provides information as of April 30, 2025, regarding active joint ventures that we were invested in, by joint venture category ($ amounts in thousands):

| Land Development Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Other Joint Ventures |  | Total
Number of unconsolidated entities | 19 |  | 3 |  | 39 |  | 2 |  | 63
Investment in unconsolidated entities (1) | $ | 527,551 |  |  | $ | 73,853 |  |  | $ | 565,208 |  |  | $ | 5,690 |  |  | $ | 1,172,302 |
Number of unconsolidated entities with funding commitments by the Company | 9 |  | 1 |  | 17 |  | 1 |  |  | 28
Company’s remaining funding commitment to unconsolidated entities (2) | $ | 285,544 |  |  | $ | 8,646 |  |  | $ | 48,861 |  |  | $ | 6,199 |  |  | $ | 349,250 |

(1) Our total investment includes $134.7 million related to seven unconsolidated joint venture-related variable interests in VIEs and our maximum exposure to losses related to these VIEs is approximately $248.0 million as of April 30, 2025, inclusive of our investment in these joint ventures. Our ownership interest in such unconsolidated Joint Venture VIEs ranges from 25% to 50%.
(2) Our remaining funding commitment includes approximately $92.7 million related to our unconsolidated joint venture-related variable interests in VIEs.
10

The table below provides information as of October 31, 2024, regarding active joint ventures that we were invested in, by joint venture category ($ amounts in thousands):

| Land Development Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Other Joint Ventures |  | Total
Number of unconsolidated entities | 16 |  | 2 |  | 40 |  | 2 |  | 60
Investment in unconsolidated entities (1) | $ | 388,550 |  |  | $ | 58,403 |  |  | $ | 549,195 |  |  | $ | 11,269 |  |  | $ | 1,007,417 |
Number of unconsolidated entities with funding commitments by the Company | 6 |  | — |  | 20 |  | 1 |  |  | 27
Company’s remaining funding commitment to unconsolidated entities (2) | $ | 242,966 |  |  | $ | — |  |  | $ | 65,444 |  |  | $ | 4,427 |  |  | $ | 312,837 |

(1) Our total investment includes $158.0 million related to eight unconsolidated joint venture-related variable interests in VIEs and our maximum exposure to losses related to these VIEs is approximately $369.8 million as of October 31, 2024, inclusive of our investment in joint ventures. Our ownership interest in such unconsolidated Joint Venture VIEs ranges from 25% to 50%.
(2) Our remaining funding commitment includes approximately $109.6 million related to our unconsolidated joint venture-related variable interests in VIEs.
Certain joint ventures in which we have investments obtained debt financing to finance a portion of their activities. The table below provides information at April 30, 2025, regarding the debt financing obtained by category ($ amounts in thousands):

| Land Development Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  |  |  | Total
Number of joint ventures with debt financing | 13 |  | 1 |  | 37 |  |  |  | 51
Aggregate loan commitments | $ | 799,566 |  |  | $ | 63,500 |  |  | $ | 3,409,108 |  |  |  |  | $ | 4,272,174 |
Amounts borrowed under loan commitments | $ | 499,572 |  |  | $ | 5,359 |  |  | $ | 2,731,051 |  |  |  |  | $ | 3,235,982 |

The table below provides information at October 31, 2024, regarding the debt financing obtained by category ($ amounts in thousands):

| Land Development Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  |  |  | Total
Number of joint ventures with debt financing | 11 |  | 1 |  | 38 |  |  |  | 50
Aggregate loan commitments | $ | 639,589 |  |  | $ | 98,150 |  |  | $ | 3,538,148 |  |  |  |  | $ | 4,275,887 |
Amounts borrowed under loan commitments | $ | 381,614 |  |  | $ | 47,903 |  |  | $ | 2,751,201 |  |  |  |  | $ | 3,180,718 |

More specific and/or recent information regarding our investments in, advances to, and future commitments to these entities is provided below.
New Joint Ventures

The table below provides information on joint ventures entered into during the six-months ended April 30, 2025 ($ amounts in thousands):

| Land Development Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  |
Number of unconsolidated joint ventures entered into during the period | 3 |  | 1 |  | 2 |  |  |
Aggregate joint venture fair value at formation date | $ | 152,700 |  |  | $ | 15,800 |  |  | $ | 31,100 |  |  |
Investment balance at April 30, 2025 | $ | 84,076 |  |  | $ | 8,534 |  |  | $ | 7,727 |  |  |

There were no new joint ventures entered into during the six-months ended April 30, 2024.
Results of Operations and Intra-entity Transactions
From time to time, certain of our land development and rental property joint ventures sell assets to unrelated parties or to our joint venture partners. In the three-month and six-month periods ended April 30, 2025, two of our Rental Property Joint Ventures sold their assets and we recognized $15.5 million and $18.2 million, respectively, in “Income (loss) from
11

unconsolidated entities,” representing our proportionate share of the gains. In the three-month and six-month periods ended April 30, 2024, one of our Rental Property Joint Ventures sold its assets. We recognized $21.0 million, representing our proportionate share of the gain.
In addition, in the six-month period ended April 30, 2025, we sold our ownership interest in one of our Rental Property Joint Ventures and recognized a gain of $2.7 million, which is included in “Income (loss) from unconsolidated entities” in our Condensed Consolidated Statements of Operations and Comprehensive Income. No similar transactions occurred in the three-month period ended April 30, 2025 or the three-month and six-month periods ended April 30, 2024.
In the three-month periods ended April 30, 2025 and 2024, we purchased land from unconsolidated entities, principally related to our acquisition of lots from our Land Development Joint Ventures, totaling $36.7 million and $35.0 million, respectively. In the six-month periods ended April 30, 2025 and 2024, we purchased land from unconsolidated entities, principally related to our acquisition of lots from our Land Development Joint Ventures, totaling $53.9 million and $61.9 million, respectively. Our share of income from the lots we acquired was insignificant in each period.
In our normal course of business, we may contribute land to certain of our joint ventures in exchange for an ownership interest. In the three-month and six-month periods ended April 30, 2025, we sold land to unconsolidated entities, which principally involved land sales to Home Building and Rental Property Joint Ventures, for $8.6 million and $25.7 million, respectively. These amounts are included in “Land sales and other revenue” on our Condensed Consolidated Statements of Operations and Comprehensive Income and were sold at our land cost basis. No similar land sales to unconsolidated entities occurred in the three-month or six-month periods ended April 30, 2024.
Guarantees
The unconsolidated entities in which we have investments generally finance their activities with a combination of partner equity and debt financing. In some instances, we have guaranteed portions of the debt of unconsolidated entities. These guarantees may include any or all of the following: (i) project completion guarantees, including any cost overruns; (ii) repayment guarantees, generally covering a percentage of the outstanding loan; (iii) carry cost guarantees, which cover costs such as interest, real estate taxes, and insurance; (iv) an environmental indemnity provided to the lender that holds the lender harmless from and against losses arising from the discharge of hazardous materials from the property and non-compliance with applicable environmental laws; and (v) indemnification of the lender from “bad boy acts” of the unconsolidated entity or its partners.
In some instances, we and our joint venture partner have provided joint and several guarantees in connection with loans to unconsolidated entities. In these situations, 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 an 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 venture.
Information regarding certain of the Company’s unconsolidated entities’ outstanding debt obligations, loan commitments and our guarantees thereon are as follows ($ amounts in thousands):

| April 30, 2025 | October 31, 2024 |  |  |
Loan commitments in the aggregate | $ | 2,676,700 |  | $ | 3,031,500 |  |  |  |
Our maximum estimated exposure under repayment and carry cost guarantees if the full amount of the debt obligations were borrowed (1) | $ | 581,800 |  | $ | 646,900 |  |  |  |
Debt obligations borrowed in the aggregate | $ | 1,915,400 |  | $ | 2,204,300 |  |  |  |
Our maximum estimated exposure under repayment and carry cost guarantees of the debt obligations borrowed | $ | 523,000 |  | $ | 560,400 |  |  |  |
Estimated fair value of guarantees provided by us related to debt and other obligations | $ | 17,100 |  | $ | 17,400 |  |  |  |
Terms of guarantees | 1 month - 8.7 years | 1 month - 3.0 years |  |  |

(1) At April 30, 2025 and October 31, 2024, our maximum estimated exposure under repayment and carry cost guarantees includes approximately $20.6 million and $102.3 million related to our unconsolidated joint venture VIEs.
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The maximum exposure estimates presented above do not take into account any recoveries from the underlying collateral or any reimbursement from our partners, nor do they include any potential exposures related to project completion guarantees or the indemnities noted above, which are not estimable. To date, we have not been required to make any significant payment under any of the guarantees described above.
Variable Interest Entities
We have both unconsolidated and consolidated joint venture-related variable interests in VIEs. Information regarding our involvement in unconsolidated joint-venture related variable interests in VIEs has been disclosed throughout information presented above.
The table below provides information as of April 30, 2025 and October 31, 2024, regarding our consolidated joint venture-related variable interests in VIEs ($ amounts in thousands):

| Balance Sheet Classification | April 30, 2025 | October 31, 2024
Number of Joint Venture VIEs that the Company is the primary beneficiary and consolidates |  | 5 |  | 5 |
Carrying value of consolidated VIEs assets | Receivables, prepaid expenses and other assets and Investments in unconsolidated entities | $ | 117,300 |  | $ | 105,300 |
Our partners’ interests in consolidated VIEs | Noncontrolling interest | $ | 9,700 |  | $ | 9,800 |

Our ownership interest in the above consolidated Joint Venture VIEs ranges from 75% to 98%. The income/losses generated from such joint ventures were not material.
As shown above, we are the primary beneficiary of certain VIEs due to our controlling financial interest in such ventures as we have the power to direct the activities that most significantly impact the joint ventures’ performance and the obligation to absorb expected losses or receive benefits from the joint ventures. The assets of these VIEs can only be used to settle the obligations of the VIEs. In addition, in certain of the joint ventures, in the event additional contributions are required to be made to the joint ventures prior to the admission of any additional investor at a future date, we would fund 100% of such contributions, including our partner’s pro rata share, which we expect would be funded through an interest-bearing loan. For other VIEs, we are not the primary beneficiary because the power to direct the activities of such VIEs that most significantly impact their performance was either shared by us and such VIE’s other partners or such activities were controlled by our partner. For VIEs where the power to direct significant activities is shared, business plans, budgets, and other major decisions are required to be unanimously approved by all partners. Management and other fees earned by us are nominal and believed to be at market rates, and there is no significant economic disproportionality between us and other partners.
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4. Receivables, Prepaid Expenses, and Other Assets
Receivables, prepaid expenses, and other assets at April 30, 2025 and October 31, 2024, consisted of the following (amounts in thousands):

| April 30, 2025 |  | October 31, 2024
Expected recoveries from insurance carriers and others | $ | 102,535 |  |  | $ | 109,569 |
Improvement cost receivables | 46,219 |  |  | 41,173 |
Escrow cash held by our wholly owned captive title company | 69,762 |  |  | 62,048 |
Properties held for rental apartment and commercial development | 113,204 |  |  | 116,802 |
Prepaid expenses | 33,745 |  |  | 40,432 |
Right-of-use assets | 109,555 |  |  | 108,311 |
Derivative assets | 8,593 |  |  | 18,398 |
Other | 99,809 |  |  | 93,878 |
| $ | 583,422 |  |  | $ | 590,611 |

5. Loans Payable, Senior Notes, and Mortgage Company Loan Facilities
Loans Payable
At April 30, 2025 and October 31, 2024, loans payable consisted of the following (amounts in thousands):

| April 30, 2025 |  | October 31, 2024
Senior unsecured term loan | $ | 650,000 |  |  | $ | 650,000 |
Loans payable – other | 406,175 |  |  | 437,969 |
Deferred issuance costs | (3,465) |  |  | (2,152) |
| $ | 1,052,710 |  |  | $ | 1,085,817 |

Senior Unsecured Term Loan
We are party to a $650.0 million senior unsecured term loan facility (the “Term Loan Facility”) with a syndicate of banks. On February 7, 2025, we entered into an amendment to the Term Loan Facility to extend the maturity date of all $650.0 million of outstanding term loans to February 7, 2030. No principal payments are required before the stated maturity date. Under the Term Loan Facility, we may select interest rates equal to (i) the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin, (ii) the base rate (as defined in the agreement) plus an applicable margin, or (iii) the federal funds/Euro rate (as defined in the agreement) plus an applicable margin, in each case, based on our leverage ratio. At April 30, 2025, the interest rate on the Term Loan Facility was 5.43% per annum. Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries are guarantors under the Term Loan Facility. The Term Loan Facility contains substantially the same financial covenants as the Revolving Credit Facility described below.
In November 2020, we entered into five interest rate swap transactions to hedge $400.0 million of the Term Loan Facility through October 31, 2025. The interest rate swaps effectively fix the interest cost on the $400.0 million at 0.369% plus the spread set forth in the pricing schedule in the Term Loan Facility, which was 1.15% as of April 30, 2025. These interest rate swaps were designated as cash flow hedges.
Revolving Credit Facility
We are party to a $2.35 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”) with a syndicate of banks. On February 7, 2025, we increased the total amount of revolving loans and commitments available under the Revolving Credit Facility from $1.96 billion to $2.35 billion and extended the maturity date to February 7, 2030. The Revolving Credit Facility provides us with a committed borrowing capacity of $2.35 billion, which we have the ability to increase 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.
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Both our Revolving Credit Facility and Term Loan Facility require us to maintain certain financial covenants, which include not exceeding a defined maximum leverage ratio and maintaining a minimum tangible net worth. In addition, our ability to repurchase our common stock and pay cash dividends is limited by these agreements. However, during the three-month and six-month periods ended April 30, 2025, these limitations did not meaningfully restrict our ability to pay cash dividends or repurchase stock. We were in compliance with all covenants and requirements as of April 30, 2025.
At April 30, 2025, we had no outstanding borrowings under the Revolving Credit Facility and had approximately $159.0 million of outstanding letters of credit that were issued under the Revolving Credit Facility. At April 30, 2025, the interest rate on outstanding borrowings under the Revolving Credit Facility, which is a variable rate, would have been 5.58% per annum.
Loans Payable – Other
“Loans payable – other” primarily represents purchase money mortgages on properties we acquired that the seller had financed, project-level financing, and various revenue bonds that were issued by government entities on our behalf to finance community infrastructure and our manufacturing facilities. At April 30, 2025, the weighted-average interest rate on “Loans payable – other” was 5.53% per annum.
Senior Notes
At April 30, 2025, we had four issues of fixed rate senior notes outstanding with an aggregate principal amount of $1.60 billion.
Mortgage Company Loan Facilities
During fiscal 2023 and until December 2023, our wholly-owned mortgage subsidiary, Toll Brothers Mortgage Company (“TBMC”), was party to a mortgage warehousing facility that contained substantially the same terms as those described in the paragraph below.
On December 5, 2023, TBMC executed a new Warehousing Agreement (“New Warehousing Agreement”) with a bank that provides for loan purchases up to $75.0 million, subject to certain sublimits. In addition, the New Warehousing Agreement, provides for an accordion feature under which TBMC may request that the aggregate commitments under the New Warehousing Agreement be increased to an amount up to $150.0 million for a short period of time. The New Warehousing Agreement is accounted for as a secured borrowing under ASC 860, “Transfers and Servicing.” TBMC is also subject to an under-usage fee based on outstanding balances, as defined in the New Warehousing Agreement. Prior to its scheduled expiration on December 3, 2024, the New Warehousing Agreement was amended to extend the expiration date to December 2, 2025. No other changes were made to the terms of the New Warehousing Agreement as a result of the amendment. The New Warehousing Agreement bears interest at SOFR plus 1.75% per annum (with a SOFR floor of 2.50%). At April 30, 2025, the interest rate on the New Warehousing Agreement was 6.07% per annum.
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6. Accrued Expenses
Accrued expenses at April 30, 2025 and October 31, 2024 consisted of the following (amounts in thousands):

| April 30, 2025 |  | October 31, 2024
Land development and construction | $ | 327,227 |  |  | $ | 356,613 |
Liabilities related to consolidated inventory not owned | 773,055 |  |  | 388,778 |
Compensation and employee benefits | 179,351 |  |  | 208,394 |
Escrow liability associated with our wholly owned captive title company | 69,752 |  |  | 62,038 |
Self-insurance | 245,293 |  |  | 242,306 |
Warranty | 192,613 |  |  | 189,258 |
Lease liabilities | 129,307 |  |  | 128,588 |
Deferred income | 52,370 |  |  | 51,138 |
Interest | 30,986 |  |  | 29,669 |
Commitments to unconsolidated entities | 38,873 |  |  | 38,661 |
Other | 49,761 |  |  | 57,405 |
| $ | 2,088,588 |  |  | $ | 1,752,848 |

The table below provides, for the periods indicated, a reconciliation of the changes in our warranty accrual (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Balance, beginning of period | $ | 189,374 |  |  | $ | 202,920 |  |  | $ | 189,258 |  |  | $ | 206,171 |
Additions – homes closed during the period | 11,654 |  |  | 9,143 |  |  | 19,796 |  |  | 14,965 |
Change in accruals for homes closed in prior years – net | 1,091 |  |  | 9,344 |  |  | 4,315 |  |  | 12,145 |
Charges incurred | (9,506) |  |  | (14,690) |  |  | (20,756) |  |  | (26,564) |
Balance, end of period | $ | 192,613 |  |  | $ | 206,717 |  |  | $ | 192,613 |  |  | $ | 206,717 |

7. Income Taxes
We recorded income tax provisions of $125.1 million and $168.2 million for the three months ended April 30, 2025 and 2024, respectively. The effective tax rate was 26.2% for the three months ended April 30, 2025, compared to 25.9% for the three months ended April 30, 2024. We recorded income tax provisions of $168.7 million and $239.8 million for the six months 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. The income tax provisions for all periods included the provision for state income taxes, interest accrued on anticipated tax assessments, excess tax benefits related to stock-based compensation, and other permanent differences.
We are subject to state tax in the jurisdictions in which we operate. We estimate our state tax liability based upon the individual taxing authorities’ regulations, estimates of income by taxing jurisdiction, and our ability to utilize certain tax-saving strategies. Based on our estimate of the allocation of income or loss among the various taxing jurisdictions and changes in tax regulations and their impact on our tax strategies, we estimate that our state income tax rate for the full fiscal year 2025 will be approximately 5.7%. Our state income tax rate for the full fiscal year 2024 was 6.3%.
At April 30, 2025, we had $22.1 million of gross unrecognized tax benefits, including interest and penalties. If these unrecognized tax benefits were to reverse in the future, they would have a beneficial impact on our effective tax rate at that time. During the next 12 months, it is reasonably possible that our unrecognized tax benefits will change, but we are not able to provide a range of such change. The possible changes would be principally due to the expiration of tax statutes, settlements with taxing jurisdictions, increases due to new tax positions taken, and the accrual of estimated interest and penalties.
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8. Stock-Based Benefit Plans
We grant various types of restricted stock units to our employees and our non-employee directors. We also previously granted stock options to certain of our employees and non-employee directors, but discontinued this practice in fiscal year 2023. Additionally, we have an employee stock purchase plan that allows employees to purchase our stock at a discount. Information regarding the amount of total stock-based compensation expense and tax benefit recognized by us, for the periods indicated, is as follows (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Total stock-based compensation expense recognized | $ | 4,773 |  |  | $ | 3,889 |  |  | $ | 22,795 |  |  | $ | 22,139 |
Income tax benefit recognized | $ | 1,607 |  |  | $ | 1,466 |  |  | $ | 5,765 |  |  | $ | 5,676 |

At April 30, 2025 and October 31, 2024, the aggregate unamortized value of unvested stock-based compensation awards was approximately $31.6 million and $21.8 million, respectively.
9. Stockholders’ Equity
Stock Repurchase Program
From time to time, our Board of Directors has renewed its authorization to repurchase up to 20 million shares of our common stock in open market transactions, privately negotiated transactions (including accelerated share repurchases), issuer tender offers or other financial arrangements or transactions for general corporate purposes, including to obtain shares for the Company’s equity awards and other employee benefit plans. Most recently, on December 13, 2023, our Board of Directors renewed its authorization to repurchase 20 million shares of our common stock and terminated, effective the same date, the existing authorization that had been in effect since May 17, 2022. The Board of Directors did not fix any expiration date for this repurchase program.
The table below provides, for the periods indicated, information about our share repurchase programs:

| Three months ended April 30, | Six months ended April 30,
| 2025 |  | 2024 | 2025 |  | 2024
Number of shares purchased (in thousands) | 1,645 |  |  | 1,502 |  | 1,832 |  |  | 1,503 |
Average price per share (1) | $ | 107.84 |  |  | $ | 120.60 |  | $ | 109.80 |  |  | $ | 120.59 |
Remaining authorization at April 30 (in thousands) | 13,255 |  |  | 18,498 |  | 13,255 |  |  | 18,498 |

(1) Average price per share includes costs associated with the purchases, including the excise tax accrued on our share repurchases as a result of the Inflation Reduction Act of 2022, as applicable.
Cash Dividends
On March 11, 2025, our Board of Directors approved an increase in our quarterly cash dividend from $0.23 per share to $0.25 per share. During the three-month periods ended April 30, 2025 and 2024, we declared and paid cash dividends of $0.25 and $0.23 per share, respectively, to our shareholders. During the six-month periods ended April 30, 2025 and 2024, we declared and paid cash dividends of $0.48 and $0.44 per share, respectively, to our shareholders.
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Accumulated Other Comprehensive Income
The changes in each component of accumulated other comprehensive income (“AOCI”), for the periods indicated, were as follows (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Employee Retirement Plans |  |  |  |  |  |  |
Beginning balance | $ | 1,171 |  |  | $ | 2,996 |  |  | $ | 1,018 |  |  | $ | 3,080 |
Losses (gains) reclassified from AOCI to net income (1) | 206 |  |  | (114) |  |  | 411 |  |  | (227) |
Less: Tax (benefit) expense (2) | (52) |  |  | 29 |  |  | (104) |  |  | 58 |
Net losses (gains) reclassified from AOCI to net income | 154 |  |  | (85) |  |  | 307 |  |  | (169) |
Other comprehensive income (loss) – net of tax | 154 |  |  | (85) |  |  | 307 |  |  | (169) |
Ending balance | $ | 1,325 |  |  | $ | 2,911 |  |  | $ | 1,325 |  |  | $ | 2,911 |
Derivative Instruments |  |  |  |  |  |  |
Beginning balance | $ | 29,201 |  |  | $ | 34,016 |  |  | $ | 30,259 |  |  | $ | 37,830 |
Gains on derivative instruments | 98 |  |  | 6,378 |  |  | 765 |  |  | 2,810 |
Less: Tax (expense) benefit | (25) |  |  | (1,964) |  |  | (193) |  |  | (1,059) |
Net gains on derivative instruments | 73 |  |  | 4,414 |  |  | 572 |  |  | 1,751 |
Gains reclassified from AOCI to net income (3) | (3,305) |  |  | (2,496) |  |  | (5,388) |  |  | (4,039) |
Less: Tax expense (2) | 836 |  |  | 982 |  |  | 1,362 |  |  | 1,374 |
Net gains reclassified from AOCI to net income | (2,469) |  |  | (1,514) |  |  | (4,026) |  |  | (2,665) |
Other comprehensive loss – net of tax | (2,396) |  |  | 2,900 |  |  | (3,454) |  |  | (914) |
Ending balance | $ | 26,805 |  |  | $ | 36,916 |  |  | $ | 26,805 |  |  | $ | 36,916 |
Total AOCI ending balance | $ | 28,130 |  |  | $ | 39,827 |  |  | $ | 28,130 |  |  | $ | 39,827 |

(1) Reclassified to “Other income – net”
(2) Reclassified to “Income tax provision”
(3) Reclassified to “Cost of revenues – home sales”
10. Earnings per Share Information
The table below provides, for the periods indicated, information pertaining to the calculation of earnings per share, common stock equivalents, weighted-average number of antidilutive options and restricted stock units, and shares issued (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Numerator: |  |  |  |  |  |  |
Net income as reported | $ | 352,447 |  |  | $ | 481,617 |  |  | $ | 530,150 |  |  | $ | 721,175 |
Denominator: |  |  |  |  |  |  |
Basic weighted-average shares | 99,890 |  |  | 104,794 |  |  | 100,360 |  |  | 104,958 |
Common stock equivalents (1) | 695 |  |  | 1,009 |  |  | 848 |  |  | 1,076 |
Diluted weighted-average shares | 100,585 |  |  | 105,803 |  |  | 101,208 |  |  | 106,034 |
Other information: |  |  |  |  |  |  |
Weighted-average number of antidilutive options and restricted stock units (2) | 123 |  |  | 7 |  |  | 126 |  |  | 72 |
Shares issued under stock incentive and employee stock purchase plans | 11 |  |  | 154 |  |  | 379 |  |  | 675 |

(1) Common stock equivalents represent the dilutive effect of outstanding in-the-money stock options using the treasury stock method and shares expected to be issued upon the conversion of restricted stock units under our equity award programs.
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(2) Weighted-average number of antidilutive options and restricted stock units are based upon the average closing price of our common stock on the New York Stock Exchange for the period.
11. Fair Value Disclosures
Financial Instruments
The table below provides, as of the dates indicated, a summary of assets/(liabilities) related to our financial instruments, measured at fair value on a recurring basis (amounts in thousands):

|  |  |  | Fair value
Financial Instrument |  | Fair value hierarchy |  | April 30, 2025 |  | October 31, 2024
Mortgage Loans Held for Sale |  | Level 2 |  | $ | 195,651 |  |  | $ | 191,242 |
Forward Loan Commitments — Mortgage Loans Held for Sale |  | Level 2 |  | $ | (552) |  |  | $ | 2,152 |
Interest Rate Lock Commitments (“IRLCs”) |  | Level 2 |  | $ | 963 |  |  | $ | (962) |
Forward Loan Commitments — IRLCs |  | Level 2 |  | $ | (963) |  |  | $ | 962 |
Interest Rate Swap Contracts |  | Level 2 |  | $ | 7,630 |  |  | $ | 15,283 |

At April 30, 2025 and October 31, 2024, the carrying value of cash and cash equivalents, escrow cash held by our wholly owned captive title company, and customer deposits held in escrow approximated fair value.
The fair values of the interest rate swap contracts are included in “Receivables, prepaid expenses and other assets” in our Condensed Consolidated Balance Sheets and are determined using widely accepted valuation techniques including discounted cash flow analysis based on the expected cash flows of each swap contract. Although the Company has determined that the significant inputs, such as interest yield curve and discount rate, used to value its interest rate swap contracts fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our counterparties and our own credit risk utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of April 30, 2025 and October 31, 2024, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our interest rate swap contract positions and have determined that the credit valuation adjustments were not significant to the overall valuation of our interest rate swap contracts. As a result, we have determined that our interest rate swap contracts valuations in their entirety are classified in Level 2 of the fair value hierarchy.
Mortgage Loans Held for Sale
At the end of the reporting period, we determine the fair value of our mortgage loans held for sale, interest rate lock commitments, and the forward loan commitments we have entered into as a hedge against the interest rate risk of our mortgage loans and commitments using the market approach to determine fair value.
The table below provides, as of the dates indicated, the aggregate unpaid principal and fair value of mortgage loans held for sale (amounts in thousands):

| Aggregate unpaid principal balance |  | Fair value |  | Fair value greater (less) than principal balance
At April 30, 2025 | $ | 195,204 |  |  | $ | 195,651 |  |  | $ | 447 |
At October 31, 2024 | $ | 193,333 |  |  | $ | 191,242 |  |  | $ | (2,091) |

Inventory
We recognize inventory impairment charges and land impairment charges based on the difference in the carrying value of the inventory and its fair value at the time of the evaluation. The fair value of the aforementioned inventory was determined using Level 3 criteria. Estimated fair value is primarily determined by discounting the estimated future cash flow of each community. In determining the fair value related to land impairments, we consider recent offers received, prices for land in recent comparable sales transactions, and other factors. We record land impairments related to land parcels we plan to sell to third parties within land sales and other cost of revenues. See Note 1, “Significant Accounting Policies – Inventory,” in our 2024 Form 10-K for additional information regarding our methodology for determining fair value. Impairments on operating communities were not significant during the three-month and six-month periods ended April 30, 2025 and 2024 and, accordingly, we did not disclose the ranges of certain quantitative unobservable inputs utilized in determining the fair value of such impaired operating communities.
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Debt
The table below provides, as of the dates indicated, the book value, excluding any bond discounts, premiums, and deferred issuance costs, and estimated fair value of our debt (amounts in thousands):

|  |  | April 30, 2025 |  | October 31, 2024
| Fair value hierarchy |  | Book value |  | Estimated fair value |  | Book value |  | Estimated fair value
Loans payable (1) | Level 2 |  | $ | 1,056,175 |  |  | $ | 1,042,184 |  |  | $ | 1,087,969 |  |  | $ | 1,069,577 |
Senior notes (2) | Level 1 |  | 1,600,000 |  |  | 1,580,310 |  |  | 1,600,000 |  |  | 1,572,580 |
Mortgage company loan facility (3) | Level 2 |  | 150,000 |  |  | 150,000 |  |  | 150,000 |  |  | 150,000 |
|  |  | $ | 2,806,175 |  |  | $ | 2,772,494 |  |  | $ | 2,837,969 |  |  | $ | 2,792,157 |

(1) The estimated fair value of loans payable was based upon contractual cash flows discounted at interest rates that we believed were available to us for loans with similar terms and remaining maturities as of the applicable valuation date.
(2) The estimated fair value of our senior notes is based upon their market prices as of the applicable valuation date.
(3) We believe that the carrying value of our mortgage company loan borrowings approximates their fair value.
12. Other Income – Net
The table below provides the significant components of “Other income – net” (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Interest income | $ | 7,054 |  |  | $ | 9,007 |  |  | $ | 16,023 |  |  | $ | 19,475 |
Income from ancillary businesses | 9,068 |  |  | 4,907 |  |  | 8,189 |  |  | 5,747 |
Management fee income earned by home building operations | 972 |  |  | 1,157 |  |  | 1,771 |  |  | 2,306 |
Other | (758) |  |  | 5,295 |  |  | 1,347 |  |  | 4,756 |
Total other income – net | $ | 16,336 |  |  | $ | 20,366 |  |  | $ | 27,330 |  |  | $ | 32,284 |

Income from ancillary businesses is generated by our mortgage, title, landscaping, smart home technology, apartment living, city living, and golf course and country club operations. The table below provides, for the periods indicated, revenues and expenses for our ancillary businesses (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Revenues | $ | 47,580 |  |  | $ | 39,159 |  |  | $ | 84,363 |  |  | $ | 71,460 |
Expenses | $ | 38,512 |  |  | $ | 34,252 |  |  | $ | 76,174 |  |  | $ | 65,713 |

In the three-month and six-month periods ending April 30, 2024, our smart home technology business recognized a $4.4 million gain from a bulk sale of security monitoring accounts, which is included in income from ancillary businesses above. No similar amounts were recognized in the three-month and six-month periods ending April 30, 2025.
In the six-month period ending April 30, 2025, we recognized $4.4 million of net write-offs related to previously incurred costs that we believed not to be recoverable in our apartment rental development business operations. In the three-month and six-month periods ending April 30, 2024, we recognized $5.0 million of net write-offs related to previously incurred costs that we believed not to be recoverable in our apartment rental development business operations. No similar charges were recognized in the three-month period ending April 30, 2025.
In the three-month periods ended April 30, 2025 and 2024, income from ancillary businesses included management fees earned on our apartment rental development, high-rise urban luxury condominium, and other unconsolidated entities and operations totaling $6.1 million and $9.5 million, respectively. In the six-month periods ended April 30, 2025 and 2024, income from ancillary businesses included management fees earned on our apartment rental development, high-rise urban luxury condominium, and other unconsolidated entities and operations totaling $13.2 million and $17.1 million, respectively.
In the three-month and six-month periods ending April 30, 2024, we recognized 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, which is included in “Other” above. No similar amounts were recognized in the three-month and six-month periods ending April 30, 2025.
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13. Commitments and Contingencies
Legal Proceedings
We are involved in various claims and litigation arising principally in the ordinary course of business. We believe that adequate provision for resolution of all current claims and pending litigation has been made and that the disposition of these matters will not have a material adverse effect on our results of operations and liquidity or on our financial condition.
Land Purchase Contracts
Generally, our agreements to acquire land parcels do not require us to purchase those land parcels, although we, in some cases, forfeit any deposit balance outstanding if and when we terminate an agreement. Information regarding our land purchase contracts, as of the dates indicated, is provided in the table below (amounts in thousands):

| April 30, 2025 |  | October 31, 2024
Aggregate purchase price: |  |  |
Unrelated parties | $ | 7,174,155 |  |  | $ | 6,073,847 |
Unconsolidated entities that the Company has investments in | 76,120 |  |  | 26,783 |
Total | $ | 7,250,275 |  |  | $ | 6,100,630 |
Deposits against aggregate purchase price | $ | 700,057 |  |  | $ | 549,195 |
Additional cash required to acquire land | 6,550,218 |  |  | 5,551,435 |
Total | $ | 7,250,275 |  |  | $ | 6,100,630 |
Amount of additional cash required to acquire land included in accrued expenses | $ | 767,556 |  |  | $ | 382,277 |

In addition, we 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 prices of these home sites will be determined at a future date.
At April 30, 2025, we also had purchase contracts to acquire land for apartment developments of approximately $236.5 million, of which we had outstanding deposits in the amount of $11.2 million. We intend to acquire and develop these projects in joint ventures with unrelated parties in the future.
We have additional land parcels under option that have been excluded from the aggregate purchase price since we do not believe that we will complete the purchase of these land parcels and no additional funds will be required from us to terminate these contracts.
Investments in Unconsolidated Entities
At April 30, 2025, we had investments in a number of unconsolidated entities, were committed to invest or advance additional funds, and had guaranteed a portion of the indebtedness and/or loan commitments of these entities. See Note 3, “Investments in Unconsolidated Entities,” for more information regarding our commitments to these entities.
Surety Bonds and Letters of Credit
At April 30, 2025, we had outstanding surety bonds amounting to $866.0 million, primarily related to our obligations to governmental entities to construct improvements in our communities. We have an additional $402.6 million of surety bonds outstanding that guarantee other obligations. Although significant construction and development activities have been completed related to these improvements, the bonds are generally not released until all construction and development activities are completed and acceptance by the counterparty is received. The aggregate amount of surety bonds outstanding is in excess of the estimated cost of the remaining work to be performed. We do not believe that it is probable that any outstanding bonds will be drawn upon.
At April 30, 2025, we had outstanding letters of credit of $159.0 million under our Revolving Credit Facility and $6.3 million under other letter of credit facilities. These letters of credit were issued to secure various financial obligations, including insurance policy deductibles and other claims, land deposits, and security to complete improvements in communities in which we are operating. We do not believe that it is probable that any outstanding letters of credit will be drawn upon.
At April 30, 2025, we had provided financial guarantees of $61.9 million related to fronted letters of credit to secure obligations related to certain of our insurance policy deductibles and other claims.
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Backlog
At April 30, 2025, we had agreements of sale outstanding to deliver 6,063 homes with an aggregate sales value of $6.84 billion.
Mortgage Commitments
Our mortgage subsidiary provides mortgage financing for a portion of our home closings. For those home buyers to whom our mortgage subsidiary provides mortgages, we determine whether the home buyer qualifies for the mortgage based upon information provided by the home buyer and other sources. For those home buyers who qualify, our mortgage subsidiary provides the home buyer with a mortgage commitment that specifies the terms and conditions of a proposed mortgage loan based upon then-current market conditions. Prior to the actual closing of the home and funding of the mortgage, the home buyer will lock in an interest rate based upon the terms of the commitment. At the time of rate lock, our mortgage subsidiary agrees to sell the proposed mortgage loan to one of several outside recognized mortgage financing institutions (“investors”) that is willing to honor the terms and conditions, including interest rate, committed to the home buyer. We believe that these investors have adequate financial resources to honor their commitments to our mortgage subsidiary.
Mortgage loans are sold to investors with limited recourse provisions derived from industry-standard representations and warranties in the relevant agreements. These representations and warranties primarily involve the absence of misrepresentations by the borrower or other parties, the appropriate underwriting of the loan and in some cases, a required minimum number of payments to be made by the borrower. The Company generally does not retain any other continuing interest related to mortgage loans sold in the secondary market.
Information regarding our mortgage commitments, as of the dates indicated, is provided in the table below (amounts in thousands):

| April 30, 2025 |  | October 31, 2024
Aggregate mortgage loan commitments: |  |  |
IRLCs | $ | 310,413 |  |  | $ | 168,829 |
Non-IRLCs | 1,637,572 |  |  | 1,668,455 |
Total | $ | 1,947,985 |  |  | $ | 1,837,284 |
Investor commitments to purchase: |  |  |
IRLCs | $ | 310,413 |  |  | $ | 168,829 |
Mortgage loans held for sale | 186,985 |  |  | 182,834 |
Total | $ | 497,398 |  |  | $ | 351,663 |

14. Information on Segments
We operate in the following five geographic segments, with operations generally located in the states listed below:
•The North region: Connecticut, Delaware, Illinois, Massachusetts, Michigan, New Jersey, New York and Pennsylvania;
•The Mid-Atlantic region: Georgia, Maryland, North Carolina, Tennessee and Virginia;
•The South region: Florida, South Carolina and Texas;
•The Mountain region: Arizona, Colorado, Idaho, Nevada and Utah;
•The Pacific region: California, Oregon and Washington.
Our geographic reporting segments are consistent with how our chief operating decision makers are assessing operating performance and allocating capital.
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Revenues and income (loss) before income taxes for each of our segments, for the periods indicated, were as follows (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Revenues: |  |  |  |  |  |  |
North | $ | 378,489 |  |  | $ | 335,215 |  |  | $ | 633,201 |  |  | $ | 607,872 |
Mid-Atlantic | 321,757 |  |  | 376,110 |  |  | 557,997 |  |  | 640,264 |
South | 758,635 |  |  | 658,374 |  |  | 1,264,908 |  |  | 1,191,260 |
Mountain | 755,874 |  |  | 603,568 |  |  | 1,312,578 |  |  | 1,056,949 |
Pacific | 492,184 |  |  | 674,687 |  |  | 779,348 |  |  | 1,083,679 |
Total home building | 2,706,939 |  |  | 2,647,954 |  |  | 4,548,032 |  |  | 4,580,024 |
Corporate and other | (486) |  |  | (934) |  |  | (803) |  |  | (1,168) |
| 2,706,453 |  |  | 2,647,020 |  |  | 4,547,229 |  |  | 4,578,856 |
Land sales and other revenues (1) | 32,624 |  |  | 190,466 |  |  | 50,979 |  |  | 206,478 |
Total consolidated | $ | 2,739,077 |  |  | $ | 2,837,486 |  |  | $ | 4,598,208 |  |  | $ | 4,785,334 |
Income (loss) before income taxes: |  |  |  |  |  |  |
North | $ | 82,168 |  |  | $ | 51,422 |  |  | $ | 110,361 |  |  | $ | 84,443 |
Mid-Atlantic | 63,228 |  |  | 254,525 |  |  | 96,657 |  |  | 304,043 |
South | 162,842 |  |  | 126,465 |  |  | 253,258 |  |  | 224,895 |
Mountain | 137,928 |  |  | 81,950 |  |  | 218,668 |  |  | 162,114 |
Pacific | 89,703 |  |  | 170,881 |  |  | 127,816 |  |  | 274,534 |
Total home building | 535,869 |  |  | 685,243 |  |  | 806,760 |  |  | 1,050,029 |
Corporate and other | (58,366) |  |  | (35,464) |  |  | (107,875) |  |  | (89,089) |
Total consolidated | $ | 477,503 |  |  | $ | 649,779 |  |  | $ | 698,885 |  |  | $ | 960,940 |

(1) Included in the three and six months ended April 30, 2024 is a $185.0 million land sale related to our Mid-Atlantic segment, as further discussed in Note 1, “Significant Accounting Policies”.
“Corporate and other” is comprised principally of general corporate expenses such as our executive offices; the corporate finance, accounting, audit, tax, human resources, risk management, information technology, marketing, and legal groups; interest income; income from certain of our ancillary businesses, including our apartment rental development business and our high-rise urban luxury condominium operations, and income from our Rental Property Joint Ventures and Other Joint Ventures.
Land sales and other revenues for each of our segments, for the periods indicated, were as follows (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
North | $ | — |  |  | $ | 140 |  |  | 17,155 |  |  | 140 |
Mid-Atlantic | 23,427 |  |  | 185,176 |  |  | 23,683 |  |  | 192,971 |
South | 640 |  |  | 2,745 |  |  | 1,477 |  |  | 6,385 |
Mountain | — |  |  | — |  |  | — |  |  | 4,577 |
Pacific | — |  |  | — |  |  | 107 |  |  | — |
Total home building | 24,067 |  |  | 188,061 |  |  | 42,422 |  |  | 204,073 |
Corporate and other | 8,557 |  |  | 2,405 |  |  | 8,557 |  |  | 2,405 |
Total consolidated | $ | 32,624 |  |  | $ | 190,466 |  |  | $ | 50,979 |  |  | $ | 206,478 |

“Corporate and other” is comprised principally of activities from our apartment rental development business.
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Total assets for each of our segments, as of the dates indicated, are shown in the table below (amounts in thousands):

| April 30, 2025 |  | October 31, 2024
North | $ | 1,526,124 |  |  | $ | 1,425,738 |
Mid-Atlantic | 1,623,888 |  |  | 1,444,951 |
South | 2,996,835 |  |  | 2,514,446 |
Mountain | 3,162,007 |  |  | 2,950,806 |
Pacific | 2,720,556 |  |  | 2,266,829 |
Total home building | 12,029,410 |  |  | 10,602,770 |
Corporate and other | 2,166,414 |  |  | 2,765,162 |
Total consolidated | $ | 14,195,824 |  |  | $ | 13,367,932 |

“Corporate and other” is comprised principally of cash and cash equivalents, restricted cash, investments in our Rental Property Joint Ventures, expected recoveries from insurance carriers and suppliers, manufacturing facilities, our apartment rental development and high-rise urban luxury condominium operations, and our mortgage and title subsidiaries.
The amounts we have provided for inventory impairment charges and the expensing of costs that we believe not to be recoverable, for the periods indicated, which are included in home sales cost of revenues, were as follows (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
North | $ | 580 |  |  | $ | 38 |  |  | $ | 785 |  |  | $ | 533 |
Mid-Atlantic | 298 |  |  | 2,703 |  |  | 4,065 |  |  | 2,895 |
South | 620 |  |  | 647 |  |  | 4,979 |  |  | 727 |
Mountain | 7,301 |  |  | 25,000 |  |  | 14,795 |  |  | 25,674 |
Pacific | 1,000 |  |  | 40 |  |  | 1,592 |  |  | 70 |
Total consolidated | $ | 9,799 |  |  | $ | 28,428 |  |  | $ | 26,216 |  |  | $ | 29,899 |

We have also recognized $1.8 million of land impairment charges included in land sales and other cost of revenues during the six-month period ended April 30, 2025. No similar charges were incurred during the three-month period ended April 30, 2025. We recognized $0.6 million of similar charges during the three-month and six-month periods ended April 30, 2024, which was in our Mid-Atlantic segment.
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15. Supplemental Disclosure to Condensed Consolidated Statements of Cash Flows
The following are supplemental disclosures to the Condensed Consolidated Statements of Cash Flows, for the periods indicated (amounts in thousands):

|  | Six months ended April 30,
|  | 2025 |  | 2024
Cash flow information: |  |  |  |
Income tax paid – net |  | $ | 123,954 |  |  | $ | 186,108 |
Noncash activity: |  |  |  |
Cost of inventory acquired through seller financing, municipal bonds, or included in accrued expenses - net |  | $ | 418,792 |  |  | $ | 224,183 |
Transfer of inventory to investment in unconsolidated entities |  | $ | 7,548 |  |  | $ | (500) |
Transfer of other assets to investment in unconsolidated entities - net |  | $ | 7,348 |  |  | $ | — |
Unrealized loss on derivatives |  | $ | (7,652) |  |  | $ | (7,466) |
Miscellaneous non-cash changes in investments in unconsolidated entities - net |  | $ | 3,216 |  |  | $ | 1,599 |
|  | At April 30,
|  | 2025 |  | 2024
Cash, cash equivalents, and restricted cash |  |  |  |
Cash and cash equivalents |  | $ | 686,466 |  |  | $ | 1,030,530 |
Restricted cash included in receivables, prepaid expenses, and other assets |  | 75,209 |  |  | 56,924 |
Total cash, cash equivalents, and restricted cash shown on the Condensed Consolidated Statements of Cash Flows |  | $ | 761,675 |  |  | $ | 1,087,454 |

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”)
This discussion and analysis is based on, should be read together with, and is qualified in its entirety by, the accompanying unaudited condensed consolidated financial statements and related notes, as well as our consolidated financial statements, notes thereto, and the related MD&A contained in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024 (“2024 Form 10-K”). It also should be read in conjunction with the disclosure under “Statement on Forward-Looking Information” and “Risk Factors” in this report and in our 2024 Form 10-K.
Unless otherwise stated in this report, net contracts signed represents a number or value equal to the gross number or value of contracts for the sale of homes signed during the relevant period, less the number or value of contracts canceled during the relevant period (irrespective of whether the contract was signed during the relevant period or in a prior period). Backlog consists of homes under contract but not yet delivered to our home buyers (“backlog”). Backlog conversion represents the percentage of homes delivered in the period from backlog at the beginning of the period (“backlog conversion”).
OVERVIEW
Our Business Environment and Current Outlook
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 the new 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.
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.
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Financial and Operational Highlights
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.
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.
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.
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 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.
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.
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.
At April 30, 2025, we were selling from 421 communities, compared to 408 at October 31, 2024; and 386 at April 30, 2024.
At April 30, 2025, our total stockholders’ equity and our debt to total capitalization ratio were $7.95 billion and 0.26 to 1.00, respectively.
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RESULTS OF OPERATIONS – OVERVIEW
The following table compares certain items in our Condensed Consolidated Statements of Operations and Comprehensive Income and other supplemental information for the three months and six months ended April 30, 2025 and 2024 ($ amounts in millions, unless otherwise stated). For more information regarding results of operations by segment, see “Segments” in this MD&A.

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change
Revenues: |  |  |  |  |  |  |  |  |  |  |
Home sales | $ | 2,706.5 |  |  | $ | 2,647.0 |  |  | 2 | % |  | $ | 4,547.2 |  |  | $ | 4,578.9 |  |  | (1) | %
Land sales and other | 32.6 |  |  | 190.5 |  |  | (83) | % |  | 51.0 |  |  | 206.5 |  |  | (75) | %
| 2,739.1 |  |  | 2,837.5 |  |  | (3) | % |  | 4,598.2 |  |  | 4,785.3 |  |  | (4) | %
Cost of revenues: |  |  |  |  |  |  |  |  |  |  |
Home sales | 2,002.2 |  |  | 1,963.3 |  |  | 2 | % |  | 3,383.7 |  |  | 3,362.5 |  |  | 1 | %
Land sales and other | 31.4 |  |  | 13.0 |  |  | 142 | % |  | 49.5 |  |  | 23.1 |  |  | 114 | %
| 2,033.6 |  |  | 1,976.3 |  |  | 3 | % |  | 3,433.2 |  |  | 3,385.6 |  |  | 1 | %
Selling, general and administrative | 255.8 |  |  | 237.7 |  |  | 8 | % |  | 496.2 |  |  | 467.7 |  |  | 6 | %
Income from operations | 449.7 |  |  | 623.5 |  |  | (28) | % |  | 668.8 |  |  | 931.9 |  |  | (28) | %
Other |  |  |  |  |  |  |  |  |  |  |
Income (loss) from unconsolidated entities | 11.5 |  |  | 5.9 |  |  | 95 | % |  | 2.7 |  |  | (3.3) |  |  | (182) | %
Other income – net | 16.3 |  |  | 20.4 |  |  | (20) | % |  | 27.3 |  |  | 32.3 |  |  | (15) | %
Income before income taxes | 477.5 |  |  | 649.8 |  |  | (27) | % |  | 698.9 |  |  | 960.9 |  |  | (27) | %
Income tax provision | 125.1 |  |  | 168.2 |  |  | (26) | % |  | 168.7 |  |  | 239.8 |  |  | (30) | %
Net income | $ | 352.4 |  |  | $ | 481.6 |  |  | (27) | % |  | $ | 530.2 |  |  | $ | 721.2 |  |  | (26) | %
Supplemental information: |  |  |  |  |  |  |  |  |  |  |
Home sales cost of revenues as a percentage of home sales revenues | 74.0 | % |  | 74.2 | % |  |  |  | 74.4 | % |  | 73.4 | % |  |
Land sales and other cost of revenues as a percentage of land sales and other revenues | 96.3 | % |  | 6.8 | % |  |  |  | 97.2 | % |  | 11.2 | % |  |
SG&A as a percentage of home sale revenues | 9.5 | % |  | 9.0 | % |  |  |  | 10.9 | % |  | 10.2 | % |  |
Effective tax rate | 26.2 | % |  | 25.9 | % |  |  |  | 24.1 | % |  | 25.0 | % |  |
Deliveries – units | 2,899 |  |  | 2,641 |  |  | 10 | % |  | 4,890 |  |  | 4,568 |  |  | 7 | %
Deliveries – average delivered price (in ‘000s) | $ | 933.6 |  |  | $ | 1,002.3 |  |  | (7) | % |  | $ | 929.9 |  |  | $ | 1,002.4 |  |  | (7) | %
Net contracts signed – value | $ | 2,604.4 |  |  | $ | 2,941.0 |  |  | (11) | % |  | $ | 4,911.6 |  |  | $ | 5,005.8 |  |  | (2) | %
Net contracts signed – units | 2,650 |  |  | 3,041 |  |  | (13) | % |  | 4,957 |  |  | 5,083 |  |  | (2) | %
Net contracts signed – average contracted price (in ‘000s) | $ | 982.8 |  |  | $ | 967.1 |  |  | 2 | % |  | $ | 990.8 |  |  | $ | 984.8 |  |  | 1 | %
| At April 30, |  | At October 31,
| 2025 |  | 2024 |  | % Change |  | 2024 |  | 2023 |  | % Change
Backlog – value | $ | 6,839.4 |  |  | $ | 7,378.0 |  |  | (7) | % |  | 6,467.8 |  |  | 6,945.3 |  |  | (7) | %
Backlog – units | 6,063 |  |  | 7,093 |  |  | (15) | % |  | 5,996 |  |  | 6,578 |  |  | (9) | %
Backlog – average contracted price (in ‘000s) | $ | 1,128.1 |  |  | $ | 1,040.2 |  |  | 8 | % |  | $ | 1,078.7 |  |  | $ | 1,055.8 |  |  | 2 | %

Note: Due to rounding, amounts may not add. Net contracts signed information presented above is net of all cancellations that occurred in the period. “Net contracts signed - value” includes the value of each binding agreement of sale that was signed in the period, plus the value of all options that were selected during the period, regardless of when the initial agreement of sale related to such options was signed.
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Home Sales Revenues and Home Sales Cost of Revenues
Three months ended April 30, 2025 compared to the three months ended April 30, 2024
The increase in home sale revenues for the three months ended April 30, 2025, as compared to the three 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 h omes in backlog at October 31, 2023, most significantly in the Mountain and Pacific regi ons. 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.
The decrease in home sales cost of revenues, as a percentage of home sales revenues, in the three months ended April 30, 2025, as compared to the three 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.
Six months ended April 30, 2025 compared to the six months ended April 30, 2024
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 h omes in backlog at October 31, 2023, most significantly in the North, Mid-Atlantic, and South regi ons. 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.
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 to a 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.
Land Sales and Other Revenues and Land Sales and Other Cost of Revenues
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.
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.
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Selling, General and Administrative Expenses (“SG&A”)
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.
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%.
Income from Unconsolidated Entities
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.
In the six-month period ended April 30, 2025, we recognized income from unconsolidated entities of $2.7 million, as compared to a loss of $3.3 million in the prior-year period. The increase was primarily due to the same factors noted above impacting the three-month periods ended April 30, 2025 and April 30, 2024.
Other Income – Net
The table below provides, for the periods indicated, the components of “Other income – net” (amounts in thousands):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Interest income | $ | 7,054 |  |  | $ | 9,007 |  |  | $ | 16,023 |  |  | $ | 19,475 |
Income from ancillary businesses | 9,068 |  |  | 4,907 |  |  | 8,189 |  |  | 5,747 |
Management fee income earned by home building operations | 972 |  |  | 1,157 |  |  | 1,771 |  |  | 2,306 |
Other | (758) |  |  | 5,295 |  |  | 1,347 |  |  | 4,756 |
Total other income – net | $ | 16,336 |  |  | $ | 20,366 |  |  | $ | 27,330 |  |  | $ | 32,284 |

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.
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.
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.
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.
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Income Before Income Taxes
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.
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.
Income Tax Provision
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.
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.
Contracts
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.
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.
Backlog
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.
For more information regarding results of operations by segment, see “Segments” in this MD&A.
CAPITAL RESOURCES AND LIQUIDITY
Funding for our business has been, and continues to be, provided principally by cash flow from operating activities before inventory additions, credit arrangements with third parties, and the public capital markets.
Our cash flows from operations generally provide us with a significant source of liquidity. Our cash flows provided by operating activities, supplemented with our short-term borrowings and long-term debt, have been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our Company. Our primary uses of cash include inventory additions in the form of land acquisitions and deposits to obtain control of land, land development, working
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capital to fund day-to-day operations, and investments in existing and future unconsolidated joint ventures. We may also use cash to fund capital expenditures such as investments in our information technology systems. We also use cash flows from operations and other sources to pay dividends on our common stock, to repay debt and make share repurchases. We believe our sources of cash and liquidity will continue to be adequate to fund operations, finance our strategic operating initiatives, repay debt, fund our share repurchases and pay dividends for the foreseeable future.
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.
Short-term Liquidity and Capital Resources
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.
We believe we will have sufficient liquidity available to fund our business needs, commitments and contractual obligations in a timely manner for the next twelve months. We may, however, seek additional financing to fund future growth or refinance our existing indebtedness through the debt capital markets, but there is no assurance that such financing will be available on favorable terms, or at all.
Long-term Liquidity and Capital Resources
Beyond the next twelve months, our principal demands for funds will be for the payments of the principal amount of our long-term debt as it becomes due or otherwise matures, land purchases and inventory additions needed to grow our business (which could occur directly or indirectly through builder acquisitions), long-term capital investments and investments in unconsolidated joint ventures, common stock repurchases, and dividend payments.
Over the longer term, to the extent the sources of capital described above are insufficient to meet our needs, we may also conduct additional public offerings of our securities, refinance debt or dispose of certain assets to fund our operating activities and debt service. We expect these resources will be adequate to fund our ongoing operating activities as well as provide capital for investment in future land purchases and related development activities and future joint ventures.
Material Cash Requirements
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.
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
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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.
The unconsolidated joint ventures in which we have investments generally finance their activities with a combination of partner equity and debt financing. In some instances, we and our joint venture partner have guaranteed debt of unconsolidated entities. These guarantees may include any or all of the following: (i) project completion guarantees, including any cost overruns; (ii) repayment guarantees, generally covering a percentage of the outstanding loan; (iii) carry cost guarantees, which cover costs such as interest, real estate taxes, and insurance; (iv) an environmental indemnity provided to the lender that holds the lender harmless from and against losses arising from the discharge of hazardous materials from the property and non-compliance with applicable environmental laws; and (v) indemnification of the lender from “bad boy acts” of the unconsolidated entity.
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.
For more information regarding these joint ventures, see Note 3, “Investments in Unconsolidated Entities” in the Notes to the Condensed Consolidated Financial Statements.
Debt Service Requirements
Our financing strategy is to ensure liquidity and access to capital markets, to maintain a balanced profile of debt maturities, and to manage our exposure to floating interest rate volatility.
Outside of the normal course of operations, one of our principal liquidity needs is the payment of principal and interest on outstanding indebtedness. We are required by the terms of certain loan documents to meet certain covenants, such as financial ratios and reporting requirements. As of April 30, 2025, we were in compliance with all such covenants and requirements on our term loan, revolving credit facility and other loans payable. Refer to Note 5, “Loans Payable, Senior Notes, and Mortgage Company Loan Facilities” in the Notes to the Condensed Consolidated Financial Statements.
Operating Activities
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.
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.
Investing Activities
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
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and equipment. This activity was offset, in part, by $28.2 million of cash received as returns from our investments in unconsolidated entities.
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.
Financing Activities
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.
We used $308.2 million of cash in financing activities in the six-month period ended April 30, 2024, primarily for the repurchase of $180.1 million of our common stock, the payments of $77.7 million of loans payable, net of borrowings, the payment of dividends on our common stock of $47.1 million, and $3.5 million of payments related to stock-based benefit plans - net.
CRITICAL ACCOUNTING ESTIMATES
As disclosed in our 2024 Form 10-K, our most critical accounting estimates relate to inventory, cost of revenue recognition, warranty and self-insurance, and investments in unconsolidated entities. Since October 31, 2024, there have been no material changes to those critical accounting estimates.
SUPPLEMENTAL GUARANTOR INFORMATION
At April 30, 2025, our 100%-owned subsidiary, Toll Brothers Finance Corp. (the “Subsidiary Issuer”), had issued and outstanding $1.60 billion aggregate principal amount of senior notes maturing on various dates between November 15, 2025 and November 1, 2029 (the “Senior Notes”). For further information regarding the Senior Notes, see Note 5, “Loans Payable, Senior Notes and Mortgage Company Loan Facility” in the Notes to the Consolidated Condensed Financial Statements under the caption “Senior Notes.”
The obligations of the Subsidiary Issuer to pay principal, premiums, if any, and interest are guaranteed jointly and severally on a senior basis by Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries (the “Guarantor Subsidiaries” and, together with us, the “Guarantors”). The guarantees are full and unconditional, and the Subsidiary Issuer and each of the Guarantor Subsidiaries are consolidated subsidiaries of Toll Brothers, Inc. Our non-home building subsidiaries and several of our home building subsidiaries (together, the “Non-Guarantor Subsidiaries”) do not guarantee the Senior Notes. The Subsidiary Issuer generates no operating revenues and does not have any independent operations other than the financing of our other subsidiaries by lending the proceeds of its public debt offerings, including the Senior Notes. Our home building operations are conducted almost entirely through the Guarantor Subsidiaries. Accordingly, the Subsidiary Issuer’s cash flow and ability to service the Senior Notes is dependent upon the earnings of the Company’s subsidiaries and the distribution of those earnings to the Subsidiary Issuer, whether by dividends, loans or otherwise. Holders of the Senior Notes have a direct claim only against the Subsidiary Issuer and the Guarantors. The obligations of the Guarantors under their guarantees will be limited as necessary to recognize certain defenses generally available to guarantors (including those that relate to fraudulent conveyance or transfer, voidable preference or similar laws affecting the rights of creditors generally) under applicable law.
The indentures under which the Senior Notes were issued provide that any of our subsidiaries that provide a guarantee of our obligations under the Revolving Credit Facility will guarantee the Senior Notes. The indentures further provide that any Guarantor Subsidiary may be released from its guarantee so long as (i) no default or event of default exists or would result from release of such guarantee; (ii) the Guarantor Subsidiary being released has consolidated net worth of less than 5% of the Company’s consolidated net worth as of the end of our most recent fiscal quarter; (iii) the Guarantor Subsidiaries released from their guarantees in any fiscal year comprise in the aggregate less than 10% (or 15% if and to the extent necessary to permit the cure of a default) of our consolidated net worth as of the end of our most recent fiscal quarter; (iv) such release would not have a material adverse effect on ours and our subsidiaries’ home building business; and (v) the Guarantor Subsidiary is released from its guaranty under the Revolving Credit Facility. If there are no guarantors under the Revolving Credit Facility, all Guarantor Subsidiaries under the indentures will be released from their guarantees.
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The following summarized financial information is presented for Toll Brothers, Inc., the Subsidiary Issuer, and the Guarantor Subsidiaries on a combined basis after intercompany transactions and balances have been eliminated among Toll Brothers, Inc., the Subsidiary Issuer and the Guarantor Subsidiaries, as well as their investment in, and equity in earnings from the Non-Guarantor Subsidiaries.
Summarized Balance Sheet Data (amounts in millions):

| April 30, 2025
Assets |
Cash | $ | 543.5 |
Inventory | $ | 10,887.2 |
Amount due from Non-Guarantor Subsidiaries | $ | 785.8 |
Total assets | $ | 13,048.3 |
Liabilities & Stockholders' Equity |
Loans payable | $ | 928.1 |
Senior notes | $ | 1,597.5 |
Total liabilities | $ | 5,505.1 |
Stockholders' equity | $ | 7,543.0 |

Summarized Statement of Operations Data (amounts in millions):

| For the six months ended April 30, 2025
Revenues | $ | 4,547.5 |
Cost of revenues | $ | 3,397.6 |
Selling, general and administrative | $ | 495.2 |
Income before income taxes | $ | 666.8 |
Net income | $ | 505.8 |

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SEGMENTS
We operate in the following five geographic segments, with operations generally located in the states listed below:
•The North region: Connecticut, Delaware, Illinois, Massachusetts, Michigan, New Jersey, New York and Pennsylvania;
•The Mid-Atlantic region: Georgia, Maryland, North Carolina, Tennessee and Virginia;
•The South region: Florida, South Carolina and Texas;
•The Mountain region: Arizona, Colorado, Idaho, Nevada and Utah; and
•The Pacific region: California, Oregon and Washington.
The tables below summarize information related to units delivered and revenues, net contracts signed, and income (loss) before income taxes, by segment, for the periods indicated, and information related to backlog, by segment, as of the dates indicated.
Units Delivered and Revenues:

| Three months ended April 30,
| Revenues ($ in millions) |  | Units Delivered |  | Average Delivered Price ($ in thousands)
| 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change
North | $ | 378.5 |  |  | $ | 335.2 |  |  | 13 | % |  | 389 |  |  | 349 |  |  | 11 | % |  | $ | 973.0 |  |  | $ | 960.5 |  |  | 1 | %
Mid-Atlantic | 321.8 |  |  | 376.1 |  |  | (14) | % |  | 379 |  |  | 378 |  |  | — | % |  | $ | 849.0 |  |  | $ | 995.0 |  |  | (15) | %
South | 758.6 |  |  | 658.4 |  |  | 15 | % |  | 928 |  |  | 804 |  |  | 15 | % |  | $ | 817.5 |  |  | $ | 818.9 |  |  | — | %
Mountain | 755.9 |  |  | 603.6 |  |  | 25 | % |  | 856 |  |  | 686 |  |  | 25 | % |  | $ | 883.0 |  |  | $ | 879.8 |  |  | — | %
Pacific | 492.2 |  |  | 674.7 |  |  | (27) | % |  | 347 |  |  | 424 |  |  | (18) | % |  | $ | 1,418.4 |  |  | $ | 1,591.2 |  |  | (11) | %
Total home building | 2,707.0 |  |  | 2,648.0 |  |  | 2 | % |  | 2,899 |  |  | 2,641 |  |  | 10 | % |  | $ | 933.7 |  |  | $ | 1,002.6 |  |  | (7) | %
Other | (0.5) |  |  | (1.0) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total home sales revenue | 2,706.5 |  |  | 2,647.0 |  |  | 2 | % |  | 2,899 |  |  | 2,641 |  |  | 10 | % |  | $ | 933.6 |  |  | $ | 1,002.3 |  |  | (7) | %
Land sales and other revenue | 32.6 |  |  | 190.5 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total revenue | $ | 2,739.1 |  |  | $ | 2,837.5 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

| Six months ended April 30,
| Revenues ($ in millions) |  | Units Delivered |  | Average Delivered Price ($ in thousands)
| 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change
North | $ | 633.2 |  |  | $ | 607.9 |  |  | 4 | % |  | 636 |  |  | 638 |  |  | — | % |  | $ | 995.6 |  |  | $ | 952.8 |  |  | 4 | %
Mid-Atlantic | 558.0 |  |  | 640.3 |  |  | (13) | % |  | 645 |  |  | 655 |  |  | (2) | % |  | $ | 865.1 |  |  | $ | 977.6 |  |  | (12) | %
South | 1,264.9 |  |  | 1,191.3 |  |  | 6 | % |  | 1,524 |  |  | 1,435 |  |  | 6 | % |  | $ | 830.0 |  |  | $ | 830.2 |  |  | — | %
Mountain | 1,312.6 |  |  | 1,056.9 |  |  | 24 | % |  | 1,519 |  |  | 1,171 |  |  | 30 | % |  | $ | 864.1 |  |  | $ | 902.6 |  |  | (4) | %
Pacific | 779.3 |  |  | 1,083.7 |  |  | (28) | % |  | 566 |  |  | 669 |  |  | (15) | % |  | $ | 1,376.9 |  |  | $ | 1,619.9 |  |  | (15) | %
Total home building | 4,548.0 |  |  | 4,580.1 |  |  | (1) | % |  | 4,890 |  |  | 4,568 |  |  | 7 | % |  | $ | 930.1 |  |  | $ | 1,002.6 |  |  | (7) | %
Other | (0.8) |  |  | (1.2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total home sales revenue | 4,547.2 |  |  | 4,578.9 |  |  | (1) | % |  | 4,890 |  |  | 4,568 |  |  | 7 | % |  | $ | 929.9 |  |  | $ | 1,002.4 |  |  | (7) | %
Land sales and other revenue | 51.0 |  |  | 206.5 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total revenue | $ | 4,598.2 |  |  | $ | 4,785.4 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

Note: Due to rounding, amounts may not add.
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Net Contracts Signed:

| Three months ended April 30,
| Net Contract Value ($ in millions) |  | Net Contracted Units |  | Average Contracted Price ($ in thousands)
| 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change
North | $ | 386.9 |  |  | $ | 422.1 |  |  | (8) | % |  | 372 |  |  | 412 |  |  | (10) | % |  | $ | 1,039.9 |  |  | $ | 1,024.6 |  |  | 1 | %
Mid-Atlantic | 378.7 |  |  | 348.9 |  |  | 9 | % |  | 407 |  |  | 376 |  |  | 8 | % |  | $ | 930.5 |  |  | $ | 928.0 |  |  | — | %
South | 636.8 |  |  | 746.8 |  |  | (15) | % |  | 753 |  |  | 892 |  |  | (16) | % |  | $ | 845.7 |  |  | $ | 837.2 |  |  | 1 | %
Mountain | 695.5 |  |  | 814.6 |  |  | (15) | % |  | 776 |  |  | 944 |  |  | (18) | % |  | $ | 896.3 |  |  | $ | 862.9 |  |  | 4 | %
Pacific | 506.5 |  |  | 608.6 |  |  | (17) | % |  | 342 |  |  | 417 |  |  | (18) | % |  | $ | 1,480.9 |  |  | $ | 1,459.4 |  |  | 1 | %
Total consolidated | $ | 2,604.4 |  |  | $ | 2,941.0 |  |  | (11) | % |  | 2,650 |  |  | 3,041 |  |  | (13) | % |  | $ | 982.8 |  |  | $ | 967.1 |  |  | 2 | %

| Six months ended April 30,
| Net Contract Value ($ in millions) |  | Net Contracted Units |  | Average Contracted Price ($ in thousands)
| 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change
North | $ | 723.6 |  |  | $ | 751.0 |  |  | (4) | % |  | 690 |  |  | 737 |  |  | (6) | % |  | $ | 1,048.7 |  |  | $ | 1,019.0 |  |  | 3 | %
Mid-Atlantic | 720.2 |  |  | 587.6 |  |  | 23 | % |  | 765 |  |  | 622 |  |  | 23 | % |  | $ | 941.4 |  |  | $ | 944.7 |  |  | — | %
South | 1,230.0 |  |  | 1,216.7 |  |  | 1 | % |  | 1,453 |  |  | 1,467 |  |  | (1) | % |  | $ | 846.5 |  |  | $ | 829.4 |  |  | 2 | %
Mountain | 1,229.6 |  |  | 1,313.4 |  |  | (6) | % |  | 1,404 |  |  | 1,485 |  |  | (5) | % |  | $ | 875.8 |  |  | $ | 884.4 |  |  | (1) | %
Pacific | 1,008.2 |  |  | 1,137.1 |  |  | (11) | % |  | 645 |  |  | 772 |  |  | (16) | % |  | $ | 1,563.1 |  |  | $ | 1,472.9 |  |  | 6 | %
Total consolidated | $ | 4,911.6 |  |  | $ | 5,005.8 |  |  | (2) | % |  | 4,957 |  |  | 5,083 |  |  | (2) | % |  | $ | 990.8 |  |  | $ | 984.8 |  |  | 1 | %

Backlog:

| At April 30,
| Backlog Value ($ in millions) |  | Backlog Units |  | Average Backlog Price ($ in thousands)
| 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change
North | $ | 1,028.5 |  |  | $ | 1,108.0 |  |  | (7) | % |  | 909 |  |  | 1,055 |  |  | (14) | % |  | $ | 1,131.5 |  |  | $ | 1,050.3 |  |  | 8 | %
Mid-Atlantic | 987.4 |  |  | 900.8 |  |  | 10 | % |  | 906 |  |  | 912 |  |  | (1) | % |  | $ | 1,089.9 |  |  | $ | 987.7 |  |  | 10 | %
South | 1,774.7 |  |  | 2,120.2 |  |  | (16) | % |  | 1,932 |  |  | 2,344 |  |  | (18) | % |  | $ | 918.6 |  |  | $ | 904.5 |  |  | 2 | %
Mountain | 1,563.9 |  |  | 1,836.2 |  |  | (15) | % |  | 1,480 |  |  | 1,891 |  |  | (22) | % |  | $ | 1,056.7 |  |  | $ | 971.0 |  |  | 9 | %
Pacific | 1,484.9 |  |  | 1,412.8 |  |  | 5 | % |  | 836 |  |  | 891 |  |  | (6) | % |  | $ | 1,776.1 |  |  | $ | 1,585.6 |  |  | 12 | %
Total consolidated | $ | 6,839.4 |  |  | $ | 7,378.0 |  |  | (7) | % |  | 6,063 |  |  | 7,093 |  |  | (15) | % |  | $ | 1,128.1 |  |  | $ | 1,040.2 |  |  | 8 | %

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| At October 31,
| Backlog Value ($ in millions) |  | Backlog Units |  | Average Backlog Price ($ in thousands)
| 2024 |  | 2023 |  | % Change |  | 2024 |  | 2023 |  | % Change |  | 2024 |  | 2023 |  | % Change
North | $ | 937.5 |  |  | $ | 964.1 |  |  | (3) | % |  | 855 |  |  | 956 |  |  | (11) | % |  | $ | 1,096.5 |  |  | $ | 1,008.5 |  |  | 9 | %
Mid-Atlantic | 824.8 |  |  | 953.0 |  |  | (13) | % |  | 786 |  |  | 945 |  |  | (17) | % |  | $ | 1,049.4 |  |  | $ | 1,008.4 |  |  | 4 | %
South | 1,807.5 |  |  | 2,093.4 |  |  | (14) | % |  | 2,003 |  |  | 2,312 |  |  | (13) | % |  | $ | 902.4 |  |  | $ | 905.5 |  |  | — | %
Mountain | 1,645.5 |  |  | 1,577.7 |  |  | 4 | % |  | 1,595 |  |  | 1,577 |  |  | 1 | % |  | $ | 1,031.7 |  |  | $ | 1,000.5 |  |  | 3 | %
Pacific | 1,252.5 |  |  | 1,357.1 |  |  | (8) | % |  | 757 |  |  | 788 |  |  | (4) | % |  | $ | 1,654.6 |  |  | $ | 1,722.2 |  |  | (4) | %
Total consolidated | $ | 6,467.8 |  |  | $ | 6,945.3 |  |  | (7) | % |  | 5,996 |  |  | 6,578 |  |  | (9) | % |  | $ | 1,078.7 |  |  | $ | 1,055.8 |  |  | 2 | %

Income (Loss) Before Income Taxes ($ amounts in millions):

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | % Change |  | 2025 |  | 2024 |  | % Change
North | $ | 82.2 |  |  | $ | 51.4 |  |  | 60 | % |  | $ | 110.4 |  |  | $ | 84.4 |  |  | 31 | %
Mid-Atlantic | 63.2 |  |  | 254.5 |  |  | (75) | % |  | 96.7 |  |  | 304.0 |  |  | (68) | %
South | 162.8 |  |  | 126.5 |  |  | 29 | % |  | 253.3 |  |  | 224.9 |  |  | 13 | %
Mountain | 137.9 |  |  | 82.0 |  |  | 68 | % |  | 218.7 |  |  | 162.1 |  |  | 35 | %
Pacific | 89.7 |  |  | 170.9 |  |  | (48) | % |  | 127.8 |  |  | 274.5 |  |  | (53) | %
Total home building | 535.8 |  |  | 685.3 |  |  | (22) | % |  | 806.8 |  |  | 1,049.9 |  |  | (23) | %
Corporate and other | (58.4) |  |  | (35.5) |  |  | (65) | % |  | (107.9) |  |  | (89.0) |  |  | (21) | %
Total consolidated | $ | 477.5 |  |  | $ | 649.8 |  |  | (27) | % |  | $ | 698.9 |  |  | $ | 960.9 |  |  | (27) | %

Note: Due to rounding, amounts may not add.
“Corporate and other” is comprised principally of general corporate expenses such as our executive offices; the corporate finance, accounting, audit, tax, human resources, risk management, information technology, marketing, and legal groups; interest income; income from certain of our ancillary businesses, including our apartment rental development business and our high-rise urban luxury condominium operations; and income from our Rental Property Joint Ventures and Other Joint Ventures.
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FISCAL 2025 COMPARED TO FISCAL 2024
North

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | Change |  | 2025 |  | 2024 |  | Change
Units Delivered and Revenues: |  |  |  |  |  |  |  |  |  |  |
Home sales revenues ($ in millions) | $ | 378.5 |  |  | $ | 335.2 |  |  | 13 | % |  | $ | 633.2 |  |  | $ | 607.9 |  |  | 4 | %
Units delivered | 389 |  |  | 349 |  |  | 11 | % |  | 636 |  |  | 638 |  |  | — | %
Average delivered price ($ in thousands) | $ | 973.0 |  |  | $ | 960.5 |  |  | 1 | % |  | $ | 995.6 |  |  | $ | 952.8 |  |  | 4 | %
Net Contracts Signed: |  |  |  |  |  |  |  |  |  |  |
Net contract value ($ in millions) | $ | 386.9 |  |  | $ | 422.1 |  |  | (8) | % |  | $ | 723.6 |  |  | $ | 751.0 |  |  | (4) | %
Net contracted units | 372 |  |  | 412 |  |  | (10) | % |  | 690 |  |  | 737 |  |  | (6) | %
Average contracted price ($ in thousands) | $ | 1,039.9 |  |  | $ | 1,024.6 |  |  | 1 | % |  | $ | 1,048.7 |  |  | $ | 1,019.0 |  |  | 3 | %
Home sales cost of revenues as a percentage of home sale revenues | 74.1 | % |  | 77.9 | % |  |  |  | 74.9 | % |  | 78.0 | % |  |
Income before income taxes ($ in millions) | $ | 82.2 |  |  | $ | 51.4 |  |  | 60 | % |  | $ | 110.4 |  |  | $ | 84.4 |  |  | 31 | %
Number of selling communities at April 30, | 43 |  |  | 34 |  |  | 26 | % |  |  |  |  |  |

The increase in the number of homes delivered in the fiscal 2025 three-month period was mainly due to an increase in the number of spec homes delivered, 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. The average prices of homes delivered in the fiscal 2025 three-month period was relatively flat compared to the fiscal 2024 three-month period.
The number of homes delivered in the fiscal 2025 six-month period was essentially flat compared to fiscal 2024 period, despite 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. We attribute this primarily to an increase in the number of spec homes delivered in the fiscal 2025 period. The average prices of homes delivered in the fiscal 2025 six-month increased compared to the fiscal 2024 six-month period primarily due to a shift in the number of homes delivered to more expensive areas and/or products.
The decreases in the number of net contracts signed in fiscal 2025 periods, compared to the prior year periods, were due to a decline in demand, offset, in part, by an increase in the number of selling communities. The increases in the average value of each contract signed in the fiscal 2025 periods were mainly due to a shift in the number of contracts signed to more expensive areas and/or products partially offset by increased sales incentives.
The increases in income before income taxes in the three-month and six-month fiscal 2025 periods were attributable to higher earnings from increased revenue, lower home sales cost of revenues, as a percentage of home sale revenues offset, in part, by higher SG&A costs. The decreases in home sales cost of revenues, as a percentage of home sales revenues, in the fiscal 2025 periods were primarily due to a shift in product mix/areas to higher-margin areas and by lower interest expense as a percentage of home sales revenues. The three-month fiscal 2025 period also benefited from higher income from unconsolidated entities and other income - net.
39

Mid-Atlantic

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | Change |  | 2025 |  | 2024 |  | Change
Units Delivered and Revenues: |  |  |  |  |  |  |  |  |  |  |
Home sales revenues ($ in millions) | $ | 321.8 |  |  | $ | 376.1 |  |  | (14) | % |  | $ | 558.0 |  |  | $ | 640.3 |  |  | (13) | %
Units delivered | 379 |  |  | 378 |  |  | — | % |  | 645 |  |  | 655 |  |  | (2) | %
Average delivered price ($ in thousands) | $ | 849.0 |  |  | $ | 995.0 |  |  | (15) | % |  | $ | 865.1 |  |  | $ | 977.6 |  |  | (12) | %
Net Contracts Signed: |  |  |  |  |  |  |  |  |  |  |
Net contract value ($ in millions) | $ | 378.7 |  |  | $ | 348.9 |  |  | 9 | % |  | $ | 720.2 |  |  | $ | 587.6 |  |  | 23 | %
Net contracted units | 407 |  |  | 376 |  |  | 8 | % |  | 765 |  |  | 622 |  |  | 23 | %
Average contracted price ($ in thousands) | $ | 930.5 |  |  | $ | 928.0 |  |  | — | % |  | $ | 941.4 |  |  | $ | 944.7 |  |  | — | %
Home sales cost of revenues as a percentage of home sale revenues | 72.0 | % |  | 72.4 | % |  |  |  | 73.6 | % |  | 72.6 | % |  |
Income before income taxes ($ in millions) | $ | 63.2 |  |  | $ | 254.5 |  |  | (75) | % |  | $ | 96.7 |  |  | $ | 304.0 |  |  | (68) | %
Number of selling communities at April 30, | 65 |  |  | 45 |  |  | 44 | % |  |  |  |  |  |

The number of homes delivered in each of the fiscal 2025 periods was flat year over year. Although the number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023 was lower, the segment delivered more spec homes in the fiscal 2025 periods, which kept deliveries relatively flat. The average price of homes delivered in the fiscal 2025 periods decreased compared to the fiscal 2024 periods, primarily due to a shift in the number of homes delivered to less expensive areas.
The increases in the number of net contracts signed in the fiscal 2025 periods were mainly due to the increase in the average number of selling communities, offset, in part by softer demand. The average values of signed contracts in the fiscal 2025 periods were relatively flat compared to the fiscal 2024 periods.
The decreases in income before income taxes in the fiscal 2025 periods were mainly due to the $180.7 million land parcel sale described above, which resulted in a pre-tax gain of $175.2 million during the three and six months ended April 30, 2024 and which did not recur in fiscal 2025. In addition, the fiscal 2025 periods were impacted by lower earnings from decreased revenue and higher SG&A costs.
South

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | Change |  | 2025 |  | 2024 |  | Change
Units Delivered and Revenues: |  |  |  |  |  |  |  |  |  |  |
Home sales revenues ($ in millions) | $ | 758.6 |  |  | $ | 658.4 |  |  | 15 | % |  | $ | 1,264.9 |  |  | $ | 1,191.3 |  |  | 6 | %
Units delivered | 928 |  |  | 804 |  |  | 15 | % |  | 1,524 |  |  | 1,435 |  |  | 6 | %
Average delivered price ($ in thousands) | $ | 817.5 |  |  | $ | 818.9 |  |  | — | % |  | $ | 830.0 |  |  | $ | 830.2 |  |  | — | %
Net Contracts Signed: |  |  |  |  |  |  |  |  |  |  |
Net contract value ($ in millions) | $ | 636.8 |  |  | $ | 746.8 |  |  | (15) | % |  | $ | 1,230.0 |  |  | $ | 1,216.7 |  |  | 1 | %
Net contracted units | 753 |  |  | 892 |  |  | (16) | % |  | 1,453 |  |  | 1,467 |  |  | (1) | %
Average contracted price ($ in thousands) | $ | 845.7 |  |  | $ | 837.2 |  |  | 1 | % |  | $ | 846.5 |  |  | $ | 829.4 |  |  | 2 | %
Home sales cost of revenues as a percentage of home sale revenues | 72.1 | % |  | 73.0 | % |  |  |  | 72.0 | % |  | 72.7 | % |  |
Income before income taxes ($ in millions) | $ | 162.8 |  |  | $ | 126.5 |  |  | 29 | % |  | $ | 253.3 |  |  | $ | 224.9 |  |  | 13 | %
Number of selling communities at April 30, | 142 |  |  | 137 |  |  | 4 | % |  |  |  |  |  |

The increases in the number of homes delivered in the fiscal 2025 periods were mainly due to higher backlog conversion and increased spec home deliveries, offset, in part, by a decrease in the number of homes in backlog at October 31, 2024, as
40

compared to the number of homes in backlog at October 31, 2023. The average prices of homes delivered in the fiscal 2025 periods were relatively flat with the fiscal 2024 periods.
The decreases in the number of net contracts signed in the fiscal 2025 periods were due primarily to softer demand, offset, in part, by an increase in the average number of selling communities. The increases in the average value of each contract signed in the fiscal 2025 periods were primarily due to a shift in the number of contracts signed to more expensive areas or product types, partially offset by increased sales incentives.
The increases in income before income taxes in the fiscal 2025 periods were principally due to higher earnings from increased revenues and lower home sales cost of revenues, as a percentage of home sale revenues, offset, in part by higher SG&A costs and lower other income - net. The decreases in home sales cost of revenues, as a percentage of home sales revenues, in the fiscal 2025 periods were primarily due to a shift in product mix/areas to higher-margin areas and lower interest expense as a percentage of home sales revenues.
Mountain

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | Change |  | 2025 |  | 2024 |  | Change
Units Delivered and Revenues: |  |  |  |  |  |  |  |  |  |  |
Home sales revenues ($ in millions) | $ | 755.9 |  |  | $ | 603.6 |  |  | 25 | % |  | $ | 1,312.6 |  |  | $ | 1,056.9 |  |  | 24 | %
Units delivered | 856 |  |  | 686 |  |  | 25 | % |  | 1,519 |  |  | 1,171 |  |  | 30 | %
Average delivered price ($ in thousands) | $ | 883.0 |  |  | $ | 879.8 |  |  | — | % |  | $ | 864.1 |  |  | $ | 902.6 |  |  | (4) | %
Net Contracts Signed: |  |  |  |  |  |  |  |  |  |  |
Net contract value ($ in millions) | $ | 695.5 |  |  | $ | 814.6 |  |  | (15) | % |  | $ | 1,229.6 |  |  | $ | 1,313.4 |  |  | (6) | %
Net contracted units | 776 |  |  | 944 |  |  | (18) | % |  | 1,404 |  |  | 1,485 |  |  | (5) | %
Average contracted price ($ in thousands) | $ | 896.3 |  |  | $ | 862.9 |  |  | 4 | % |  | $ | 875.8 |  |  | $ | 884.4 |  |  | (1) | %
Home sales cost of revenues as a percentage of home sale revenues | 75.6 | % |  | 79.5 | % |  |  |  | 76.1 | % |  | 77.3 | % |  |
Income before income taxes ($ in millions) | $ | 137.9 |  |  | $ | 82.0 |  |  | 68 | % |  | $ | 218.7 |  |  | $ | 162.1 |  |  | 35 | %
Number of selling communities at April 30, | 117 |  |  | 126 |  |  | (7) | % |  |  |  |  |  |

The increases in the number of homes delivered in the fiscal 2025 periods were mainly due to higher backlog conversion, an increase in spec homes delivered in the fiscal 2025 periods and an increase in the number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023. The average price of homes delivered in the fiscal 2025 three-month period was relatively flat with the fiscal 2024 period. The decrease in the average price of homes delivered in the fiscal 2025 six-month period was primarily due to a shift in the number of contracts delivered to less expensive areas or product types.
The decreases in the number of net contracts signed in the fiscal 2025 periods were primarily due to softer demand and a decrease in the number of selling communities. The increase in the average value of each contract signed in the fiscal 2025 three-month period was mainly due to a shift in the number of contracts signed to more expensive areas or product types, partially offset by increased sales incentives. The decrease in the average value of each contract signed in the fiscal 2025 six-month period was mainly due to a shift in the number of contracts signed to less expensive areas or product types and increased sales incentives.
The increases in income before income taxes in the fiscal 2025 periods were due mainly to higher earnings from increased revenues in the fiscal 2025 periods, lower home sales cost of revenues, as a percentage of home sale revenues, offset, in part, by higher SG&A costs. The decreases in home sales cost of revenues, as a percentage of home sales revenues, in the fiscal 2025 periods were primarily due to a shift in product mix/areas to higher-margin areas and a decrease in inventory impairment charges. Inventory impairment charges were $7.3 million and $25.0 million during the three months ended April 30, 2025 and 2024, respectively. Inventory impairment charges were $14.8 million and $25.7 million during the six months ended April 30, 2025 and 2024, respectively.
41

Pacific

| Three months ended April 30, |  | Six months ended April 30,
| 2025 |  | 2024 |  | Change |  | 2025 |  | 2024 |  | Change
Units Delivered and Revenues: |  |  |  |  |  |  |  |  |  |  |
Home sales revenues ($ in millions) | $ | 492.2 |  |  | $ | 674.7 |  |  | (27) | % |  | $ | 779.3 |  |  | $ | 1,083.7 |  |  | (28) | %
Units delivered | 347 |  |  | 424 |  |  | (18) | % |  | 566 |  |  | 669 |  |  | (15) | %
Average delivered price ($ in thousands) | $ | 1,418.4 |  |  | $ | 1,591.2 |  |  | (11) | % |  | $ | 1,376.9 |  |  | $ | 1,619.9 |  |  | (15) | %
Net Contracts Signed: |  |  |  |  |  |  |  |  |  |  |
Net contract value ($ in millions) | $ | 506.5 |  |  | $ | 608.6 |  |  | (17) | % |  | $ | 1,008.2 |  |  | $ | 1,137.1 |  |  | (11) | %
Net contracted units | 342 |  |  | 417 |  |  | (18) | % |  | 645 |  |  | 772 |  |  | (16) | %
Average contracted price ($ in thousands) | $ | 1,480.9 |  |  | $ | 1,459.4 |  |  | 1 | % |  | $ | 1,563.1 |  |  | $ | 1,472.9 |  |  | 6 | %
Home sales cost of revenues as a percentage of home sale revenues | 75.3 | % |  | 69.3 | % |  |  |  | 75.3 | % |  | 68.2 | % |  |
Income before income taxes ($ in millions) | $ | 89.7 |  |  | $ | 170.9 |  |  | (48) | % |  | $ | 127.8 |  |  | $ | 274.5 |  |  | (53) | %
Number of selling communities at April 30, | 54 |  |  | 44 |  |  | 23 | % |  |  |  |  |  |

The decreases in the number of homes delivered in the fiscal 2025 periods were mainly due to the lower number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023 and lower backlog conversion. The average price of homes delivered decreased in the fiscal 2025 periods compared to the prior-year periods primarily due to a shift in the number of contracts delivered to less expensive areas or product types.
The decreases in the number of net contracts signed in the fiscal 2025 periods were primarily due to softer demand, offset, in part, by an increase in the number of selling communities in the fiscal 2025 periods. The increases in the average value of each contract signed in the fiscal 2025 periods were primarily due to a shift in the number of contracts signed to more expensive areas or product types and decreased sales incentives.
The decreases in income before income taxes in the fiscal 2025 periods were mainly due to lower earnings from decreased revenues in the fiscal 2024 periods and higher home sales cost of revenues, as a percentage of home sales revenues. The increases in home sales cost of revenues, as a percentage of home sales revenues, was primarily due to a shift in product mix/areas to lower-margin areas, offset, in part, by lower interest expense as a percentage of home sales revenues. The six-month fiscal 2025 period was also impacted by higher SG&A costs.
Corporate and Other
In the three months ended April 30, 2025 and 2024, loss before income taxes was $58.4 million and $35.5 million, respectively. The increase in the loss before income taxes in the fiscal 2025 period was principally due to higher SG&A costs, higher losses from unconsolidated entities, and a decrease in other income - net. The higher losses from unconsolidated entities was primarily due to a $21.0 million gain we recognized in the fiscal 2024 period related to a property sale by one of our Rental Property Joint Ventures, while we only recognized $15.5 million of such gains in the fiscal 2025 period. The decrease in other income - net was primarily due to gains recognized in fiscal 2024 that did not recur in fiscal 2025. Specifically, in the fiscal 2024 period, we recognized a $5.0 million gain related to an investment in a privately held company that sold substantially all of its assets to a third party and a $4.4 million gain from a bulk sale of security monitoring accounts by our smart home technology business. In addition, we recognized lower interest income in the fiscal 2025 period primarily due to lower average cash balances. These decreases were partially offset by increased earnings from our mortgage operations due to higher closing volume. In addition, we recognized $5.0 million of net write-offs related to our Apartment Living operations in the fiscal 2024 period that did not recur in the fiscal 2025 period.
In the six months ended April 30, 2025 and 2024, loss before income taxes was $107.9 million and $89.0 million, respectively. The increase in the loss before income taxes in the fiscal 2025 period was principally due to higher SG&A costs and higher losses from unconsolidated entities, and a decrease in other income - net. The higher losses in the six-month period in fiscal 2025 were primarily due to the factors noted above impacting the three-month period.
AVAILABLE INFORMATION
Our principal Internet address is www.tollbrothers.com, and our Investor Relations website is located at investors.tollbrothers.com. We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
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Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act available through our Investor Relations website, free of charge, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We provide information about our business and financial performance, including our company overview, on our Investor Relations website. Additionally, we webcast our earnings calls and certain events we participate in with members of the investment community on our Investor Relations website. Corporate governance information, including our codes of ethics, corporate governance guidelines, and board committee charters, is also available on our Investor Relations website. The content of our websites is not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk primarily due to fluctuations in interest rates. We utilize both fixed-rate and variable-rate debt. For fixed-rate debt, changes in interest rates generally affect the fair market value of the debt instrument, but not our earnings or cash flow. Conversely, for variable-rate debt, changes in interest rates generally do not impact the fair value of the debt instrument but do affect our earnings and cash flow. We generally do not have the obligation to prepay fixed-rate debt before maturity and, as a result, interest rate risk and changes in fair value should not have a significant impact on our fixed-rate debt until we are required or elect to refinance it.
The table below sets forth, at April 30, 2025, our debt obligations by scheduled maturity, weighted-average interest rates, and estimated fair value (amounts in thousands):

|  | Fixed-rate debt |  | Variable-rate debt (a),(b)
Fiscal year of maturity |  | Amount |  | Weighted- average interest rate |  | Amount |  | Weighted- average interest rate
2025 |  | $ | 101,602 |  |  | 5.31% |  | $ | 34,791 |  |  | 6.92%
2026 |  | 425,416 |  |  | 4.90% |  | 229,215 |  |  | 6.49%
2027 |  | 507,090 |  |  | 4.91% |  | — |  |  |
2028 |  | 411,581 |  |  | 4.31% |  | — |  |  |
2029 |  | 413,195 |  |  | 3.78% |  | — |  |  |
Thereafter |  | 40,435 |  |  | 3.43% |  | 650,000 |  |  | 5.43%
Discounts, premiums and deferred issuance costs - net |  | (9,606) |  |  |  |  | (3,465) |  |  |
Total |  | $ | 1,889,713 |  |  | 4.55% |  | $ | 910,541 |  |  | 5.77%
Fair value at April 30, 2025 |  | $ | 1,858,488 |  |  |  |  | $ | 914,007 |  |  |

(a) Based upon the amount of variable-rate debt outstanding at April 30, 2025, and holding the variable-rate debt balance constant, each 1% increase in interest rates would increase the interest incurred by us by approximately $9.1 million per year, without consideration of the Company’s interest rate swap transactions.
(b) In November 2020, we entered into five interest rate swap transactions to hedge $400.0 million of the $650.0 million Term Loan Facility, which is included in the variable-rate debt column in the table above. The interest rate swaps effectively fix the interest cost on the $400.0 million at 0.369% plus the spread set forth in the pricing schedule in the Term Loan Facility through October 31, 2025. The spread was 1.15% as of April 30, 2025. These interest rate swaps were designated as cash flow hedges.
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ITEM 4. CONTROLS AND PROCEDURES
Any controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected; however, our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives.
Our Chief Executive Officer and Chief Financial Officer, with the assistance of management, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report (the “Evaluation Date”). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
There has not been any change in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our quarter ended April 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are involved in various claims and litigation arising principally in the ordinary course of business. We believe that adequate provision for resolution of all current claims and pending litigation has been made and that the disposition of these matters will not have a material adverse effect on our results of operations and liquidity or on our financial condition.
ITEM 1A. RISK FACTORS
There have been no material changes in our risk factors as previously disclosed in Part I, Item 1A., “Risk Factors” in our 2024 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
During the three-month period ended April 30, 2025, we repurchased the following shares of our common stock:

Period |  | Total number of shares purchased (a) |  | Average price paid per share (b) |  | Total number of shares purchased as part of publicly announced plans or programs (c) |  | Maximum number of shares that may yet be purchased under the plans or programs (c)
|  |  |  |  |  |  |  | (in thousands)
February 1, 2025 to February 28, 2025 |  | 658 |  |  | $ | 116.03 |  |  | 658 |  |  | 14,242 |
March 1, 2025 to March 31, 2025 |  | 473 |  |  | $ | 108.80 |  |  | 473 |  |  | 13,769 |
April 1, 2025 to April 30, 2025 |  | 514 |  |  | $ | 96.47 |  |  | 514 |  |  | 13,255 |
Total |  | 1,645 |  |  |  |  | 1,645 |  |  |

(a) Our stock incentive plans permit us to withhold from the total number of shares that otherwise would be issued to a performance based restricted stock unit recipient or a restricted stock unit recipient upon distribution that number of shares having a fair value at the time of distribution equal to the applicable income tax withholdings due and remit the remaining shares to the recipient. During the three months ended April 30, 2025, we withheld 776 of the shares subject to performance based restricted stock units and/or restricted stock units to cover approximately $94,700 of income tax withholdings and we issued the remaining 1,853 shares to the recipients. The shares withheld are not included in the total number of shares purchased in the table above.
Our stock incentive plans also permit participants to exercise non-qualified stock options using a “net exercise” method. In a net exercise, we generally withhold from the total number of shares that otherwise would be issued to the participant upon exercise of the stock option that number of shares having a fair market value at the time of exercise equal to the option exercise price and applicable income tax withholdings, and remit the remaining shares to the participant. During the three-month period ended April 30, 2025, the net exercise method was not employed to exercise options.
(b) Average price paid per share includes costs associated with the purchases but excludes any excise tax that we accrue on our share repurchases as a result of the Inflation Reduction Act of 2022.
(c) On December 13, 2023, our Board of Directors authorized the repurchase of 20 million shares of our common stock in open market transactions, privately negotiated transactions (including accelerated share repurchases), issuer tender offers or other financial arrangements or transactions for general corporate purposes, including to obtain shares for the Company’s equity award and other employee benefit plans. This authorization terminated, effective December 13, 2023, the existing authorization that had been in effect since May 17, 2022. Our Board of Directors did not fix any expiration date for the current share repurchase program.
Except as set forth above, we have not repurchased any of our equity securities during the three-month period ended
April 30, 2025.
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Dividends
During the six months ended April 30, 2025, we paid cash dividends of $0.48 per share to our shareholders. The payment of dividends is within the discretion of our Board of Directors and any decision to pay dividends in the future will depend upon an evaluation of a number of factors, including our results of operations, our capital requirements, our operating and financial condition, and any contractual limitations then in effect. Our revolving credit agreement and term loan agreement each require us to maintain a minimum tangible net worth (as defined in the applicable agreement), which restricts the amount of dividends we may pay. During the six months ended April 30, 2025, these limitations did not meaningfully restrict the amount of cash dividends that could have been paid. At April 30, 2025, these agreements permitted us to pay up to approximately $3.82 billion of cash dividends.
ITEM 5. OTHER INFORMATION
Securities Trading Plans of Directors and Executive Officers
During the period covered by this Quarterly Report on Form 10-Q, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
ITEM 6. EXHIBITS

3.1 | Certificate of Amendment to Second Restated Certificate of Incorporation, is hereby incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12, 2025
4.1* | Thirty-Sixth Supplemental Indenture dated as of April 30, 2025 to the Indenture dated as of February 7, 2012 by and among the party listed on Schedule A hereto and The Bank of New York Mellon, as successor trustee
31.1* | Certification of Douglas C. Yearley, Jr. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2* | Certification of Martin P. Connor pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1* | Certification of Douglas C. Yearley, Jr. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2* | Certification of Martin P. Connor pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 | The following financial statements from Toll Brothers, Inc. Quarterly Report on Form 10-Q for the quarter ended April 30, 2025, filed on May 29, 2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income, (iii) Condensed Consolidated Statements of Changes in Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) the Notes to Condensed Consolidated Financial Statements
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

* | Filed electronically herewith.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  | TOLL BROTHERS, INC.
|  | (Registrant)
Date: | May 29, 2025 | By: |  | /s/ Martin P. Connor
|  |  |  | Martin P. Connor Senior Vice President and Chief Financial Officer (Principal Financial Officer)
Date: | May 29, 2025 | By: |  | /s/ Michael J. Grubb
|  |  |  | Michael J. Grubb Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)

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