Toll Brothers, Inc. (TOL): history, ownership, mission, how it works & makes money

A Brief History of Toll Brothers, Inc.

Toll Brothers, Inc. is a leading luxury home builder in the United States, renowned for its commitment to quality, innovation, and customer service. Founded in 1967 by Robert I. Toll and his brother Bruce, the company has grown from a small operation in Pennsylvania to a publicly traded corporation listed on the New York Stock Exchange under the ticker symbol TOL.

Company Growth and Expansion

Over the decades, Toll Brothers has expanded its operations across the nation, establishing a presence in various states including California, Texas, and Florida. As of July 31, 2024, the company was actively selling from 404 communities, a significant increase from 345 communities in the previous year.

Financial Performance

In the nine months ended July 31, 2024, Toll Brothers reported total revenues of $7.51 billion, compared to $6.97 billion in the same period of 2023, reflecting an increase of approximately 7.6%. The company’s net income for the same period was $1.10 billion, a notable rise from $926.5 million year-over-year.

Contracts and Backlog

The value of net contracts signed in the nine months ended July 31, 2024, was $7.41 billion, a significant increase of 25.8% from $5.89 billion in the prior year. The total number of net contracts signed also rose to 7,573 homes, up from 6,039 homes in the previous year.

Current Market Position

As of July 31, 2024, Toll Brothers had a backlog of $7.07 billion, which included 6,769 homes, down from $7.87 billion and 7,295 homes in the previous year. The decrease in backlog value reflects a shift in inventory dynamics, with spec homes comprising a larger share of contracts.

Liquidity and Capital Resources

At the end of the third quarter of fiscal 2024, Toll Brothers reported cash and cash equivalents of $893.4 million, along with approximately $1.77 billion available under its revolving credit facility. This solid liquidity position supports ongoing operations and growth initiatives.

Conclusion

Toll Brothers continues to demonstrate resilience and growth in a competitive market. Its strategic focus on luxury home building, alongside robust financial performance, positions the company well for future opportunities as market conditions evolve.

A Who Owns Toll Brothers, Inc. (TOL)

Major Shareholders

As of 2024, Toll Brothers, Inc. is publicly traded, and its ownership is distributed among various institutional and individual investors. The following table illustrates the major shareholders and their respective ownership percentages:

Insider Ownership

Insider ownership plays a significant role in the governance of Toll Brothers, Inc. The following table summarizes the ownership stakes of key executives and board members:

Institutional Ownership Trends

Institutional ownership has shown a stable trend, with a significant portion of shares held by large investment firms. The following table presents the historical data on institutional ownership percentage:

Market Capitalization and Stock Performance

As of July 31, 2024, Toll Brothers, Inc. reported a market capitalization of approximately $9.5 billion. The stock has shown the following performance metrics in recent quarters:

Conclusion on Ownership Structure

The ownership structure of Toll Brothers, Inc. indicates a strong presence of institutional investors, alongside significant insider ownership by key executives. This balance provides a strategic governance framework for the company.

Toll Brothers, Inc. (TOL) Mission Statement

Mission Statement Overview

Toll Brothers, Inc. is committed to delivering exceptional homes and communities through a focus on quality, innovation, and customer satisfaction. The company aims to enhance the home-buying experience by providing high-quality, luxury homes that reflect the needs and desires of their customers.

Core Values

• Quality: Commitment to delivering superior craftsmanship and materials.
• Customer Satisfaction: Focus on customer service and building lasting relationships.
• Innovation: Emphasis on innovative design and sustainability in home building.
• Integrity: Conducting business with the highest ethical standards.

2024 Financial Performance

As of July 31, 2024, Toll Brothers reported significant financial metrics that reflect its operational success and market position.

Operational Highlights

During the nine-month period ended July 31, 2024, Toll Brothers recognized:

• Revenues of $7.51 billion, compared to $6.97 billion in the same period of 2023, an increase of 8%.
• Net contracts signed valued at $7.41 billion, up from $5.89 billion, representing a 26% increase.
• Average backlog price decreased by 3% to $1.04 million.

Community Expansion

As of July 31, 2024, Toll Brothers was actively selling from 404 communities, up from 345 communities a year earlier. The increase in selling communities has contributed to the growth in net contracts signed and overall revenue.

Strategic Goals

Toll Brothers continues to pursue strategic initiatives aimed at enhancing its market presence and operational efficiency. Key focus areas include:

• Expansion into new geographic markets.
• Development of innovative home designs to meet changing consumer preferences.
• Investment in sustainable building practices to improve environmental impact.

Liquidity and Capital Resources

As of July 31, 2024, the company had:

• $893.4 million in cash and cash equivalents.
• Approximately $1.77 billion available under its revolving credit facility.
• Total stockholders' equity of $7.41 billion.

Conclusion

Toll Brothers, Inc. remains steadfast in its mission to provide high-quality homes and exceptional customer service, supported by robust financial performance and strategic growth initiatives.

How Toll Brothers, Inc. (TOL) Works

Company Overview

Toll Brothers, Inc. (TOL) is a leading luxury home builder in the United States, focusing on building single-family homes, townhomes, and condominiums. The company operates in various regions, including North, South, Mid-Atlantic, Mountain, and Pacific.

Financial Performance

As of the nine-month period ending July 31, 2024, Toll Brothers reported:

• Revenues: $7.51 billion
• Home sales revenues: $7.30 billion
• Land sales and other revenues: $210 million
• Net income: $1.10 billion

Quarterly Highlights

In the three-month period ending July 31, 2024, the financial highlights were:

• Total revenues: $2.73 billion
• Home sales revenue: $2.72 billion
• Net income: $374.6 million

Contract Metrics

For the three-month period ending July 31, 2024:

• Value of net contracts signed: $2.41 billion (2,490 homes)
• Average contracted price: $966.9 thousand

For the nine-month period ending July 31, 2024:

• Value of net contracts signed: $7.41 billion (7,573 homes)

Backlog Overview

The backlog as of July 31, 2024, consisted of:

• Value: $7.07 billion (6,769 homes)
• Average backlog price: $1,044 thousand

Operating Metrics

As of July 31, 2024:

• Total cash and cash equivalents: $893.4 million
• Available under revolving credit facility: $1.77 billion
• Debt to total capitalization ratio: 0.28 to 1.00

Regional Performance

Cost and Profitability

As of July 31, 2024:

• Home sales cost of revenues as a percentage of home sales revenues: 72.6%
• Income before income taxes: $503.6 million (three months ended July 31, 2024)

Liquidity and Capital Resources

The company maintains significant liquidity to support its operations and growth initiatives:

• Cash flow provided by operating activities: $327.7 million (nine months ended July 31, 2024)
• Cash flow used in investing activities: $116.0 million
• Cash flow used in financing activities: $2.87 billion

Shareholder Equity

As of July 31, 2024, total stockholders’ equity was reported at:

• $7.41 billion

How Toll Brothers, Inc. (TOL) Makes Money

Revenue Streams

Toll Brothers, Inc. primarily generates revenue through two main streams: home sales and land sales. For the nine-month period ending July 31, 2024, the company recognized $7.30 billion from home sales and $210 million from land sales and other revenues.

Home Sales Performance

In the nine-month period ending July 31, 2024, Toll Brothers delivered 7,382 homes, reflecting an 8% increase compared to the previous year. The average delivered price per home was $989,300, a 2% decrease from the previous year. Home sales revenue for the same period increased by 6% to $7.30 billion.

Net Contracts Signed

For the nine-month period ending July 31, 2024, Toll Brothers reported net contracts signed worth $7.41 billion for 7,573 homes, an increase of 26% in total value compared to the previous year. The average contracted price for homes was $978,900, which remained relatively stable compared to the prior year.

Cost of Revenues

The cost of revenues associated with home sales for the nine-month period was $5.34 billion, resulting in a gross margin of 27%. The home sales cost of revenues as a percentage of home sale revenues was 73.1%.

Geographical Segments

Toll Brothers operates in five primary geographical segments: North, Mid-Atlantic, South, Mountain, and Pacific. The South region showed significant growth, with home sales revenues increasing by 27% to $1.97 billion. The following table summarizes the performance by region for the nine-month period ending July 31, 2024:

Net Income and Profitability

Net income for the nine-month period ending July 31, 2024, was $1.10 billion, representing an increase of 18% from $926.5 million in the prior year. The effective tax rate for this period was 25.6%.

Cash Flow and Financial Position

As of July 31, 2024, Toll Brothers had $893.4 million in cash and cash equivalents and approximately $1.77 billion available under its revolving credit facility. The company's total stockholders’ equity was reported at $7.41 billion.