Toll Brothers Reports FY 2026 Second Quarter Results

FORT WASHINGTON, Pa., May 19, 2026 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL) (TollBrothers.com), the nation’s leading builder of luxury homes, today announced results for its second quarter ended April 30, 2026.

FY 2026's Second Quarter Financial Highlights (Compared to FY 2025's Second Quarter):

• Net income and earnings per share were $260.6 million and $2.72 per diluted share, compared to net income of $352.4 million and $3.50 per diluted share in FY 2025's second quarter.
• Pre-tax income was $350.4 million, compared to $477.5 million in FY 2025's second quarter.
• Home sales revenues were $2.51 billion compared to $2.71 billion in FY 2025's second quarter; delivered homes were 2,491 compared to 2,899 in FY 2025's second quarter.
• Net signed contract value was $2.81 billion compared to $2.60 billion in FY 2025's second quarter; contracted homes were 2,834 compared to 2,650.
• Backlog value was $6.32 billion at second quarter end compared to $6.84 billion at FY 2025’s second quarter end; homes in backlog were 5,394 compared to 6,063.
• Home sales gross margin was 23.9%, compared to FY 2025’s second quarter home sales gross margin of 26.0%.
• Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 26.2%, compared to FY 2025’s second quarter adjusted home sales gross margin of 27.5%.
• SG&A, as a percentage of home sales revenues, was 10.3% compared to 9.5% in FY 2025's second quarter.
• Income from operations was $346.6 million.
• Other income, income from unconsolidated entities, and gross margin from land sales and other was $9.3 million.
• The Company repurchased approximately 1.2 million shares at an average price of $143.72 per share for a total purchase price of $175.4 million.
  
  

Karl K. Mistry, chief executive officer, stated: “In the second quarter, we once again successfully navigated a challenging market and produced strong results. We delivered 2,491 homes at an average price of $1,009,000 in the quarter, generating $2.5 billion of home sales revenues, or approximately $110 million above the midpoint of our guidance. Our adjusted gross margin was 26.2%, or 70 basis points above guidance, and our SG&A expense, as a percentage of home sales revenues, was 10.3% or 40 basis points better than guidance. In addition, orders were up 7% in units and 8% in dollars year-over-year. Based on our year-to-date performance, we are raising our full year guidance across all key home building metrics.

“Our strong results continue to reflect our unique position as the nation’s leading builder of luxury homes, with operations spanning more than 60 markets across the country. The strength of our brand, broad geographic footprint, and wide variety of home offerings and price points, combined with our long history serving the luxury market and its affluent customers, continues to set us apart.

“In our second quarter, we repurchased $175 million of common stock, bringing our year-to-date total to $226 million, and we raised our quarterly dividend. In addition, we increased community count by 9% year-over-year and control sufficient land for continued 8% to 10% growth in 2027 and beyond. With a strong balance sheet, attractive margins and significant operating cash flows, we are well positioned to invest in the growth of our business and deliver strong returns to stockholders.”

Third Quarter and FY 2026 Financial Guidance: Third Quarter Full Fiscal YearDeliveries2,600 - 2,700 units 10,400 - 10,700 unitsAverage Delivered Price per Home$965,000 -$985,000 $985,000 -$1,000,000Adjusted Home Sales Gross Margin25.25% 26.10%SG&A, as a Percentage of Home Sales Revenues10.0% 10.10%Period-End Community Count475  480 - 490Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other$5 million $120 millionTax Rate26.0% 25.5%

    Financial Highlights for the three months ended April 30, 2026 and 2025 (unaudited): 2026
 2025
Net Income$260.6 million, or $2.72 per share diluted $352.4 million, or $3.50 per share dilutedPre-Tax Income$350.4 million $477.5 millionPre-Tax Inventory Impairments included in Home Sales Costs of Revenues$32.5 million $9.8 millionHome Sales Revenues$2.51 billion and 2,491 units $2.71 billion and 2,899 unitsNet Signed Contracts$2.81 billion and 2,834 units $2.60 billion and 2,650 unitsNet Signed Contracts per Community6.3 units 6.4 unitsQuarter-End Backlog$6.32 billion and 5,394 units $6.84 billion and 6,063 unitsAverage Price per Home in Backlog$1,171,800  $1,128,100 Home Sales Gross Margin23.9% 26.0%Adjusted Home Sales Gross Margin26.2% 27.5%Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues1.1% 1.1%SG&A, as a percentage of Home Sales Revenues10.3% 9.5%Income from Operations$346.6 million, or 13.7% of total revenues $449.7 million, or 16.4% of total revenuesOther Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other$9.3 million $29.0 millionOther Pre-Tax Impairments:   Included in Land Sales and Other Cost of Revenues$2.3 million $— millionIncluded in Income (loss) from Unconsolidated Entities$13.5 million $— millionQuarterly Cancellations as a Percentage of Beginning-Quarter Backlog2.9% 2.8%Quarterly Cancellations as a Percentage of Signed Contracts in Quarter4.8% 6.2%

Financial Highlights for the six months ended April 30, 2026 and 2025 (unaudited): 2026 2025Net Income$471.5 million, or $4.91 per share diluted $530.2 million, or $5.24 per share dilutedPre-Tax Income$623.9 million $698.9 millionPre-Tax Inventory Impairments included in Home Sales Costs of Revenues$44.2 million $26.2 millionHome Sales Revenues$4.37 billion and 4,390 units $4.55 billion and 4,890 unitsNet Signed Contracts$5.19 billion and 5,137 units $4.91 billion and 4,957 unitsHome Sales Gross Margin24.2% 25.6%Adjusted Home Sales Gross Margin26.3% 27.3%Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues1.1% 1.1%SG&A, as a percentage of Home Sales Revenues11.8% 10.9%Income from Operations$565.7 million, or 12.1% of total revenues $668.8 million, or 14.5% of total revenuesOther Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other$81.3 million $31.5 millionOther Pre-Tax Impairments:   Included in Land Sales and Other Cost of Revenues$3.7 million $1.8 millionIncluded in Other Income - Net$— million $4.4 millionIncluded in Income (loss) from Unconsolidated Entities$57.8 million $— million    

Additional Information:

• The Company ended its FY 2026 second quarter with $1.11 billion in cash and cash equivalents, compared to $1.26 billion at FYE 2025 and $1.20 billion at FY 2026’s first quarter. At FY 2026 second quarter end, the Company also had $2.24 billion available under its $2.38 billion senior unsecured revolving credit facility.
• On February 5, 2026, the Company extended the maturity date of its senior unsecured revolving facility from February 7, 2030 to February 5, 2031 and increased the total amount of revolving loans and commitments available under the facility from $2.35 billion to $2.38 billion. The Company also extended the maturity of approximately $548 million of loans outstanding under its $650 million term loan credit facility from February 7, 2030 to February 5, 2031, with the remainder continuing to mature on February 7, 2030.
• On March 10, 2026, the Company announced a 4% increase in its quarterly cash dividend from $0.25 to $0.26 per share. On April 24, 2026, the Company paid its quarterly dividend of $0.26 per share to shareholders of record at the close of business on April 10, 2026.
• Stockholders’ equity at FY 2026 second quarter end was $8.48 billion, compared to $8.27 billion at FYE 2025.
• FY 2026’s second quarter-end book value per share was $90.51 per share, compared to $87.25 at FYE 2025.
• The Company ended FY 2026's second quarter with a debt-to-capital ratio of 24.7%, compared to 24.4% at FY 2026’s first quarter end and 26.0% at FYE 2025. The Company ended FY 2026’s second quarter with a net debt-to-capital ratio(1) of 15.4%, compared to 14.2% at FY 2026’s first quarter end, and 15.3% at FYE 2025.
• The Company ended FY 2026’s second quarter with approximately 76,800 lots owned and optioned, compared to 75,000 one quarter earlier, and 78,600 one year earlier. Approximately 42% or 32,000, of these lots were owned, of which approximately 18,400 lots, including those in backlog, were substantially improved.
• In the second quarter of FY 2026, the Company spent approximately $422.0 million on land to purchase approximately 1,943 lots.
• The Company ended FY 2026’s second quarter with 459 selling communities, compared to 445 at FY 2026’s first quarter end and 421 at FY 2025’s second quarter end.
  

(1)   See “Reconciliation of Non-GAAP Measures” below for more information on the calculation of the Company’s net debt-to-capital ratio.

Toll Brothers will be broadcasting live via the Investor Relations section of its website, investors.TollBrothers.com, a conference call hosted by Douglas C. Yearley, Jr., executive chairman of the board, and Karl K. Mistry, chief executive officer, at 8:30 a.m. (ET) Wednesday, May 20, 2026, to discuss these results and its outlook for the third quarter and FY 2026. To access the call, enter the Toll Brothers website, click on the Investor Relations page, and select “Events & Presentations” under the “News & Events” tab. Participants are encouraged to log on at least fifteen minutes prior to the start of the presentation to register and download any necessary software.

The call can be heard live with an online replay which will follow.

ABOUT TOLL BROTHERS

Toll Brothers, Inc., a Fortune 500 Company, is the nation’s leading builder of luxury homes. The Company was founded in 1967 and became a public company in 1986 with common stock listed on the New York Stock Exchange under the symbol “TOL.” Toll Brothers builds new homes and communities in over 60 markets across the United States, serving first-time, move-up, active-adult, and second-home buyers. The Company also operates its own architectural, engineering, mortgage, title, land development, smart home technology, landscape, and building components manufacturing businesses.

Toll Brothers was named the #1 Most Admired Home Builder in Fortune magazine’s 2026 list of the World’s Most Admired Companies®, the ninth year the Company has achieved this honor. Toll Brothers has also been named Builder of the Year by Builder magazine and is the first two-time recipient of Builder of the Year from Professional Builder magazine. For more information visit TollBrothers.com.

Toll Brothers discloses information about its business and financial performance and other matters, and provides links to its securities filings, notices of investor events, and earnings and other news releases, on the Investor Relations section of its website (investors.TollBrothers.com).

From Fortune, ©2026 Fortune Media IP Limited. All rights reserved. Used under license.

FORWARD-LOOKING STATEMENTS

Information presented herein for the second quarter ended April 30, 2026 is subject to finalization of the Company’s regulatory filings, related financial and accounting reporting procedures and external auditor procedures.

This release contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 and statements regarding: 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 plans and expectations regarding our announced exit from the multifamily development business, including the disposition of our remaining assets; 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; management succession plans; and the impact of public health or other emergencies.

Any or all of the forward-looking statements included in this release are not guarantees of future performance and may turn out to be inaccurate. This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties. 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, inflation rates, interest and mortgage rates, 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, home components and labor;
• 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;
• federal and state tax policies;
• transportation costs;
• the effect of land use, environment 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 or unsuccessful management transitions;
• changes in accounting principles;
• risks related to unauthorized access to our computer systems, theft of our and our homebuyers’ confidential information or other forms of cyber-attack; and
• other factors described in “Risk Factors” included in our Annual Report on Form 10-K for the year ended October 31, 2025 and in subsequent filings we make with the Securities and Exchange Commission (“SEC”).
  
  

Many of the factors mentioned above or in other reports or public statements made by us will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements.

Forward-looking statements 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 actual results to differ materially from expected and historical results, see the information under the captions “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 subsequent reports filed with the SEC. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995, and all of our forward-looking statements are expressly qualified in their entirety by the cautionary statements contained or referenced in this section.

 TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)  April 30, 2026 October 31, 2025 (Unaudited)  ASSETS   Cash and cash equivalents$1,105,511  $1,258,997 Inventory 11,377,712   10,678,460 Property, construction and office equipment - net 283,878   273,397 Receivables, prepaid expenses and other assets 543,805   554,720 Real estate and related assets held for sale —   420,969 Mortgage loans held for sale 141,482   200,816 Customer deposits held in escrow 125,326   106,612 Investments in unconsolidated entities 955,462   1,025,895  $14,533,176  $14,519,866     LIABILITIES AND EQUITY   Liabilities:   Loans payable$903,336  $896,388 Senior notes 1,742,154   1,741,525 Mortgage company loan facility 138,202   150,000 Customer deposits 472,098   418,897 Accounts payable 461,439   615,771 Accrued expenses 2,158,618   2,061,919 Liabilities related to assets held for sale —   172,186 Income taxes payable 171,337   177,116 Total liabilities$6,047,184  $6,233,802     Equity:   Stockholders’ Equity   Common stock, 102,937 shares issued at April 30, 2026 and October 31, 2025 1,029   1,029 Additional paid-in capital 649,556   687,123 Retained earnings 8,997,249   8,574,807 Treasury stock, at cost — 9,297 and 8,140 shares at April 30, 2026 and October 31, 2025, respectively (1,191,681)  (1,014,568)Accumulated other comprehensive income 19,002   22,272 Total stockholders’ equity 8,475,155   8,270,663 Noncontrolling interest 10,837   15,401 Total equity 8,485,992   8,286,064  $14,533,176  $14,519,866 

 TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data and percentages)
(Unaudited)  Three Months Ended
April 30, Six Months Ended
April 30,  2026   2025   2026   2025  $% $% $% $%Revenues:           Home sales$2,512,464   $2,706,453   $4,367,449   $4,547,229  Land sales and other 18,766    32,624    309,408    50,979    2,531,230    2,739,077    4,676,857    4,598,208              Cost of revenues:           Home sales 1,913,162 76.1%  2,002,218 74.0%  3,308,624 75.8%  3,383,698 74.4%Land sales and other 13,178 70.2%  31,421 96.3%  286,352 92.5%  49,527 97.2%  1,926,340    2,033,639    3,594,976    3,433,225              Gross margin - home sales 599,302 23.9%  704,235 26.0%  1,058,825 24.2%  1,163,531 25.6%Gross margin - land sales and other 5,588 29.8%  1,203 3.7%  23,056 7.5%  1,452 2.8%            Selling, general and administrative expenses 258,253 10.3%  255,760 9.5%  516,189 11.8%  496,174 10.9%Income from operations 346,637    449,678    565,692    668,809              Other:           Income (loss) from unconsolidated entities (16,720)   11,489    18,724    2,746  Other income - net 20,441    16,336    39,517    27,330  Income before income taxes 350,358    477,503    623,933    698,885  Income tax provision 89,767    125,056    152,410    168,735  Net income$260,591   $352,447   $471,523   $530,150  Per share:           Basic earnings$2.74   $3.53   $4.94   $5.28  Diluted earnings$2.72   $3.50   $4.91   $5.24  Cash dividend declared$0.26   $0.25   $0.51   $0.48  Weighted-average number of shares:           Basic 95,144    99,890    95,422    100,360  Diluted 95,755    100,585    96,130    101,208              Effective tax rate 25.6%   26.2%   24.4%   24.1% 

                TOLL BROTHERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA
(Amounts in thousands)
(unaudited)
                 Three Months Ended
April 30,
 Six Months Ended
April 30,
  2026   2025   2026   2025 Inventory impairments and write-offs included in home sales cost of revenues:          Pre-development costs and option write offs$20,077  $1,674  $24,751  $5,631 Land owned for operating communities 12,400   8,125   19,400   20,585  $32,477  $9,799  $44,151  $26,216            Land and other impairments included in land sales and other cost of revenues$2,300  $—  $3,692  $1,841            Joint venture impairments included in income (loss) from unconsolidated entities$13,500  $—  $57,800  $—            Other asset write-offs (recoveries) included in Other income - net$—  $(42) $—  $4,405            Depreciation and amortization$17,259  $20,775  $33,495  $37,940 Interest incurred$29,372  $31,603  $58,919  $61,438 Interest expense:          Charged to home sales cost of revenues$27,416  $30,311  $47,496  $50,387 Charged to land sales and other cost of revenues 207   623   207   638 Charged to other income - net 1,959   482   2,942   482  $29,582  $31,416  $50,645  $51,507            Home sites controlled:     April 30,
2026
 April 30,
2025
Owned      32,025   32,763 Optioned      44,779   45,843        76,804   78,606 

Inventory at April 30, 2026 and October 31, 2025 consisted of the following (amounts in thousands):

 April 30,
2026
 October 31,
2025
Land deposits and costs of future communities$947,963  $843,110 Land and land development costs 3,286,410   3,018,179 Land and land development costs associated with homes under construction 3,967,014   3,738,695 Total land and land development costs 8,201,387   7,599,984       Homes under construction 2,577,971   2,535,219 Model homes(1) 598,354   543,257  $11,377,712  $10,678,460         

(1)        Includes the allocated land and land development costs associated with each of our model homes in operation.

Toll Brothers operates in the following five geographic segments, with operations generally located in the states listed below:

• North: Connecticut, Delaware, Massachusetts, Michigan, New Jersey, New York and Pennsylvania
• Mid-Atlantic: Georgia, Maryland, North Carolina, Tennessee and Virginia
• South: Florida, South Carolina and Texas
• Mountain: Arizona, Colorado, Idaho, Nevada and Utah
• Pacific: California, Oregon and Washington
  

 Three Months Ended
April 30, Units $ (Millions) Average Price Per Unit $ 2026 2025  2026   2025   2026  2025REVENUES           North374 389 $388.5  $378.5  $1,038,800 $973,000Mid-Atlantic401 379  413.3   321.8  $1,030,700 $849,000South791 928  661.5   758.6  $836,200 $817,500Mountain638 856  565.1   755.9  $885,800 $883,000Pacific287 347  484.9   492.2  $1,689,500 $1,418,400Home Building2,491 2,899  2,513.3   2,707.0  $1,008,900 $933,700Corporate and other     (0.8)  (0.5)    Total home sales2,491 2,899  2,512.5   2,706.5  $1,008,600 $933,600Land sales and other     18.7   32.6     Total Consolidated    $2,531.2  $2,739.1                 CONTRACTS           North468 372 $496.4  $386.9  $1,060,700 $1,039,900Mid-Atlantic384 407  347.6   378.7  $905,300 $930,500South937 753  818.4   636.8  $873,400 $845,700Mountain738 776  645.6   695.5  $874,700 $896,300Pacific307 342  499.3   506.5  $1,626,500 $1,480,900Total Consolidated2,834 2,650 $2,807.3  $2,604.4  $990,600 $982,800            BACKLOG           North1,052 909 $1,234.2  $1,028.5  $1,173,200 $1,131,500Mid-Atlantic740 906  797.0   987.4  $1,077,000 $1,089,900South1,783 1,932  1,671.4   1,774.7  $937,400 $918,600Mountain1,241 1,480  1,297.5   1,563.9  $1,045,500 $1,056,700Pacific578 836  1,320.8   1,484.9  $2,285,200 $1,776,100Total Consolidated5,394 6,063 $6,320.9  $6,839.4  $1,171,800 $1,128,100                  

Note: Due to rounding, amounts in the geographic tables may not add.

 Six Months Ended
April 30, Units $ (Millions) Average Price Per Unit $ 2026 2025  2026   2025   2026  2025REVENUES           North652 636 $666.9  $633.2  $1,022,900 $995,600Mid-Atlantic653 645  651.5   558.0  $997,700 $865,100South1,369 1,524  1,131.0   1,264.9  $826,200 $830,000Mountain1,175 1,519  1,040.9   1,312.6  $885,900 $864,100Pacific541 566  878.0   779.3  $1,622,900 $1,376,900Home Building4,390 4,890  4,368.3   4,548.0  $995,100 $930,100Corporate and other     (0.9)  (0.8)    Total home sales4,390 4,890  4,367.4   4,547.2  $994,900 $929,900Land sales and other     309.5   51.0     Total Consolidated    $4,676.9  $4,598.2                 CONTRACTS           North871 690 $929.5  $723.6  $1,067,200 $1,048,700Mid-Atlantic685 765  625.1   720.2  $912,600 $941,400South1,591 1,453  1,343.6   1,230.0  $844,500 $846,500Mountain1,392 1,404  1,217.8   1,229.6  $874,900 $875,800Pacific598 645  1,070.6   1,008.2  $1,790,300 $1,563,100Total Consolidated5,137 4,957 $5,186.6  $4,911.6  $1,009,700 $990,800

RECONCILIATION OF NON-GAAP MEASURES

This press release contains, and Company management’s discussion of the results presented in this press release may include, information about the Company’s adjusted home sales gross margin and the Company’s net debt-to-capital ratio.

These measures are non-GAAP financial measures which are not calculated in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures should not be considered a substitute for, or superior to, the comparable GAAP financial measures, and may be different from non-GAAP measures used by other companies in the home building business.

The Company’s management considers these non-GAAP financial measures as we make operating and strategic decisions and evaluate our performance, including against other home builders that may use similar non-GAAP financial measures. The Company’s management believes these non-GAAP financial measures are useful to investors in understanding our operations and leverage and may be helpful in comparing the Company to other home builders to the extent they provide similar information.

Adjusted Home Sales Gross Margin
The following table reconciles the Company’s home sales gross margin as a percentage of home sales revenues (calculated in accordance with GAAP) to the Company’s adjusted home sales gross margin (a non-GAAP financial measure). Adjusted home sales gross margin is calculated as (i) home sales gross margin plus interest recognized in home sales cost of revenues plus inventory write-downs recognized in home sales cost of revenues divided by (ii) home sales revenues.

Adjusted Home Sales Gross Margin Reconciliation
(Amounts in thousands, except percentages)   Three Months Ended
April 30, Six Months Ended
April 30,   2026   2025   2026   2025 Revenues - home sales$2,512,464  $2,706,453  $4,367,449  $4,547,229 Cost of revenues - home sales 1,913,162   2,002,218   3,308,624   3,383,698 Home sales gross margin 599,302   704,235   1,058,825   1,163,531 Add:Interest recognized in cost of revenues - home sales 27,416   30,311   47,496   50,387  Inventory impairments and write-offs in cost of revenues - home sales 32,477   9,799   44,151   26,216 Adjusted home sales gross margin$659,195  $744,345  $1,150,472  $1,240,134          Home sales gross margin as a percentage of home sale revenues 23.9%  26.0%  24.2%  25.6%         Adjusted home sales gross margin as a percentage of home sale revenues 26.2%  27.5%  26.3%  27.3%                

The Company’s management believes adjusted home sales gross margin is a useful financial measure to investors because it allows them to evaluate the performance of our home building operations without the often varying effects of capitalized interest costs and inventory impairments. The use of adjusted home sales gross margin also assists the Company’s management in assessing the profitability of our home building operations and making strategic decisions regarding community location and product mix.

Forward-looking Adjusted Home Sales Gross Margin
The Company has not provided projected third quarter and full FY 2026 home sales gross margin or a GAAP reconciliation for forward-looking adjusted home sales gross margin because such measure cannot be provided without unreasonable efforts on a forward-looking basis, since inventory write-downs are based on future activity and observation and therefore cannot be projected for the third quarter and full FY 2026. The variability of these charges may have a potentially unpredictable, and potentially significant, impact on our third quarter and full FY 2026 home sales gross margin.

Net Debt-to-Capital Ratio
The following table reconciles the Company’s ratio of debt to capital (calculated in accordance with GAAP) to the Company’s net debt-to-capital ratio (a non-GAAP financial measure). The net debt-to-capital ratio is calculated as (i) total debt minus mortgage warehouse loans minus cash and cash equivalents divided by (ii) total debt minus mortgage warehouse loans minus cash and cash equivalents plus stockholders’ equity.

Net Debt-to-Capital Ratio Reconciliation
(Amounts in thousands, except percentages)   April 30, 2026 January 31, 2026 October 31, 2025Loans payable$903,336  $858,347  $896,388 Loans payable included in liabilities held for sale —   —   114,254 Senior notes 1,742,154   1,741,842   1,741,525 Mortgage company loan facility 138,202   121,130   150,000 Total debt 2,783,692   2,721,319   2,902,167 Total stockholders’ equity 8,475,155   8,409,092   8,270,663 Total capital$11,258,847  $11,130,411  $11,172,830 Ratio of debt-to-capital 24.7%  24.4%  26.0%       Total debt$2,783,692  $2,721,319  $2,902,167 Less:Mortgage company loan facility (138,202)  (121,130)  (150,000) Cash and cash equivalents (1,105,511)  (1,202,828)  (1,258,997) Cash and cash equivalents included in assets held for sale —   —   (773)Total net debt 1,539,979   1,397,361   1,492,397 Total stockholders’ equity 8,475,155   8,409,092   8,270,663 Total net capital$10,015,134  $9,806,453  $9,763,060 Net debt-to-capital ratio 15.4%  14.2%  15.3%            

The Company’s management uses the net debt-to-capital ratio as an indicator of its overall leverage and believes it is a useful financial measure to investors in understanding the leverage employed in the Company’s operations.

CONTACT:
Gregg Ziegler
(215) 478-3820
[email protected]

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/46ea3a15-c3ca-4d69-a35a-55336aa8387b