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Toll Brothers Inc
Toll Brothers Inc., an emblem of luxury and sophistication in the homebuilding industry, has carved out a distinctive niche as America’s leading builder of luxury homes. Founded in 1967 by Robert and Bruce Toll in Pennsylvania, the company has grown dramatically, standing as a paragon of upscale residential construction. Over the decades, Toll Brothers has perfected the art of transforming raw land into luxurious havens, primarily focusing on affluent markets across the United States. Their portfolio extends from single-family detached homes and townhomes to urban high-rise condominiums, each project meticulously designed to cater to the tastes of discerning customers. By directly engaging in the construction and sale of these properties, Toll Brothers ensures quality control and brand consistency, which are crucial in sustaining its premium reputation.
The company generates revenue primarily through the sale of residential properties, but its business model is underpinned by a vast array of complementary operations. Land acquisition and development play pivotal roles in their strategy, allowing them to control costs and ensure steady availability of building sites. Moreover, their integration of architectural, engineering, and design services provides an appeal that extends beyond mere construction. Toll Brothers also leverages its national footprint to tap into ancillary services, such as mortgage financing and title insurance, enhancing customer experience and adding layers of profitability. This holistic approach not only diversifies their revenue streams but also fortifies their position against market volatility, an essential strategy in the cyclical real estate sector.
Toll Brothers Inc., an emblem of luxury and sophistication in the homebuilding industry, has carved out a distinctive niche as America’s leading builder of luxury homes. Founded in 1967 by Robert and Bruce Toll in Pennsylvania, the company has grown dramatically, standing as a paragon of upscale residential construction. Over the decades, Toll Brothers has perfected the art of transforming raw land into luxurious havens, primarily focusing on affluent markets across the United States. Their portfolio extends from single-family detached homes and townhomes to urban high-rise condominiums, each project meticulously designed to cater to the tastes of discerning customers. By directly engaging in the construction and sale of these properties, Toll Brothers ensures quality control and brand consistency, which are crucial in sustaining its premium reputation.
The company generates revenue primarily through the sale of residential properties, but its business model is underpinned by a vast array of complementary operations. Land acquisition and development play pivotal roles in their strategy, allowing them to control costs and ensure steady availability of building sites. Moreover, their integration of architectural, engineering, and design services provides an appeal that extends beyond mere construction. Toll Brothers also leverages its national footprint to tap into ancillary services, such as mortgage financing and title insurance, enhancing customer experience and adding layers of profitability. This holistic approach not only diversifies their revenue streams but also fortifies their position against market volatility, an essential strategy in the cyclical real estate sector.
Record Revenue: Toll Brothers delivered record home sales revenue of $10.8 billion in 2025, up 2.6% from last year, despite a soft housing market.
Delivery Guidance: The company expects to deliver 10,300 to 10,700 homes in 2026 with an average price of $970,000 to $990,000, citing a lower starting backlog as the main reason for fewer expected closings.
Gross Margin Outlook: Gross margin guidance for 2026 is 26%, lower than 2025 due to higher incentives, especially for spec homes in the latter part of the year.
Conservative Approach: Management emphasized a cautious outlook for 2026, with no assumed market improvement and guidance viewed as conservative.
Affluent Buyer Base: Toll Brothers targets wealthier, older buyers less sensitive to mortgage rates and affordability pressures; 26% of Q4 buyers paid all cash.
Capital Allocation: Company plans $650 million in share repurchases for 2026 and will use proceeds from the multifamily exit for both growth and shareholder returns.
Multifamily Exit: The sale of a major portion of the Apartment Living business is expected to close in Q1 2026, with a full exit planned over the next few years.