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Toll Brothers Is Scaling Active Adult Communities — But How Durable Is This Growth Engine?

Toll Brothers reported solid performance for the fiscal year 2025 despite a challenging sales environment due to broader market factors such as affordability pressures and interest rate fluctuations. The company posted record home sales revenue of $10.8 billion, generated from the delivery of 11,292 homes at an average price of $960,000. Their adjusted gross margin stood at a strong 27.3%, with a return on beginning equity of 17.6%. This indicates efficient cost management and operational execution, supported by robust cash flows of $1.1 billion, facilitating $750 million returns to shareholders through buybacks and dividends. During the fourth quarter, Toll Brothers achieved $3.4 billion in home sales revenue. The quarterly performance was slightly undercut by a delay in finalizing the sale of a portion of its Apartment Living business to Kennedy Wilson.