UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
(Address of principal executive offices, including zip code)
(
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered |
|---|---|---|
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
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
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of April 30, 2026, the registrant had
Form type: 10-Q
Period end: 2026-04-30
| Three Months Ended April 30, 2026 | Three Months Ended April 30, 2025 | Six Months Ended April 30, 2026 | Six Months Ended April 30, 2025 | |
|---|---|---|---|---|
| Revenue | ||||
| Total Revenue | ||||
| Cost of revenue | ||||
| Total COGS | ||||
| Gross Profit | ||||
| Operating expenses | ||||
| Other income statement items (derived) | - | - | - | - |
| Total operating expenses | ||||
| Operating income | ||||
| Other income (expense) | ||||
| Income from equity method investments | - | - | - | |
| Other nonoperating income (expense), net | - | - | - | - |
| Income before income taxes | ||||
| Income tax expense (benefit) | ||||
| Net income including noncontrolling interests | ||||
| Less: net income attributable to noncontrolling interests | ||||
| Net Income | ||||
| Basic earnings per share | ||||
| Diluted earnings per share | ||||
| Weighted average shares outstanding, basic | ||||
| Weighted average shares outstanding, diluted | ||||
| Three Months Ended April 30, 2026 | Three Months Ended April 30, 2025 | Six Months Ended April 30, 2026 | Six Months Ended April 30, 2025 | |
|---|---|---|---|---|
| Net income | 260,591,000.00 | 352,447,000.00 | 471,523,000.00 | 530,150,000.00 |
| Other comprehensive income (loss), net of tax | - | - | - | - |
| Comprehensive income |
| April 30, 2026 | October 31, 2025 | |
|---|---|---|
| Assets | ||
| Cash and cash equivalents | ||
| Inventory | ||
| Mortgage loans held for investment, net | ||
| Operating lease right-of-use assets | ||
| Other assets (derived) | ||
| Property, plant and equipment | ||
| Restricted cash and equivalents | 66,588,000.00 | 79,941,000.00 |
| Total Assets | ||
| Liabilities | ||
| Borrowings under credit facilities | ||
| Deferred revenue | ||
| Operating lease liabilities | ||
| Other liabilities (derived) | ||
| Secured borrowings, net | 0.00 | 249,087,000.00 |
| Taxes payable | 0.00 | 16,766,000.00 |
| Unsecured and other notes, net | ||
| Total Liabilities | ||
| Equity | ||
| Preferred stock | ||
| Preferred stock, par value per share | ||
| Preferred stock, shares authorized | ||
| Preferred stock, shares issued | ||
| Accumulated other comprehensive income (loss) | ||
| Additional paid-in capital | ||
| Common stock | ||
| Common stock, par value per share | ||
| Common stock, shares authorized | ||
| Common stock, shares issued | ||
| Common stock, shares outstanding | ||
| Retained earnings (accumulated deficit) | ||
| Treasury stock, at cost | - | - |
| Treasury stock, common shares held | ||
| Total stockholders equity attributable to parent | ||
| Noncontrolling interests | ||
| Total Equity | ||
| Total liabilities and equity | ||
| Six Months Ended April 30, 2026 | Six Months Ended April 30, 2025 | |
|---|---|---|
| Operating activities | ||
| Net income | ||
| Depreciation and amortization | ||
| Stock-based compensation | ||
| Change in income taxes receivable | - | |
| Other noncash items, net | ||
| Change in inventories | - | - |
| Change in contract liabilities | ||
| Change in accounts payable and accrued liabilities | - | |
| Changes in operating assets and liabilities, net | ||
| Net cash from operating activities | - | |
| Investing activities | ||
| Purchases of property and equipment | - | - |
| Payments for (proceeds from) other investing activities | - | - |
| Other investing activities (derived) | - | |
| Net cash from investing activities | - | |
| Financing activities | ||
| Repurchases of common stock | - | - |
| Dividends paid | - | - |
| Other financing activities (derived) | - | - |
| Net cash from financing activities | - | - |
| Net change in cash | - | - |
| Cash at beginning of period | 1,370,435,000.00 | |
| Cash at end of period | 761,675,000.00 | |
| Supplemental cash flow information | ||
| Cash paid for income taxes | ||
| Common stock | Additional paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive income (loss) | Treasury stock, at cost | Noncontrolling interests | Total | |
|---|---|---|---|---|---|---|---|
| Balance at January 31, 2025 | 1,129,000.00 | 674,492,000.00 | 8,307,555,000.00 | 30,372,000.00 | -1,217,942,000.00 | 15,888,000.00 | 7,811,494,000.00 |
| Net income | |||||||
| Other equity movements | 0.00 | 4,942,000.00 | -25,145,000.00 | -2,242,000.00 | -176,883,000.00 | -438,000.00 | -199,766,000.00 |
| Balance at April 30, 2025 | 1,129,000.00 | 679,434,000.00 | 8,634,857,000.00 | 28,130,000.00 | -1,394,825,000.00 | 15,690,000.00 | 7,964,415,000.00 |
| Balance at January 31, 2026 | 1,029,000.00 | 653,399,000.00 | 8,761,441,000.00 | 20,856,000.00 | -1,027,633,000.00 | 10,832,000.00 | 8,419,924,000.00 |
| Net income | |||||||
| Other equity movements | 0.00 | -3,843,000.00 | -24,783,000.00 | -1,854,000.00 | -164,048,000.00 | -34,000.00 | -194,562,000.00 |
| Balance at April 30, 2026 | 1,029,000.00 | 649,556,000.00 | 8,997,249,000.00 | 19,002,000.00 | -1,191,681,000.00 | 10,837,000.00 | 8,485,992,000.00 |
| Balance at October 31, 2024 | 1,129,000.00 | 694,713,000.00 | 8,153,356,000.00 | 31,277,000.00 | -1,209,547,000.00 | 15,787,000.00 | 7,686,715,000.00 |
| Net income | |||||||
| Other equity movements | 0.00 | -15,279,000.00 | -48,649,000.00 | -3,147,000.00 | -185,278,000.00 | -595,000.00 | -252,948,000.00 |
| Balance at April 30, 2025 | 1,129,000.00 | 679,434,000.00 | 8,634,857,000.00 | 28,130,000.00 | -1,394,825,000.00 | 15,690,000.00 | 7,964,415,000.00 |
| Balance at October 31, 2025 | - | ||||||
| Net income | |||||||
| Other equity movements | 0.00 | -37,567,000.00 | -49,081,000.00 | -3,270,000.00 | -177,113,000.00 | -4,697,000.00 | -271,728,000.00 |
| Balance at April 30, 2026 | - |
Toll Brothers, Inc. is a public reporting company classified under Operative Builders. Toll Brothers, Inc. is a public reporting company classified under Operative Builders. 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. The accompanying unaudited condensed consolidated financial statements have been prepared from our accounting records as of and for the period ended April 30, 2026. Company: Toll Brothers, Inc. Period: 2026-04-30 In the opinion of management, the financial statements reflect all adjustments necessary for a fair statement of the financial position, results of operations, and cash flows for the periods presented. The financial statements include the accounts of the Company and its consolidated subsidiaries, if any. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full fiscal year, and these statements should be read in conjunction with our most recent annual consolidated financial statements. Inventories are stated at the lower of cost and net realizable value. Property and equipment are stated at cost less accumulated depreciation. Depreciation is recognized over the estimated useful lives of the related assets, generally on a straight-line basis. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.
Backlog consists of homes under contract but not yet delivered to our home buyers. Revenue for the period was $2,531,230,000 compared with $2,739,077,000 in the prior period, a decrease of 7.6%, while cost of revenue was $1,926,340,000 compared with $2,033,639,000, a decrease of 5.3%. Cost of revenue [cogs]: current $1926340000, prior $2033639000, delta -5.3% Revenue [revenue]: current $2531230000, prior $2739077000, delta -7.6% Deferred revenue was $472,098,000 at period end compared with $514,965,000 in the prior period, a decrease of 8.3%. Deferred revenue [accounts_payable]: current $472098000, prior $514965000, delta -8.3% Operating expenses were $258,253,000 compared with $255,760,000, an increase of 1.0%, and other nonoperating income, net, was $20,441,000 compared with $16,336,000 in the prior period. Operating expenses [expense]: current $258253000, prior $255760000, delta 1.0% Other nonoperating income (expense), net [expense]: current $-20441000, prior $-16336000, delta -25.1% Income tax expense was $89,767,000 compared with $125,056,000 in the prior period, a decrease of 28.2%. Income tax expense (benefit) [expense]: current $89767000, prior $125056000, delta -28.2% Effective tax rate 25.6%; Effective tax rate year to date 24.4%; Unrecognized tax benefits: ending balance $24,700,000.00; beginning balance $22,752,000.00 Net income for the period was $260,591,000. Net income: $260591000 Net income attributable to noncontrolling interests was $39,000 compared with $240,000 in the prior period. Net income attributable to noncontrolling interests [expense]: current $39000, prior $240000, delta -83.8% Basic earnings per share were $2.74 and diluted earnings per share were $2.72, based on weighted-average basic shares outstanding of 95,144,000 and a dilutive adjustment of 611,000 shares. Earnings per share: basic EPS $2.74; diluted EPS $2.72; weighted basic shares 95,144,000; dilutive adjustment 611,000 shares Share-based compensation: total expense $4,519,000.00 (prior $4,773,000.00)
Total debt at period end was $6,047,184,000. Total debt: $6047184000 Borrowings under credit facilities: $2,588,387,000.00; Operating lease liabilities: $139,766,000.00; Secured borrowings, net: $0.00; Unsecured and other notes, net: $1,742,154,000.00; unamortized debt issuance costs $4,620,000.00 Borrowings under credit facilities decreased 20.0% from $3,235,982,000 in the prior period, while unsecured and other notes, net, increased 9.1% from $1,597,544,000. Borrowings under credit facilities [debt]: current $2588387000, prior $3235982000, delta -20.0% Unsecured and other notes, net [debt]: current $1742154000, prior $1597544000, delta 9.1% Operating lease liabilities were $139,766,000 compared with $129,307,000 in the prior period, an increase of 8.1%, and the related operating lease right-of-use assets were $117,258,000 compared with $109,555,000, an increase of 7.0%. Operating lease liabilities [debt]: current $139766000, prior $129307000, delta 8.1% Operating lease right-of-use assets [other_asset]: current $117258000, prior $109555000, delta 7.0% Cash and cash equivalents were $1,105,511,000 at period end compared with $686,466,000 in the prior period, an increase of 61.0%, and restricted cash and equivalents were $66,588,000 compared with $75,209,000. Cash and cash equivalents [cash]: current $1105511000, prior $686466000, delta 61.0% Restricted cash and equivalents [cash]: current $66588000, prior $75209000, delta -11.5% Primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. The company does not have material foreign currency or commodity price exposure.
Total stockholders' equity at period end was $8,485,992,000. Total equity: $8485992000 Stockholders' equity: Accumulated other comprehensive income (loss): $19,002,000.00; Additional paid-in capital: $649,556,000.00; Common stock: $1,029,000.00; Retained earnings (accumulated deficit): $8,997,249,000.00; Treasury stock, at cost: $-1,191,681,000.00 Retained earnings increased 4.2% from $8,634,857,000 in the prior period, and the cost of treasury stock held decreased from $1,394,825,000 to $1,191,681,000. Retained earnings (accumulated deficit) [equity]: current $8997249000, prior $8634857000, delta 4.2% Treasury stock, at cost [equity]: current $-1191681000, prior $-1394825000, delta 14.6% Common stock decreased from $1,129,000 to $1,029,000, additional paid-in capital decreased 4.4% from $679,434,000 to $649,556,000, and accumulated other comprehensive income decreased 32.4% from $28,130,000 to $19,002,000. Accumulated other comprehensive income (loss) [equity]: current $19002000, prior $28130000, delta -32.4% Additional paid-in capital [equity]: current $649556000, prior $679434000, delta -4.4% Common stock [equity]: current $1029000, prior $1129000, delta -8.9% Noncontrolling interests were $10,837,000 at period end compared with $15,690,000 in the prior period, a decrease of 30.9%. Noncontrolling interests [noncontrolling_interest]: current $10837000, prior $15690000, delta -30.9% [COMPLETE: number of shares authorized, issued, and outstanding, and details of any share repurchase program and dividends declared during the period.]
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the applicable rules and regulations of the Securities and Exchange Commission. In the opinion of management, the financial statements reflect all adjustments necessary for a fair statement of the financial position, results of operations, and cash flows for the periods presented.
The financial statements include the accounts of the Company and its consolidated subsidiaries, if any. All intercompany balances and transactions have been eliminated in consolidation.
Inventories are stated at the lower of cost and net realizable value.
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recognized over the estimated useful lives of the related assets, generally on a straight-line basis. Expenditures for maintenance and repairs are expensed as incurred.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. When the carrying amount of an asset or asset group is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds fair value.
Debt is carried at amortized cost. Debt issuance costs and discounts or premiums are presented as an adjustment to the carrying amount of the related debt and amortized to interest expense over the contractual term of the debt.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is recognized when it is more likely than not that some portion of the deferred tax assets will not be realized.
Share-based compensation is measured at the grant-date fair value of the award and recognized as expense over the requisite service period of the award.
Basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock, except when the effect would be antidilutive.
Equity instruments issued by the Company are classified in stockholders' equity based on their terms. The components of stockholders' equity and the changes in those components for the periods presented are set forth in the equity note.
The Company evaluates the applicability and impact of Accounting Standards Updates issued by the Financial Accounting Standards Board as they are issued. Adopted updates and updates not yet effective are not expected to have a material effect on the financial statements, except as otherwise described in these notes.
| Current | Prior | |
|---|---|---|
| Borrowings under credit facilities | ||
| Operating lease liabilities | ||
| Secured borrowings, net | 0.00 | |
| Unsecured and other notes, net | ||
| Total debt | 4,470,307,000.00 | 4,445,188,000.00 |
| Current | Prior | |
|---|---|---|
| Unamortized debt issuance costs |
| Current | Prior | |
|---|---|---|
| Property, plant and equipment | ||
| Total property and equipment | 283,878,000.00 | 273,397,000.00 |
| Current | Prior | |
|---|---|---|
| Accumulated other comprehensive income (loss) | ||
| Additional paid-in capital | ||
| Common stock | ||
| Retained earnings (accumulated deficit) | ||
| Treasury stock, at cost | - | - |
| Total stockholders' equity | 8,475,155,000.00 | 8,270,663,000.00 |
| Current | Prior | |
|---|---|---|
| Weighted average shares outstanding, basic | ||
| Dilutive effect of potential common shares | ||
| Weighted average shares outstanding, diluted | ||
| Basic earnings per share | 2.74 | 3.53 |
| Diluted earnings per share |
| Current | Prior | Year to date | Prior year to date | |
|---|---|---|---|---|
| Effective tax rate |
| Current | Prior | |
|---|---|---|
| Deferred tax assets, gross | ||
| Share-based compensation | ||
| Other deferred tax assets | ||
| State and local operating loss carryforwards | ||
| Inventory | ||
| Accrued liabilities | ||
| Impairment losses | ||
| Deferred tax liabilities | ||
| Deferred income tax liabilities | ||
| Property and equipment | ||
| Tax-deferred income | ||
| Capitalized interest |
| Amount | |
|---|---|
| Balance at beginning of period | |
| Balance at end of period |
| Current | Prior | |
|---|---|---|
| Accrued interest and penalties |
| Current | Prior | |
|---|---|---|
| Total share-based compensation expense |
| Current | Prior | |
|---|---|---|
| Other nonoperating income (expense), net | 20,441,000.00 | 16,336,000.00 |
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, 2025. Toll Brothers, Inc. is a public reporting company classified under Operative Builders. We operate our own architectural, engineering, mortgage, title, land development, insurance, smart home technology and landscaping subsidiaries, and we also develop master-planned and golf course communities as well as operate, in certain regions, our own lumber distribution, house component assembly and component manufacturing operations. At October 31, 2025, we had 1,137 communities in various stages of planning, development or operations containing approximately 76,100 home sites that we owned or controlled through options, and at fiscal year-end we were selling from 446 of these communities. In addition to our residential for-sale business, we have also developed and, in some cases operated, for-rent apartments generally through joint ventures, and in September 2025 we announced plans to exit this business over time. We have investments in various unconsolidated entities, including our Land Development Joint Ventures, Home Building Joint Ventures and Rental Property Joint Ventures.
Revenue for the current period was $2,531.2 million, a decrease of 7.6% from $2,739.1 million in the comparable prior-year period. The decrease in revenue was primarily attributable to [COMPLETE: change in the number of homes delivered and the average price of homes delivered compared to the prior-year period]. Net contracts signed represents a number or value equal to the gross number or value of contracts signed during the relevant period, less the number or value of contracts canceled during the relevant period, and backlog consists of homes under contract but not yet delivered to our home buyers; net contracts signed and backlog at period-end were [COMPLETE: net contracts signed and backlog units and value with prior-year comparison]. Cost of revenue decreased 5.3% to $1,926.3 million from $2,033.6 million, consistent with the lower revenue in the period, and the change in cost of revenue as a percentage of revenue was driven by [COMPLETE: drivers of home sales gross margin change, including land and construction costs, incentives and inventory impairments]. Operating expenses increased 1.0% to $258.3 million from $255.8 million in the prior-year period. Our unconsolidated entities generated a loss of $16.7 million in the current period compared with income of $11.5 million in the prior-year period, while other nonoperating income, net, increased to $20.4 million from $16.3 million. Income tax expense decreased 28.2% to $89.8 million from $125.1 million, reflecting lower pre-tax income in the current period. Net income for the period was $260.6 million, after net income attributable to noncontrolling interests of $39 thousand compared with $240 thousand in the prior-year period, and basic earnings per share were $2.74 on weighted-average basic shares outstanding of 95,144,000.
Cash and cash equivalents were $1,105.5 million at period-end, an increase of 61.0% from $686.5 million at the prior period-end, and restricted cash and equivalents were $66.6 million compared with $75.2 million. The increase in cash reflected [COMPLETE: principal sources and uses of cash during the period, including cash flows from operating, investing and financing activities]. Borrowings under our credit facilities decreased 20.0% to $2,588.4 million from $3,236.0 million, while unsecured and other notes, net, increased 9.1% to $1,742.2 million from $1,597.5 million. Total liabilities were $6,047.2 million and total equity was $8,486.0 million at period-end. Inventory increased 3.5% to $11,377.7 million from $10,994.9 million as we continued to invest in land and homes under construction, and mortgage loans held for investment, net, decreased to $141.5 million from $195.7 million. Deferred revenue decreased 8.3% to $472.1 million from $515.0 million, and other liabilities increased 46.6% to $1,104.8 million from $753.6 million. We believe that [COMPLETE: management's assessment of whether cash and cash equivalents, cash flows from operations and availability under our credit facilities are sufficient to fund our operations and commitments for at least the next twelve months]. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure.
Inventories are stated at the lower of cost and net realizable value. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable, and when the carrying amount of an asset or asset group is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds fair value. Property and equipment are stated at cost less accumulated depreciation, and depreciation is recognized over the estimated useful lives of the related assets, generally on a straight-line basis. Property, plant and equipment decreased 36.9% to $283.9 million from $450.0 million at the prior period-end. We are involved in legal proceedings arising in the ordinary course of business from time to time, and management does not currently believe any pending matter is material to the financial statements. There have been no material changes to our critical accounting policies and estimates from those described in our 2025 Form 10-K other than as noted above.
Our primary market risk exposure is interest rate risk on our cash, cash equivalents, and short-term investments. Primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. The company does not have material foreign currency or commodity price exposure. Toll Brothers, Inc. is a public reporting company classified under Operative Builders, and our operations are conducted in a manner that does not give rise to material foreign currency or commodity price risk. [COMPLETE: description of any derivative or hedging instruments used to manage market risk, if any]
Our exposure to changes in interest rates on invested funds relates principally to the balances we hold in cash, cash equivalents, and short-term investments. As of April 30, 2026, cash and cash equivalents were $1,105,511,000, compared with $686,466,000 in the prior period, an increase of 61.0%, and restricted cash and equivalents were $66,588,000, compared with $75,209,000 in the prior period, a decrease of 11.5%. Mortgage loans held for investment, net were $141,482,000, compared with $195,651,000 in the prior period, a decrease of 27.7%. Changes in prevailing interest rates affect the interest income we earn on these balances. [COMPLETE: estimated effect on annual interest income of a hypothetical change in market interest rates]
We are also exposed to interest rate risk on our outstanding indebtedness, to the extent that borrowings bear interest at variable rates or must be refinanced at maturity. Borrowings under credit facilities were $2,588,387,000, compared with $3,235,982,000 in the prior period, a decrease of 20.0%, and unsecured and other notes, net were $1,742,154,000, compared with $1,597,544,000 in the prior period, an increase of 9.1%. Total liabilities were $6,047,184,000 and total equity was $8,485,992,000 as of the end of the period. [COMPLETE: breakdown of fixed-rate and variable-rate borrowings, weighted average interest rates, and estimated effect on interest expense of a hypothetical change in market interest rates]. We will continue to monitor our interest rate exposure and may adjust our investment and financing activities in response to changes in market conditions.
Toll Brothers, Inc. maintains disclosure controls and procedures designed to ensure that information required to be disclosed in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including its [COMPLETE: principal executive officer title and name] and [COMPLETE: principal financial officer title and name], as appropriate to allow timely decisions regarding required disclosure. Management evaluated the effectiveness of the company's disclosure controls and procedures as of the end of the period covered by this report and concluded that they were effective at the reasonable assurance level. This evaluation relates to the fiscal period ended April 30, 2026.
There were no changes in the company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting. [COMPLETE: confirm whether any system implementations, process changes, or remediation activities occurred during the quarter that should be described in this section.]
Management recognizes that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that its objectives will be met, and that the design of such controls necessarily reflects judgments about the likelihood of future events and the benefits of controls relative to their costs. Because of these inherent limitations, controls may not prevent or detect all misstatements, and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate. Management's conclusion as to the effectiveness of disclosure controls and procedures at the reasonable assurance level is set forth above [COMPLETE: management to review and formally adopt the conclusion language in this section prior to filing].
We are involved in legal proceedings arising in the ordinary course of business from time to time. These matters generally relate to the routine conduct of our operations and are not the result of any single event or transaction outside the normal scope of our activities. Management does not currently believe any pending matter is material to our financial statements.
We evaluate the status of pending legal matters as of the end of each reporting period and record accruals when we determine a loss is probable and reasonably estimable. While the outcome of litigation is inherently uncertain and we cannot predict with certainty the ultimate resolution of any pending matter, management does not currently believe that any pending matter is material to the financial statements of Toll Brothers, Inc. as of the period ended April 30, 2026. [COMPLETE: confirm with counsel whether any specific proceedings, including environmental matters exceeding applicable disclosure thresholds, require individual disclosure under Item 103 of Regulation S-K.]
Toll Brothers, Inc. is a public reporting company classified under Operative Builders, and our business is subject to a number of risks and uncertainties that could adversely affect our results of operations, financial condition and cash flows. There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended October 31, 2025, other than as set forth below and [COMPLETE: any additional updates to previously disclosed risk factors]. The risks described below and in our Annual Report are not the only risks we face, and additional risks not presently known to us or that we currently deem immaterial may also impair our business.
Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure. Changes in interest rates could also affect the cost and availability of our financing and the affordability of our homes for prospective buyers. At April 30, 2026, we had borrowings under credit facilities of $2,588,387,000, compared to $3,235,982,000 in the prior period, and unsecured and other notes, net of $1,742,154,000, compared to $1,597,544,000 in the prior period, with total liabilities of $6,047,184,000 and total equity of $8,485,992,000. At April 30, 2026, we had $1.11 billion of cash and cash equivalents and approximately $2.24 billion of borrowing capacity of the $2.38 billion available under our Revolving Credit Facility, with no borrowings and approximately $136.5 million of outstanding letters of credit under that facility. Our ability to access capital on acceptable terms, and to comply with the covenants in our debt agreements, is subject to conditions in the credit markets that are outside of our control.
Our results are sensitive to demand for new homes, which is influenced by mortgage interest rates, consumer confidence, employment levels and the availability of financing. Revenue for the period was $2,531,230,000, compared to $2,739,077,000 in the prior period, a decrease of 7.6%, and net income was $260,591,000. In the six-month periods ended April 30, 2026 and 2025, the value of net contracts signed was $5.19 billion (5,137 homes) and $4.91 billion (4,957 homes), respectively, and the value of our backlog at April 30, 2026 was $6.32 billion (5,394 homes), as compared to $6.84 billion (6,063 homes) at April 30, 2025. A decline in backlog or an increase in contract cancellations could adversely affect our future revenues and earnings. Our inventory increased 3.5% to $11,377,712,000 from $10,994,873,000 in the prior period, and at April 30, 2026, we owned or controlled through options approximately 76,800 home sites, as compared to approximately 76,100 at October 31, 2025. If market conditions deteriorate in the areas where we hold land, we may be required to record inventory impairment charges or write off option deposits and pre-acquisition costs, which could materially reduce our profitability.
We are involved in legal proceedings arising in the ordinary course of business from time to time, and management does not currently believe any pending matter is material to the financial statements; however, the outcome of litigation is inherently uncertain and adverse results could exceed our expectations. Our effective tax rate was 25.6% for the current period compared to 26.2% for the prior period, and our balance of unrecognized tax benefits increased from $22,752,000 at the beginning of the period to $24,700,000 at the end of the period. Changes in tax law or the resolution of tax examinations could result in tax liabilities that differ from the amounts we have recorded. Management evaluated our disclosure controls and procedures as of the end of the period and concluded they were effective at the reasonable assurance level, and no changes materially affected internal control over financial reporting during the quarter, but any future failure to maintain effective controls could impair our ability to report our financial results accurately and on a timely basis.
The following disclosure is provided pursuant to Item 408(a) of Regulation S-K with respect to Rule 10b5-1 trading arrangements of directors and officers of Toll Brothers, Inc. for the fiscal quarter ended April 30, 2026.
[COMPLETE: Rule 10b5-1 trading arrangement adoptions and terminations from the D&O questionnaires]