With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

The companies on this annual list make a conscious effort to be supportive, inclusive workplaces.

100 Best Large Workplaces for Women

See which workplaces made this year's list.

2025_GPTW_Construction_Large_Taylor Morrison Home Corporation_US1__685d50c0023fa8a026342320_4

Employees say:"The company's strong commitment to building not just homes, but thriving communities, is unique. There's a deep sense of purpose in knowing that our work has a lasting impact on families and neighborhoods. The culture here supports innovation, collaboration, and continuous learning, especially in cross-functional roles like mine, where land development, HOA management, and resident experience intersect. Leaders truly empower employees to lead with integrity and heart, which makes it both fulfilling and inspiring to be part of the team."

Best Large Workplaces in Construction

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are construction and engineering services and homebuilders.

Fortune Sector Leaders: Engineering and Construction

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-452-Taylor Morrison Home

Taylor Morrison builds mid-to-upscale, first-time, and mid-market homes in 10 U.S. states. It makes its Fortune 500 debut this year.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune 500 marks the 66th running of the list.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Best Workplaces In Construction

Founded

Sites

Best Workplaces For Women

Industry Vertical

# Work Sites

Sector

Industry

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Founded in 1936, Taylor Morrison Home Corporation is a land developer and homebuilder that designs, builds, and sells single-family and multifamily detached and attached homes. It also develops various types of planned communities. Under the Urban Form brand name, it develops and constructs multiuse properties that include commercial space, as well as multifamily properties. Under the Yardly brand, it operates a build-to-rent homebuilding business. Other brands it holds include Darling Homes Collection by Taylor Morrison and Esplanade.

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Taylor Morrison Home (TMHC): Company Profile, Stock Price, News, Rankings

legacy

Taylor Morrison Home

taylor morrison home

Ladies and gentlemen, the Q4 twenty twenty four Taylor Morrison Home Corp. Earnings Conference Call will begin shortly with your host, Mackenzie Aaron. We appreciate your patience as we prepare your session today. During the call, we encourage participants to raise any questions they may have. You can raise a question by pressing star followed by one on your telephone keypad.

Good morning and welcome to Taylor Morrison's Fourth Quarter twenty twenty four Earnings Conference Call. Currently, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. As a reminder, this conference call is being recorded. And I'd like to introduce your host, Mackenzie Aaron, Vice President of Investor Relations.

Thank you, and good morning, everyone. We appreciate you joining us today. Before we begin, let me remind you that this call, including the question and answer session, will include forward looking statements. These statements are subject to the Safe Harbor statement for forward looking information that you can review in our earnings release on the Investor Relations portion of our website at taylormorrison.com. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections.

These risks and uncertainties include, but are not limited to, those factors identified in the release and in our filings with the SEC, and we do not undertake any obligation to update our forward looking statements. In addition, we will refer to certain non GAAP financial measures on the call, which are reconciled to GAAP figures in the release. Now, I will turn the call over to our Chairman and Chief Executive Officer, Cheryl Palmer.

Thank you, Mackenzie, and good morning, everyone. Joining me today is Kirk Van Heffy, our Chief Financial Officer and Eric Huzer, our Chief Corporate Operations Officer. I will share an update on the market and our strategic priorities, while Eric will discuss our land portfolio and thoughts on the retail market, and Kurt will detail our financial performance and initial guidance for 2025. I am proud to share the strong results of our fourth quarter, which I believe once again distinguished our team's execution and the merits of our diversified consumer and geographic strategy. Among the highlights, we delivered 3,571 homes at an average price of $608,000 producing nearly 2,200,000,000 of revenue with an adjusted home closings gross margin of 24.9%.

Each of our operational metrics met or exceeded our prior guidance. Combined with cost leverage, improved financial services income and a favorable tax rate, this generated nearly 30% year over year growth in our adjusted earnings per diluted share and a 14% year over year increase in our book value per share to $56 From a sales perspective, as I shared on our last earnings call in October, we were seeing healthy demand trends in line with seasonal patterns. While interest rates increased sharply through the quarter, activity held up with impressive consistency through year end. As a result, our fourth quarter net orders increased 11% year over year with an absorption pace of 2.6 per community, up from 2.4 a year ago. This brought our annualized absorption pace to three for the year within our targeted range.

I am pleased that this sales success was achieved with only a modest increase in incentives needed to address the impact of higher interest rates. This contributed to our better than expected fourth quarter adjusted gross margin, which was stable sequentially and up year over year in contrast to significant compression seen across our industry. As I have highlighted on recent calls, our margins have remained in a tight range over the last two years despite the volatile rate environment. I attribute our positive results to the quality locations of our communities, which are concentrated in attractive core submarkets with minimal exposure to further out tertiary locations. As Eric will discuss, tertiary markets are facing the most pricing pressure from rising inventory, as well as greater sensitivity to affordability constraints among first time buyers attracted to such markets.

Alternatively, our prime location strategy continues to benefit from attractive underlying fundamentals by serving well qualified homebuyers in our entry level move up and resort lifestyle segments. Across our portfolio, we further diversify by offering both to be built and spec homes aimed at meeting the needs and preferences of our customers. In addition to aiding our sales opportunities, this balanced mix further insulates our margins from broader market pressures as to be built homes generate superior gross margins. As we have discussed in the past, a high percentage of our resort lifestyle buyers prefer to select their own home site, floor plan and elevation and generally spend three times more in lot and option premiums as compared to each of our other consumer groups. They also require less incentives than entry level heavy spec homes.

This makes our fourth quarter margin performance all the more notable when considering that 54% of the quarter's closings came from specs, including 21% that were sold and closed during the quarter, a higher than normal contribution that helped drive the upside to our closing volume. As we look ahead, we expect this balanced approach and long standing emphasis on quality locations to serve us well as we balance pace and price in each community to maximize our returns. With the spring selling season officially kicking off this week following Sunday's Super Bowl, early indicators are encouraging, Appreciating that we have a difficult year over year comparison this quarter given the exceptionally strong sales recorded in the first quarter of twenty twenty four, we are pleased to see pre qualifications growing by week and web traffic to taylormorrison.com almost up 40% from a year ago. This strong lift in website visitors is a direct correlation to our involvement in ABC's reboot of Extreme Makeover Home Edition, where we serve as the season's official home builder, providing beautiful functional homes to deserving families. In the fourth quarter and continuing into 2025, we're seeing healthy momentum in online home reservations with a 53 conversion to sale and a declining rate of participation with real estate agents.

Most notably among customers using our online scheduling tool, we saw a sharp decline in the share of sales with the real estate agent to 67% last quarter from 80% a year ago. This shift is likely due to a number of factors including the recent NAR rulings, the pricing transparency delivered by our digital experience and our long standing reputation as America's most trusted home builder ten years running. Alongside the year's early momentum, we are strategically managing our pricing and incentives, including the rollout of a national base price increase in early January. As needed, we continue to prioritize customizable finance incentives to address each customer's unique circumstances. By working closely with our customers to personalize the most effective use of sales tools, we better manage our overall incentive cost while improving our customers purchasing power.

This customer by customer strategy has allowed us to maintain a relatively low utilization of mortgage forward commitments tied to below market interest rates with just 38% of our fourth quarter closings using these most costly incentive structures. Similar to the last many quarters, about half of the customers using these forward commitments are first time homebuyers. By consumer group, our fourth quarter orders consisted

move up, resort lifestyle. On a year over year basis, orders were strongest in our move up segment with 27% growth, while our entry level sales were up 5% and resort lifestyle declined 9% in part due to the hurricane impact in Florida where this segment is heaviest as well as the timing of opening and closeouts of Esplanade communities at year end. In addition, Florida has been faced with some of the highest levels of rising inventory. But as Eric will elaborate on, we have found that most of this supply is not competitive to our communities and we are encouraged that Florida has started to show some positive signs year to date. Overall, I would characterize buyer demand across all of our buyer profiles as healthy, albeit with varying needs of assistance to overcome affordability challenges with the most pressure at the entry level.

Recognizing that there are more unknowns this year than typical given the new administration, we continue to be grounded in a positive view on the need for new construction that meets the needs and budgets of our targeted consumer groups. While interest rates are unlikely to provide near term relief to affordability constraints, we believe our suite of incentive tools and broad product offerings are appropriately aligned to achieve our targeted sales goals. We will meet the market as needed as we look to maintain an annualized sales pace in the low three range, while also generating healthy gross margins in the low to mid 20% range. As Kurt will discuss in greater detail, our initial guidance for the year calls for 13,500 to 14,000 home closings at a gross margin between 23% to 24% and an SG and A ratio in the mid 9% range. Let me just end by saying that as an organization with significant tenure across our leadership and operating teams, we are well accustomed to facing uncertainty and market disruptions head on.

Our teams are nimble and have the flexibility to adjust our starts, product offerings and pricing structures as needed to minimize risk and maximize long term profitability. Beyond the near term potential headwinds, we remain confident in our outlook and look forward to providing more insights into our strengthened organizational capabilities at our upcoming Investor Day. We hope all of you will join us on March 6 at 12PM Eastern Time for the webcast presentations, which will highlight our multi year growth trajectory and the many ways in which we have set up Taylor Morrison to succeed regardless of the market backdrop. For those of you able to attend in person, we look forward to seeing you soon. With that, let me now turn the call over to Eric.

Thanks, Cheryl, and good morning. Beginning with our land portfolio, our owned and controlled lot inventory was 86,153 homebuilding lots at quarter end. Based on trailing twelve month closings, this represented six point six years of supply, of which only two point eight years was owned. Of these total lots, 57% were controlled via options and off balance sheet structures, up from 53% at the end of twenty twenty three and fifty one percent at the end of twenty twenty two. From an investment perspective, we allocated two ninety three million dollars to homebuilding land acquisition and $297,000,000 to development of existing assets for a total of $590,000,000 during the quarter.

This brought our full year investment to approximately $2,400,000,000 of which 57% was for lot acquisitions and 43% was for development of existing parcels. In 2025, we are projecting our total homebuilding land investment to be approximately $2,600,000,000 with a similar split between acquisition and development. As always, our ultimate investment will be dependent on market opportunities and our increasing use of off balance sheet financing tools to support our growth aspirations. Our use of such tools aims to generate enhanced returns on our invested capital, and we are well on our way to achieving our near term goal of controlling at least 60% to 65 of our lot supply. Supported by this investment, we expect our community count to grow in the quarters ahead with an anticipated ending outlet count between three forty to three forty five for the first quarter and at least three fifty five by the end of the year.

As we have discussed previously, our average underwritten community size has grown materially in the last three years versus the prior three, while our targeted pesos have increased by approximately 25% over the same period, allowing us to greatly expand our business on a smaller outlet count, all else equal. This shift to support higher sales paces and a more cost effective structure, we believe will continue to provide greater returns over time. Turning to our Yardley built to rent business. As expected, we sold two wholly owned assets during the quarter for a valuation that yielded a load of mid five cap rate. With 11 communities currently leasing across six markets, we are targeting five to seven additional assets sales in 2025, dependent on market conditions.

As we look out based on the pipeline of communities underway, we expect to ramp the level of annual dispositions until reaching a relatively steady state in the next three to four years. I look forward to providing a greater detail on this evolving business at next month's Investor Day. Another topic we will spend time on at the Investor Day is the quality of our land locations, which we believe is a defining characteristic of our portfolio. The importance of this focus is reinforced as resale home supply has increased in most markets as has new construction inventory in many cases. While the aggregate level of new and resale homes on the market across The U.

S. Remains well below historic averages, we are closely monitoring the impact of rising supply on our portfolio given the 30% increase of resale months of supply across our MSA footprint over the last year. Despite these headline numbers, it is worth noting several meaningful market nuances. For one, there are still markets with very low supply, such as the Bay Area with less than two months of inventory. And after analyzing a number of our MSAs, including those in Florida and Texas where attention is most focused and reviewing the submarkets in which we operate compared to those in which we do not, we overwhelmingly found lower months of supply, reflecting our favorable strategic positioning.

As you will recall, this recent analysis followed our previous community review, which highlighted that approximately 17% of resale homes would be deemed competitive to our new home offerings after considering vintage, size, price and product type factors. This competitive set would be even lower after further filtering for community type, which is especially relevant among shoppers in the age targeted communities such as Esplanade, where we resort lifestyle buyers intentionally seek out our distinctive amenities, concierge services and single level product that they can personalize to meet their needs. As we look to invest to support our strong growth aspirations, we will remain mindful of these dynamics as we contemplate investment decisions while continuing to emphasize a strong preference for core locations. With that, I will turn the call to Kurt.

Thanks, Eric, and good morning, everyone. For the fourth quarter, reported net income was $242,000,000 or $2.3 per diluted share. After excluding legal impairment and other charges, our adjusted net income was $278,000,000 or $2.64 per diluted share. This was up 29% from an adjusted earnings per share of $2.05 a year ago, driven by higher revenue due to increased closing volume and improved home closings gross margin, stronger financial services profitability and a lower tax rate. Our closing volume increased 12% year over year to 3,571 homes.

The average closing price of these deliveries was roughly flat from a year ago at $608,000 In total, this produced home closings revenue of $2,200,000,000 From a production standpoint, we moderated our starts volume by 5% to 2,779 homes or 2.7 per community per month from 2,912 homes or three per community per month a year ago. Recognizing that our finished inventory of eight fifty seven homes at quarter end is slightly elevated compared to our historic run rate, we believe this inventory is well positioned to meet expected consumer demand during the spring selling season as evidenced by our team's success in selling and closing a record number of intra quarter spec sales during the fourth quarter. Going forward, we will be mindful of our inventory levels and will continue to align new starts with sales as our strategy allows us to pivot based on market demand. In total, we ended the quarter with 7,698 homes under production, of which 3,437 were specs. During the quarter, our cycle times continued to improve and were down nearly thirty days year over year as our teams achieved the savings we targeted going into 2024.

Based on our homes currently under production and the normalization in our production timelines, we currently expect to deliver between 13,500 to 14,000 homes this year. This includes approximately 2,900 homes in the first quarter. Based on the mix of these deliveries, we expect the average closing price to be in the range of $590,000 to $600,000 each quarter and for the full year. Turning now to margins. Our home closings gross margin in the fourth quarter was 24.8% on a reported basis and 24.9 adjusted for a $3,000,000 impairment charge.

This was stable from our reported margin of 24.8% in the third quarter, but up from 24.1% in the fourth quarter of twenty twenty three. We understand there is heightened focus on margin outlooks this year given the many crosscurrents at play. On the one hand, our beginning backlog of over 4,700 homes carry strong margins and the normalization in cycle times affords us the opportunity to start and close a greater number of high margin to be built homes than in recent years. And as you've heard today, we expect our diversified portfolio to withstand relative margin pressure given the strength of our customer base. However, on the other hand, we are assuming a step up in incentives from the fourth quarter given the increase in interest rates thus far in the New Year.

We're also expecting a step up in land cost inflation to approximately 7% this year from 4% in 2024. Taking into account these factors and the anticipated mix of our deliveries, we expect our home closings gross margin to be between 2324% this year, including the high 23% range in the first quarter. We are watching the evolving tariff situation closely and believe our range for the year appropriately accounts for the likely outcomes we could face based on our best understanding of product exposure. Fortunately, given the steps we have taken to streamline our options queues, reshore products and strengthen our supply chain resiliency in recent years, we believe we are prepared for any potential disruptions should they arise. Importantly, we continue to expect our long term gross margins to remain above our historic averages in the low to mid-twenty percent range given production and operational efficiencies, cost leverage from our scale and lower capitalized interest burden.

Now to sales. Our net sales orders increased 11% year over year to 2,621 homes. This was driven by an 8% improvement in our monthly absorption pace to 2.6 per community and 4% increase in ending community count to three thirty nine outlets, reflecting the sustained improvement in our absorption rates as we shifted into higher pacing communities and geographies, our sales paces throughout 2024 remained well above our pre-twenty twenty average in the low to mid-two range. Specific to the fourth quarter, our 2.6 pace was well ahead of our historic average of two. Cancellations remained within normal ranges and below industry averages at 13.1 of gross orders as we continue to benefit from our strong consumer base, diligent prequalification requirements and average customer deposits of approximately $50,000 per home.

SG and A as a percentage of home closings revenue in the fourth quarter was 9.4%, down 30 basis points from 9.7% a year ago. As we look ahead into 2025, we expect our SG and A ratio to improve to the mid 9% range from 9.9% in 2024. Financial services revenue was $54,000,000 with a gross margin of 48%, up from $43,000,000 and 46% a year ago. Driving these results, our financial services team achieved a capture rate of 89%, up from 86% a year ago, reflecting the success of our incentive strategies, customer service and close partnership with our homebuilding teams. In the fourth quarter, buyers financed by Taylor Morrison Home Funding had an average credit score of 752, down payment of 23% and household income of $183,000 Turning now to our balance sheet.

We ended the quarter with liquidity of approximately $1,400,000,000 This included $487,000,000 of unrestricted cash and $947,000,000 of available capacity on our revolving credit facility, which was undrawn outside of normal course letters of credit. Our net homebuilding debt to capitalization ratio was within targeted ranges at 20% at year end. And our next senior note maturity is not until 2027 providing us with financial flexibility. During the quarter, we repurchased 1,400,000.0 shares of our common stock outstanding for $90,000,000 bringing our full year investment to 5,600,000.0 shares and $348,000,000 well ahead of our target. At year end, our remaining repurchase authorization was $910,000,000 Having repurchased a total of $1,800,000,000 of our shares outstanding since 2015 or nearly 55% of our beginning share count, we expect to continue utilizing healthy cash generation to repurchase our shares utilizing both programmatic and opportunistic strategies.

For 2025, we are targeting total share repurchases in the range of $300,000,000 to $350,000,000 After considering the midpoint of this repurchase target, we expect our diluted shares outstanding to average approximately $102,000,000 for the full year, including $104,000,000 for the first quarter. Now I will turn the call back over to Cheryl.

Thank you, Curt. To wrap up, before we turn the page on 2024, I'd like to take a moment to reflect on this year's achievements of each of our long term targets. When we introduced these targets last year for sales pace, closings growth, gross margin and return on equity, our intent was to help provide greater insight into the evolution of Taylor Morrison following years of strategic growth and positioning. These are multi year targets that we believe are achievable based on the makeup of our communities, land investment strategy and diversified portfolio. I am proud that despite the challenges that arose over the course of 2024 from volatile interest rates, highly competitive pressures and extreme weather, we still met or exceeded each of these goals.

By delivering nearly 13,000 homes, we increased our closings volume by 12% well ahead of the 4% increase contemplated in our initial guidance heading into the year and our 10% average growth target. Along with the stronger volume, our adjusted gross margin of 24.5% was up 50 basis points year over year, more than 100 basis points better than our initial expectation and at the high end of our low to mid 20% target. As you've heard this morning, our annualized sales pace of three for the year also met our goal. Combined with nearly $350,000,000 in share repurchases, these results helped drive our return on equity to approximately 16% and set the stage for further expansion this year. We also entered into the affordable Indianapolis market prudently increased our controlled lot percentage towards our 60% to 65% goal and made further progress in streamlining our operations for greater profitability.

Most importantly, while 2025 promises to bring new challenges, some of which we are just beginning to fully understand, we are confident in our ability to navigate the headwinds and deliver results that once again meet the long term targets we have established. As our initial guidance for the year suggests, we expect to grow our business while producing better than historical margins and returns. As you will hear at our Investor Day, we are committed to outsized growth in the years ahead and believe we have established the operational capability to do so accretively. I look forward to sharing more in three weeks and as always want to end by thanking our teams for their dedication and execution. It is because of their efforts that Taylor Morrison has recently been named America's Most Trusted Home Builder by LifeStory Research for an unprecedented tenth year and to Forbes inaugural Most Trusted Companies in America list where we ranked number 12 out of 300.

Now let's open the call to your questions. Operator, please provide our participants with instructions.

Thank you. We'd now like to open the lines for Q and A. Our first question comes from Matthew Bouley of Barclays. Matthew, your line is now open.

Good morning. You have Elizabeth Langan on for Matt this morning. Thank you for taking the questions. I just wanted to start off on gross margins. I know that you noted that incentives are moving higher.

Could you talk a little bit about how you're thinking about the cadence for gross margins this year with the higher incentives? And with your 1Q gross margin guide in the high 23% range, would you mind speaking kind of how you're thinking about it in the context of the year in that 23% to 24% range?

Yes. Elizabeth, this is Kurt. I'll take that one. So again, for the first quarter, we're guiding to the high 23% range. And as I think you can tell by our full year margin guide for the year, we're assuming moderating our margins over the course of the year as we take into account the step up in rates and the fact that we have lot cost inflation that we're going to be taking on over the course of the year.

So that's kind of I guess the general idea is that I guess in summary is that the margin will moderate over the course of the year.

And Curt, would you say it's fair if you look at what came through the P and L in the fourth quarter, probably a little bit different. We're going to see that go up a little bit because rates have gone up. But when we think about what we were offering on the sales floor in the fourth quarter, it's actually probably pretty the exit rate is probably pretty similar to what we expect given rates are generally in the same place.

Okay. Thank you. And just to follow-up on the gross margins a little bit. You mentioned that land costs, you're assuming like 7% this year. What are you assuming around material costs with the potential impact for tariffs?

And I know that you said that you've re shored a lot of your products, but it would be helpful to have any color around that.

Yes, another great question. It's very interesting. Up until a couple of weeks ago, I would say that the cost environment was probably pretty stable as well as the overall supply chain. But like you, we've been following the news relative to the discussions on tariffs. And so as we look at that, depending on kind of which tariff and you want to speak to whether it's steel or any of the other tariffs relative to our friends to the North or to the South, we do expect some cost pressure from some of that.

If it's just the steel, it's quite minimal from that perspective, maybe $1,200 a lot. And that would only impact us in the back half of the year. Relative to the other tariffs that are out there, as we're looking at it and doing our homework, it's really early in the process. And depending on if they come back, when we're looking at it, it might be an impact of $4,000 to $5,000 a house roughly speaking. But the time that that would get implemented and the impact on the year would largely be a fourth quarter kind of time period.

So again, we think it's very manageable, within the range guide that we gave for the year that it's been contemplated in that.

Okay. Thank you. That's really helpful. I look forward to seeing you guys in March.

very much. Thank you very much. Our next question comes from Michael Rehautz of JPMorgan. Michael, your line is now open.

Thanks. Good morning, everyone. Thanks for taking my questions. First, I'd love to get a sense for the pricing backdrop. You mentioned that you had only modest incentive increase in incentives in the fourth quarter and you're actually looking for a price increase, if I heard you right, in January, so which is a little counter to, I think, the rest of the group.

So I'd love to get a better sense of, number one, your pricing strategy in general, how you are approaching the market given that perhaps the rest of the market is seeing perhaps a sharper increase in incentives? And also, how much of your guidance includes a step up in incentives in the first quarter or throughout 2025?

Yes. Fair questions, Michael. Thanks for them. Let me start with kind of the fourth quarter. We saw kind of pricing power in just about 50% of our communities.

So we felt really good about the sales performance in the fourth quarter, even as you mentioned, a very difficult selling environment. Looking month to month over the quarter, performance felt like it was kind of more in line with historical patterns, albeit with maybe a few more little obstacles. But honestly, if anything, I was a little surprised how consistent each month was within the quarter, seeing a very, very small spread between the months. As we moved into 2025, the price increase that you spoke of, we actually did do a national price increase. I think it was on the January 2.

But January started off pretty slow, I'll be honest. Very pleased with the pickup we've seen since mid January and further pickup into February. Having said that, as I mentioned in my prepared remarks, we had a very robust Q1 last year. So we're up against a very difficult comp. I'm not sure if we'll catch it, but I'm very optimistic about the traffic we're seeing.

You know, as you would expect, Mike, the pricing opportunities is very much a community by community decision. We even had one or two communities in the fourth quarter and maybe in January that we actually had a habo. And so when you're looking at these distinct locations with our move up and active adult on unique lots, we actually do have pricing power. As I mentioned to Elizabeth, when I think about what came through the P and L in the fourth quarter, I would expect a small pickup, in incentives. When I look at what we were actually offering on the sales floor, I think where we ended Q4 is generally what our expectations are for 2025.

So yes, our guide does contemplate the environment we're in today if we see something meaningfully different and rates go up significantly from where we are today, I'm not sure we'll have that captured. But generally we feel we're in a pretty good place when we look as Curt mentioned the combination of our to be built and the higher margin opportunity they have as well as what's required in our first timers. And maybe I'll wrap that up Mike with just one more comment and that's just the strength of our buyer groups. When we look at the move up in the resort lifestyle, we just don't see the same need on the incentive side on rates because they're taking smaller loans and obviously within our resort lifestyle, we're still seeing a great deal of cash.

Great. No, I appreciate all the thoughts there, Cheryl. Maybe secondly, on the SG and A guidance, looking for a little bit of leverage this year. And I think that's also in contrast perhaps to some of your peers looking for maybe flat to even slightly up SG and A, given the tougher environment. I would think some of it is coming just from the operational leverage with the out expectation for some volume growth.

But I'd also be curious about the marketing dollars and the commissions that you're putting out there. How would you compare just in the fourth quarter versus a year ago? How does that line up? You mentioned the NAR settlement. But in general, obviously, also just perhaps a slightly more competitive backdrop that would require more investment in this area.

So how you're thinking about 2025 in terms of those two buckets, from a leverage or a year over year perspective?

And maybe I'll take the NAR kind of broker world and ask, Kurt to pick up on the just overall SG and A in total. You know, I think what we're seeing, Mike, with NAR is the consumer is just becoming more aware. You know, we're getting a lot of more lot more calls in advance, calling in to understand what our commission rates are. I think the consumer understands the game that's being played, and I think that is aiding to in the reduction of co broke. You know, as I mentioned in our prepared remarks, when I look across our virtual tools, we are finally really beginning to see some relief in broker commissions.

I think we saw, you know, more than a 10% reduction year over year in the fourth quarter. When I looked at January, we went from 67% on our online appointments down to 60%. So when we start seeing that come through all of our virtual tools at that level, it's gonna be very meaningful. You want to pick up just on overall?

Yes. I think, Mike, what I would just suggest is that with the step up in closings and the associated kind of revenue growth with that, and the work that our teams have done to continually focus on running an efficient business, we're able to achieve some SG and A leverage going into this year. So it's a tremendous focus of the team. We're seeing that kind of up and down kind of the overhead structures whether it's on the sales side and or even within kind of the admin kind of side of it as well. So but overall, that's kind of the genesis.

Great. Thanks very much and see you next month.

Our next question comes from Mike Dahl of RBC. Mike, your line is now open.

Thanks for taking my questions. I want to stick with kind

So it's interesting kind of testing the market with the broad increase, but at the same time you're messaging that the net of incentives and cost inflation is going to bring margins down over the course of the year. So is this kind of would you characterize this as pretty modest in aggregate, just take a little bit where you can just to offset some pressures? Or how would you characterize kind of magnitude of the attempted base increases in aggregate?

Yes. If I'm understanding your question correctly, Mike, I mean, it really does come down to the mix of communities in the portfolio. When I think about the pressures across the business, there's it's undeniable that we are seeing more pressure with the first time buyer and what we need to do to get them into their home. The good news we've talked about for a number of quarters that we really personalized the needs of our individual buyers and make sure we put a program that works for them. Being able to do that and kind of not spreading forward commitments across the portfolio is an absolute advantage.

Earlier this year, we actually introduced this new program by Build Secure Flex program that assures customers that are not about to close, aren't buying a completed inventory, that we're going to deliver them a rate that's generally 1% under the market rate at a time they close. That gives them more assurance and not near as costly as a forward commitment for someone that's going to close in forty five days. So as you start spreading these different tools, recognizing that a third of our buyers are the first time buyers with the most expensive incentives and you compare that to the other tools and then the impact that we see with our resort lifestyle buyers, it gives you, you know, in total, I don't know if I'd call it modest, modest plus, but certainly that along with the land appreciation, we're we're gonna see some margin pressure, but I feel that we're able to kind of stand tall with it in

Yes, I think the comparison is clearly positive. Just one quick follow-up or clarification there and then a second question. When you talk about the moderation through the year, does your guiding vision you're staying within the 23 to 24 each quarter of the year? And then if I could kind of sneak a second question in just on the paper front. Any there's obviously some noise in the market around what may or may not happen with various parts of immigration.

And are you seeing anything today on your job sites that's noteworthy? Or how do you kind of balance and mitigate some of those potential issues?

Mike, I'll take the first part of that and maybe Cheryl can take the, I guess, the latter part on the immigration. But overall from a margin guide perspective for 2025, what I would say is right now we're guiding to for Q1 and for the full year and not really providing any additional guide on the other quarters over the course of the year at this point in time. But overall, to your point, we are assuming some moderation over the course of the year and we feel very good about our margin for the year overall and staying within that range despite even some of the noise that's out there. So, Cheryl, I would throw it to you on the immigration front.

You bet. More to come next quarter on the margin, right? On immigration, happy to report that we haven't seen anything hit the job site. Certainly, we've got protocols in place. We across the business have E Verify protocols.

Even though we've seen activity within markets, we have not seen anything hit our job sites. I'll be honest, Mike, coming into the year had a little bit of fear that we would see some absenteeism of folks that maybe they, you know, didn't have a specific issue, but maybe a family member did and they may not show up. And we just haven't seen that so far. So we'll keep you posted. But to date, I'd say there's been no disruptions.

Our next question comes from Trevor Allinson of Wolfe Research. Trevor, your line is now open.

Hi, good morning. Thank you for taking my questions. First one on demand by geography focusing specifically on your central region. I know that's not exclusively Texas, but it has a lot of Texas in it. And given the softness in that region, your 22% increase in absorptions was pretty notable.

So can you just talk about what is driving your strong performance in that region, and any specific metros to call out?

Yes. I certainly can try to help. It's honestly I'm happy to report it's generally across the board. But if I were to have a couple callouts, if I go back to 2023, we probably all recall the days where Austin, was taking some disproportionate pain. They had seen some of the highest pace and pricing.

And so the year of 2023 was a little bit more of a struggle. So I'd say part of it was just the tremendous job on our Austin team. Sales were up nearly 20%, absorptions were up nearly 30%. When I look at Houston, another great story, lots to talk about. You've heard Eric, Kurt and I all talk about the repositioning of our communities to self developed.

We've really seen pieces up and discounts down. So good stuff there. Dallas, you know, it's a whole new business with kind of outsized growth this year and planned in the coming years doubling in size. When I go to The Carolinas, honestly, we're seeing equal strength with community count sales and closings up, and honestly same in Raleigh and Atlanta. So it's actually pretty equally weighted across the central, which is very encouraging.

And, Cheryl, I might argue relative to submarket positioning, we've alluded to the fact that we test where we're playing in the market and where we're not. And in each of those circumstances, as far as the supply of resale homes in the places that we're operating are less than the place that

And so I think that helps relative to the resale conditions.

Yes. Yes. And your performance would clearly support that as well. And then second question, demand for resort lifestyle buyers, it's been stronger in recent quarters. This quarter, it took a bit of a setback.

You called out some impacts from the hurricane, also some community count closeouts, which may have weighed on the number. Can you talk about your expectations for growth by consumer segment in 2025? And do you think there's a meaningful change in resort lifestyle, closings as a percentage of your 2025 closings in 2025 versus 2024? Thanks.

Yes. No, fair question. Let me start by saying you're absolutely right. When I look at the fourth quarter, we had a number of impacts. So three hurricanes certainly didn't help even though our communities fared very well.

I would tell you we had a number of days maybe even qualified as weeks that most many of our communities were closed due to prep for hurricanes as well as recovery. At the same time because of all of that, we also changed the timing of some of our openings. So in total, I think we had three that were in closeout and three that we pushed openings till early in the year along with the timing of amenities. So I think there was a number of factors. When I look at kind of the overall performance of Esplanade, really excited about some of the things across the country and new Esplanade that are in the works today at different levels of either underwriting, horizontal development, buying the land.

But when I look at 25, probably pretty close to 24 from a total penetration, but I would expect you know, we'll see if the penetration grows. As we grow, the penetration may stay relatively similar, But I would tell you that we're adding a number of communities and I would expect to see a slight uptick in the esplanade penetration and just active adult because that gets a little blurred with our move up. So the strength that you're seeing in our move up predominantly our second move up, I think also blurs the line of them showing up in our more traditional communities compared to just

You're right. Thank you for all the color and see you guys next month.

Taylor Morrison Home (TMHC) Q4 2024 Earnings Call Transcript

Company Participants