Taylor Morrison Reports Strong Fourth Quarter and Full Year 2025 Results
Taylor Morrison Home Corporation (NYSE: TMHC), a leading national homebuilder and land developer, announced its financial results for the fourth quarter and full year ended December 31, 2025. The Company delivered solid operational performance despite ongoing market challenges, supported by disciplined execution, portfolio diversification, and strategic capital allocation.
For the fourth quarter of 2025, Taylor Morrison reported net income of $174 million, or $1.76 per diluted share. Adjusted net income was $188 million, or $1.91 per diluted share.
For the full year 2025, reported net income totaled $783 million, or $7.77 per diluted share. On an adjusted basis, full-year net income reached $830 million, or $8.24 per diluted share.
Fourth Quarter 2025 Financial Highlights
During the fourth quarter, the Company generated home closings revenue of $1.96 billion. A total of 3,285 homes were closed during the period at an average sales price of $596,000.
Home closings’ gross margin was 21.8% for the quarter. Selling, general, and administrative (SG&A) expenses represented 9.9% of home closings revenue.
Net sales orders for the quarter totaled 2,499 homes. At quarter-end, Taylor Morrison controlled 78,835 homebuilding lots, with 54% of those controlled off balance sheet.
Full Year 2025 Performance Overview
For the full year, Taylor Morrison generated home closings revenue of $7.76 billion, closing 12,997 homes at an average sales price of $597,000.
Home closings gross margin for the year was 22.5% on a reported basis and 23.0% on an adjusted basis. The SG&A ratio improved to 9.5% of home closings revenue, representing a 40-basis-point improvement compared to the prior year.
Net sales orders totaled 11,074 homes during 2025. The Company invested $2.2 billion in land development and acquisition throughout the year.
Capital allocation remained a priority, with the Company repurchasing 6.5 million shares for $381 million during 2025. Total liquidity at year-end stood at approximately $1.8 billion.
CEO Commentary on 2025 Performance
Sheryl Palmer, Chairman and Chief Executive Officer, highlighted the Company’s resilient performance throughout the year.
She noted that fourth quarter results met or exceeded expectations across nearly all key operational metrics, despite continued market headwinds. The Company delivered nearly 13,000 homes during 2025 while maintaining an adjusted gross margin of 23.0%.
Palmer emphasized that the Company achieved SG&A leverage while maintaining essentially flat revenue, alongside generating a 13% return on equity and 14% growth in book value per share. She attributed this success to the Company’s diversified geographic and consumer portfolio, as well as its disciplined approach to balancing pace and pricing across well-positioned communities.
The CEO also pointed to the strength within the Company’s resort lifestyle segment. The fourth quarter monthly absorption pace remained stable at 2.4 net orders per community, outperforming typical seasonal moderation trends. Early January activity continued to show encouraging signs as the spring selling season began.
Looking ahead, Palmer stated that consumer confidence will likely be the primary driver of future demand recovery. She reaffirmed the Company’s commitment to focusing on core move-up buyers, expanding its Esplanade resort lifestyle brand, refining investments in non-core submarkets, and accelerating innovation initiatives across the organization.
2026 Business Outlook
Taylor Morrison provided guidance for both the first quarter and full year 2026.
For the first quarter of 2026, the Company expects:
- Ending community count of approximately 360
- Approximately 2,200 home closings
- Average closing price of about $580,000
- Home closings gross margin of approximately 20% (excluding inventory-related charges)
- Effective tax rate between 23.0% and 23.5%
- Average diluted share count of approximately 98 million
For the full year 2026, the Company expects:
- Ending community count between 365 and 370
- Approximately 11,000 home closings
- Average closing price between $580,000 and $590,000
- SG&A in the mid-10% range as a percentage of home closings revenue
- Effective tax rate of approximately 25%
- Average diluted share count of about 95 million
- Homebuilding land investment of approximately $2 billion
- Share repurchases of approximately $400 million
The Company noted that it cannot provide a reconciliation of forward-looking adjusted gross margin to GAAP measures due to the uncertainty of future adjusting items.
Operational Performance – Fourth Quarter Review
Homebuilding Segment
Compared to the prior-year quarter, home closings revenue declined 10%, primarily due to an 8% decrease in closings volume and a 2% reduction in average selling price.
Net sales orders declined 5%, driven by a modest decline in the monthly absorption pace from 2.6 to 2.4 orders per community. This was partially offset by a 1% increase in community count to 341 outlets.
Cancellations as a percentage of beginning backlog increased to 9.9% from 7.0% a year ago. However, cancellations as a percentage of gross orders improved slightly to 12.5% from 13.1%.
Quarter-end backlog totaled 2,819 homes valued at $1.9 billion, with average customer deposits of approximately $44,000 per home.
Land Portfolio
Homebuilding land investment during the fourth quarter totaled $550 million, including $213 million for land development. For the full year, land investment reached approximately $2.2 billion, slightly lower than 2024 levels.
Total lot supply stood at 78,835 homesites, representing 6.1 years of supply based on trailing twelve-month closings. Of these, 2.8 years were owned. Compared to year-end 2024, both total homesites and supply years declined modestly.
Financial Services
The mortgage capture rate was 88%, slightly lower than the prior year. Borrowers maintained strong credit quality, with an average credit score of 750 and an average debt-to-income ratio of 40%.
Balance Sheet and Capital Position
At the end of the fourth quarter, total liquidity was approximately $1.8 billion, including $928 million of available capacity under the Company’s revolving credit facility.
The gross homebuilding debt-to-capital ratio was 26.0%. After accounting for $850 million in unrestricted cash, the net homebuilding debt-to-capital ratio was 17.8%, reflecting a strong and flexible balance sheet.
During the fourth quarter alone, the Company repurchased 1.2 million shares for $71 million. Since 2021, Taylor Morrison has repurchased approximately 39 million shares totaling $1.5 billion, reducing shares outstanding by roughly 34%.
Stock Repurchase Program Expansion
Taylor Morrison’s Board of Directors approved an increase in the Company’s stock repurchase authorization to $1 billion. The new program replaces the previous authorization and remains in effect through December 31, 2027.
Repurchases may be executed through open market purchases, privately negotiated transactions, or other methods, depending on market conditions, liquidity position, capital requirements, land investment plans, and strategic opportunities.
Earnings Webcast Information
Taylor Morrison will host a webcast to discuss fourth quarter and full year 2025 results at 8:30 a.m. ET. The webcast will be available on the Company’s Investor Relations website and will remain accessible for replay following the event.
SOURCE LINK: https://newsroom.taylormorrison.com/
