Taylor Morrison Home (TMHC) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw 3,200 home closings at an average price of $600,000, with adjusted EPS of $1.97 and adjusted home closings gross margin of 23.9%.

• Net sales orders increased 3% year-over-year to 3,111, with a monthly absorption pace of 3 per community and a 6% rise in community count.

• Book value per share grew to $52, and backlog at quarter end was 6,256 homes valued at $4.2 billion.

• Repurchased 1.7 million shares for $105 million in Q2; total liquidity stood at $1.3 billion.

• Product mix included 64% Resort Lifestyle/move-up buyers and 36% entry-level; spec homes accounted for 58% of gross orders.

Financial highlights

• Total Q2 2024 revenue was $1.99 billion, down 3% year-over-year; home closings gross margin was 23.8% reported, 23.9% adjusted.

• Adjusted net income was $211 million, with adjusted diluted EPS at $1.97; net income was $199 million ($1.86 per share).

• SG&A as a percentage of home closings revenue increased to 10.2% from 9.2% a year ago.

• EBITDA for Q2 2024 was $303 million (15.2% of revenue); adjusted EBITDA was $325 million (16.3% of revenue).

• Homebuilding net debt-to-capitalization ratio was 22.8%, up from 15.4% a year ago.

Outlook and guidance

• Full-year 2024 guidance: 12,600–12,800 home closings, average price $600,000–$610,000, gross margin near 24%, and effective tax rate ~25%.

• Land and development spend projected at $2.3–$2.5 billion; share repurchases to total ~$300 million.

• SG&A ratio expected in the high 9% range for the year; long-term targets include 10%+ annual home closings growth and mid-to-high teens ROE.

• Q3 2024 guidance: ~3,200 home closings, average price ~$600,000, gross margin ~24%.

• Sufficient capital resources and liquidity are expected to support operations and capital needs for the next twelve months.