TOL - NYSE

Good day, and welcome to the Toll Brothers First Quarter Fiscal Year 2026 Conference Call. [Operator Instructions] Please also note, today's event is being recorded. I would now like to turn the conference over to Douglas Yearley, CEO. Please go ahead, sir.

Thank you, Rocco. Good morning. Welcome, and thank you for joining us. With me today are Gregg

Thank you, Doug. I'm excited for this opportunity and grateful for the trust that you and the Board have placed in me. I very much appreciate our investors and the analyst community, and I look forward to building on the great relationships that you and Bob before you have developed over the years. We started the year off with a solid first quarter. We beat the midpoint of our homebuilding revenue guidance, exceeded margin expectations and increased our earnings per share by 25% over last year's first quarter. From a demand perspective, we saw the typical seasonal pattern unfold in the first quarter. Based on signed contracts on both an absolute and per community basis, November was the slowest month followed by December with a market uptick in January. As Doug mentioned, we saw an increase in demand beginning in mid-January that is consistent with the start of the spring selling season. With our broadly diversified portfolio and affluent buyer profile, we are well positioned to capitalize on any further improvement in homebuyer demand. Geographically, the Boston to South Carolina corridor has continued to perform well, as has Boise, Las Vegas and Reno in our mountain region and all of California. Most of Florida seems to have found its footing, although Tampa remains challenged, along with Atlanta, San Antonio and the Pacific Northwest. Among our buyer segments, our luxury move-up business also continued to perform well. In the first quarter, luxury move-up accounted for 59% of homebuilding revenues. Luxury first time was 25% and luxury move-down was 16%. Our luxury move-up business has the highest margin among our buyer segments, so we are very pleased that it is the largest part of our business. Turning now from buyer segments to our build-to-order and spec home strategy. I will note that we generate about 1/2 of our homebuilding revenues from specs and the other half from build-to-order. We believe we have achieved the right balance in our overall business with this healthy 50-50 mix of high-margin build-to-order homes with buyers who want to customize their dream home with specific layouts, designs and finishes alongside lower margin, but faster turning spec homes that appeal to buyers who want to move into their homes on a quicker schedule. I will also point out that we sell our specs at various stages of construction. Although the mix can change from quarter-to-quarter, on average, approximately 1/3 of our specs sell before framing is completed. And the risk profile and margin for these homes is not all that different from our build-to-order homes. Our goal is to sell our specs as early in the construction cycle as possible. The earlier we sell our specs, the greater the opportunity for our customers to visit our design studio and personalize their homes with finishes that match their tastes. This ability to customize remains an important competitive advantage for Toll Brothers, and it benefits our margins as design studio upgrades tend to be highly accretive. In the first quarter, design studio upgrades, structural options and lot premiums averaged $212,000 or 25% of our average base sales price. Doug mentioned the benefits of serving a more affluent customer base, consistent with the past several quarters, approximately 24% of our buyers paid all cash in the first quarter. And the loan-to-value for buyers who took a mortgage was approximately 70%, also consistent with recent quarters. Our contract cancellation rate in the first quarter remained low at 2.8% of beginning backlog. This industry low cancellation rate speaks to the financial strength of our buyers as well as the sizable deposits they make and how emotionally invested they become as they personalize their homes at our design studios. We benefited from improved production efficiencies in our construction cycle times in the first quarter. For our build-to-order homes, the cycle time was approximately 9.5 months and was about 1 month shorter for spec homes. Additionally, our build costs in the first quarter were flat compared to the fourth quarter of 2025. With that, I will turn it over to Gregg.

Thanks, Karl. In the first quarter, we delivered 1,899 homes at an average price of $977,000 and generated home sales revenues of $1.85 billion. While we exceeded the midpoint of our revenue guidance, the average delivered price was below our guidance due primarily to mix as we delivered more lower-priced finished spec homes in the quarter than projected. As Doug mentioned, we signed 2,303 net agreements for $2.4 billion in the quarter, flat in units, but up 3% in dollars compared to the first quarter of fiscal 2025. The average price of contracts signed in the quarter was approximately $1,033,000, which was up 3% compared to the first quarter of fiscal 2025 and up 6% sequentially. The increase was primarily due to mix as we sold well in the North and Pacific regions, particularly in our luxury move-up business. Our first quarter adjusted gross margin was 26.5%, 25 basis points better than our guidance of 26.25%. Q1 gross margin exceeded our guidance due primarily to operating efficiency. We are maintaining our full year adjusted gross margin guidance of 26.0% and project a second quarter margin of 25.5%. In the second half of the year and especially in the fourth quarter, we expect our adjusted gross margin to rise as our deliveries mix should include a greater contribution from our higher-margin North and Pacific regions. Write-offs in our home sales gross margin totaled $11.7 million in the quarter, approximately $5 million of these related to predevelopment costs and option write-offs with the remainder associated with a handful of operating communities in different markets around the country. SG&A as a percentage of revenue was 13.9% in the first quarter compared to our guidance of 14.2%, the 30 basis point beat relative to our guidance was due primarily to leverage from higher-than-anticipated homebuilding revenues. Note that our SG&A margin in the first quarter is higher as it generally is our lowest revenue quarter, and it includes accelerated employee stock-based compensation expense that only hit in the first quarter. Joint venture, land sales and other income was $72 million in the first quarter compared to $2.5 million in the first quarter of fiscal 2025 and our guidance of $70 million. During the quarter, we substantially completed our previously announced sale of about half of our Apartment Living portfolio for net cash proceeds of approximately $330 million. The $72 million of joint venture, land sales and other income includes the net gain associated with this sale. As we noted on our last call, we intend to fully exit the multifamily development business over the next several years. Our tax rate in the first quarter was 22.9%, 30 basis points better than guidance. We ended the first quarter with approximately $3.4 billion of liquidity, including $1.2 billion of cash and $2.2 billion of availability under our revolving bank credit facility. Our net debt-to-capital ratio was 14.2% at first quarter end compared to 21.1% 1 year ago. Turning to our guidance. I will remind you that our projections are subject to all the caveats regarding forward-looking statements included in our earnings release. We are projecting fiscal 2026 second quarter deliveries of approximately 2,400 to 2,500 homes with an average delivered price between $975,000 and $985,000. For full fiscal year 2026, we are maintaining our projected deliveries of between 10,300 and 10,700 homes with an average price between $970,000 and $990,000. As I noted earlier, we expect adjusted gross margin to be 25.5% for the second quarter, and we continue to project 26.0% for the full year. We expect interest and cost of sales to be approximately 1.1% in the second quarter and for the full year. We project second quarter SG&A as a percentage of home sales revenues to be approximately 10.7%. For the full year, we continue to expect it to be 10.25%. Other income, income from unconsolidated entities and land sales gross profit in the second quarter is expected to breakeven. We continue to expect $130 million for the full year, of which we have already realized $72 million. Included in our second half projection is the sale of several stabilized apartment projects. We project the second quarter tax rate to be approximately 26% and for the full year rate to be approximately 25.5%. Based on land we currently own or control, we expect to grow community count by 8% to 10% by the end of fiscal 2026 and are targeting 480 to 490 communities. We expect to be selling from 455 communities at the end of the second quarter. Our weighted average share count is expected to be approximately 96 million for the second quarter and 95 million for the full year. This assumes we repurchase a targeted $650 million of common stock for the full year, with most of that occurring later in the year, aligned with our anticipated higher cash flows. Now, let me turn it back to Doug.

Thank you, Gregg. We remain positive on the long-term future of the U.S. housing market. Owning a home continues to be a key aspiration for tens of millions of American families. The market is supported by strong demographic tailwinds driven by the millennial generation reaching its peak home buying years and Gen

[Operator Instructions] Today's first question comes from John Lovallo at UBS.

The first one is you've exceeded your gross margin outlook in each of the past 13 quarters by 65 basis points on average. So sort of with that as a backdrop, what's driving the 100 basis point sequential decline from 26.5% in 1Q to 25.5% in 2Q?

John, it's mix. Gregg touched on it. We will have less Pacific in the second quarter, which is for us, a very high margin region. That reverses itself as the year progresses, particularly in the fourth quarter when we will have a lot more coming out of both the North and the Pacific, which are our #1 and #2 margin areas.

Got you. Okay. And then curious on your thoughts of the Sumitomo acquisition of Tri Pointe. I mean, obviously, there's an effort to diversify away from an aging demographic in Japan. But the Japanese in general tend to be pretty big proponents of off-site construction. I mean, do you think that they have a bigger goal in mind here to bring more technology sort of like Toyota did in the 1980s in the automotive industry?

I don't know the answer to that. I'm not close enough to it. Doug Bauer could probably help you out on that one. I'm sure there have been conversations around how they intend to invest in his great company. They've obviously been aggressive in terms of getting into the U.S. housing market through the acquisition of a number of mid-cap-sized builders. That's between, of course, not -- it's Daiwa also, we put in that conversation with their MDC deal. So I don't know. The Japanese have always been innovative. We have had a very hard time as an industry, making that innovation, that technology lead to more efficient homebuilding operations. You've heard me say many times that in my 35.5 years here at Toll Brothers, it's -- the way we build houses has changed very little from when Bob Toll sent me out in the field with -- when he told me that go buy a pair of Timberland boots and get in a trailer. And so I am -- we are all anxiously awaiting more innovation and technology to the industry. Maybe the Japanese can help in that regard. I don't know. But it's been a tough nut to crack for all of us.

And our next question today comes from Stephen Kim at Evercore ISI.

This is Randa on for Stephen. First question, I kind of wanted to dig into your spec strategy. Today, you reiterated that you're comfortable with the spec ratio around 50% and that you would like to close your specs early in the construction process. Say that demand is insufficient to maybe support kind of both parts of your spec strategy, which would you prioritize? Would you either slow your spec starts but continue to sell them earlier under the construction process, or maybe sell later, but maintain that 50% spec ratio?

Randa, it's Karl. We are happy now with the 50-50 mix. You'll see that change quarter-to-quarter, may go up and may come down. To your question about a softening, we are very comfortable and as we outlined, execute well at a high margin on the build-to-order business. So we would pull back if there's more softening. We're not going to blindly build specs into a softening market. And we are working to sell them at an earlier stage. The trick for us is getting our customers into the design studio to make their selections. It's a unique process. We execute well there. So yes, we would lean into build-to-order if the market softened.

Got it. That makes sense. And then curious what kind of long-term net debt to cap are you targeting? And how do you think about cash? How much cash you want to hold going forward?

Randa, it's Gregg. Yes, long-term net debt to total cap, we think somewhere in the mid-teens makes a lot of sense for us. And then in terms of what our cash holdings need to be, you'll see they generally accelerate as you move into the second half of the year. But we probably have a minimum holding of a few hundred million just to meet normal operating expenses, including land purchases. But that's kind of the general cash flow cadence that we see throughout the year.

And our next question today comes from Sam Reid at Wells Fargo.

Karl, welcome to the call. I wanted to unpack the January to-date comments. And would you just characterize the traffic and sales that you're seeing as better, as potentially good relative to normal seasonality? Or is it just tracking in line with normal seasonality? Maybe just trying to parse through that difference there. And then we've heard some comments from peers that weather has been a little bit of a headwind year-to-date. It doesn't sound like that's been the case for you, but any comments on impacts from weather?

Sam, it's Doug. I'll take this one. There's 3 data points, right? We've got web traffic. We've got physical traffic visiting our communities, and we've got deposits because agreements lag 1 to 3 weeks behind deposits. When you look at the last month, the agreement number is not as relevant. And for all 3 of those, web traffic, physical traffic and most importantly, deposits, we are up modestly over last year, same period of time. It's modest. It's too early to be high-fiving around here, but it causes us to have what we call -- the industry likes to call cautious optimism, and that's where it is. But we're in mid-February. We'll have to see how it plays out, but we are -- we knew it would increase as mid-January hit, consistent with the beginning of what we call the spring selling season. And it did, of course, increase, but it is only up modestly over a year ago. But at the moment, we'll take it.

Sounds like a plan.

Weather, I'm sorry. Your question about weather my apologies. North Carolina, Raleigh and Charlotte got slammed. Nashville has been on the news. Kids didn't go to school for a week. Vanderbilt lost half of their beautiful trees. My friends tell me from kids being there. And Atlanta got hit. So that corridor, the Mid-Atlantic from North Carolina down to Georgia definitely had an impact, slowed us down for a week to 10 days. But outside of that, Philly, New York, Boston, Washington recovered pretty quickly. So I think it's just the Carolinas to Atlanta corridor that we felt it.

All helpful color there, Doug. And then maybe switching gears on the P&L to gross margins. You talked a little bit about gross margins improving sequentially in Q3 and Q4. It sounds like Q4 is going to be particularly strong just given the timing of some of those luxury closings. But would just love maybe a little bit more nuance around the cadence of margin in the third and fourth quarters.

Sam, it's Karl. Yes, we expect that the back half to be better. It's mix again. It's actually similar to the answer around the second quarter. So in the back half of the year, you'll see more revenue out of the Pacific and the North as well as more of that move-up luxury that I referenced in my remarks. And that's what's contributing to the improvement, and we see more of that even in Q4.

That's right. Yes. Karl, I can just add on to it for you, Sam. Yes, Q3 is probably slightly improved over Q2, and then we expect the benefit to accelerate a bit in Q4.

And our next question today comes from Mike Dahl at RBC Capital Markets.

This is Chris on for Mike. Just a follow-up on that 3Q, 4Q gross margin step-up. Outside of mix, I mean, could you just talk about how you guys are thinking about the pricing incentives, costs and some of the other financial impacting gross margin outside of mix?

Yes. So incentives, as you go throughout the year, we've maintained them at current levels. So there's no assumption that the market has a dramatic improvement or anything like that. So it should be -- we tried to underwrite for today's conditions throughout our projection, and that's where we left it.

And for building costs. Building costs are flat.

And building costs are flat.

We're beginning to see a little bit of downward pressure, downward move, downward improvement on building costs, but it's small. Lumber right now is a little bit of a headwind, but there's other costs that are coming down. But in terms of our projections, we're just going into it assuming they'll stay flat.

Understood. Appreciate that. And then just maybe if you guys can just touch on what you're seeing in the land market today, the outlook there as you progress through the year and how aggressive you guys plan on being investing in land this year?

Yes. Mike, it's Karl again. I think we're still seeing that low- to mid-single-digit inflation on land.

And our next question today comes from Michael Rehaut at JPMorgan.

Congrats, Doug and Karl, on your upcoming moves. First, I just wanted to dig in a little bit to the -- also on the comments around kind of year-to-date trends. And I think you mentioned just earlier that you're up modestly versus a year ago. I just wasn't sure if that was in terms of sales pace in particular or any other metrics? And more broadly, as you talked about incentives being consistent for, I think, 3 months in a row, that's not necessarily what we've heard from other builders. I think maybe perhaps they're more spec or first-time builder oriented -- but buyer oriented. But there has been a lot of movement around incentives over the last 3 months, I think, on a broader market basis. So just would love to understand, number one, again, the up modestly versus a year ago, what exact metrics are those, if it's sales pace? And number two, how your own incentive strategy is different from the market?

Sure. I'll take this one. All 3 metrics I mentioned, web traffic, foot traffic to our communities and deposits, all 3 of those -- each of those are up modestly over a year ago. With respect to incentives, we're comfortable with the guide around 8%. That's where we've been, as I mentioned, for the last 3 quarters. While -- we did focus in Q1 on leaning into our completed specs a little bit more because we did [indiscernible] down, and we have had success in doing that, where we are now very comfortable moving forward with our mix of the stage of construction of our specs. Some of those completed specs required a little bit more incentive to move them, but that was offset by a modestly lower incentive in our build-to-order business, which was very encouraging. And when you put it all together, it came out to the same 8%. And even though we did lean into selling a bit more of the finished inventory to get down to what we think is the right percentages, we were still able to beat margin. So that was -- I'm very proud of that in today's environment. And we don't -- we think we have fully budgeted and have conservatism in our internal projections around the spec business, which is where the incentive can be a bit higher. And so we're very comfortable with that 8% number. We think it will stick right in that range, and we're very comfortable with full year guide around margin.

And our next question today comes from Alan Ratner at

Nice quarter. And yes, congrats again to both Doug and Karl. I guess, first, I'll add on to the incentive trend. Personally, I think it's encouraging. I guess, I think you said 3 quarters in a row that incentives have been stable at 8% and it doesn't sound like you're expecting much movement from here in the near term. But I'm curious, as we head into the spring, which typically does have a little more pricing power than the winter. What would you need to see to try to take a stab at dialing back some of those incentives? Is it thinking about absorptions on a year-over-year basis? Is it thinking about what mortgage rates do? I'm just curious at what point you might get more aggressive in trying to dial some of those incentives back?

Yes. I think -- Alan, it's a great question. If the market improves, we're going to first lean into pace. Right now, we're running at a 24 pace per year per community to a month. We have the operation capacity in the field and the infrastructure, the organization out there to build into the low 30s per community per year. So the first thing you're going to see is for us to increase pace. But as that happens, price will probably also go up because it's just the nature of more and more people get in your sales office and there's more activity and the deposit starts popping up on the site plan and the sales center and urgency, it's an amazing thing what happens with urgency. And so that will not just drive pace, but it will also drive price, but we will first lean into pace.

Got it. That makes a lot of sense. And you mentioned having the infrastructure to build 30 homes a year per community. As you think about labor and cost in general, obviously, I think that was the big positive surprise in '25 in terms of the cost relief that builders were able to see in spite of the tariffs. I'm curious how you see the labor environment today? We have seen a little bit of an uptick in lumber prices to start the year. What's the flex in the supply chain right now where if we do see a strong spring, do we -- is there any risk that labor can become tight again, costs can begin creeping higher? Just curious what your thoughts there are.

Alan, we are not seeing the impact from tariffs. We -- on the good news, we're seeing plenty of availability of labor, more and more people showing up to the job site that want to work. I think our scale is going to continue to help us with suppliers and so I think it's too early to tell. If there's a really robust spring, which we'd be happy to see, it's hard to see if there's going to be pressure ahead. We'll continue to leverage our scale and the rationalization that we have done with our products over the last several years to minimize those impacts.

[Operator Instructions] Our next question comes from Jay McCanless with Citizens.

Just wanted to focus on the cost side a little bit. It sounds like labor and construction costs are moving in Toll's favor. Are you seeing any opportunities to maybe lean in on land purchases, especially since Toll seems to be doing better than a lot of other builders out there?

Jay, I think we're seeing -- because of who we are and what we build, I think the opportunity for us to structure land deals with seller financing over time more efficiently has always been a part of the playbook. I think we are -- to your question, we are seeing a little bit more of those opportunities of late, which is encouraging on the land side. But broadly speaking, we just have less competition. There are fewer and fewer builders that have capital and the desire to build luxury homes north of $1 million, and that plays right into what we do well. So we'll continue to watch it, and we are seeing a little bit of an opportunity for some well-structured land deals.

That's good news. Could you talk about the opportunity to raise prices? It sounds like Pacific and North are doing well, but maybe what percentage of your communities this quarter were you able to raise prices? And how is that outlook going forward?

30% to 40% of our communities saw a price increase in Q1. And you're right, the North is the strongest. Boston down to -- really Boston down to South Carolina, that full corridor. It's no longer Boston to Washington, D.C. It extends with Raleigh, Charlotte, our 4 South Carolina markets and Atlanta. Atlanta has been a bit softer lately, but certainly through South Carolina, we have done the best. We had a community in -- down in the Delray Boca Raton area that took 10 sales at $1.5 million in the quarter with a mid-30s gross margin. We have a community in Central New Jersey at the Beach took 12 sales in the quarter at $1 million to $1.2 million, north of 30% gross margin. Southern Cal, at the Great Park, everyone knows the Great Park right next to Irvine Ranch, took 23 sales in the quarter at a community that sold between $1.5 million and $3 million. So there is still action out there, and there's still pricing power. It's relatively limited. But I think what -- I think I fully described it. I think 30% to 40% is about the right range of where we saw some price increases. And by the way, that's -- I have been corrected. Those numbers I just gave you for sales was not in the quarter. It's in the last 8 weeks. So it's in the last 2 months.

And our next question today comes from Paul Przybylski with Wolfe Research.

Congratulations, Doug and Karl. I guess to start off, you mentioned your January traffic and deposits were up slightly. Can you add any color on how that breaks out among your consumer groups, especially with how the age targeted is starting off the snowbird season?

Yes. It was pretty consistent activity between our 3 consumer segments, move up, move down in first time. I don't -- and it was pretty consistent between spec and build-to-order. So there's nothing in those buyer segments that stood out as either outsized sales or undersized. So consistent across the business.

Okay. It's good to hear. And then you mentioned that the Pacific Northwest was one of your weaker markets. Can you give us any color on how the ethnic homebuyer demand trends have performed since we've had a little bit of settling since the H1B controversy?

Yes, Paul, we still hear -- even separate from the Pacific Northwest, I'll just say broadly, we do still hear about it a little bit. The uncertainty around Visa status has created a little bit of a pause from customers across the country. It's been modest, and I don't think it has been concentrated in the Pacific Northwest, but we still hear it on the sales floor.

Alex, it's Karl again. We we like the business, and we like its current footprint. It probably serves 20% to 30% of the revenue for the company nationwide, as you know, predominantly sort of Carolinas North. The limitation with expansion of those facilities is transportation costs are really significant. So it's had a sort of a fixed footprint for a very long time. We like the business. That vertical integration in this corridor has really helped us. But at least in the near term, we don't see a need or desire for expansion.

And our next question today comes from Ryan Gilbert of BTIG.

Congratulations to Doug and Karl. I wanted to go back to the North segment, really strong sales, and I understand that demand is strong in this area. I'm just wondering the extent to which there have been any changes in product mix that could be contributing to the improvement in orders and then also how the community pipeline looks and your ability to replace community closeouts given the strength of orders?

Yes, Ryan, it's a good question. There has been a planned shift and repositioning of product and our land acquisition strategy throughout the Northeast, particularly here in Pennsylvania, New Jersey, New York State, we're seeing a lot of opportunities for infill development, repositioning of old unoccupied or poorly occupied office buildings. These tend to be in very, very good locations, great school districts. And so it's helped us maintain better velocity and absorptions in these markets. I think the other thing you have going on is that there's just less inventory. This corner of the country during the pandemic, it was not one of these markets that ran away. And so inventory has remained a bit muted. And so we -- yes, we are seeing a repositioning of our strategy here, much more attached product. And that's really the same on both coasts, both here in the Northeast and parts of California.

And we are also -- to your question about opportunities, we are -- I think, guys, we would all agree, we're seeing outsized land opportunities now in the North and the Mid-Atlantic, which is very exciting for us.

Yes, the pipeline in the North region is very strong.

Okay. Great. And then second question on the land bank. You've talked about having the lots controlled to continue growing community count in the years to come, but I think kind of flat to down lots controlled versus growing community count seem a bit at odds. So I'm hoping you can add some detail to what gives you the confidence that you can continue growing your community count given relatively flattish controlled lot count and then where you think your optimal years of land supply sits?

Ryan, it's Gregg. We're still very comfortable because we have 75 -- approximately 75,000 lots that we own or control. So the mix is still very favorable with 55% of those being optioned. It's -- when you net out our backlog, I think we have 2.7 years of owned land, so an attractive statistic as well. So we think we have the right land bank to support our continued community count growth, somewhere in that 7% to 10% each year as we look forward.

And our next question today comes from Susan Maklari with Goldman Sachs.

And I want to add my congrats to Karl and to Doug. My first question is on the design studios. You mentioned that you've still seen some really healthy activity there, especially as you're selling some of those specs a bit earlier. Have there been any notable trends in the spend there? Anything that has changed? And anything that we should be aware of as we're thinking about the outlook for future deliveries and margins?

Yes, Susan, it's remarkable. Over my 20-plus years at Toll Brothers in good markets and bad, the design studio upgrades as sort of a percentage of the home have been really consistent. And so what has improved is I think if you spend time in our studios, we have continued to professionalize them. We'll continue to do that and make the buying experience better and better. The margin has improved over time. But to your question on spend, it has been very consistent.

Okay. That's helpful. And then you mentioned some of those headcount reductions that you recently implemented. As you're thinking about balancing costs relative to current conditions, but still being able to flex once things do normalize and improve, can you talk a bit about how you're thinking about those 2 worlds? And what is your ability to eventually ramp the business as conditions improve?

Yes. Susan, we are constantly making sure that the business is structured to be efficient. And we've done that quarter after quarter. If we have a great spring, again, we're hopeful we do, and we see that absorption at 24-year climb. We see that on the front end of the business first. We see it in the sales offices. And we can begin to staff up, particularly with our field personnel, our construction teams and our sales teams. But our back office, our G&A, those folks are intact. They're here. And as Doug alluded to, we believe have capacity to produce a lot more revenue with the existing team.

And that concludes today's question-and-answer session. I'd like to turn the conference back over to Doug Yearley for any closing remarks.

Rocco, as always, you've been terrific. Thanks, everyone, for all your great questions, your interest and support of our great company. This is an exciting time here at Toll Brothers. And we appreciate all of you very much. And I hope you have a wonderful remaining winter and the spring comes early this year for all of us. Thank you. Take care.