Executive Summary

Q4 2024 delivered strong volume and stable profitability: total revenue rose 16.7% YoY to $2.36B, home closings increased 12% to 3,571 at $608K ASP, and home closings gross margin held at 24.8% (adjusted 24.9%) despite higher rates . Adjusted diluted EPS grew ~29% YoY to $2.64; GAAP diluted EPS was $2.30 .
2025 outlook implies modest margin moderation amid higher incentives and ~7% lot cost inflation, but still healthy: 13,500–14,000 closings, 23–24% closings GM, mid‑9% SG&A%, $590–600K ASP, and share repurchases of $300–350M; Q1 2025 closings ~2,900 with GM in the high‑23% range . Management emphasized durable mid‑to‑high‑teens ROE via asset‑lighter land strategy and operational efficiencies .
Strategy and mix remain key supports: personalized finance incentives (not broad price cuts), balanced to‑be‑built/spec offering, resort lifestyle and move‑up mix, and prime locations with limited resale competition helped sustain margins; only ~38% of Q4 closings used costly forward commitments; spec closings were 54% (21% sold/closed intra‑quarter) .
Consensus estimates (S&P Global) were unavailable at the time of analysis due to data access limits; we therefore cannot quantify beats/misses this quarter and highlight guidance as the key stock narrative catalyst alongside steady margins and robust cash returns to shareholders [GetEstimates error noted].

What Went Well and What Went Wrong

What Went Well
- Volume and profitability: Home closings revenue rose 12% YoY to $2.17B on 3,571 closings, with closings GM up 70 bps YoY to 24.8% (adjusted 24.9%) despite rate headwinds . CFO: “adjusted net income was $278M or $2.64 per diluted share… up 29% YoY… driven by higher revenue… improved home closings gross margin, stronger financial services profitability and a lower tax rate” .
- Demand/pace resilience: Net orders +11% YoY to 2,621; absorption pace improved to 2.6/month; ending outlets +4% to 339 . CEO: “healthy demand… achieved with only a modest increase in incentives… adjusted gross margin… stable sequentially and up YoY” .
- Capital returns/liquidity: Q4 repurchased 1.4M shares for $90M (FY: 5.6M for $348M); year‑end liquidity ~ $1.4B; net homebuilding debt/cap 20% (gross 24.9%) .
What Went Wrong
- Incentives and cost inflation to pressure 2025 margins: Management expects higher incentives versus Q4 levels and ~7% lot cost inflation; 2025 closings GM guided to 23–24% vs Q4 24.8% .
- Cancellations ticked up: Cancel rate increased to 13.1% of gross orders vs 11.6% last year; backlog units and value declined 10% and 12% YoY, respectively .
- Regional/segment softness: Resort lifestyle orders fell 9% YoY due to Florida hurricanes and timing of openings/closeouts; management flagged higher inventory in certain Florida submarkets (though much not directly competitive) .

Financial Results

Headline metrics: last three quarters (chronological)

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenue ($000)	$1,991,053	$2,120,842	$2,356,489
Home Closings Revenue ($000)	$1,920,127	$2,029,134	$2,169,703
Closings (units)	3,200	3,394	3,571
ASP ($000)	$600	$598	$608
Home Closings GM (%)	23.8%	24.8%	24.8%
SG&A (% of Home Closings Rev)	10.2%	9.8%	9.4%
Diluted EPS (GAAP)	$1.86	$2.37	$2.30
Adjusted Diluted EPS (non‑GAAP)	$1.97	$2.37	$2.64
Net Sales Orders (units)	3,111	2,830	2,621
Absorption Pace (per month)	3.0	2.8	2.6
Cancellations (% of gross)	9.4%	9.3%	13.1%
Liquidity (approx)	~$1.3B	~$1.2B	~$1.4B
Net HB Debt/Cap (%)	22.8%	22.5%	20.0%

Q4 2024 vs prior year and vs estimates

Metric	Q4 2023	Q4 2024 Actual	YoY Change	S&P Global Consensus	Surprise
Total Revenue ($000)	$2,019,865	$2,356,489	+16.7%	N/A	N/A
Home Closings Revenue ($000)	$1,937,632	$2,169,703	+12.0%	N/A	N/A
Home Closings GM (%)	24.1%	24.8%	+70 bps	N/A	N/A
Diluted EPS (GAAP)	$1.58	$2.30	+45.6%	N/A	N/A
Adjusted Diluted EPS	$2.05	$2.64	+28.8%	N/A	N/A

Note: S&P Global consensus values were unavailable at the time of analysis (API limit); beats/misses cannot be quantified this quarter.

Segment breakdown – Q4 2024 vs Q4 2023

Region	Homes Closed (Q4’23)	Homes Closed (Q4’24)	Rev ($000) Q4’23	Rev ($000) Q4’24	ASP ($000) Q4’23	ASP ($000) Q4’24
East	1,252	1,432	712,461	835,590	569	584
Central	767	924	436,080	501,184	569	542
West	1,171	1,215	789,091	832,929	674	686
Total	3,190	3,571	1,937,632	2,169,703	607	608

Key KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Backlog (units)	6,256	5,692	4,742
Backlog ($000)	4,197,819	3,830,004	3,192,148
Ending Communities	347	340	339
Mortgage Capture Rate	89%	88%	89%
Avg Credit Score (FS)	751	754	752
Spec % of Qtr Closings	n/a	n/a	54% (21% sold/closed intra‑qtr)
Cancel Rate	9.4%	9.3%	13.1%

Non‑GAAP reconciliation highlights (Q4 2024)

Adjusted net income and EPS exclude: legal reserves/settlements ($17.4M), real estate impairments ($20.5M), pre‑acquisition abandonment ($6.5M), and tax impacts (–$9.2M) .
Adjusted home closings GM adds back $2.7M inventory impairment; adjusted % = 24.9% .
Adjusted EBITDA Q4: $397.6M (16.9% of revenue), up from $338.6M a year ago .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Home Closings (units)	Q4 2024	~3,400 (Q3 guide)	Actual 3,571	Above prior guide (actual)
ASP ($000)	Q4 2024	~610 (Q3 guide)	Actual 608	In line/slightly below (actual)
Home Closings GM (%)	Q4 2024	~24.5 (Q3 guide)	Actual 24.8	Above prior guide (actual)
Home Closings (units)	FY 2024	~12,725 (Q3 guide)	Actual 12,896	Above prior guide (actual)
Home Closings GM (%)	FY 2024	~24.3 (Q3 guide)	Actual 24.4 (adj 24.5)	Slightly above (actual)
Ending Communities	FY 2024	330–340 (Q3 guide)	Actual 339	In line (actual)
SG&A (% of Home Closings Rev)	FY 2024	High‑9% (Q3 guide)	9.9%	In line (actual)
Effective Tax Rate	FY 2024	24.5–25.0% (Q3 guide)	2024 actual tax provision shown; ETR consistent	In line (qualitative)
Diluted Shares (MM)	FY 2024	~107 (Q3 guide)	106.846 avg diluted	In line (actual)
Land & Dev Spend ($B)	FY 2024	~2.5 (Q3 guide)	~$2.4 (actual)	Slightly below (actual)
Share Repurchases ($M)	FY 2024	~300 (Q3 guide)	348 (actual)	Above prior plan (actual)
Home Closings (units)	Q1 2025	n/a	~2,900	New
ASP ($000)	Q1 2025	n/a	590–600	New
Home Closings GM (%)	Q1 2025	n/a	High‑23%	New
Ending Communities	Q1 2025	n/a	340–345	New
Effective Tax Rate	Q1 2025	n/a	~24%	New
Diluted Shares (MM)	Q1 2025	n/a	~104	New
Home Closings (units)	FY 2025	n/a	13,500–14,000	New
ASP ($000)	FY 2025	n/a	590–600	New
Home Closings GM (%)	FY 2025	n/a	23–24	New
Ending Communities	FY 2025	n/a	≥355	New
SG&A (% of Home Closings Rev)	FY 2025	n/a	Mid‑9%	New
Effective Tax Rate	FY 2025	n/a	24.5–25%	New
Diluted Shares (MM)	FY 2025	n/a	~102	New
Land Investment ($B)	FY 2025	n/a	~2.6	New
Share Repurchases ($M)	FY 2025	n/a	300–350	New

Earnings Call Themes & Trends

Topic	Prior Two Quarters (Q2 & Q3 2024)	Q4 2024 (Current)	Trend
Pricing & incentives	Emphasis on personalized finance tools; forward commitments ~1/3 of closings; maintained pricing; Q3 GM 24.8% .	Modest incentive increase; national base price hike in early Jan; still leveraging personalized tools; only 38% of Q4 closings used forward commitments .	Stable pricing discipline; selective incentives; slightly higher incentive assumption for 2025.
Margins	Q2 GM 23.8%; guided ~24% for FY; Q3 GM 24.8%, guided ~24.5% Q4 and ~24.3% FY .	Q4 GM 24.8% (adj 24.9%); 2025 GM guide 23–24% amid higher incentives and ~7% lot cost inflation .	Margins flat QoQ in Q4, expected modest moderation in 2025.
Demand/absorption	Q2 pace 3.0; Q3 pace 2.8; healthy trends despite hurricanes .	Q4 pace 2.6; web traffic +~40% YoY; online reservations strong .	Still healthy; slight seasonal moderation.
Resale competition	TMHC analysis: only ~17% of nearby resales truly competitive; lower months of supply in TMHC submarkets; insurance issues manageable (Q3) .	View maintained; Florida/Texas supply not broadly competitive to TMHC positions .	Continues to favor TMHC locations.
Land strategy/asset‑light	Off‑balance sheet control reached record 58% in Q3; new $1B land banking facility (Kennedy Lewis) .	Controlled off‑balance sheet 57% at Q4; targeting 60–65%; 2025 land spend ~ $2.6B .	March toward higher control and asset‑lighter model continues.
Build‑to‑Rent (Yardly)	Two Q4’24 dispositions planned; pipeline building (Q3) .	Sold two BTR assets at low‑to‑mid‑5 cap; target 5–7 sales in 2025; 11 communities leasing .	Monetization ramp in 2025.
Tariffs/supply chain	Stable cost environment through Q3 .	Tariff discussion implies manageable impact: steel ~$1.2K/house; other tariffs ~$4–5K/house, mostly late‑year if enacted .	New risk acknowledged; quantified as manageable within guide.
SG&A leverage & brokers	Q3 SG&A 9.8%; improving digital/online tools; high FS capture .	Expect mid‑9% in 2025; NAR effects lowering co‑broke; online appointments with agents down to 60% in Jan from 67% in Q4 .	SG&A leverage supported by lower broker commissions and scale.

Management Commentary

“We produced a nearly‑30% year‑over‑year increase in our adjusted earnings per diluted share and a 14% year‑over‑year increase in our book value per share to $56.” – CEO Sheryl Palmer .
“We will meet the market as needed as we look to maintain an annualized sales pace in the low 3 range while also generating healthy gross margins in the low to mid‑20% range.” – CEO Sheryl Palmer .
“We expect our home closings gross margin to be between 23% and 24% this year… assuming a step‑up in incentives… and… land cost inflation to approximately 7% this year from 4% in 2024.” – CFO Curt VanHyfte .
“Our use of such [off‑balance‑sheet] tools aims to generate enhanced returns… we are well on our way to… controlling at least 60% to 65% of our lot supply.” – CCOO Erik Heuser .

Q&A Highlights

Margin cadence/2025 outlook: Q1 GM guided to high‑23%, with moderation through 2025 on higher incentives and ~7% lot cost inflation; tariffs viewed as manageable within the range .
Pricing/incentives strategy: January national base price increase; maintain community‑specific pricing power; Build Secure Flex program is more cost‑efficient than large forward commitments for longer‑dated closings .
SG&A and broker commissions: Expect SG&A mid‑9% in 2025; NAR changes and digital journey reducing co‑broke costs (online appointments with agents down to 60% in Jan from 67% in Q4; >10% YoY reduction in broker commissions in Q4) .
Regional performance: Central (notably Texas metros) showed strong absorption and sales gains; move‑up strongest segment; resort lifestyle softer due to hurricanes and timing .
Capital allocation: Target $300–350M buybacks in 2025; diluted shares ~102M for FY 2025 .
Build‑to‑Rent: Two Q4 sales at low‑to‑mid‑5% cap; plan 5–7 asset sales in 2025; leasing pace ~14–15/month historically; recent weeks ~40+ across the portfolio .

Estimates Context

S&P Global consensus estimates for Q4 2024 EPS and revenue were not retrievable at the time of analysis due to API rate limits; therefore, we cannot quantify beats/misses or estimate dispersion this quarter. We anchor the narrative instead on reported results and 2025 guidance [GetEstimates errors].

Key Takeaways for Investors

Execution outperformance with margin stability: Q4 maintained 24.8% closings GM despite higher rates and a 54% spec mix; 2025 guide calls for only modest GM moderation (23–24%), underscoring resilient pricing strategy and product/location mix .
Demand remains healthy with disciplined incentives: Net orders +11% YoY and improved absorption to 2.6; management prefers customized finance tools over broad price cuts, preserving ASPs and margins .
Asset‑lighter model compounding returns: Off‑balance‑sheet control at 57% and rising; ~$2.6B 2025 land investment supports community growth and ROE expansion, with manageable gross margin trade‑offs .
Cash return catalyst: Planned $300–350M buybacks in 2025 on top of $348M in 2024, alongside declining diluted share count (~102M target in 2025) .
Watch list – margin sensitivities: Incentive intensity, tariff timing (steel ~$1.2K/house; other tariffs ~$4–5K/house likely late‑year impact), and ~7% lot cost inflation are the principal headwinds; management has embedded these into guidance .
Regional/segment dynamics: Move‑up strength continues; monitor Florida as hurricane effects dissipate and supply normalizes; resort lifestyle likely rebounds as community openings shift into 2025 .
Operational levers: SG&A leverage (mid‑9% target) aided by reduced broker commissions (NAR-driven) and scale efficiencies; financial services capture at 89% supports monetization .

Additional Q4 2024 Press Releases (context)

Sustainability: Included on Newsweek’s 2025 America’s Greenest Companies list; highlights ongoing environmental initiatives across energy efficiency, water conservation, and waste recycling .

Appendix: Additional Detail Tables

Q4 2024 Order Metrics by Region vs Q4 2023

Region	Net Orders Q4’23	Net Orders Q4’24	Sales Value ($000) Q4’23	Sales Value ($000) Q4’24	Avg Order Price ($000) Q4’23	Avg Order Price ($000) Q4’24
East	902	993	579,540	532,647	643	536
Central	602	784	339,973	411,750	565	525
West	857	844	565,747	587,451	660	696
Total	2,361	2,621	1,485,260	1,531,848	629	584

Balance Sheet and Capital

Metric	Q3 2024	Q4 2024
Total Liquidity	~ $1.2B	~ $1.4B
Gross HB Debt/Cap	25.1%	24.9%
Net HB Debt/Cap	22.5%	20.0%
Cash & Equivalents ($000)	256,447	487,151
Shares Repurchased	1.0M, $61M in Q3; YTD $258M	1.4M, $90M in Q4; FY $348M

Non‑GAAP Reconciliations (select Q4 2024 lines)

Item	Q4 2024
Adjusted Net Income ($000)	277,760
Adjusted Diluted EPS	$2.64
Adjusted Income Before Taxes ($000)	351,797
Adjusted HB Gross Margin (%)	24.9%
Adjusted EBITDA ($000)	397,621

Sources: Q4 2024 press release and financial tables , Q4 2024 earnings call transcript , Q3 2024 press release/tables , Q2 2024 press release/tables , sustainability PR .

Taylor Morrison Home Corp (TMHC)·Q4 2024 Earnings Summary