RLGY - Earnings call transcript Q2 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Realogy Holdings Corp.

Second Quarter 2019 Earnings Conference Call via webcast. Today's call is being recorded and a written transcript will be made available in the Investor Information section of the company's website later today. A webcast replay will also be made available on the company's website.

At this time, I would like to turn conference over to Realogy's Senior Vice President, Alicia Swift. Alicia. ahead, go Please

Ryan Schneider

Good Conference welcome Call. Dennis. Quarter Realogy's XXXX Earnings morning, you, to and Second Thank

Officer, On Realogy's Ryan Financial CEO call and Simonelli. the with President, Schneider; me and today are Charlotte Chief

X As about and this the current statements results call. of shown statements future on the the based be its statements company forward-looking other environment. expectations are current presentation, and These economic making will during the Slide on

many and projections may and to inherently which other control uncertainties the are contingencies, those differ expressed results competitive statements Forward-looking or the significant of and implied subject of from Actual beyond are in economic, management. statements. forward-looking materially

X our For materially the important you those remarks results as factors Important made earnings rebroadcast of listen August been to actual as is differ the the earnings certain measures are call. in other that have specified on measures today will information filings. per rules, our regarding be subsequent financial updated those annual this press and presentation, initial this non-GAAP assumptions earnings not important quarterly to our as the that non-GAAP to we and these Also, financial SEC discussed in forward-looking herein cause SEC issued remind today from release and and call included could statements who of release. are in well

over call Ryan President, and turn Schneider. CEO will to I the Now

Ryan Schneider

Thank you, Alicia. everyone. Good morning,

to our with financial this and strategic I'm in about flow. and excited we future. initiatives optimistic to profitability us substantial free results, number environment, outlook make the of competitive sustained EBITDA share our today points cash continue that you a operating proof on with generate Even

products optimistic position, and combination partnerships, Realogy's market and will be, future. today should are, and the of far hear about best agents, by we are why profitability, We you you scale, brands,

EBITDA cost free management. know cost to million We driven generated strong earned expect to earn what agent pressure cash We sequentially, macro to moderating commission in $XXX XXXX in in today operating QX volume million $XXX in based and $XXX $XXX subject uncertainty. million in improving on operating flow, and EBITDA and now by million we

Our improving. trajectory volume transaction is

Our decline the At improving unit in X% X% business year-over-year, QX. declined QX. was is decline the compared year-over-year level, X% volume QX in a year-over-year. the to in our improvement X% business substantial from transaction franchise This down an quarter

Our an X%, in in concentration owned California. improvement the pressures its geographic was QX. our brokerage down shared QX, decline competitive we We faced as XX% from and in in specifically similar business QX environment

transaction sequential in positive We in with are QX improvement QX. volume forecasting

of million $XX Our XXXX on cost track. are efforts

We and have of in will these with required And actions on savings the executed statement have generate cost on additional XXXX information beyond. that efforts captured you call, further the approximately to impact will income share year-to-date. far so our next $XX million and Charlotte XX%

Finally, demonstrate have this bottom-line top- quarter been results in areas that growth. we began to to and headwinds

we've of First, commission commission past on the most new cost, across plans year, rolled the agent out in U.S.

select include local and use grow create machine to commission The is attractive our base, fees. plans new scale, agent the data better learning leverage plans unique our Remember, costs. commission while goal managing/controlling capabilities to our

year-over-year. cost moderation continued increase commission only seeing are agent basis XX pressure, an our of We in points

the on in commission we by result row a two We expect is quarters. This have and XX upward much this quarters far on metric, our pressure best results now of in better basis XX to you less the XX range earlier be than points the it to We full in splits we year expect of the of for about XXXX. now year. in told

proposition. to new improve our we're and products, and technology offerings Second, partnerships delivering value data

growth to today our have proof of is and, how and in around want points help retain helps cases, agents, we better number us the value of discussion I emphasize margins we have drive new QX, in recruit proposition In the share. much business. had some how a to While improving it improves will also

about Concierge agents is rate Listing good Listing our product, in listings our markets. average. of package on a which First, a XX% using provides for Concierge great get integrated Today, higher live now marketing commission agent

We are drive business. of while very back more growth actually that this help excited to win product, into listings agents the demonstrating margin can we and add

that is to launched get a QX and in The and Engine traction in through TurnKey, marketing volumes. another to Realogy fantastic with available campaigns We marketing Instagram consumer. over with product to designed Facebook and This experience greater for leads recently product home-buying thousands XX,XXX only for the continues Social our Amazon Ad launched create we collaboration partnership example launched already drive named is innovative move-in delivered of agents. with product

The and today. in program are U.S. XX% to drive the potential generate has agents only of high-quality beginning. and growth to transactions is greater for market margins, it and owned brokerage TurnKey drive July and We launched Realogy the in are leads expected franchisees. just

in cities. continues partnership iBuying capital-light X Our

We've expanded and select include franchisees, learnings to cities we forward moving like soon. early to our our efforts and additional early to now look

brokerage and we while. occurred in the accelerated has first because changes. base our of the and combination four of past owned the new commission our growth have agent for This Finally, grown value our months plans a time proposition in

about our X% is recruiting Our up and from like NRT momentum. we QX, agent base

growth fiscal continue million So transaction to up, volume in volume operating $XXX to $XXX of QX. and sequential moving transaction improvement anticipate we year earning positive for EBITDA million pulling full - year in We QX, anticipate expect to we way XXXX.

our drive to ahead, looking back business. creating margin is pressure And the into designed to and moderating. We're partnerships add commission agent products growth and

X% owned volume more our our all we see optimistic agent things transaction NAR XXXX. are brokerage Putting we those trajectory. why top- forecasting base more you together, bottom-line and can now is in - and growing are about We

the turn I performance. call into now over dive a for Charlotte deep will the to financial

Charlotte Simonelli

Good Ryan. everyone. you, morning, Thank

across financial quarter. metrics. financial for solid delivered Before we of results about me into with several comments improvement a few key the get We start quarter let the sequential exhibiting financial details, a our performance,

to profitably, transaction the which strategy, diligent execute expense incremental new continue process market industry focused grow that and for partnerships both includes the leverage improving remain upon leading and our business. identifying efficiencies while operational and products our overall. our management, across on We share to the We actioning business

even is impact practices the are same At automation, to strong and we the statement gain focus across to more which the The process year-to-date. implementing scale management enterprise. best time, and we momentum on look cost further income favorably starting

cost approximately and We reported for $XX cost slightly the year operating savings full actioned XX% of million already XXXX. program lower

achieve flow below. reducing and to are We and in quarter also our positive returned free committed the cash until to we leverage Xx

XXXX on X. Slide results into jump QX consolidated let's financial Now

was costs. the due versus Total million, of commissions billion, operating in prior quarter $X.X primarily lower to revenue. of from second due decline net was million $XX a QX Operating decline $XX and revenue Expenses lower EBITDA $XX NRT year, XXXX. million decreased approximately a $XXX million by to

Operating in costs net QX decline the slightly in million improved of an in due was QX XXXX, to $XXX interest optimization. and to volume. quarter, million predominantly primarily in compared due office $XX the to of footprint transaction income income million XXXX $XX net expense increase

on to share QX compared $X by The to interest adjusted our was per XXXX. per driven no an earnings earnings $X.XX XXXX. mark-to-market a QX expense change in rate million interest versus loss was mark-to-market $XX share swaps Adjusted increase in of

XXXX Free the QX million the million and let's flow billion. to season operations, the QX. cash as sheet. We cash-generating with quarter, turn and of liquidity peak into higher moves in flow was $XXX ended in driven debt cash balance Now we $XXX reduced business by $X.X net from cash the by total

were $XXX debt business while X. We free August prudent continue to We making which below Xx, to million borrowings, no leverage pay net as investments achieve revolver reduce we using committed in cash until leverage the maturities. to near-term down remain debt the with flow of our

X Now performance let's of primarily QX royalties million X. revenue from a operating lower $XXX due into of Slide decreased review year-over-year NRT. slightly and RFG segment to intercompany XXXX move on

royalties revenue intercompany up Excluding slightly. NRT, from was RFG

billion to operating volume, XXXX, California, lower of of down million, competition. is decline NRT intense in $XX transaction faces $XXX NRT million especially $XX a concentrated EBITDA revenue million. QX and was predominantly due geographically RFG from $X.X where was

due by lower royalties quarters. up XXXX XX offset increase intercompany million, in EBITDA basis $XX were was splits million lowest points year-over-year, revenues, XX commission Operating lower $XX QX agent a agent and partially commissions to RFG. year-over-year to lower of decrease the

large On basis, primarily revenue million, up points. like-for-like Cartus due to from basis a revenue XXXX. move and a were QX international group decreased splits million, revenue, XX lapping of including $X in lower referral decreases $XX

to Operating EBITDA was favorable $XXX million, million, primarily was decline of of only expenses. lower the revenue partially as revenue. revenue $X TRG $X million due a down by decline resell offset was operating million $XX

million increase GRA generate the as million offset EBITDA $XX revenue in was JV year of more an We resell EBITDA full $X in to earnings. $XX million, $X was operating GRA by expect now than XXXX. increase an for in mortgage TRG million in Operating decline approximately of

our discuss in efficiency driver as me would per our for a stop royalty believe more from financials. effort, the clarity on let benefit I I minute, everyone side Before net franchise

business moved the know, you our royalty in we As to as XXXX. key net driver for side franchise per

net we XXXX, royalty side by The the decline XXXX, allows the per has growth. designed impact driven was of $XXX our grow. different $XXX a broadly XXXX. per royalty structure primarily pricing QX X compared incentives, franchisees fee introduced side to in This factors: to drive the compete of QX First, including to help metric showing more brands of across one in royalty benefit This all year-over-year market. our was net more those In franchise to in in cap us $X

our recruiting new to through XXX and a Second, pace and help franchisees And also to grow grow, at franchisees mergers, agreements franchise earn franchisees third, to larger incentives rebates. continue to use and we extend continue top faster to convert acquisitions, our brands.

GCI approximately which RFG QX represent Our XXX XX% of is XXXX. from top up QX, in

Turning to Slide X.

and the $XX on progress To largely and through year. statements. the previously million come actions savings XXXX, Through QX for these make XX% to optimization. of income been continue already our have workforce million initiatives savings have realized date, has identified from cost our $XX completed office been We

me. will XXXX savings, We late with details launched efficient are track you target. intend March, very deliver I more our in that and is on arrival have for call. in a remain I Realogy and to priority on both full more my to efforts share Since much Making additional strong drive next XXXX new will year and our

million on we we are of track executing performance, incurred I pleased our with the and we $X with of quarter, XXXX. through which with second quarter restructuring cost-savings performance. believe these financial highlights that associated million necessary I and up, improve our the are steps plan costs now Wrapping am $XX cost expect initiatives, our During restructuring to

and and rigor that flow us to the financial are approaching the In business. free will our with drive greater speed our decisions term, We performance business better lower balanced both across business we with performance even near use overall drive cash our leverage. improved allow remain will to of

With that, for the Ryan some turn call back to closing remarks. I'll

Ryan Schneider

Thanks Charlotte.

me In a few step closing, make back competitive let points. and

competitive $XXX tough and the and environment $XXX of is in absolute deployed there a operating in the First, current Those industry large capital profitability. a in cash dollar pretty an without EBITDA in we million amount market, flow massive even amounts free in where generated housing quarter. are million

foremost, money strong a a a business. joined us, I about. lot number have of a big how our business. sustainable ton to is X to huge gone, XX and is were competitors proving industry There attractiveness as easy which are "disrupter" think there to compete X got are Realogy of make companies of still in evidence how one Today, capital we we hard of splash those with multiple ago, companies a of and spend When a fundament the investing and is build questions of disrupter to first months it who our

We are agents, scale, combination partnerships, best the market profitability. of brands, far position, and products by

internally-generated compete to from to We successfully. have financial to significant business, de-lever and invest resources substantial the flow, cash us free our in which allows

improve We intend believe position to We market. results trajectory as here this will our stay; points. of and this we number our our we strengthen in like a fully proof are to quarter attractive

Looking moderating. is ahead, our agent commission pressure

into the We're products back and margin partnerships to creating drive and designed growth business. to add

that our Putting in are are base optimistic brokerage more NAR top- We see growth and about all we is can our owned trajectory. you X% bottom-line volume forecasting and agent growing XXXX. why transaction together, now

and With your I that, Charlotte will questions. take

Operator

the from Kim is question first your And Instructions] [Operator of with Stephen line ISI. Evercore

to move we'll Zelman McKeveny on the line & from of question next Okay, Please Associates. go with the ahead. Ryan

Ryan McKeveny

on job quarter. Nice the

two-part So I have a to TurnKey. related

love built lot kind TurnKey, of you you've infrastructure on obviously OJO picture technology on of what's the actually and with kind of AI going of the got the would touch that kind back that's Realogy Also first you the I part infrastructure that's on on with and focus how's about of leveraging, one maybe a some hear office can integrated headlines. the that to you're integration the guess, wise? the Labs just have. Amazon being Cartus? side and that point the bigger So at consumer give big that the color the just guys picture So

And then is kind quality. just over with second quantity there of always generation out versus in the there this lead part, trade-off online general,

potentially so, So better generate about if the as converting, that's embark as could think far to that in with do better case? sources in think I you the guess, on why? compare other decision do the you quality, can what you And of TurnKey, how terms leads

Ryan Schneider

an me in incredibly address nothing is but really the low-conversion so TurnKey leads, incubated effectively, with because it'll at not to let and think partnership, lead question. by a the So Labs' second online be our an talk by ready if to because agent tends awash your world an we're ready it's low-quality, the moment. high-quality live they're both start Look lead incredibly be e-mail customer excited to OJO we

Amazon customer and smartphone a proposition help Home about value of move-in also of both thing. it's the who’s on But and kind the excited the support Services,

valued in a and this so high-quality from mass. will leads of of the are there that of out incredibly that the kind just the in will spectrum differentiated quality be - And be leads there, very out we lead in low-quality think really

geographies, about kind I excited the Ryan, standpoint, think this of you really where we're player this any our of our about business. case, Amazon the it's, doing infrastructure think scale in and something So that. X who really coverage an all else, between examples whether or we're has owned From helps, in is uniqueness national and national of we're market one partnership, the with what if right, Realogy across franchise the so

side subset for got broker kind our We've infrastructure through franchisees basis that from, lead already national proven our network multiple a that on of very agents, the value. already of and of to agents, consumers agents support of on the national a can the brands we Cartus have do our high-quality, choose an and that things and existing we kind partners overall really infinity and re-lo

built an So built conversation technology for for interaction when and the some to we Amazon together the the in is for the program through want right. for experience ready yet, consumer part incubator who and amazon.com/turnkey. some We with time human but as aren't OJO be people

industry in things the the one in we company scale, tried this to of our etc., But folks everybody and us, combination which the we possible built uniquely what I of we to was the the attractive no remind that share for have scale but technology and of this. this this on an have leveraged those was we do is with that lion's industry part don't, how in agents, almost why my of leveraging best both already which is things else get company, with of partnerships, much comments, geographic can example our national scale given like feel market of the position, very branch, rest

Ryan. question, your of parts both answer I'd how that's So

Operator

go line ahead. Your question next Campbell Inc. with is John Stephens of from the Please

John Campbell

you want a opportunity Congrats more guys. Amazon to back interesting seems on that to a one just pretty partnership, to the like - great time quarter. I go for

of than I originally levels, we certain Just is there there? how is expected? level hey, you mean, you better this define where transactions of working say, a at do the highest success

Ryan Schneider

of as - Look, thing a and a big of economics the dreams about, are the basically question we possible. as investment to function bit Ryan's for thing, we little want be it we've big a got going this We while standpoint, the transactions. as technology do from talked of get closed to

a close transaction Services the part smarthome deliver and services Amazon the of we Home then TurnKey, it. when we So Amazon through as

in So of who not as but as on things a it kind possible. lot marginal very the this, large large. got would be and very Obviously, we want it does we partner of cost ways, economics fixed be big we've to here, a cost are think very

launch. And right, now. getting right And so U.S. in only the we're of July, year We're XX% started, our late only we're just which early kind the days. we is launched in to in in of bluntly,

six months about prime going we the if really as more you of learnings pains started the have our it I'm even the And excited get crews into shakedown be could from next can so with it we like yet, imagine this momentum, look you even behind housing doing it learning, about in think want of stuff, to as but year be. haven't marketing growing XXXX what season all as it, you're big your marketing and of kind and we

John Campbell

makes it sense. Yes,

the growth in good. I think, run some seen others late. challenging who, the you've was felt a seen have agents, really On space of in that X% NRT that of I more

And - a last but like to, could driven of that you U.S. kind the sounds guess, does that improvement slid faster better, is whether maybe if few is just for then just And So adds? by quarters? X% retention I versus look you bit a looking that growth It talk of maybe gross the there? degree a; there, that growth secondly, or good maybe better how agents? mostly that's

Ryan Schneider

Yes.

XXX% U.S. based. So off, it's first

it's a NRT, U.S. thing. For

we the of the kind same and agents of quarter and some like cetera, new with different had say, as of more then better the things, U.S. TurnKey joining of leads in plans it XXX% would So growth is leads combination we more about make for or and bringing before. attractive. a et of those now commission level And it's of of kind kind combination keeping new think it's I most rate Listing look the Concierge, - of But at retention we're delivering the higher agents. high-quality and

that the things are enhancing value doing in proposition. We're turn

X% so a the to that X% X% year QX. think then funny, helps of of compared it's the is to and I start it's year start compared it's to lot, and the a the compared X% ago,

the we X%. So gave

the data been have kind for. then flat we while, were so while, going rooting going And point of in we down have a we're now, that for for a all we and a actually direction

Operator

the ISI. Please Kim Your ahead. next question go Stephen with of Evercore from line is

Stephen Kim

I that splits of on splits, about XX Sorry, earlier. to seen I encouraging on if Technical issues. what we've couple and said a for a had be up to wanted basis that year-over-year clarify, looking basis. you're could. XX questions I to here, you Obviously, just points

For full the just year? that or in the back year, the half of was Ryan

Ryan Schneider

more we're that getting for and start of we've the growth that's XX year. of half, happen the higher year. higher half No, things you think year. in kind than to recruiting is bit agents full one still the working had That's the will way so but be some doing will back the do the little XXX be and we're splits we that, from XX see year. in than half first of earlier We the of to for of back a momentum the better half to back talked XX thinking we our a the are at there of tables little going about the the productivity on their sequential Obviously, their been to and because up that happening,

that, you - recalibrated trajectory, like that better it. with in thought we've of row two stay to we on love tell So thought, we probably keep want far we'd had don't we we focused but and to it we our excited are quarters - of than that, but so and than where too we kind a we've in should we yet, and go very heads on to

seeing pay new and lot just numbers now both results worse of plans commission quarters we're off you quarters of of deliver quarters a one our others XX quarters in seeing very a been had that. than helped and looked those pretty kind our we're that the have it the now past of X because bluntly, We've it, them number than kind a actually looks but - has influenced XX delivering for different so question that a in of and we also of have number massively, of before very, heck And excited see a to something two some we're actions row asked that, that row, us. that different

Stephen Kim

you've was splits low mean, to Yes, goal goal, pointed improve you not the splits is and charge, absolutely. out, the the the alone productivity took - when I keeping as revenue.

industry exposure the do to your housekeeping see NRT indicating. performance once that's me what a what vein, just side, can or to floating that, back? the price close much hedged? share gave and gain gave And that be So NAR important. In again, how mark-to-market a forecast relative some - have maybe your you interest you the the is you in doing, on RFG, that on good little on both expense, one to to the even NAR, a the industry you the remind in was the know other the to with I item to did numbers year-over-year potential notice both of but And gap we relative good on and relative to lower get volume than XXXX, seemed NAR for

Charlotte Simonelli

real I can to that is. mark-to-market just quick, the take put thing out, that

ratio, XX% is We have XX/XX a hedged. so

Ryan Schneider

NAR, Last so gap - to to first this Look XXX NAR. quarter, closed question. great a the So we shortfall had point on off, things, gap the X right? we basis and quarter,

a had basis quarter, gap NAR. This we to XXX point

QX, in than rest year. U.S. performed the And in and talked we about of the of competition some worse last also, But some we the is overweighted stuff how California are California even that fact

volume we've can we gap. close in the of Obviously, are so forces hope to that Engine gap the get side and XXX and XXX. closed Social to we're like we of positive our - kind transaction gap past we the from focus, QX, same, focused things efforts our We'd cetera. TurnKey, So the continue QX and see on that you that, but - why like but recruiting love of as on we like to that's the et to product, things move positive much be the Ad

drive to really And especially for that's and the the be I and do did line close of to to and create a better drive points quarter, NAR, good anything we partnerships is the agents, we clear, should recruiting, going by quarter between - to vis-à-vis more want be and growth of geographic can we we're very to still did is California. - proof this optimistic. even line that translate difference products the some some view gap us bottom and both thing as if gap this But top Stephen, why we better just driven

Operator

of next ahead. Your Chris Please with Gamaitoni the question from Compass line is go Point.

Chris Gamaitoni

I wanted to ask first question on TurnKey.

who of that? So engagement, and pays approach controls for to marketing about the will it the success who it consumer really be

Ryan Schneider

both of we marketing and the primarily. Amazon Amazon is both funding funding we'll the needs - we to we're of, marketing channels, marketing anything of the our So supportive do thing. primarily there channels. And Obviously, inside - be can something for that excited channels do marketing inside we're we but is Amazon can the be marketing there do inside of

channels. there we'll out we'll of have in kind of in marketing general, - world through also Amazon access access people within Amazon the We kind -

Chris Gamaitoni

Internet-based to the ads, trying being to approach, understand marketing envision message? how just get TV you Do

Ryan Schneider

I where company industry I industry I a in I'd and the financial is the had not this I winner. way think that TV think where I an TV a go. well. $XXX mean, to come last is necessarily from services massive ad, like an where at, had spend a I don't I company million is like I This TV feel pretty that worked is a understand

is predict going our Amazon's of through Internet through will channels that we own fact we're it whole obviously, Interest-based, our and where is market Things can to and much in dollars. invest be partner their our model so the more Internet-based, on likely I marketing this

Chris Gamaitoni

brokerages agents. entering and industry? on new then agents level of And joining, from more is the new retention you Are mentioned - other the agents new same coming profile the they are these agents of or

Ryan Schneider

We're large enough.

We us both have a every every we our single businesses. new across business in like the of have our country franchise who join and year, agents ton profile, owned

year. spot is the those we're whole We have probably the spot have across - growth - spectrum would in having who - whole say, every join the of have the recruiting I spectrum agents is the sweet kind the recruit think our but we us - and probably like that we're across and well, of the is terms what sweet do it, is to into trying people yes, potential. we

before But as there private public out and the agent stands that's and to target across their no going the all because So tries little spectrum as whole and that growth probably we're we the we've model think just out independent first most. of a in our production, lot get of most data figure scans kind across spectrum size, data had we're that is and quarter, in years for group last kind people of where almost calls we so who our current the three recruiting broader we're talked to of disproportionate. targeting agent I've success of the that five the growth criteria. on It's it an us. the a kind potential, one the bit of machine of to has learning we built

Operator

ahead. of Please Jason Piper go with Jaffray. the Your line from next question Deleeuw is

Jason Deleeuw

any can or drivers competition there? I bit up a trends, some key It's if change also, you Have that good we some little here. lead And then, fundamental at all? having the changing on of was the just of all the to influence? just And to is wondering that see a agent generation or are improving conversation, those opportunities Is things of the splits could bring competitors lightened color it still table, kind bigger these the get agent a not? or recruiting

Ryan Schneider

Yes.

Chicago, I've in variations. very, change. on competition call say, about On would especially talked intensity really right. how, agent the I quarter intense, California side, And there think and It no thing. of the Tap remains geographic XX for are Spinal kind very some has last and the between competition cities last our a There don't on this change is quarter been of example, I that.

answer first to So that's your question. the

money On lose money are I not to at a of certain where you guys - markets before, choice to nothing, for it's between the and I've the and is retain going it as but losing mean, I the people. letting money told certain day, there conversation, we're the agents about go, end if just someone and

But you QX But earlier agent here full-service and dimensions, the past. the trajectory even we on kind versus in really I even traditional in time brokerage. are and competition, NRT down the with we growth right? mean, a have conversation of our this saw question long multiple for first time a in

Our you if because going to money higher highest possible, to you can you're at brokerage. split going value and here want go than traditional have other proposition isn't you're just any the a RE/MAX to or the have split

like products with kind the of in really be trying of - to we bring things competitive we've of also that scale, benefits So that. we to the of emphasize our the partnerships call that, kind referral, the described and power some we're on got I with but that

to a meaningful But year since flat And disclose growth, we quarter, wanted of obviously, we and good world and a for those about felt other then market some we're actually talk every where the get it. out question losing to agents so them tough going or again, we've for to been numbers it's on here. there, kind fighting keep

Jason Deleeuw

outlook, and basis? both I opens growth fourth you quarter, in combined the is what's know that for the that? outlook? RFG the have a on just of the on you of transaction quarter is the for help that the about think the quarter kind that the volume just just visibility And in third or quarter, and third NRT then visibility the on us but see on And better most for here third positive

Ryan Schneider

good feel was based on a a XX% right? some pretty us it you how good flat month we year QX a - seen both X% the think haven't talked about and up And July out we improving trajectory. was our or far the I plays We X%. then the market down was good like in the and we got going mind, that we're basis, year market July, July, market month, for down September we'll on see was keep We've last they're in August - feel about. that of on we've think just numbers. in a after look, like we July, numbers, was competition as it seen Last so Keep and and then X%, but like Yes. combined to positives -

terms the of a So still our the volatility volume guidance fell kind the the details like from point transitioning is of the we are business. off those actually we and it. kind optimistic trajectory market, different normal in around of growth about of in a here cliff, we bit of about growth this had trajectory, period number of so off when our There year a to little decimal kind the overall is of things what feel of are quarter type been but by last based parts and and time of good

Operator

So KBW. our George with line ahead. is from Bose the question Please of next go

Bose George

seeing Can very you active? iBuyer on update where market competition iBuyers markets us in an trends the in and give are you're

Ryan Schneider

like where, lot phenomenon, for market that's share or we of it's X% me iBuying, of closely. into dated, pretty X% a has that at of a - it's big hold market iBuying as been - X something It's that, think, month too poured a look the capital' I kind the but biggest is Phoenix don't the much or is Yes. market, area

using of the some shifting including - for are agents, are iBuyers disappearing a and is now the franchise iBuyers model economics are the there using our less example. lot had a predicted. our agents, And agents commission the where of pilots, people the bit so violent is is use little so We idea, in than

a an few changing iBuying - is in a markets you down people time turn they're as vast their because in will the service and majority house those at a other is, good conversation, and above I The lot I pretty have beyond cases, lot about those that of talked discount the offers that some of the about, believe, of talking selling same thing of iBuyer an the it people shopping, say agent will at to fee. offer get the find of is people a offers bid that, part bluntly, the of are consumer

it's little bit conversation. a So of a in change the consumer

at continuing which part the the majority win more thing. real it, are proposition not adjusting of being vast importantly, the frankly, both, I just get best by others, the think of but of, value by and people to few listings price, with helping is agents, in brands our cases, a

an you I sell your a percent price. taking often mean, market house you you're through XX-plus look hit data, can but at iBuyer the on if

of keep what's testing it going there. so it. a Look, doing testing some out expand some we're bit more to And soon on in cities, to to three cities we're little that's other

our for very to cities. think, it in the our learnings. like agents way and probably like their participating unclear, those to lot. in We that have to at access to profitability, franchisees learning We've we capital-light everybody expanded some is path I But of this let a of point. The

Bose George

the And the TRG cost-cutting the despite Is earnings, then lower volumes. just segment, switching off? to up that margin side your - was just paying the

Charlotte Simonelli

the It's a bit but little cost-cutting, it's also of GRA.

I feeling now there. called our are about progress we good out joint as really we're GRA So bit, making money on venture, and a the

Bose George

deleverage the cash to flow? management. on one any then there or last your that using thought dividend to Any just is actually cutting is one capital not to - just meaningful - free and And there relative that

Ryan Schneider

$XXX investing paid EBITDA, million, since revolver obviously, down even And free debt the end we can paid flow, hear by and million pretty $XXX of is further quarter. quarter, remark, $XXX Charlotte's down excited business our the look, we're the debt. and million in focus the you we the down paying about operating about cash the on So it

dividend the the capacity capital in cash-generating context Look, down we're investing but our allocation, of on the our we'll and you of sure the business is - posted focused company. on the evaluating in like on we the we keep keep debt, doing that. making And paying biggest so what thing we're been we've

Operator

Please question with today's Micenko Jack SIG. from go will ahead. of come the And final line

Jack Micenko

I for on you've flow, free you. obviously that's up mentioned following pay question, a for cash sort a we debt balance priority that of thing debt given looking the Ryan, and How think down that the the how outlook? year the some pecking big about down? prior of and order outlook the about severance do that better should the and at the through through know got better pay you got of we charges coming think you've year

Ryan Schneider

I'm get could Jack, might little up better my challenging sorry, time going mic. close a hearing that had or I you possibly a or to be speak and hearing though. you repeat the that either

Jack Micenko

Is this better?

Ryan Schneider

little a better. It's

Jack Micenko

free think talk through between through better year balance flow outlook the year-end the you with the Just the debt cash the guidance and how and of kind pay can of as now you down much range holds?

Charlotte Simonelli

Yes.

it last generate we won't cash be a balance really not market we better, trend year, different with does the the that year, where of going we from de-lever free a giving be depend make we're this leverage housing lot So because and of we and a throughout we to the can lot it that what any consistent very so will had year. the be year go we're on that as always on at the perspective guidance feel flow comfortable

Jack Micenko

more partnerships it mix around shift? tech spend bigger you pay of can tech brokerage or internal the that And then over partnerships, that tech now, mean especially maybe does spend down? spends debt - does down send that to the go the And of Okay. versus pivot just more as picture spends, Amazon to it's seems maybe is time does maybe if on

Ryan Schneider

more probably the latter. little of it's a think I

any just expect our more go after I spend opportunities differently team, reallocate months spend, we to think to tech the even and still forefront material in way. sort to development. working be product we the up with still Our it tech on better even of don't have and XX of

out so than parties architecture but party that trying focused to we the it's our a going with product do on of more we're there. going and But But open an probably going partnerships any more rate. think, rate franchisees can deliver development, different kind agents own I to providers of tech we're products, are some to at or same the our we're because do deliver to best access sort to whether some third third investing keep want products integration

add providing they we're think business. others again, and the into we some margin because, that back providing - have some can growth like On drive the the of tech we products hopefully, side, and both some and are

cheaper franchisees, we're cost for of going spend. in agents into of a top business - We're and onto benefits and faster translate to those a speed business. real-time way. data the but again, the that, then, center rotating Jack, will be bit the a not And And probably cloud sort keep on But again, our the net of in we, being market little hope data benefits transformative to line. and our more getting some out the and not quicker on basis,

talked as in offices of the type just of about and as our where single time. ways different there sprawling we're future of X the places doing more more run as optimization company a as are she'll of this, places Charlotte little we to about, and efficient on over in or and work Most getting company kind try well talk the more few call of a more redesign - the of to kind of the kind next efficiency, more of office a some as some take holding drive going the of of X in we're kind stuff classic

Charlotte Simonelli

rationalizing through rationalized how so them to to our a agents we too, few give here them we maybe a lot only build buck. almost offer we've gone the redirecting like that of products offer there example because hoc that we or to that just have products on was efficiency use drive there product, products process of more that to just would a and XX% better another agents and and And we've that's spend of we're the bang the for ad a of

Jack Micenko

rest like maybe you've like dropping $XX call $XX far or the so It $XX that follow-up. well can about that point, I'm think to looks the as Charlotte, or just a the third is net just thinking - that the on the as two-third the $XX of of coming bottom the million up does the quarter it savings or million is million, way down? realized line, is quick of to million right what go about to the whatever in

Charlotte Simonelli

Yes.

savings investments the dropping in to the investments we I line. think any through. basically, from savings other making coming perspective, a expect are wild that that is business in whole versus So bit the the are how our swings It's I the we're ratio of it. just bottom don't offsetting mean,

in year more implement you due for back savings the half wind As down changes. big before know, these to wait will the the just come we season through of that of the some sort we to the of fact of

to So a quarter-by-quarter of thing, the it's invest really more what it's bottom they line, drop timing that to choose just but offsets we all that.

Operator

continue closing Please questions. further no are there remarks. time, this any at And with

Charlotte Simonelli

for with you. thank and Thank joining call coming today, you quarter. forward We the Great. you look to speaking the over we

Operator

quarter earnings second call. again, for Realogy conference thank you, Holdings joining XXXX and the Ladies gentlemen, Corp.

now may disconnect. You

Realogy (RLGY) 8 Aug 192019 Q2 Earnings call transcript