RLGY - Earnings call transcript Q3 2020

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Operator

Good morning, and welcome to the Realogy Holdings Corp.

Third Quarter 2020 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 tomorrow. A webcast replay will also be made available on the company's website. At this time, I would like to turn the conference over to Realogy's Senior Vice President, Alicia Swift. Alicia. ahead, go Please

Alicia Swift

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

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

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

many to other of are projections subject significant uncertainties inherently may control and expressed from and management, ongoing we contingencies, respect differ are Forward-looking any statements and statements. those results the or of which economic, to crisis. the expectations beyond statements competitive in Actual implied to forward-looking materially COVID including make with related the

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

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

Ryan Schneider

we share market, transaction earnings to driving, with the substantial morning, material huge volume was technology Realogy. debt today. quarter and strategic a from been QX thank paydown. delivery, growth, tremendous combined joining progress for for housing The drive came prior market us strong Good quarter gain and the together and you have

quarter, strategic in growth good EBITDA we million delivered race October, continuing transaction on nearly from operations substantial in And and growth increased our up we Realogy Franchise transaction continues Revenue and by momentum our actions. by differences businesses. was powered the by was XXXX, growth growth most estate the a revenue September our during growth year-over-year. brokerage look ago. improved X/X the plus mortgage volume capture brokerage price. cost operating and year-over-year driven million with to XX% the transaction to like geographic from to are quarter. was each delta be month $XXX XX% above about and the XX% of of and plus EBITDA $XXX was data by equally the volume closed units and the quarter increased New volume York was versus driven by City. operating July the like in up integrated was year-over-year, driven leading through XX%, plus title headwinds our was with Our This August preliminary momentum. based real XX% It of excitingly, delivered we economics continuing XX% year

QX data. quarter us we when what quarter not changes, headwinds consumer XX% market the from we and believe very with combined and exciting behavior been share gain happening in testament strength strategic market we to acceleration faced is a and the digital to is market This stabilization past powerful the just the We move months. gain, in have positive but this results see is NAR's To because to gain volume Our over incredibly compared housing us year. a progress success demonstrated for are plus delivering. for delivering, share in building technology share

mature. seeing are we Specifically, initiatives our growth

drove in both and agent over retention growth QX. agent improved brokerage consistent year Our past more volume the

Arizona. in York, initiatives, International New Realty franchise our we Corcoran, QX really are great with growth transaction brands, stood franchise substantial virtualize out virtual by technology as product and the months. close in efforts And and transaction digital gain new especially its digitize We in of performance transactions which the and gained in strategic Our share. powerful. of more helping past Sotheby's traction these like our excited especially estate growth And price. Colorado business California, more very recently are our agents units which our really digital both is believe realty-driven real changed business, markets the and to and brand expanded dramatically, Adoption our to the Hawaii, up is win X virtual world and we and products

living the are it, real someday, and estate While financial transaction up digitizing results. many showing our talk it's we in companies about

industry-leading Finally, We our year our great Shifting partner the technology sheet. substantial leverage by combination with quarter X.Xx the paid have we $XXX great And revolver not in and believe turbulent in with of In ended balance ago $XXX debt agent We are from flow of and remain this We on net versus they and made start we've our operations, the already all it borrowings. brands. multiple continuing on million our is reduced very strong us across cash to QX. with value off agents to net momentum. million of agents, it's generated leverage. base October, progress free our others year. accelerating need realized we believers demonstrating great whereas hire lost in that agents, the during the or a

our revolver QX, our now And like our of trajectory as we into going is balance deleveraging. So the X. momentum

or that It's approximately through that data most in XX% better. up franchise growth or XXXX So transaction half growth Realogy by And year-over-year even half looking closed is Realogy sales. preliminary most more through driven of October unit also unit more and more sales. driven with approximately of up more brokerage with October volume is of both XX% versus ahead, even volume open of by

we COVID October XXXX share for with macro discipline. as volume and headwinds mortgage will strategic discuss I housing expect the and combined low uncertainties, and focus, cost and we're we market consumer QX, position. with and and competitive and we data, positive uncertainties, strong will expect macro these But subject in So to temporary about trends trends excited enter overall, competitive are including later, of trends, based a momentum also there that strong believe and continued progress that, COVID absence on our continue XXXX rates on continued consumer long be to we how the will said our continued last. preliminary the very savings significant from progress momentum, cost track Having very this we cost and

to We quarter greater financial With to to going detail. that, allocation the performance unchanged. Finally, to our delever. plan and turn capital review continue third to in in I'm call priorities over Charlotte business remain the invest the

Charlotte Simonelli

of Thank Ryan. share taking drove a brands We significant and to business. strength in third continued position and advantage of virtual Realogy operating the quarter morning, on in Good progress you, made everyone. to improved exceptional quarter. capabilities. NAR, the our from market power third relative our demonstrated debt gains top line bottom delivered deleveraging strong and growth, our line execute the and We foundation of margins of paydown

the EBITDA operations growth on and brokerage continuing $X.X higher quarter across biggest to volume Turning far to to third $XXX was our by million year-over-year $XXX the QX QX quarter. billion, our increased Revenue growth transaction year-over-year Operating title predominantly from due was up XX% franchise and million businesses. outstanding in record. highlights. revenue

even mortgage basis growth an basis. significantly to year-over-year points We transaction expanded up actions and quarter, profitability. margins volume We all greater earnings Strong continuing of businesses. real brokerage robust title, and JV our third meaningfully the also realized our XXX ongoing cost a mortgage temporary on with ops title management in and estate cost in franchise, and contributed and economics share

mortgage EBITDA the continued $XX versus momentum Our in quarter, million year. strong in $XX and up million last business its contributed operating

contributed up versus $XX $XX EBITDA, operating million business in million last title our year. Additionally,

know, clearly current years our in the have these businesses we environment. market you past this over paid As has off invested investment and few in

on to We the both virtualize to these products our also and strategy fully integrate more of to more economics. execute get transaction continue

is of quarter. in Lastly, operations, million operating $X discontinued reported generated business, which our EBITDA in the relocation

growth despite the our the focused significant revenue further simplifying and We quarter have laser-focus base and cost on lowering business. kept the across the on a in efficiencies business driving remain

accomplished recap delivered XXXX, September on expect to have $XX moving a take we million minute million before already savings cost me what in of already do year-to-date. In approximately expect deliver Let XXXX. $XX to we to on to approximately what permanent we with savings

Additionally, we QX. executed savings in temporary $XX million approximately in

remainder Given the the big permanent QX. pulled rebound reductions cost in transaction expect volume, of cost the we and affect to only actions have back temporary

to $XX for XXXX by previously lease We efficiencies $XX reduce cost currently what expect approximately to XXXX, I communicated. million permanent to the additional and in above XXXX. action we savings to expense in annual administrative delivered million to now similar deliver expect million working $XX are We

on trade year-over-year of third convert have improved increased basis permanent This quarter meetings the entertainment, worthwhile travel, more Also, we remember, in efficiencies reductions a our agent as trends, other and year. QX this temporary each the We metrics our you can over and brokerage ongoing and if expenses the have to the expense competitive higher last in we a agents but we to results. years grew aggressive experienced growth retention XXX few is the year-over-year, conferences X% drive you is believe see past to to portion as splits Commission than look quarter. operating our been expect in quarter due we side. significant quarter, retention in We volume recruiting and largely and highly environment have previous some since points reductions.

off to the We get are excited volume efforts. our from now pay

about we loss year a saw that hit point primarily ago. we communicated affinity a the from Lastly, business, XX USAA basis of

we pressure metric. in While and overall delivered profit the on splits issue, even P&L remain we a this critical the growth like with

Moving capital on structure. to

are our further change in and we our we sale an announced effort property optimize mix the simplify In refocus our rental capital October, willing working to business have are deployment. We of and shown to capital management structure. to business

as and continue simplify proactive on extract performance improvements and remain to in explore will this to our ways incremental front to operating we value continued drive leverage. business greater We

the million of flow restricted quarter reduced including net last cash cash by and and by generated free only We million million sheet. year. the excited equivalents, in cash have borrowings. from operations continuing cash, with $XXX exited since million and $XXX our strength the balance improving debt in in We revolver QX $XXX am I quarter $XXX Finally, of

ratio million leverage the XXXX. and XX, on now Our secured XX, was repaid revolver, the X.Xx as at senior X.XXx total the net X. ratio Also, which September of fully we as is have of leverage balance October was $XXX

with Wrapping year with ratio up, the no clearly XXXX, and I resiliency reminder, sheet stronger than have are several a refinancing leverage we quarters. balance they past as were the a last in and and pleased Realogy over Lastly, ago. performance very place our quarter, our maturities much am a until of

proven have debt the ability to and We deliver reduction continue investing profitability our and strategy to execute flow cash free accelerating growth, while on our and in business.

Our financial of I is future business. for and increasingly much today, remain stronger profile optimistic the our

it Ryan. turn will back I Now to

Ryan Schneider

a Charlotte. few take want to issues Thanks, strategic before touch your I questions. on we

start several years. the in last for But very seen in annualized putting the increasing. about me mortgage sales. shifts demand, housing million for increasingly market even has unit we're X.X With housing housing million resale per between the U.S. of months, and some million-plus GDP the X low and number pace XXXX, market housing with combination with X stuck on year population a of and unlock the rates we've both social Let ways, what X hovering supply units and market. since household been seeing In transactions growth, formation

While in migrate it the suburban are gained we markets. shifts, past particular, quarter discussed they've was first we urban months. consumer momentum absolutely consumers In X from to early these last seeing when

houses journey driven needs are second definitely they purchases. that clearly We including rotating the better seeing we home, trends saw are meet from in seeing to consumers of to attractive and and these by their more weather within QX accelerating continuation their are continuing in tax our find suburban We October. and consumers work results, geographies, home markets

for unit sales, is better, with of Realogy approximately forecasting driven sales. in broadly, also year-over-year As volume half XXXX I approximately XX% told even XX% our you, currently October or we XXXX. Those NAR by with driven units of price more both data up by versus and more and strong continue the results growth is most QX October of more Realogy for growth through are or momentum. half is open growth as the transaction up most of more unit through preliminary volume incredibly Realogy closed More

benefit mentioned, clearly trends uncertainty lately, in our I continuation we and While the the improvement stand has given transaction third especially market long-term low the quarter. world from market in consumer above seeing, QX are share numbers we more usual of these to we substantially believe mortgage the the than growing rates potential a given XXXX,

give X this to is there's economics while and scale future, the my deliver about of quarter. expand strengths capitalize Realogy's you and lot industry and to some substantial a in delivering those both always to they're about what bit like us. potential, from going in we're especially other toward they results old power I've brokerage do and of actually And and relation moving and big saw what work really great opening we in going are on to that I'd get And the across strategic our me proven building of noise a examples. on the scale, industry. Second, in you issues to new, believed our data combined strategically agent-centric technology, focus brands world remarks model, Realogy, the delivery have the what at how let players,

So integrated of someday about capturing estate is transaction world real much talking the the economics.

it and doing unprecedented levels. are at scale at We

in You're technology $XX third our joint this our our both new and and EBITDA digitizing operating We're initiatives successes seeing by title the title mortgage. strategic mortgage was closings. mortgage and quarter, from like million benefiting driven of venture given

to invest in continue transaction We capture even future. to our the real and economics of efforts share greater expand an estate

the this work be experiences people last we greater from has taking adoption in Second, digital been innovations. to our and and finally, have using transaction integrated digital acceleration our to And year for continue the digital/virtual the by agent the of and more virtual of saying. We benefited consumer the process. and brighter created consumer driven the months. transaction, agent technology we've data the technologies both learnings and COVID comfortable X the the reinvent from throughout agent than with as future continues substantially become And

large excited being agents power We expect to this supporting on central the versus more infrequent are that other and of agents very QX. are both the ever, agents to market financial recovery, great now partner the during we big We our of brands. for clearly Realogy used the data continue agents. be consumer. focused here the and personal, and has realize Many models in disruptive the size And and increasingly agent for moving and with the very this to transaction very will COVID show our transaction base a given customers advantage than typical who very great during hire are in to centrality of models and agent across see remain or the scale

if substantial remiss actually fees higher believe be didn't we since discuss their the and but for consumers would great for model. and given homes. it's competition into actually I they iBuying, is iBuying simplifies But stay, market a we have experience, the better transaction Finally, to prices flowing I capital get the business don't substantially pay believe below way. we here that

for achieve house to all to sale Our higher a And program RealSure to their home their listings. buy agent offering to help sell days, agents an guaranteed win offer our with price lets even agents a going consumers RealSure XX the differentiated consumer. our upside to offer works them cash our program the with provides while

deep our venture with existing joint homes selling buying RealSure with focused on we markets, them This of at have together. Our goal products program Partners selling RealSure help homes seen in We a and support our formalized over dozen and put to XX,XXX their with our venture company that portfolio. is to the like in buying scale at is growing but from not competition. our out what capital geographies have in and joint the stand multiple risk houses America, from pilot agents Home we with experience

of expand a We are way capital markets to number network of the great America buying expertise and a Home capital very year. excited light new of Partners the with Realogy. home capabilities in substantial combined distribution approach leverages power agent of for to next Realogy's and This markets

our health and up operations putting over $XXX QX, quarters in and the the In customers Realogy; a ratio, prior a both quarter material in the debt crisis gain from X deliver XXXX. behind a agents our care year earnings demonstrated Realogy taking leverage Realogy aggressively of was performance us, than in QX while for growth delivery, improvement, economics operating way earned substantially together. $XX million in transaction continuing substantial of substantial continuing huge technology all midst and confronted adoption to all In EBITDA tremendous QX, EBITDA and improved pulling safely. generating demand the With So and we've drop from this quarter. and line volume of global greater And moving bottom invest by still cost market in while to accelerating quarter digital paydown. housing growth, huge share on and million

QX during continues data, results month our each and our quarter, Our good our better look got to preliminary growth the volume momentum. volume on based we like October

I'm what excited you and future. we'll questions. take in our proud our So am as XXXX I our in so progress, closing, far as incredibly and that, I team has are hope achieved your With of our about results

Operator

Instructions]. [Operator

Your first Evercore the of Kim from comes question Stephen line ISI. with

Stephen Kim

volumes data, year-over-year had be you if would willing you happy I fully in see your that's surging the I the because if curious, splits. up? we of price trade-off volume, here been your volume of volume you take the the have deeply flat, Or in here if splits splits to time. that have Knowing the sort question obviously been participating to rose look industry. was a down wanted you'd a it would about very had ask any and flat? and But seen into I been

Charlotte Simonelli

Yes.

mix you still in what about quarters. we we previous the two that told have is So impacting agent that us

are in agent to affinity, trends And the similar the in what of USAA So past. the some overall, the other main mix, we on is what mix splits the saw of driver average, our still sort increases on stuff. and

would splits agents up commission transactions. due those delivering go seen with we to yes, still So have higher-producing more of agent mix the

Stephen Kim

think XX of... that all affinity from bps, And you Was what, Yes. was said right, the USAA? the I

Charlotte Simonelli

XX in XX. total. Yes.

Stephen Kim

X-X?

Charlotte Simonelli

Yes.

Stephen Kim

Okay. Got it.

about like in carry into could at is splits figure general, there seeing see process growth year -- anticipated year, for normal? negotiations talk -- strong exceptionally to is little or explosive next likely as reasonable in negotiated time that period thought growth the to volume likely would going there? levels And you're you higher that to out if this, Sorry then we next how you transaction I'm a ahead current In split a that. of year. And influence the see next bit we it in and to about that for industry kind look is trying thresholds a where bit us of year-over-year. What's to to into a probably your think

Ryan Schneider

Yes, a question. great that's

agents written base in just over year. most of naturally. XX,XXX-plus are some So because a of our in of look, the typically most year owned roll upward is be But we business. on they before. the things There's agreements going brokerage pressure over kind way don't just had volume that we've you roll got do negotiations these way off to XX,XXX bit And a the

remember, negative better of And top already will concentration a lets the kind seen lot volume that, other mix a standpoint year. Though to bit a a want really, kind in our of better the be away too often So agents. that was about, had them talking start from because of at much the than if side been I don't a really production Charlotte of among of year, is, low it table. things volume little that a with of you at greater their maybe position high run people we've

cases. to a So higher to many roll there's not like in place

phenomenon I just bit of is shouldn't negotiations may kind you we'll a about, XX,XXX little place bit market again, from as but So upward trade-off. happening. a But where this talking think pressure a is take you're be a describing, we've there from little like been think of it that of the the standpoint there

volume does down, there's bit in work got things, Now then right? -- to the too, of remember world it reset way, way if In also, these go a too. other volumes on on little a going poor you've the

here, in took quarter trade by $XX the we the our take when totally line trade million. and also grew the we'll we bottom So first

on Second But bit quarter anomaly. it's a bit of and it, is that's hopefully a color helpful. little more

Stephen Kim

had absolutely. brokerage the I related franchise. ASP Last question to lagging Yes,

But in you of presence a You of whether maybe portion obviously longer, a big the little the business, as got And hit the business. between of a you out things City think I for the business in which that the the that in aspect sense. may of presence that, lingering like maybe New because maybe maybe suggest some that saw franchise the in curious New called brokerage York the effect brokerage they the there growth even a York where narrow down makes and geographical quarter lot the suburb a effect there's was people have also despite hunkered where you was would of regions City ASP ongoing kind gap lag for then between longer. and to

Ryan Schneider

They're me transaction so So brokerage actually The in to narrowed. franchise. volume seen take October stuff. it's closed both that gap has we've October right The same let the and for far, XX% a around two; XX%, is the opens, or plus same the or minus two; a or plus owned point or franchised. point and and minus XX% actually in basically on the plus same you the

up. is gap half and So size that is in again, whatever gap, that size more the or was is was New least including that But whatever driving driving and like price. that half October that York of for headwind October, totally actually of rest at has, City closed -- than

businesses of of look one how it, on just the same there. QX so the be weaker but effectively still more price and York the New When to in the by data were driven to that's we biggest than far. excited numbers But look both October driver see the and our strong most. so were, data focus may being not units across hypothesis we at you the probably to of itself, be the one look Your reasons this is October

Operator

& Your next McKeveny of Associates. question Ryan Zelman will be with from the line

Ryan McKeveny

Congratulations quarter. the side and on and mortgage things. the ask Charlotte, of wanted on I to Ryan title

I'm of strategic out the posted in within or those So you've the last for called obviously talk curious is and you quarter, everybody. efforts operational if strength you can there. put some also mortgage to space booming businesses. Obviously,

So of through just that of operations you doing scenes of have on we're things kind trying seeing. side behind with just or of think what guys compared strategic to this boom kind the been the the overall industry dynamic mortgage

Ryan Schneider

Yes.

say I'll of me So and together. mortgage title hit two there's and things, kind let

of We've the seen last businesses refis virtual. and to says, we up in they're And much out shows first we've a the doing. we're experience," much why with with acceleration. and easier of capturing that competitors last mortgage of Net come Promoter the couple notarization, So during X for stuff and our actually the a self-assessment got And remote the and think gone and releases team of that acceleration digital and our already "Hey, in about Scores mortgage have more, and our easy flash does months. kind product, that and better is stuff. lot digital for up tools, the consumer been more it virtual partner, digital the both that's much with press purchase what We've close make title that affinity, transaction happened guaranteed of got more we X months, in in to things both flows are investing, rate and

So has virtualizing digitizing our transaction in really during we businesses both move and that the the helped to think these X us months.

the strategic expansion. is thing other The just continued

loan building covering coverage, X more the ago. X lost up We want we've loan And increasing JV X adding even is kind Instead set year. doing get of new mortgage on our direct-to-consumer agents, more been officer we XX right? it again, XXXX covering officer loan to So agents. still, what it a we years money some XX in channels, of to officers first

covered. there's while, the And we a still officers. we're sure every title for our So stuff still even we're We've expansion got but adding business title then trying geographic more same. of Idaho. new some some on in side, we've place to Utah, we're loan doing the got where opened just title make And

sure last in We that I X I'm another state the and so to out and our linking helped have our customers bunch these the digital we and market these really a things that helped X for agents in continued the We've X day, business to integrated to acceleration I'm won't. at But not more then that months. create a has our expanding to loud, together, supposed coming technology gets that build just and virtual end of in in as the other the months got we is and drove thing this, last of parts think the how we're do all you Ryan. combination been We've experience consumers? the the of businesses investment the And strategic we've our volume again, doing, it. transaction here this got housing pieces do good actually say

those got that, too. do and of size we financial love big and both it's We think advantage, delivery, there. investing competitive about and excited a to scale to very we we're keep we're the and the So going

Ryan McKeveny

Ryan. And quick helpful, is then That or one clarification question.

Just are mentioned formalizing off-balance be dynamic? entails? Or capital-light joint I -- it going for joint remain So you type a with does you wondering, of venture talk from bit you sheet capital a of a just clarification I'm exactly that. is kind that to going this? Partners on yourselves guess America. of what looking into about Home Can venture

Ryan Schneider

and the will on Partners in The as America, of sheet. its into actual the expenses. for our just latter, homes JV won't its markets bit purchase Home Just stay savvy America capital very, to fund we're the of the but things. And going is off-balance to put that's JV operation a and of very capital balance and sheet. capital sale of Home Partners side They of be its

number So we're of hence, a either remain start. for it's And run that a business. to the to in but capital just view of capital-light not to will the an sheet, as thesis joint huge investing remain. this us off-balance you capital contributing my again, thing, again, example the us venture, But amount capital-light homes, of capital will it's should not buy

Operator

Our next question comes from the McJoynt line of with Tommy KBW.

Tommy McJoynt

do what in expected. hit to or I be going I what for about seem then so. a bit is Can the talk strategically ask than outlook be over the to wanted outlook business. It seems And business corporate just with relocation taking want about year to that? of the had better like the you just to for the kind a holding with relocations actually next you

Ryan Schneider

Yes. corporate $X of business how the things obviously less good before. Look, kind like made and to is cost of about a relocation team But year on did profitable. and man, stay the million that which lot done our it has than EBITDA, side the hard

that. immigration when right of obviously, the a the or very the -- that. we for something. of is onto franchisees. COVID been markets we're had. headwind that has that another not about the are And like a the But of we a kind thing housing long you're that's It's the big had global the place are bounce market had business. another But player, end mortgage look, are, generation and And chunk you company corporate So are back that part markets really At in now restrictions of excited a day, relocation valuable, the business. time. for the on agents to We -- like been lead the including

out into we a So business the is the pure a industry how in that that what have of there out. ecosystem. that can player much players largest shakes of that integrates interested kind support actually business We're our there. There's broader lot I'm industry, and most

get shakeout what very kind an market way you of see industry I'm has, the that's if recovered interested so the not And kind to housing of happens.

be is to working and you But that, technology we'll recovery shape that investing and watching on So thank different, we're of what strategically trying asking for it we'll keep that question. in terms in it. of the things like business But see is. still that and and

Tommy McJoynt

there that any out? market switching acquisitions organic sense purely it. some guys during gain share how in you'd call Any were quarter Got the the over, so that much And of did of or was quarter. you

Ryan Schneider

No acquisitions.

acquisition But are Now there no somebody. occasionally our look, that. is franchisees -- drove buying

to little list had hope that some the not the market Ryan And of stuff I do again, share and of gain. strategically, some we to it. a it that done here. of question and just back what you, Man, I kind kind gets combination excited to great we've share headwinds. about drove whole As said, repeat McKeveny's that technology it's but how we've gave that stabilize we market share together gain And bit think we're to feel

Tommy McJoynt

rolled affinity USAA few the affinity have After one. an how you guys last on past just new you Could off, those year? then over announced give partnerships. update And the progressed

Ryan Schneider

Yes. we've both about. with ones We're mostly talked of happy the

open program that. Rewards growth thing USAA in Military is years like the it anybody The to Military. to related was the XX we Realogy building Our up. U.S. And of

against July. did and awash marketing really not a they're a long it's So growth so in and and the in we QX Realogy to But of leads. effectively program to and kind it like up And off leads build soft that's many the of impact, our to nice the We agents going messed of Rewards. Military excited think we're a dollars we our our be start. June with to something because But like for term, We a COVID we in early putting drive is plans. low-quality high-quality started launch then AARP replaced world to it great partner franchisees just returns, overnight.

of a them, but both go So new. because we're to of are about building they excited lot

Operator

Our the question Barclays. Bouley from comes Matthew of next with line

Matthew Bouley

exaggerated, greatly what away, is the topic Ryan, whether But brokerage at the to importance of the death sellers homebuyers the and of of on just of of commission you of on there goes agent people but some remarks one guess. I end of the not perspective around structure and whether your gave kind they may the rates the day. so change and I think agent the the opening more in zero kind So agent,

my steam, ABCR your what's taking virtual in I coming extent mean going that. things question mentioned there obviously, is To offerings, the are or today? view? changes any So of this, why to be You market out there gaining structural would share would on that not like and changes iBuyers

Ryan Schneider

mean imply great Well, strategic to are mean I -- way, I gaining that it's a the didn't by topic. iBuyers share.

of that I there share the on talked a X-plus last think transactions. aspirations done even have going, small And math have will QX, yet, transactions the incredibly I example, and do thousands hundreds did couple take iBuying very when all you share the is quarters, when out ever people program kept in I'll right? but in I they don't some the the of about we agents mean of small you that market. data the have have bet down business agents more the million of -- suspect I is shut and of all if than data written,

remember So it's dimension. but And up ABCR been old take on we'll a commission on ago. ABCR, very the long I'm Look, said risk, happens that was brokerage a in to sure, I forever. -- time was risk it's the was quarter, when from the Bill what yes, Gates to X, enough flat see to Internet and going to right? X% a that mean

So a are And people moving But data, the if it's lot you actual just falloff to a you risk, even have predicted. it I -- that, have big at absolutely. seen the that to models also that trying of agents disrupt you cited. as see then look not always

at the about their sometimes, anyway, they what's agents so question. in the topic, So the and strategically commission really out He agree the But the famous are is I -- got with all all real But and clear. on for deserve occasionally, person, him. in there We data watching it to provide value, noise is watch look but question show data that And are your a quote the think and there at out mean world. making there people to doesn't out look doesn't agents very worried is Buffett happening won't data, about. see through it actually got future, worry the happening current it's great you the Warren and thing another we that what's the to the thinks But it. and I keep we'll world actually powering earning time. commission

Matthew Bouley

Got it.

that appreciate second it's clearly change I to you've a since away this show And had you ask just about up the one thoughts which does the there. of the from moved wanted a side? at intentionally in lot of then all or, on around in I had else something know thoughts the investment Okay. M&A, success deleveraging I kind general, where growth might side, just

Charlotte Simonelli

in business invest on definitely excited the our changes, We're and going strong focused debt we let path. But We're And to remain and like that down remain progress to if really know. have that certainly we we'll we business. quarter the paying us. we we listen, continue was with investing do It to do. No, made. a what need we enough for do feel you anything focused, in else capital and on

So we don't by feel limited that.

Operator

question Inc. John line Next the Campbell comes with from Stephens

John Campbell

in some dreaming talk also mortgage on about and along the put picked that's But you already as a to and that's just that? some of at the side really, couple you've you guaranteed helping obviously, about goals. maybe Can Can living looking then title you and talked what you Ryan, pretty you Congrats kind refresh Day, a on point, some guys maybe talked up outperformance. attach as rate us rate kind at years that one and good well? how ago are traction good what attach economics Analyst you title JV and quarter. rates us like of of of you kind the drive the the made points to to since great guys far on are -- obviously It I others guys results sounds operations, Back there. how things motion way. mortgage much really think are as

Ryan Schneider

Yes.

Day and Analyst on we is Look, know of rates. I don't time was our capture that know capture don't even But predates what topic. rates bluntly should kind our give you there. out said my So we that what like

step We that stuff. newer, kind actually most it's where to the partly of success And change a mortgage kind side are we of increase where or are had two, the trying we've change a of the in always them. on creating it's because

more these digital is by and key rates. even that it and far the capture kind integrated of increasing of believe to -- So I things greater is those

a not thing. does 'XX what We're here. to it's to huge you numbers I'm everything back sorry, ways, 'XX. knowing some for back strategic give the comes that. And out in were not going And So given in just or

John Campbell

guys you iBuying Zillow a anyone at adding sounds of industry? about announcement. that Realogy you if threat a it bit I but play as ago. broader Zillow don't kind how years kind about of within -- Ryan, What's a you the Any there. the Do initial kind that in-house prepared like cost-driven is reaction thoughts of your curious business? that in viewing the talked were Zillow asked I'm question, many many, this then -- hinting was And That is, fine. remarks, that's No, kind talked your agents. Is little just about But to to it you that? view the harmless of

Ryan Schneider

thesis And to value, as base future business. previous the in the to deliver gets if partner here with either excited remarks, to okay, realized the folks have I just or said then were look, are I need lot trying agents in et really question have of particular, think a the a who just of, and back cetera. are they got, the to or role comments agents anyone meant about back whatever, actually my of Zillow. be about long-term including the business that little you none business I bit hire change agent our Well, or which real disrupt of a agents we, my to and

kind very transactions This is it. through high-dollar for, where infrequent, high very Amazon or of people And you remember, a shepherding paying different human people that is to of in something got world there's value at You've what lot real are the and a than infrequent, are do it pay for buying dollar transaction. very having businesses adding whatever.

we the we're our kind great kind very out else the we no has both it. do we've up we in agent well RealSure. like integration all and But business. this think the got greater got title us, like I of like data, of themselves and on to and stay industry. brands to for that's ability held there -- to tech but the these focused around competitors We mortgage size got base, closely. going have We all our of risks in the in the agents products that consumer to differentiate But to watch make and focus. the to one showed We're none it. the invest We've -- watch got, some sure scale infrastructure

So doing. actually just other digital think the the with do of to we are people some we our from COVID, are have we acceleration us about gain ability And things things talking those. the more mortgage about of like it demonstrated more And in bottom title now acceleration shows in in our up the kind doing market line. and of quarter share the optimistic

Operator

the of from Micenko comes line question final SIG. Our with Jack

John Micenko

couple for Charlotte. A

if permanent, sort On G&A coming side, up, that the of expense case. to was sequential I'm picked increase some the off of temporary due and in the guessing the that's

the a $XX we the permanent to permanent. of the you Are something million million expense, year color, goes marketing at next rate for $XX operating because expense to $XX the And that the On lease outperformance? Or million of new marketing? run I are on am then closer thanks side, on saying over-interpreting.

Charlotte Simonelli

them take order. in I'll Great. Yes.

employee-related quarter-by-quarter. to due There of So is volume-related that some expense, in of the expense the temporary. it is quarter, some the drop-off part varies

bit expenses so in the well. as that's of what's happening And general a

-- I working always As rate, far say optimize are with marketing marketing, we're wouldn't most we spend. as be run new to a it's and our but efficient

quarters after there's up probably coming side. next firmed with the that in year are the you So for marketing plans share what more I'll we've on

the to be but I an year, exact lease mean for I that thought imply expense number we the didn't administrative really better next -- far is no, next number. wouldn't As as to going fact the year, change than

that on higher something level. interpreting be shouldn't you So

John Micenko

like, through are a what we're go, nationally of issue lot "Look, supply to keeps to and just Ryan, perspective, take that split think multiple get because to going going XX% it really issue an versus from sure. how the you you've has And traditional got talking just more supply that better we're helpful. we think do agents discounted the where sanguine And the is a you then, or to got like seems and your lot more going to do environment share utility XX% bids got up, for limited in market splits solve a That's I is obviously dynamic today, we're more more When in of sort option, down maybe year-to-year. we're And environment, think coming high-level business, and Okay. supply that in the right and we a tougher value whole maybe splits better everything as agent else. thoughts the a of view sort of focus and the issue? aren't the on supply that's Just just kind the of -- in." to curious about

Ryan Schneider

two do Well, let things. me

everybody. probably think number think, -- good stuff, drivers I I and kind one focuses of just everybody up again, as on I did a or think even bottom But focused first we a on company, So in bottom I we share but overall, with P&L, thing line of line. a but in kind a more just the I -- And our -- line, the this affect quarter, substantial splits split a general be of like to and use the the improvement what that's little of drove the going is even think bottom comment. some we increase agents, of have bit -- going that's not growth us with the so quarter think gain would integrated because for when for

I'm supply On bit it's say and something, little different. right a think about me this, let just thing, but the I

think by But and I were half a our than our they're closed even volume. opens now, has is are because think ours And now like two more October and number than of NAR's worse And amount. up. gone things half clearly a XX%, more supply. ago on plus units. is units. inventory more looks supply market Days number, people confusing I different sold right? plus getting right both are they We're in of down. inventory is More and houses substantial is year XX%

in houses long For where staying it's a XX%. XX% drop is NAR's like like on are number us how market

reality even So inventory but ever, transactions tighter being the is are there done. than looks more housing

to it's just in piling growth, the unit book in not It's So very coming a more And again, volume up is there it's inventory. in on price of market. our all the and not world. supply growth quickly moving and lot

housing million us time. been for people unstick for have which million like I used reason, asking years, X in a and to transactions to what's we So X be I for from plus, is made million get me X.X the the X to made to points a which going market long

years sitting that builder side, are well, that happening, just unlocked keep homes to Just is, ago both of kind just unlocking if social like terrible build And number it's been going you I in rates in the demand. that's of on thing, moving I is bit, asking, shifts the the just these a are X not it. what we I we XX when sure. supply tight, and the Even think like low and and the bluntly crisis And much houses which inventory. the built people because by see But in last think it is are health same happened quickly. driven really for numbers. helps more They're looks inventory months, it

was predict And a we sure. moving. look market. supply a for it we're be wasn't has for year frankly, more sure unlocked coming it and continuing, this when people But to the globe seller. data the more unlock the to And seems a going I housing. for unlocked more silver And at momentum it was be I every has thing But that so lining the buyer, is there's seeing. didn't to and for supply terrible it's there going what that to

again running inventory really very and and number." out lot market comes plus grown And stabilized this market bluntly probably people the I should supply in of we -- good moving scale, even have if because So which I the of is a reality when I there. that's share housing especially size "inventory think our quickly country kind run low us situation. confuse to where we the But be is and that's or growth, inventory at formation, million supply think is more just rate, And for and think cetera, very given part population household growth, a hits never quarter. supply. and bit X a a there's GDP it having our et It's really

bigger think from market. we're what is number here supply we a were dead it's So reason I I many and how again, these D.C. this But not price that's in to who and demand to the optimistic. "Hey, I from just suburbs And that it's crazy." hearing supply Maine, market me -- doing talking and demand part in housing now transactions. said, both was the Portland, for very generate excited great. side, D.C., was I'm of somebody that are and the it's the unlocked. being And future the even and talking it's has of in the so -- just for economics geographies someone

So dynamic Inventory for the our in that supply-demand we're but is QX unlocked. saw supply it's think, you're related, that about. pretty and demand, us I increase both supply, the thing more it's being units is that we a positive and and in seeing actually not supply, asking of not in is for growth October and is

up probably question. I'm that's Jack. going you But too to there, much. for So wrap the thank

John Micenko

great use interchangeably, actually. do We made. too good a delineation and really to that's tend And point them a you much that's

Operator

Ladies gentlemen, webcast. and today's thank in you for participating

at this disconnect may You time.

Realogy (RLGY) 30 Oct 202020 Q3 Earnings call transcript