HOUS - Earnings call transcript Q3 2024 | Anywhere Real Estate Inc.

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Alicia Swift

Thank you, Briana. Good morning, and welcome to the Third Quarter 2024 Earnings Conference Call for Anywhere Real Estate.

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

As shown on Slide 3 of the presentation, the company will be making statements about its future results and other forward-looking statements during this call. These statements are based on the current expectations and the current economic environment.

beyond projections other subject uncertainties and litigation, many which and competitive, significant and macroeconomic estimates management, of and of antitrust regulatory are developments. statements, are others, to inherently economic, contingencies, including, Forward-looking among control industry the and other forward-looking Actual may the for or implied those results expressed materially in differ statements. The for the to in remarks these October made month. references are results preliminary one business October included day more XXXX XXXX. October than

days. like-for-like closed and volumes been number opened of October reflect business on discussion Our adjusted have to

shared we times, large onetime have X we As headwinds. free multiple expected have cash flow

settlement. first our The is approved headwind $XX.X million litigation

We $XX and remaining The earlier we depending mid-XXXX. the to appeals XXXX in in have proceedings, when million million on made was occur payment no of timing of the QX $XX due in resolved. $XX.X million was made are uncertain, million the $XX payments, currently is will made in The than the developments XXXX. expect be and appeals

is after Second, $XX but the XXXX of approximately Overall, yet anticipated received, has is XXXX. due notice we is still happened, $XX for for million, not Cendant onetime around million legacy XXXX. which tax matter, estimate which payments shortly

periodic For filed matters, these discussion our including see we further Form the XX-Q this SEC of morning. reports,

in are and from issued in factors SEC release core excluding and our in our referenced in assumptions Our industry segment, to Important to the cause uncertain. these potential as statements results settlement quarterly remain franchise free implementation as remarks differ the relocation practice cash leads. any could specified franchise estimates include do reference The well annual today of filings. those flow and actual is not impacts relating changes, which to the forward-looking that materially earnings

of remind initial rebroadcast subsequent November of the listen today, to updated herein who X, earnings as you are to we call. those For have and been remarks the made not that presentation, this the

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

Ryan Schneider

performance, EBITDA delivered Estate's in balance long-term for than third are housing short-term Anywhere flow, morning. We positioned proud meaningfully cash remain quarter future more Good free as strategic I'm strengthens. for growth, are for Alicia. significant especially you, market strengthened strong the in are that and our octane earnings. of business others, sacrificing committed not Real growth, made anticipated. our sheet the unique progress Thank challenging future had we market the invested proved potential to Unlike a financial We assets. for and profitable anyone across housing investing meaningful and

of and During operating the Charlotte third billion revenue quarter of couple one-off $XX of EBITDA, $X.X which million includes will of delivered a that XXXX, we cover. headwinds

gains. prior transaction continues being the rates. variation Our down We market did year-over-year as geographic resilient versus flat rising. still with QX Prices most seeing with continuing even to some elevated country to price units with in see of gains closed trend outpace supply continue the be the prices and interesting advisers volume Florida portfolio, more of demand with which was of few year a on mortgage business our and brands when you performance our volume, where And having strength look and New This advisers share love tougher outperforming led City, the like the nationwide York delta markets heavily is business our luxury a demonstrated revenue explaining we small quarter. to great year-over-year. concentrated,

free we as and $XX We highlighting raised of savings allocation led and top for very network from on previously our readiness track generated track business franchisees the for used to navigate discount. and and A and repurchase our changes of Loan we a the feedback meaningfully capital in we to in continued cash invest on realized repay we what debt took receiving with agents can our quarter, million We effect at cost Term in remain third of control cost cash our the the $XX flow industry our flow. future And million versus Consistent executing year. positive free record quarter savings our our to growth way that million $XXX the our the priorities, helping competitors. target achieve

While was I the the am about near-term incredibly third optimistic quarter outlook. market housing tough,

growth. volume these much was days and to represents was are October Our results match in adjusted future numbers closings, contracts strong volume, had for stronger XXXX, X% fewer than closed up which business saw day. year-over-year, we October including up X new year-over-year open and were volume And unit remember, QX. October which business XX% October

these are even October unadjusted an in the clearly hope that needs. trend are So the stronger. we market results U.S. And numbers strong the improving first step housing

improves. position capitalize a in our difficult to and medium-term are the market both demonstrated market. housing generate are in as market meaningful flow the to for improvements our financial EBITDA cash ability and near-term octane by strong and We in very free this excited We've

our the in quarter. to strategic turning progress Now

and investing our we luxury, are we in love First, disproportionately results.

and our in unit Corcoran broader market year-over-year where including brands consistently down Our world with luxury the share Realty growing a the across market. volume International X% Sotheby's are in quarter, outperforming are the growth units

global have above different and X,XXX multiple in listings have ever the million Our geographies, Coldwell highest to the agents luxury $XX XXX currently in quarter do And Banker over sale record in transactions over Miami including $XXX with we we at above continue million. $XX great, sales closed million.

proposition proving growing XX network. franchisees, strategically brands, be and in further our differentiator, high-margin our positioning competitive reflected robust Each industry business. added X QX, are are welcome new new substantial growth. change, a to franchise and we brands our expanding unique In and results excited us for our expansion our continued this we are assets we time powerful value strong Second, our franchisees, of franchise our our about of pipeline. In

and Third, remains Estate. brokerage a Real for priority strategic Anywhere integrating title top

Consumers later this to interacting great services with benefit on and progress generating use both and from per transaction for agents more integrated seamlessly more month. agents transaction especially track global of this seamless to This on deliver services higher title and This of services. and choose agents capture their focus satisfaction, allowing agents rollout strategic mortgage faster, saves new closing support our high-value to the Anywhere, to transaction process, mortgage and time and milestone Coldwell are simpler nationwide and insurance. And with a brokerage provides experience cost our our lower brokerage and own when a they should coordination the Banker agent business. insurance We expense, client. our complete agent client and title, enhanced title

been innovation how we better The great agenda positive, capabilities this us we're successfully standpoint, generative this executing introduced an Finally, our AI they've recognition experiences cost. of brand brokerage help told publications. at generative of and overwhelmingly as our AI Real we product new a recognized it's by feedback XX,XXX from leading our including called AI our use Estate nearly listings market you drive product industry's AI deployed Listing in to from best one and to being marketing lower for through faster from earned And Anywhere a using just Last actively quarter, months. agents leader, has a few the Concierge.

the across in business generation excited generative brokerage capabilities, We in quite to benefit in last let our nearly and Building area lead believe our our me Charlotte to and can efficiency. better estate AI of the every costs. industries forefront also to relocation improve faster the for and than teams all experiment turn see we're opportunities powerful quarter, for title business, you leverage functional these use on all today and a at in gave brokerage With details example QX. both that, our and companies deliver new operations our that transformation we we It's being to journey these from finance. experiences that have operations it lower at to like over I these operations HR continue document And in processing industry. areas more generative operational we our opportunity clear on remain to with can AI committed real of to customers,

Charlotte Simonelli

everyone. morning, Good

adviser partially expenses a versus offset in by driven lower employee-related comp note, higher a prior predominantly EBITDA year prior compounded due operating enterprise. lower Please challenging advance the investing of environment. across the our and and will expenses. $XX headwind revenue, third strategic by versus had year achieved quarter QX to $XX quarter highlight Our in we capital sheet. our results. flow, was third financial EBITDA results priorities, resilience in improving cash our solid and We in I strong prior by revenue driven a and a and million, benefit business lower leveraged was year, now revenue, these some market prior balance ongoing results $X.X year down by our a we advisers. to QX the free allocation quarter slightly focus reflect billion, decrease million

quarter. additional We legal realized were million. QX cost the also savings had $XX some in expenses

on and our ahead our us our We flow was We year-end over earnings a have $XXX will excited details the expectations provide results delivered are and to XXXX million for opportunities track our these more We're at on year-to-date the further full savings $XX drive by for year. savings. of I to million in timing million, securitization cash unsecured $XX prior release. QX notes facility. and a borrowings. free of repurchased and cost savings a cash at $XXX despite using A Term repaid in Loan revolver combination million unfavorable discount year slight increase deliver

detail on segment business more into go me let our performance. Now

in and leads generated $XXX its offset over as expanded decreased includes expenses. in intercompany primarily in Our margins slightly $X partially and operating royalties, stable Anywhere business, million remain which lower marketing confident EBITDA. EBITDA relocation, year-over-year, franchise Operating time. reduced noted, the further to Brands quarter, due business, which operating Ryan million We and core our by

to to negative sequentially royalties marketing commission franchise basis XX.X%, offset points the prior transfer business. were Advisors to year-over-year of segment marketing lower EBITDA but to partially Anywhere paid million XX This operating lower such and as was up business costs. QX down company-generated before splits year items generated leads, QX new our lower due due $X the EBITDA intercompany operating million from $XX down attributable increase agent million, versus revenue, business. $XX in lower ongoing development by fees operating and previous and the was quarter. The relocation in noncore softness year-over-year, Our

lower proposition XX%, expense expense category, and Anywhere value I that is our to is with our consecutive this strong effective quarter commission agent XXth largest around management. highlight want the agent stable commissions underscoring As $X purchase quarter, in quarter. million Integrated mortgage rates but moved generated XX% Title prior versus in increased closings as EBITDA third refinancing in X% operating were Services down the year across the QX.

continue focus reducing and optimizing on debt. sheet to our balance We

of We revolver This expense. leaves repurchased third an Loan combined increase providing a out capturing the QX discount. notes until $XXX repay A $X senior flexibility. and us million a for $XXX million quarter incremental the ended Loan repaid million, $XX with $XX X.XX% of million no with cash of utilization from repurchases. using We quarter, $XX Term despite balance million a a mid-XXXX, interest we the X.XX% revolver bond and our for combination pushing aggregate million, with During no ample and borrowings, maturities with $XXX of us our A Term of million to financial the maturity of

Our years consecutive free toughest capacity. free two leveraging and housing through in and remains by the to good flow cash decades, proven in the three markets. positive delivery both generate revolver ample strong maturities of our liquidity ability past our flow bad almost near-term have provided X $XXX also in years successfully cash million addressed in our we Despite facing

flow, robust differentiator For savings tremendous capital is XXXX, working us flow disciplined to future be gives our true items, excluding reduce which debt, in strong management. free the and cost industry $XXX priorities. flexibility cash about This for allocation and generation a by onetime cash we continue remain programs capital, top favorable invest our driven to and anticipate million, free to

as financial to efforts financial Our the our profile significant today the discipline. balance set deliver provide costs, to strategic improving future our managing versus drive and efficiency, with sheet. committed our quarter results highlight operational third market and and differentiated us These margin competitive flexibility focus growth continuing remain improves. to Anywhere's octane our We optimizing

turn now remarks. for closing call me to Let some the back Ryan

Ryan Schneider

critical roll was quarter, again the Charlotte. of than both saw time remember QX and worse we of rates volatility housing AI, can changes our edge were Thank supporting Look, navigating We given employees, our that customers. meaningful actually the on you, with changes the in forecasters rate savings We out. a that, EBITDA saw of of on higher flow excited industry deliver and quarter, investing control progress growth, saw we remained the on the great cash as continuing and things we free But strategic areas all the agents target with and generative profitable by who, proud accomplishments in continue an like this rising our biggest strategic our as of frankly franchisees and anchored in mortgage brokerage change to anticipated. competitive owned cost for end luxury, franchisees franchise, the margin a like I'm for was all year. generating our I'm These agents our incredible delivering throughout by focused near market remain and for achievements including to disciplined ongoing industry future. invest industry. our any us and in

what's is shareholders. long-term to future to markets take your to The stronger is With positioned in great are we and Real now real franchisees opportunities Estate We lead and for and deliver housing next. estate of will generate agents, financial full questions. that, octane ready value our Anywhere

Operator

from Paolone with first Anthony Our Instructions] of [Operator line question the JPMorgan. comes

Anthony Paolone

I for both cooperation mean, maybe these of housing give one first both your widely of guess, market policy, being view two Can days? you the current these your the on Ryan. take state I on clear discussed and us also things,

Ryan Schneider

Those talked Tony. two Thanks, right now. are the about industry biggest in things Yes. probably getting the

the was has growth prices, started it and and in to units was on of incredibly closer flat, you had bit, housing kind big quarter market, quarter, lot way, out work were were third be the bit. the at back moment units both little you these a up Fannie off and kind go that didn't But The of the catching you're Mae the really to and differently me growth at back forecasters very closer fourth with to prices step thinking And a XX% I down, others to if So a right? than credible of start a quarter of little going quarter that. excitement.

volume As better October closed up up the people is our and today I forecasting in open mentioned, XX%, volume X% that's year-over-year. what for was are quarter. And our than

markets So then a already the like QX. Florida excited And in October. that. we're about really of see couple that had ride in improving a We rough

almost kind given for open that housing been kind the given not unit excited, trough just And X financial here that X this million this you especially get the to but growth, the has of so we've octane generate we just of years market. pretty closed, at stronger in see me when a

good. feeling things trend. a early. boy, first One But It's like make we're that month in doesn't we So step where may be going.

here current Cooperation, rescinding really or characterize and On repeal on good. is of policy. that real to we that Clear frankly, kind for curated brokers, if going just have get who's requires market. for But little other repealing day but public large it going our create housing could who I know, but repealed, question support in advantage industry flexibility, and in be And news the Clear kind who part our marketing. be And And access to business competitively. and franchisees as a does you, walled put I'm does the really got a don't is feels that happen? if have your repealed, background, And lot So reality some it we're alternatives inventory. is the our and including win info around that's shifts, to people it the I would a sellers, this buyers. of else idly agents and issues And some of your of And of over don't debate be this that so our I not been one debate right? agents anybody advantaged bit of than to we're market if I advocating folks thing in both and their that gardens will and to We're are we as have listing thing Bluntly, limit tell fair it listings a by than that, their Tony, So there's listings anybody of that's they does, put industry, Cooperation the we advantaged right also think at the start disadvantaged did for if in the relax but whose given out there's not gardens folks be about within don't could of disadvantage. Cooperation, real And we transparency discussion the advantage franchisees like the of biggest better here be sit with think not The to thing. position at it networks. message get repealing and and don't thing, long And here; let is for ensures if actually not listings stand going a share right? available my for more choice this let answer. lack in even beneficiary we on gets you guarantee and going to consumer listings. some this, is published and going to to equal change will it there repealed We've this advantaged my back scale my in team, But sure rule be a run, an because someone disadvantage? but if from both and some of go for disadvantaged then policy, going who's frankly, less don't happening to those business in if should what's the we inventory. this be repeal about just the sellers away. arguments, repeal step bluntly, to let's Tony, Clear truth think Buyers, we and it's and the

Anthony Paolone

give on on you data question buy-side any second August just Understand. early rates change? That's commission or great commentary. just with discuss the Then us XX what's happening can is, my read given

Ryan Schneider

I brokerage commission publishes only average rates. broker mean, Tony, Yes. that firm the I we're believe, public

So right it's to there see. for you

rates X little gave quarter points to commission X in basis That's were last down driving last business, business. and actually the a that. bunch what points was on commentary quarter, points, less one X Our X a of quarter, we in this other than

We haven't seen anything change.

saw see. go keep quarter at going But And So just of and we're published again, look every can you we to that impact that last the of to of back that, transparency there things we was magnitude the single and that listed these leaning a of the can quarter. into bunch factors commentary. were drove basis X points, you overall X in quarter many which so

Charlotte Simonelli

it's Yes, then and talked we about year the issue. issue a also in quarter prior a comp second mix that

Anthony Paolone

you. great, thank Oh

Operator

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

Thomas Mcjoynt-Griffith

helpful very morning a Hey, basis. even mortgage week-by-week home a to on It might in first rates October demand. bit or little impactful those maybe trends or good guys. are second sale on half on be half dig Obviously,

can kind seven what is So talk above the back up saw XX-year that of X.X% course you you month, now? mortgage about maybe over the given of the

Ryan Schneider

honest, drop like to having already But again, a surprised I bigger positively have Tommy. pretty of way. of reasons improving lot Yes, more I similar And right? is going the I been kind market. California what by things October of was of worried a over Florida up, really to didn't uptick the end September it picked is has instead the there lead it's geographically, a a was October. September, mentioned, interesting And been whole creating that, more so four variation be be week-to-week October. in in pretty saw a I weeks. We gone into mortgage was one I tough the see then we at other nice was the got headwind Just to man. surprised little is rates how

a is Jersey October, New North nice Massachusetts. Carolina, having

these get on. red of Northern different across Western, you pretty do. different thing in Sometimes far, of states, board, all Eastern, states, kind been could kind have those it's blue, cuts different you the But October regions performance issues going Southern so much

rates, even of good the I'm little a by price in by that right? face part so that's it's it's So just price. it, in more driven of and excited widespread those either, and in not reason cuts that higher units We the mortgage pretty both see optimism performance

obviously, out the may positive either financial results way, happening for something that month it's have be there, octane and actual So, help our with the those right business, we there.

Thomas Mcjoynt-Griffith

a about and some over, industry comments switching Got some that see you and cases of utilization less the potential see AI think to Or, leads just do do more it see the space? the fees enabling AI investments, be you a will industry? for in exciting agents it. couple of Then When in of automation, you fruition. on impacting made perhaps the come the pressure to agent use you to do things? risk potentially any more in How think efficient across and that AI you

Ryan Schneider

everything than and older Tommy. that's today, analogy aspect do things, too. every Internet when little the a and I remember changed had then companies I'm teams and permeated my we you, Internet how of

we it's, to all but us across I integrate do. it's efforts AI, think everything of deep on have going

less that's more what they industry. in that. on, time of I commented great transactions will already agents and and business lot think drive, out to think generate have the same integration it do but substantial expect something and out, brokerage agents not do trying I've the be we're which there. objectives. efficiency do of title the But the rates, I will the phenomenon faster of there's that, it's experiences. is be I help part of a operational good amount best, is execute I publicly that kind it It's have I underlying think automation, lower those there'll for just some better, error lower anchoring And coming of that is that think to the cost, in it's that do a then going

Operator

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

Matthew Bouley

there in the taking It ask sounded about legal wanted question. employee some to expenses. earnings quarter. like for Thanks the I the were and

higher overall OpEx one-time, can were of quantify they actually you Just year-over-year. that. curious was Obviously, if if kind

anything sense versus guess, a costs onetime of I kind some help of of and get the, of if saw to kind to elevated anything we want the ongoing explain during costs was just quarter. I So

Charlotte Simonelli

It's actually of tale Sure. were a of with last onetime The of year. sort thing we cities. kind employee-related piece expecting. The Absolutelyâ€¦. happened was X what consistent different

inflated year had we true-up So that's last onetime looks versus because why impacted year's that it last a results.

in do expenses anticipated. but quarter, be side, believe a more than why the very out we On is that's we in incremental year to was both that that we onetime nature, different. that took the comp prior higher the we and is they're issue would cost had the in have called and one legal things, One I was onetime that quarter,

those for So out material are exact call not disclosing enough both of in total we're to script, the amount. the really but me in them

Matthew Bouley

of then And enough. the on the commission to level higher up Fair rate. Okay. just kind back

hearing that Just transparent, you since and how I that's are I actually has of guess, on all? market the I around, are evolved around falling. consumers you mentioned, commission helpful. at of approaching today agents guess, agreements? there hearing So went down rates be mentioned, stay guys on-the-ground of pushing And helpful. buyer But you back color the obviously, outside what any anything kind ground will would kind this buyer really, the How as you mix, guess really super as are not and

Ryan Schneider

These have our simple. been to buyer be the X I've was things do, to been rolled X little so agreements, different things. but it we out have proud emphasizing agents. thought may a right overkill, of We thing

awesome with phone Right? experience, wherever You go on rolled the to home then out things and spectrum got to of the X are to of still family the consumers We absorb our family between. some let's a them. kind kind long tells just are a them love house home We single and multi-house X together. agreement to an great that the our we they home on it find And your far. other driveway, of to with you find they agreements the journey work one Because far finding and of that agent. house that right? in deeply choosing that, that getting out agreements go the be down rolled in used let tour their the or The by value able flexible. biggest and that's That's help be got months, for months end the been by me next agents kind them to for agreements of

more their over the been value, excited and delivering by building the actually their So agents for have articulating fact long really And agreement been term that our relationship how than used I that, that meaningful into part incredibly That's the by makes not I'm the predicted X rolled reason X we me the amount a going of out folks. we've have other excited in. would sure because leaned has agreements.

that's It's early. we're So what hearing.

that that our So kind again, But basis to their we're and exclusive long-term feels willing is it great done And that and do assuming sign we work that to good nobody I those results. we've that to lot great. like that prepare journey. on in positioned, competitors the then us people early of have well with it, folks the it. script feel to credit did I fact people with feel that. to really, at give boy, our And a done are continuing relative especially agents name work, want feedback really to it gotten I to And navigate well. think think to really trying I of for

Operator

next Stephens. John [Operator comes Campbell the of with from line Instructions] question Our

John Campbell

of couple average on a broker gotten rate. I've questions the Ryan, commission

to you as steady you But into relative as don't activity. broker that what far saw commission that the how can point Just activity I insight good. Is that. much on how to in order it average tell, close have did you really, maybe holding October a and open rate I was mix? really quarter? the look within mean, put the know obviously, finer

Ryan Schneider

don't honest. Yes. yet, that actually have to I data be

to are I on quarter But don't of QX. have you I've numbers pretty anything quarter the to we So consistent printed that. the for across give the

So that good. October, continues whether see, trend we'll but for to we feel

Okay.

John Campbell

has probably fair. the like job That's years. moderating less It And stabilization that you holding more of and done I and reasonable guys you whatnot. due mean, I'm that I been then of in a have obviously, last of much how over just versus steady. the kind housing. looks competition know on splits, capping good fallout about have kind curious a to X.X

maybe degree some guess I to like another with splits frame to it, look So like you way recovery stage? of housing going at the what underlying are do some a feel

Charlotte Simonelli

Yes. there. of a variables There's couple different

competitive competition. stable necessarily us called you think, do with and even with lens think more the each I and different other real business I part, out just estate models helps competing in a competition versus bit.

the variable. market different is mix sure, table. could back of come as thing. So up, couple And volumes down one of Like there's agents into a offsetting I think pipeline. variables, coming competition recovers, a rate agent will as But little more up transactions that go a housing the bit some go That's be as their then our definitely too.

kind that XX love I So quarters is of a trend.

to we've the some much future, that the in XX sure. able those for of biggest the single about we're last but Competition keeping is the push think And better in if are been points probably one. range quarters, well feeling I for navigate so more it normalized this

Operator

Thank participation. we this We all you With conference will for your time. have no further that, conclude call. questions at today's

You now may disconnect.

Anywhere Real Estate (HOUS) 7 Nov 242024 Q3 Earnings call transcript