Anywhere reports losses of nearly half a billion in Q4
CEO Ryan Schneider said the company will make cost reductions to bring operations in line with the market, as he expects a volatile year in real estate.
Predicting that 2023 will be a volatile and "pretty wild" year, Anywhere CEO Ryan Schneider told investors Thursday that the company expects to make $200 million in further cost reductions to bring operations in line with the slowdown in the real estate market.
Of that total, company leaders said that they already have cut operating costs by $50 million as a result of layoffs in January and the winding down of RealSure, Anywhere's homebuying program.
Anywhere reported a net loss in Q4 of $453 million, after posting a profit a year earlier, company leaders said in an earnings call before the market opened Thursday. Losses were related to reselling properties for lower prices than anticipated, among other factors. The company said it reported a net loss in Q4 because of "non-cash goodwill and franchise trademark impairments."
The company said that it has taken steps to improve operational performance, which included the sale of its underwriting business. Anywhere also cited litigation costs as two class action lawsuits proceed to jury trial.
As the company focuses on cost reductions this year, it will look at brick and mortar space, staffing, tools and resources. The company plans in part to advance tech solutions to drive down expenses.
"Higher producing agents will drive volume," Schneider said. If the market rebounds faster, the company may accrue new costs to match demand for services.
Revenue: $1.32 billion in total Q4 revenue, down 33% year over year. Full-year revenue declined 13% to $6.9 billion.
Cash and cash equivalents: Free cash flow of negative $159 million. Despite the weaker housing market, Anywhere expects operating free cash flow to be positive in 2023, driven by "cost management."
GAAP net loss/income: $453 million net loss in Q4 versus $47 million in net income in Q4 2021. For the year, the company reported a $287 million net loss, down 184%.
EBITDA (earnings before interest, taxes, depreciation and amortization): $12 million, down from $157 million a year ago. Operating EBITDA of $449 million for the full year, down 50%.
Agent count:Agent count rose 4% year-over-year on a like-for-like basis, with the company saying it achieved record retention levels.
What Anywhere had to say
Schneider said the company made "powerful progress on transformation" as it entered 2022 with real momentum and then took quick actions as an overheated market retreated amid inflation and rising interest rates. "It was a rapidly changing year for housing with substantial declines in the market that worsened each quarter," he said.
Schneider said that higher mortgage rates put pressure on affordability and have kept many homeowners "locked in their homes," because they don't want to make a new purchase with higher lending costs.
Like many companies, Anywhere reduced its workforce in 2022, with a round of layoffs in June and another in January 2023. Schneider said the company will continue a "relentless focus" on efficiency.
The company also announced a leadership change in December, with Coldwell Banker CEO Ryan Gorman stepping down and Sue Yannaccone expanding her role as president and CEO of Anywhere Brands to include Coldwell Banker.