Anywhere on track with cuts but still loses $138 million
The company missed analyst expectations by $0.48 per share but achieved cost savings of $50 million while legal headwinds put pressure on the bottom line.
After reporting Q4 losses of nearly half a billion dollars in February, Anywhere CEO Ryan Schneider told investors to expect $200 million in cuts to align the company with the challenging market conditions of 2023.
The company is on track with those cuts, achieving cost savings of about $50 million in Q1, but still lost $138 million and missed analyst expectations for the quarter by $0.48 per share.
"It's a tough year for housing out there right now," Schneider said. "The fact that we could drive some meaningful EBITDA this year and still have some modestly positive free cash flow is still pretty good given the market that we're in."
Legal conditions also had an impact on Q1 results. The company set aside more money in response to "intensifying litigation costs," namely the Moerhl antitrust lawsuit being declared a class action in March. This increased the case's potential impact on the industry — particularly Anywhere and other named defendants.
Revenue: $1.1 billion in Q1 revenue, down 31% year over year.
Cash and cash equivalents: Free cash flow of negative $120 million in Q1 2023 vs. negative $275 million in Q1 last year.
GAAP net loss/income: $138 million net loss in Q1 versus $23 million net income in Q1 2022.
EBITDA (earnings before interest, taxes, depreciation and amortization): $52 million, down from $121 million a year ago.
What Anywhere had to say
Schneider highlighted Anywhere's strategic progress in Q1, particularly the impact of reimagining the agent and customer experience.
"I don't talk about simplifying the transaction just for the fun of it," Schneider said. "The only way to get mortgage and title capture rates into a different zip code" is to embed Anywhere's services into products that people want in ways that make those products better.
One such product is RealVitalize, which Schneider talked about using personally as a homeseller. RealVitalize handles the upfront cost and effort of preparing a home for sale (recouping the costs at closing). Title is baked in, increasing capture rates to more than 80% vs. a more typical 30%, Schneider said.
These efficiencies become even more important in a market with fewer home sales.
Anywhere reported that transaction volume was down 29% across all markets, with price changes down 3%. However, Schneider said there was "significant variation" in the latter, with prices in California and New York City dropping 5-10% while prices increased or held steady in most other areas, notably large states like Texas and Florida.
"We believe the housing market will continue to improve over the course of the year," Schneider said, while acknowledging that most forecasts call for total home sales "in the low 4 millions range" in 2023.
Anywhere CFO Charlotte Simonelli said the company is continuing to "focus on what it can control," delivering 70% of its cost savings by reducing its real estate footprint and headcount, announcing its most recent round of layoffs in January.