Anywhere’s revenue holds steady even as transactions fall
In its Q3 earnings report, the company highlighted its $1.6B in revenue, debt reduction, and a settlement that “puts significant litigation behind us.”
In its earnings report released today, the New Jersey-based brokerage giant posted nearly $1.6 billion in revenue, down just slightly from the previous quarter as home sales lagged in late summer.
The company also boasted a net income attributable to Anywhere of $129 million — well up from a year ago — but adjusted net income came in at $17 million, down from the previous quarter and off 74% from a year ago.
But as the real estate market remains on uncertain footing, Anywhere used the quarter as an opportunity to influence what it could control — including agreeing to a settlement in two landmark commissions lawsuits — and reposition itself for the upcoming quarters, Anywhere President and CEO Ryan Schneider said during today's call with investors.
"We accelerated our strategic progress, including expanding our high-margin franchise business, integrating the consumer transaction experience, taking advantage of the better competitive environment, and putting significant litigation behind us, to set Anywhere up for powerful momentum as the housing market improves."
Revenue: $1.6 billion, representing a 12% drop year-over-year, and down only slightly from last quarter's $1.7 billion.
Cash and cash equivalents: $95 million, compared to $99 million the same period last year.
Net income: Net income attributable to Anywhere of $129 million, up 135% year-over-year; adjusted net income of $17 million, down 74% from Q3 2022.
Operating EBITDA (earnings before interest, taxes, depreciation and amortization): $107 million, off $59 million from $166 million a year prior, and down from $126 million last quarter.
Transactions: Just over 200,000 homesale sides for Anywhere Brands (Franchise Group), down 18% year-over-year; nearly 72,000 closed sides for Anywhere Advisors (Owned Brokerage Group), a decline of 17% from last year; and close to 28,500 purchase title and closing units for Anywhere Integrated Services, off 19%.
Agent count: Approximately 190,300 independent sales agents in the U.S. and 140,100 independent sales agents in 117 other countries and territories, according to company data.
What Anywhere had to say
Schneider said Anywhere remained "excited" about its "leading position in luxury," but noted that the "lower end of the market has the biggest challenges" due to inventory constraints and high borrowing costs. He also highlighted New York and California as markets that are underperforming.
"We're trending to 4.1 to 4.2 million unit transactions this year, and that's the lowest number in 15 years … That's a rough year," Schneider said during the question and answer session.
The company also said it had $60 million in realized cost savings and reduced debt by $281 million. It plans to reinvest the majority of this cost savings — or 65% — into its owned brokerage group, 15% into its title group, 10% into corporate, and 10% into its franchise group.
Earlier this month, Anywhere was the first defendant to settle in the Moehrl and Sitzer/Burnett cases. The settlement agreement included a payout of roughly $83.5 million and a slew of policy changes.
"We agreed to about eight practice changes," Schneider said during the question and answer session. "Some of them are things that NAR or the DOJ agreed on three or four years ago that we supported then and we actually in some cases already implemented them."
Some of the new changes include no longer requiring NAR membership, eliminating commission requirements, and upfront disclosure that commissions are fully negotiable and not set by law.
"I'm not going to speculate too much on what's going to happen with the industry," Schneider continued. "But there are a lot of places in the U.S. that have moved away from some of the mandatory rules and moved more towards this transparency of disclosure that we agreed to. We think those markets operate well, and we're going to be here supporting our buyer and seller agents through the future."