Anywhere Real Estate (HOUS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $1.7 billion, essentially flat year-over-year, with transaction volume up 3% despite a 5% decline in closed homesale sides, driven by higher average sale prices and strong luxury and franchise segment performance.

• Operating EBITDA increased to $139 million, up from $126 million in Q2 2023, reflecting cost savings and operational efficiencies.

• Net income rose to $30 million, up from $19 million in Q2 2023, with adjusted net income at $37 million.

• Achieved $30 million in Q2 cost savings, raising the full-year target to $120 million, and generated $83 million in free cash flow excluding a $20 million litigation settlement payment.

• Actively preparing agents and franchisees for industry practice changes stemming from the NAR litigation settlement, emphasizing simplicity and flexibility in buyer agreements.

Financial highlights

• Franchise Group revenue was $265 million, down $19 million year-over-year; Owned Brokerage Group revenue rose $13 million to $1.39 billion; Title Group revenue increased $3 million to $103 million.

• Franchise Group operating EBITDA was $159 million, down $5 million; Owned Brokerage Group improved by $14 million to $4 million; Title Group was $9 million, down $1 million.

• Q2 free cash flow was $63 million, or $83 million excluding the legal settlement payment; like-for-like free cash flow was about $100 million, matching Q2 2023.

• Cash and cash equivalents totaled $128 million at quarter end; revolver balance reduced to $400 million.

• Net income attributable to Anywhere was $30 million, up from $19 million in Q2 2023.

Outlook and guidance

• Full-year 2024 free cash flow, excluding one-time items, expected to be about $100 million, supported by working capital, cost savings, and cash management.

• Cost savings target for 2024 increased to $120 million, with ongoing focus on efficiency and automation.

• One-time items for 2024 are now estimated at $60 million, including $20 million for antitrust litigation and $40 million for a legacy tax matter.

• Plans to extend, refinance, or repay the Term Loan A Facility by November 2024.

• Anticipates continued industry uncertainty due to macroeconomic factors and practice changes, but expects to benefit from demographic trends and homeownership demand in the medium term.