Realogy continued its hot streak on Thursday when the company reported that it took in $2.3 billion in revenue in the second quarter — an 81 percent year-over-year increase from 2020, when the company was dealing with the early impacts of COVID-19.
Realogy’s net income clocked in at $149 million for the most recent quarter, after the company lost money in the same quarter in 2020. The firm reported a basic earnings per share of $1.28, an increase of $163 million versus the prior year, or $1.40 per share.
Charlotte Simonelli. (Credit: Realogy)
“In the second quarter, Realogy delivered phenomenal results, significantly advanced our balance sheet, and generated impressive free cash flow that enables us to invest in our future,” said Charlotte Simonelli, Realogy’s executive vice president, chief financial officer and treasurer, in a statement. “Over the past year, Realogy has achieved tremendous quality and consistency in our financial performance.”
The company’s operating earnings before interest taxes depreciation and amortization (EBITDA) increased 77 percent year over year to $310 million, with Realogy’s title and mortgage companies continuing to drive growth. Both divisions saw robust growth as homebuyers took advantage of record-low mortgage rates.
“Realogy delivered an outstanding second quarter. We generated record Operating EBITDA, gained market share for the fourth consecutive quarter, and strengthened our balance sheet to its best position ever,” Realogy CEO Ryan Schneider said in a statement. “The unmatched power of Realogy’s strategic progress, innovation through technology, and a leading presence in the luxury market, combined with our robust growth investments, position our business to lead into the future.”
During the earnings call, Schneider reiterated Realogy’s 2021 growth strategy, which hinges on continued technology innovation, increased investment in its title and mortgage businesses, and continuing to lead the luxury market through Corcoran, Sotheby’s International Realty and Coldwell Banker.
“Our luxury business grew substantially above our overall volume numbers in both the quarter and the past year, with Sotheby’s International Realty, our No. 1 performing brand, and now the fifth-largest brand in all of U.S. residential real estate,” he said during Thursday’s live conference all. “Our Corcoran-owned brokerage business earned the No.1 Real Deal ranking in New York City for 2020, and our Corcoran franchise business expanded to seven new geographies since we last spoke [in April].”
“Finally, if you look across Sotheby’s International Realty, Corcoran and Coldwell Banker, we continue to lead the industry in million dollar plus transactions,” he added. “Given our leadership position in luxury and strategic optimism about the luxury market, we are investing to grow our luxury brands domestically and internationally, to provide unique and differentiated luxury technology, and to expand our industry-leading domestic and international luxury referral networks.”
Beyond the performance of Realogy’s luxury brands, which Schneider expects to grow as buyers and sellers respond to the changing situation with COVID-19 and working protocols, the CEO was elated with the growth of RealSure, the company’s iBuyer platform.
“For those of you new to RealSure, it is architected differently from traditional iBuyers,” he explained. “With a greater focus on winning listings and supporting agents, we continue to invest substantially in RealSure because of our encouraging early results.”
Schneider said RealSure is a “real winner” as the platform expanded from 13 markets in Q1 2021 to 21 markets in Q2. The company said it expects RealSure to grow even faster during the latter half of the year as it increases direct-to-consumer marketing to sellers and eventually, buyers. “While our core RealSure product in the market today is focused on sellers, our vision is to expand to support buyers as part of the RealSure value proposition,” he said.
Realogy’s own-side and franchise business closed transaction volume increased 85 percent year over year, pushing its market share to 16.4 percent — up from 15.7 percent in Q1 2021 — the fourth consecutive quarter of such gains. The company also increased its brokerage agent count 4 percent annually, as commission splits increased 212 basis points.
Simonelli said Realogy’s continued financial management measures boosted earnings as the company lowered its net debt leverage ratio from the Q1 2021 all-time low of 3.1x to 2.5x during Q2 2021. The company’s expected permanent cost savings remained at $80 million, due to the company’s cost-saving measures during the pandemic.
“Overall, we like the investments we are making in our agents, which are driving impressive results and market share gains,” Simonelli said. “Realogy is firing on all cylinders. We kicked off 2021 with impressive Q1 results, and this momentum has continued into Q2.”
Realogy is on track to report a strong year after building on the momentum from the last two quarters of 2020, where the company took in $1.9 billion in revenue due to a boom in homebuyer demand. As a result, Realogy remained at the top of the totem pole on multiple industry lists, including T3 Sixty’s Mega 1000.
