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Real estate franchisor Anywhere’s revenue remained flat year over year during the second quarter of 2024, as the company made significant payments toward its approved settlement in the commission lawsuit and dealt with a 1999 legacy tax matter involving its former parent company, Cendant, the company reported on Thursday.
Combined closed transaction volume rose by 3 percent on an annual basis, with units down by about 5 percent and price up 8 percent. The quarter marked the second in a row where transaction volume rose.
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Anywhere’s net income rose 58 percent on an annual basis to $30 million. Adjusted net income was up 37 percent year over year to $37 million.
Ryan Schneider | Anywhere
“Anywhere leveraged our distinct advantages to deliver strong results in the quarter, accelerating our transformation and building our future financial octane,” Ryan Schneider, Anywhere president and CEO, said in a statement. “Our strategic strengths and profitability set Anywhere apart, along with our great affiliated agents, franchisees, and employees who continue to deliver great value to consumers.”
Added Anywhere Executive Vice President, CFO and Treasurer Charlotte Simonelli, “The Anywhere second quarter financials demonstrate our continued resiliency with volume growth, strong profitability and solid free cash flow generation. We believe our unique strengths and continued holistic financial discipline drive differentiated performance versus our competition and will enable Anywhere to emerge even stronger when the housing market improves.”
Operating earnings before interest, taxes, depreciation and amortization (EBITDA) were up 10 percent on an annual basis to $139 million.
The franchisor’s free cash flow was $83 million, down from $105 million the year before. A $20 million payment was taken from this amount during the quarter for the antitrust commission lawsuit settlement.
Anywhere was one of the first major real estate companies to settle in the commission lawsuits, agreeing to pay $83.5 million. The franchisor will pay the remaining $53.5 million of its settlement ($10 million was paid during Q4 2023) when appeals are resolved, the timing of which is not clear, but will likely not occur within 2024.
Anywhere’s commission splits were up by 40 basis points on an annual basis to 80.5 percent.
Charlotte Simonelli | Anywhere
The franchisor said it expects its full-year cost savings to now reach $120 million, up $20 million year over year.
During an investor earnings call on Thursday, Simonelli noted that the franchisor faced “two headwinds” during the quarter that curbed its available cash — the approved litigation settlement payment, $20 million of which the company paid out during the quarter, and a 1999 legacy tax bill from when Anywhere (then-Realogy) was still owned by parent company Cendant Corp. That matter involves a $40 million payment due once statutory notice is received, which Anywhere expects to come in 2024.
“We are demonstrating our strengths across factors we can control,” Scheider said during the investor call, highlighting the franchisor’s luxury brands, which continue to outperform other parts of the company.
“We love our luxury results,” Schneider said, noting that luxury brands, Corcoran and Sotheby’s International Realty, saw over 300 $10 million-plus transactions during the quarter. He added that Anywhere also disproportionately invests in this sector of the company. The sentiment echoed similar ones Schneider made during a first quarter earnings call, in which Sotheby’s International Realty saw transaction volume up 7 percent on an annual basis.
“The practice changes coming out of the industrywide litigation settlement are creating uncertainty,” Schneider said, adding that Anywhere is taking advantage of the opportunity to use the time to position the company for growth.
Schneider also noted that the company has embraced AI and recently introduced AI capabilities to its listing concierge.
Despite the uncertain footing the industry is on at the moment, Schneider projected confidence in Anywhere and its brands.
“There’s an opportunity for agents,” he said, to differentiate themselves and succeed in this market.
When it comes to new buyer-broker agreements, Schneider added that the franchisor “is committed to a thoughtful rollout of buyer agreements” that will prioritize simplicity and flexibility for agents and brokers. Anywhere will also continue to hold trainings for agents (some of which will be open to agents at affiliated with any brokerage, not just Anywhere brands) as they adapt to the new industry landscape.
“I’m proud of the Anywhere team,” Schneider said in conclusion, for leading the franchisor’s agents through this uncertainty.
