On August 1, 2024, Anywhere Real Estate Inc (HOUS, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Anywhere Real Estate Inc operates in residential real estate, focusing on brokerage, relocation, title, settlement businesses, and mortgage and title insurance ventures. It supports approximately 1 million home sale sides annually. Brands include Better Homes and Gardens, CENTURY 21, Coldwell Banker, Corcoran, ERA, and Sotheby's International Realty. Revenue comes mainly from existing home transactions. Operations are segmented into Anywhere Brands (franchises), Anywhere Advisors (owned brokerage), and Anywhere Integrated Services (title and settlement).
Performance and Challenges
Anywhere Real Estate Inc (HOUS, Financial) reported a revenue of $1.7 billion for the second quarter of 2024, which remained essentially flat compared to the same period last year. The company experienced a 3% increase in combined closed transaction volume, despite a 5% decline in units and an 8% rise in average home sale prices. The luxury segment, represented by Corcoran and Sotheby’s International Realty brands, showed positive year-over-year unit growth, outperforming the market.
However, the company faced challenges with a decrease in relocation revenue and a reduction in free cash flow to $63 million from $105 million in the corresponding quarter last year. The company also paid $20 million towards an antitrust litigation settlement, impacting its free cash flow.
Financial Achievements
Anywhere Real Estate Inc (HOUS, Financial) reported a net income of $30 million, an increase of $11 million from the previous year. Adjusted net income stood at $37 million, up by $10 million year-over-year. Operating EBITDA improved by $13 million to $139 million. The company realized cost savings of approximately $30 million and expects full-year cost savings to reach $120 million, an increase of $20 million from previous estimates.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change | % Change |
|---|---|---|---|---|
| Revenue | $1.669 billion | $1.671 billion | -$2 million | 0% |
| Operating EBITDA | $139 million | $126 million | $13 million | 10% |
| Net Income | $30 million | $19 million | $11 million | 58% |
| Adjusted Net Income | $37 million | $27 million | $10 million | 37% |
| Free Cash Flow | $63 million | $105 million | -$42 million | -40% |
Income Statement Highlights
Gross commission income for the quarter was $1.376 billion, slightly up from $1.363 billion in the same period last year. Service revenue and franchise fees were relatively stable at $159 million and $101 million, respectively. The company reported a total net revenue of $1.669 billion, marginally down from $1.671 billion in Q2 2023.
Balance Sheet and Cash Flow
As of June 30, 2024, Anywhere Real Estate Inc (HOUS, Financial) had total assets of $5.846 billion and total liabilities of $4.232 billion. The company ended the quarter with $128 million in cash and cash equivalents. Net cash provided by operating activities was $39 million, down from $93 million in the same period last year.
Commentary
"Anywhere leveraged our distinct advantages to deliver strong results in the quarter, accelerating our transformation and building our future financial octane," said Ryan Schneider, Anywhere president and CEO. "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."
"The Anywhere second quarter financials demonstrate our continued resiliency with volume growth, strong profitability and solid free cash flow generation," said Charlotte Simonelli, Anywhere executive vice president, chief financial officer, and treasurer. "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."
Analysis
Anywhere Real Estate Inc (HOUS, Financial) has shown resilience in a challenging market environment, maintaining steady revenue and improving profitability. The company's focus on cost savings and strategic strengths in the luxury segment have contributed to its positive performance. However, the decline in free cash flow and the impact of litigation settlements pose challenges that the company needs to address moving forward.
Overall, Anywhere Real Estate Inc (HOUS, Financial) has demonstrated its ability to navigate market challenges and leverage its strengths to deliver solid financial results. Investors will be keen to see how the company continues to manage its cost structure and capitalize on its strategic advantages in the coming quarters.
Explore the complete 8-K earnings release (here) from Anywhere Real Estate Inc for further details.
