Realogy reported a 4 percent growth in revenue for the fourth quarter of 2019 compared to the fourth quarter of 2018 during its earnings call Tuesday.
However, Realogy’s operating EBITDA for 2019 ended up meeting expectations, according to the company’s forecasts at the end of Q3 2019.
“I’ve never been more excited about Realogy as I have been now,” Realogy President and CEO Ryan Schneider said at the beginning of Realogy’s Q4 2019 Earnings Conference call on Tuesday.
The company made various growth efforts over the course of the year, which were generally reflected in its Q4 and fiscal year 2019 results.
Here are some of the main points:
Q4 net revenue: $1.3 billion
Realogy reported a net revenue of $1.3 billion for Q4, an increase of 4 percent from Q4 2018.
During this quarter Realogy also delivered a 6 percent transaction volume growth across Realogy and other franchise businesses.
“The fourth quarter marked a strong close to Realogy’s year, driven by solid performance, both financially and operationally, across the business,” Realogy Chief Financial Officer Charlotte Simonelli said in a statement. “In 2019, we demonstrated a willingness to change our business mix to optimize our capital deployment and simplify our company, and we will remain thoughtful and deliberate in our approach as we work to build a stronger overall financial profile for Realogy.”
Q4 net loss: $45 million
With the announcement in the fourth quarter of its intention to sell assets, Realogy reported a net loss of $45 million, driven by fair value adjustment on those assets and tax expense related to the tax gain on its relocation side (Realogy announced intention to sell its global employee relocation business at the beginning of November and expect the transaction to close in the next few months).
Q4 operating EBITDA: $126 million
Realogy’s operating EBITDA for Q4 2019 was a solid $126 million, including its discontinued operations, which reflected a 19 percent increase from Q4 2018. The company also achieved a EBITDA margin improvement during this quarter.
2019 net revenue: $5.6 billion
Realogy’s net revenue for 2019 was $5.6 billion, a decrease of 3 percent year-over-year from net revenue in 2018. The company also reported a net loss of $188 million ($1.65 per share), largely as a result of a non-cash impairment charge taken in the third quarter of 2019 and the significant tax gain the company recorded in Q4 on the anticipated sale of its relocation business and higher interest expense. In 2018, Realogy reported a net income of $137 million, or $1.10 per share.
Overall, Realogy’s cash flow also decreased throughout 2019. Total cash flow reported for the year was $226 million compared with $325 million in 2018.
2019 operating EBITDA: $590 million
Operating EBITDA for 2019 came in at $590 million, a number that fell within Realogy’s reported expectations at the end of the third quarter 2019 of $590 to $610 million.
Overall, Realogy executives seemed cautiously optimistic about the next year, particularly with its growing agent base and retention. Year-over-year, agents increased 4 percent to 52,200.
“We don’t expect 2020 growth to be easy — we expect competitive intensity,” Schneider noted. “We’re optimistic about volume growth, but not too excited.”