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In a sign of growing market steadiness, mega real estate franchisor Anywhere reported relatively flat revenue in the first quarter of 2024, the company announced Thursday morning.
Generated revenue hit $1.1 billion, about the same year over year, which was largely a result of increases in home sale transactions offset by declines in relocation revenue, the company said.
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Quarterly transaction volume also saw an increase for the first time in two years, with combined closed transaction volume up 2 percent year over year, with units down roughly 4 percent and price up 7 percent.
Losses also improved, with a net loss of $101 million compared to $138 million the previous year, and adjusted net loss of $88 million, compared to $106 million the same time the year before.
Ryan Schneider | Anywhere
“Anywhere continued to demonstrate powerful leadership in the face of a challenging housing market and industry landscape, and our results in the quarter reinforce our ability to execute with discipline and focus while propelling our strategy forward,” Anywhere President and CEO Ryan Schneider said in a statement. “I appreciate how our great Anywhere affiliated agents, franchisees, and employees continue to deliver meaningful value to help consumers navigate the market as, together, we empower everyone’s next move.”
Operating earnings before interest taxes depreciation and amortization (EBITDA) saw a significant improvement from the previous year, at a loss of $17 million, compared to a loss of $35 million the year before.
Anywhere’s free cash flow sat at negative $145 million, down 21 percent year over year, which the company noted was typical since the first quarter of the year is often the slowest time for the housing market.
The franchisor hit cost savings of about $30 million, which it noted puts the company on track to deliver cost savings of at least $100 million for the full year.
Commission splits were down 3 basis points year over year, following a six-quarter trend of more stable commission splits.
During an earnings call on Thursday morning, Schneider recognized that it’s “another tough time in the housing market.”
The president and CEO thanked agents for the value they bring to the company in how they guide consumers “during the meaningful life moments that come with big decisions” during a transaction.
Schneider went on to remind those listening in on the earnings call that this is the seasonally slow part of the year, but he was encouraged that Anywhere’s March operating EBITDA “was solidly positive.”
He said the franchisor’s focus in the near future will be on on paying down debt and investing in the business, including growing the franchise network, bringing franchises new profit sources, reducing their costs, and using Anywhere’s data scale to provide them with franchise insights.
Anywhere’s luxury brands were a highlight during the quarter — the luxury market has held up better than the market at-large in general, amidst rising prices and higher mortgage rates — noting that Sotheby’s International Realty consistently outperforms the market, and the rest of Anywhere’s portfolio. The luxury brand saw its transaction volume up 7 percent year over year, with about half of that coming as a result of unit growth. Schneider also added that the New York-based Corcoran Group was named No. 1 firm in Manhattan for the fourth year in a row.
He noted that the franchisor’s luxury brands have also increasingly sought to leverage auctions to sell high-end properties through a partnership with Concierge Auctions.
Anywhere Executive Vice President, Chief Financial Officer and Treasurer Charlotte Simonelli expressed optimism at the franchisor’s performance during the quarter in the face of a softened market.
Charlotte Simonelli | Anywhere
“Anywhere delivered solid results in the first quarter despite a tough market environment,” Simonelli said in a statement. “We are excited about our financial octane when the housing market strengthens and continue to stay focused on controlling what we can control, maximizing our cost savings, prudently managing cash, and improving our capital structure to position Anywhere for long-term success.”
The earnings report comes during a tumultuous time for the industry, as more and more firms are working toward settlements in a handful of commission lawsuits that have brought into question how commissions are paid, and arguably, the value of a buyers agent. Anywhere was one of the first major real estate companies to settle in the cases, agreeing to pay $83.5 million.
During the call with investors on Thursday morning, Schneider fielded a number of questions about what steps the franchisor is taking now as the industry braces for the major changes to come to agent commissions.
In response to a question about how Anywhere might help agents communicate value in the wake of the NAR settlements, Schneider said that given the franchisor’s agents skew toward the luxury end of the market, they have been “totally untroubled by communicating” their value to their luxury clients, whose transactions are often more complicated and require true expertise. Schneider added that Anywhere has been working on buyer agreements and how to transition in the wake of the settlements longer than any other real estate company because of how early the franchisor settled.
“Finally, I think buyer agency agreements are great,” he said. “I think they’re going to let us lock in some business that slipped through our fingers beforehand.”
