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AR

Anywhere Real Estate Inc. (HOUS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue rose 6% YoY to $1.626B, beating S&P Global consensus ($1.56B) on stronger transaction volume and luxury outperformance; Operating EBITDA of $100M missed consensus ($123M) as cash‑settled LTIs rose with the stock, and EPS underperformed consensus ($0.17) with S&P “Primary EPS” at $0.00 and GAAP diluted EPS at -$0.12. Bold: Revenue beat; EBITDA/EPS miss . Estimates: revenue $1.56B*, EBITDA $123.05M*, EPS $0.167* vs actuals $1.626B, $92.0M*, $0.00* [Values from S&P Global].
  • Management suspended forward guidance given the definitive all‑stock merger agreement with Compass (expected close 2H26), pivoting investor focus to deal approval/regulatory milestones and synergy blueprint as near‑term stock catalysts .
  • Operating momentum improved: closed transaction volume +7% YoY (units +2%, price +5%), luxury +12% YoY; October MTD (through Oct 27) closed +9%, open +6%, signaling a healthier Q4 set‑up .
  • Balance sheet actions continued: revolver reduced to $415M at quarter‑end and exchangeable notes repurchased down to $36M outstanding; senior secured leverage 0.85x, net debt leverage 6.7x .

What Went Well and What Went Wrong

What Went Well

  • Revenue and volume re‑acceleration: $1.626B revenue (+$91M YoY), closed transaction volume +7% with unit growth returning; outperformed NAR volume by >2 pts .
  • Luxury strength: Closed luxury volume +12% YoY; management cited 345 $10M+ homes sold in Q3 (+30% YoY), supporting mix and price resilience .
  • Leading indicators positive: September open volume +9% YoY; October MTD closed +9% and open +6%, all showing growth in units .

Quotes:

  • CEO: “The proposed merger with Compass advances that journey… create a platform where agents, franchisees, and employees can thrive” .
  • CFO: “We are on target to achieve $100 million in cost savings for 2025” .

What Went Wrong

  • Profitability headwinds: Operating EBITDA $100M declined $8M YoY; cash‑settled LTI expense +$24M from a 193% stock price advance, and health & welfare costs +$3M, pressured margins (6% vs 7% LY) .
  • EPS and EBITDA below Street: S&P “Primary EPS” actual $0.00* vs $0.167* est; EBITDA actual $92.0M* vs $123.05M* est [Values from S&P Global].
  • Guidance visibility: Forward guidance suspended due to the Compass merger; investors lose quarterly targets and must re‑anchor to deal timeline/leverage and synergy narratives .

Financial Results

Results by quarter (company-reported)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($B)$1.204 $1.682 $1.626
Net (Loss)/Income ($M)$(78) $27 $(13)
GAAP Diluted EPS$(0.70) $0.24 $(0.12)
Operating EBITDA ($M)$(1) $133 $100
Operating EBITDA Margin %—8% 6%
Free Cash Flow ($M)$(130) $(5) $92

Q3 2025 results vs S&P Global consensus

MetricConsensusActualSurprise
Revenue ($B)$1.560*$1.626 +$0.066B (beat)
EBITDA ($M)$123.05*$92.0*-$31.1M (miss)
Primary EPS$0.167*$0.00*-$0.167 (miss)

Values with asterisks (*) retrieved from S&P Global.

Drivers/notes:

  • Volume/pricing: Units +2% YoY and average homesale price +5% YoY supported revenue .
  • Expense mix: Cash‑settled LTI (+$24M) tied to stock price and higher health benefits (+$3M) reduced EBITDA vs expectations .
  • Non‑GAAP: Adjusted net income declined to $0M vs $16M LY (see reconciliation) .

Segment performance (Q3 YoY)

SegmentRevenue Q3’25 ($M)Revenue Q3’24 ($M)Op. EBITDA Q3’25 ($M)Op. EBITDA Q3’24 ($M)Margin Q3’25Margin Q3’24
Franchise Group273 267 155 151 57% 57%
Owned Brokerage1,340 1,258 (11) (11) ——
Title Group103 96 (1) 2 ——
Corporate & Other(90) (86) (43) (34) ——
Total1,626 1,535 100 108 6% 7%

Notes: Intercompany eliminations in Corporate & Other .

KPIs

KPIQ3 2025Q3 2024YoY
Franchise Group closed homesale sides193,485 189,833 +2%
Franchise avg homesale price$526,210 $502,512 +5%
Owned Brokerage closed sides68,774 67,625 +2%
Owned Brokerage avg price$775,730 $741,623 +5%
Title purchase units27,488 27,631 -1%
Title refi units2,969 2,661 +12%

Guidance Changes

MetricPeriodPrevious Guidance (Q2’25 PR)Current (Q3’25 PR)Change
Operating EBITDAFY 2025About $350M Guidance suspended due to Compass merger Suspended
Free Cash Flow (ex one‑time)FY 2025≈ $70M Guidance suspended Suspended
One‑time cash itemsFY 2025~$115M detailed (legacy tax, TCPA, antitrust timing) ——

Management reiterated cost savings on track ($100M in 2025) but ceased tracking vs prior guidance externally due to the proposed merger .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q1)Current Period (Q3)Trend
AI/technology at scaleQ1: Launched Reimagine ’25; AI doc processing, finance automation . Q2: Amazon Q pilots; CMA generation; Canva enterprise roll‑out; 1/3 brokerage docs auto; path to 90% by YE .50% of ~15K daily brokerage docs automated (up from 1/3); AI tools for listing/buyer agreements and invoices; continued recognition for AI usage .Accelerating
Integrated transaction (mortgage/title/warranty)Q1: Added buyer‑broker agreement pilots; advocacy for broad listing distribution . Q2: Mortgage capture +2.5pp; warranty attach +4pp in pilots .Mortgage capture +2.5pp reiterated; title pilots pending broader readouts .Positive
Macro/housing volume & priceQ1: Volume +6% vs NAR +3%; April flat MoM/YoY trends . Q2: July momentum; NYC strong, FL challenged .Q3 closed volume +7% (units +2%, price +5%); Oct MTD closed +9%, open +6% .Improving
Commission rates (ABCR) & splitsQ1: ABCR modest down a few bps; mix in luxury . Q2: ABCR ~2.37% stable 12 months; splits 80.9% (+36 bps) .ABCR ~2.37% stable; splits 80.7% (+30 bps YoY), mix‑driven .Stable ABCR; splits slightly higher
Regulatory/legal & guidanceQ1/Q2: One‑time cash items (legacy tax, TCPA, antitrust) .Guidance suspended due to Compass merger; deal close targeted 2H26 .Visibility reduced; deal‑driven

Management Commentary

  • Strategy/merger: “By bringing together two of the most innovative and respected organizations in real estate, Anywhere and Compass, we expect to create a platform where agents, franchisees, and employees can thrive…” — Ryan Schneider, CEO .
  • Profitability headwinds: “Q3 operating EBITDA was $100 million, down $8 million versus prior year, driven by the $16 million year‑over‑year increase in employee long‑term cash incentive costs… [and] elevated health and welfare costs, which rose $3 million” — Charlotte Simonelli, CFO .
  • AI execution: “At the end of Q3, 50% of documents were fully automated, up from 1/3 last quarter… automating…invoice entry…45% processed using AI” — Charlotte Simonelli .

Q&A Highlights

  • No Q&A session was held due to merger‑related limitations; management provided prepared remarks only and stated they would not take questions this quarter .

Estimates Context

  • S&P Global consensus for Q3 2025: Revenue $1.560B*, EBITDA $123.05M*, Primary EPS $0.167*. Actuals per S&P: Revenue $1.626B, EBITDA $92.0M*, Primary EPS $0.00*. Result: revenue beat; EBITDA and EPS misses [GetEstimates].
  • Implications: Street models likely lower near‑term EBITDA/EPS to reflect higher variable comp (cash‑settled LTI) sensitivity and benefits cost inflation; revenue trajectory could see upward bias on improving units/luxury mix .

Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue upside with volume returning: Units growth and luxury mix drove a topline beat; October MTD momentum supports a constructive Q4 setup .
  • Profitability sensitivity: Cash‑settled incentive expense and healthcare inflation materially impacted margins; monitor stock‑price‑linked comp and benefits run‑rate as swing factors for EBITDA vs Street .
  • Guidance suspended; deal milestones now key: Focus shifts to Compass merger approvals, regulatory review, and synergy framework; timeline 2H26 close .
  • Franchise resilience contrasts with brokerage/title: Franchise margin steady at 57%; brokerage/title near breakeven/negative, levered to unit recovery and cost actions .
  • Cash and leverage: Positive Q3 FCF ($92M) and reduced revolver balance bolster liquidity; senior secured leverage 0.85x, net debt leverage 6.7x; watch exchangeables clean‑up (remaining $36M) and revolver path .
  • Commission economics stable: ABCR ~2.37% stable over 12 months; splits ~81% remain elevated on agent mix, limiting incremental margin until units scale .
  • AI execution is tangible: Higher automation penetration and capture‑rate pilots underpin medium‑term efficiency and per‑transaction revenue opportunities .

Appendix: Balance Sheet and Leverage Snapshot

  • Cash and cash equivalents: $139M; net corporate debt $2.47B; senior secured leverage 0.85x; net debt leverage 6.7x; revolver $415M at quarter‑end; $425M as of Nov 3 .

Citations:

  • Q3 2025 8‑K/press release highlights, financials, KPIs, segments, FCF, leverage:
  • Q3 2025 earnings call (no Q&A, drivers, AI progress, capture uplift, benefits):
  • Prior quarters for trend: Q2 PR/call and guidance: ; Q1 PR/call:

Estimates source: Values retrieved from S&P Global (consensus and actuals for Revenue, EBITDA, Primary EPS).