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Anywhere Real Estate Inc. (HOUS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue rose 9% YoY to $1.36B and Operating EBITDA nearly doubled to $52M, driven by 13% YoY growth in combined closed transaction volume; GAAP EPS was a loss of $0.58 as impairments and restructuring and interest expense weighed on bottom line .
  • Luxury brands (Sotheby’s International Realty, Corcoran, Coldwell Banker Global Luxury) continued to significantly outperform, with ~20% YoY luxury volume growth in Q4 and strong unit growth, reinforcing share gains at the high end .
  • 2025 guide: Operating EBITDA “about $350M”; incremental ~$100M cost savings (offset in part by inflation and investments); FCF ex one‑time items similar to 2024; one‑time cash items ~$115M (antitrust $54M; legacy tax ~$40M; TCPA $20M) .
  • Commission splits remained stable at ~80% (80.3% in Q4; 11th straight quarter), and January 2025 closed volume up ~12% YoY with open volume up ~4% YoY, suggesting momentum into Q1 despite macro headwinds and California wildfire impacts .
  • Estimates context: S&P Global consensus was unavailable; third‑party data indicate a top‑line beat and EPS miss in Q4 (rev actual $1.36B vs $1.28B est; EPS actual -$0.58 vs -$0.36 est), with comparability caveats (non‑GAAP vs GAAP) .

What Went Well and What Went Wrong

  • What Went Well

    • Luxury leadership: ~20% YoY luxury volume growth in Q4; unit growth alongside price supported outsized performance in Sotheby’s, Corcoran, and Coldwell Banker Global Luxury .
    • Cost execution: ~$125M of 2024 cost savings (25% above initial target), lifting Operating EBITDA to $290M for FY24 (+$35M YoY) .
    • Stable agent economics: Commission splits ~80% for 11 straight quarters; Q4 at 80.3% (down 7 bps YoY), supporting margin management while adding 28 franchisees in Q4 and 67 in 2024 .

  • What Went Wrong

    • GAAP losses persisted: Q4 net loss of $64M (improved YoY), reflecting depreciation/amortization, interest expense, and impairment/restructuring drag; FY24 net loss was $128M .
    • Title margins remained negative: Q4 Title Group Operating EBITDA -$9M and FY24 -$13M, with cost investments (e.g., Upward Title rollout) offsetting purchase/refi improvement .
    • Free cash flow moderated YoY: FY24 FCF $50M (vs $67M in 2023) due to timing factors and one-time settlement, though Q4 FCF improved to $33M from -$13M in Q4’23 .

Financial Results

Revenue, earnings, profitability, and cash metrics (oldest → newest):

MetricQ2 2024Q3 2024Q4 2024Q4 2023 (YoY comp)
Revenue ($B)$1.669 $1.535 $1.362 $1.250
GAAP EPS ($)$0.27 $0.06 -$0.58 -$0.97
Operating EBITDA ($M)139 94 52 28
Adjusted Net Income (Loss) ($M)37 6 -49 -54
Free Cash Flow ($M)63 99 33 -13

Segment performance (revenues and Operating EBITDA) (oldest → newest):

SegmentQ2 2024 Revenue ($M)Q2 2024 Op EBITDA ($M)Q3 2024 Revenue ($M)Q3 2024 Op EBITDA ($M)Q4 2024 Revenue ($M)Q4 2024 Op EBITDA ($M)
Franchise Group265 159 267 151 229 121
Owned Brokerage Group1,393 4 1,258 -11 1,118 -27
Title Group103 9 96 1 92 -9
Corporate & Other (elims/expense)-92 -33 -86 -47 -77 -33
Total Company1,669 139 1,535 94 1,362 52

Key KPIs (oldest → newest):

KPIQ2 2024Q3 2024Q4 2024
Franchise closed homesale sides194,372 189,833 171,609
Franchise avg homesale price ($)506,676 502,512 504,637
Franchise ABCR (%)2.42 2.41 2.39
Franchise net royalty/side ($)462 456 446
Owned Brokerage closed sides71,895 67,625 59,388
Owned Brokerage avg price ($)775,453 741,623 757,275
Owned Brokerage ABCR (%)2.36 2.36 2.35
GCI per side ($)19,141 18,376 18,577
Title purchase units29,816 27,631 24,840
Title refi units2,394 2,661 3,145
Avg fee per title closing ($)3,323 3,361 3,428
Agent commission splits (%)80.5 80.4 80.3

Vs. estimates (context)

  • S&P Global consensus could not be retrieved at this time. Third‑party indicates Q4 revenue beat and EPS miss: Revenue actual $1.36B vs $1.28B est; GAAP EPS actual -$0.58 vs -$0.36 est (caution: methodologies may differ) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operating EBITDA ($M)FY 2025N/AAbout $350M New
Cost savings ($M)FY 2025N/A~100 (offset partly by inflation/investments) New
Free Cash Flow (ex one‑time items)FY 2025N/ASimilar to 2024 New
One‑time cash items ($M)FY 2025N/A~$115 (Antitrust $54; Legacy tax ~$40; TCPA $20) New

Balance sheet/leverage context: Net corporate debt (ex securitizations) $2.437B and Net Debt Leverage 7.2x at 12/31/24; Senior Secured Leverage 1.22x .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
AI/TechnologyIntroduced generative AI in Listing Concierge; automating ~15k docs/day to reduce errors and costs .Listing Concierge recognized “best use of AI”; leads conversion +40% with AI; operating error rates as low as 1 in 5,000 in pilots .Expanding use cases, measurable efficiency gains.
Commission splits/ABCRSplits ~80.5% in Q2; ABCR down 4–7 bps YoY from luxury mix .Splits 80.3% (11th straight quarter); ABCR relatively consistent; stability supports guidance .Stable.
Luxury performanceLuxury outperformance; >$10M deals volume strength .~20% luxury volume growth in Q4, unit gains and share wins .Strengthening.
Regulatory/legalSettlement practice changes; buyer agreements rollout and display of buyer compensation .Clear Cooperation Policy: “relax not repeal”; ready if private listing networks proliferate .Active advocacy; preparedness emphasized.
Buyer agreementsMultiple templates for flexibility .>80% buyers signing six‑month exclusive agreements; may discontinue lower‑usage forms .Strong adoption.
Macro/mortgageQ3 surprised to flat; October showed improved opens/closes .Jan-2025 closed +12% YoY; opens +4% YoY; monitoring wildfire impacts .Tentative momentum.
M&A/ConsolidationInevitable consolidation; disciplined on margins, ample liquidity .Open to cash‑funded M&A with synergy benefits; covenants favorable to realized/unrealized synergies .Opportunistic, disciplined.

Management Commentary

  • CEO on 2024 and 2025 priorities: “We delivered industry‑leading EBITDA… We are excited to leverage our competitive advantages in 2025, including… innovating with generative AI… and capitalizing on our position of strength” .
  • AI impact: “Listing Concierge… named best use of AI… leads are seeing a 40+% improvement in conversion rates… we process about 15,000 documents a day… with generative AI… fewer than half the team… error rates as low as 1 in 5,000” .
  • Policy stance: On Clear Cooperation, “relax not repeal… transparency and access to all inventory… if the market evolves to private listings… we are ready… ensure our agents… are never disadvantaged” .
  • CFO on cost and FCF: “We realized nearly $125 million of cost savings… Free cash flow was $70 million before a $20 million litigation settlement payment… we anticipate our 2025 free cash flow, excluding one‑time items, to be similar to 2024” .
  • Splits stability: “This marks 11 consecutive quarters with our agent commission split rate about 80%” .

Q&A Highlights

  • 2025 EBITDA guide assumptions: Housing market is the biggest swing factor; cost savings embedded; splits stable around ~80% underpinning confidence .
  • Clear Cooperation policy: Anywhere advocates “relax not repeal”; prepared to leverage listing scale and technology if private networks gain traction .
  • Buyer agreements adoption: >80% of buyers now signing six‑month exclusive agreement; company may discontinue low‑usage alternatives .
  • Sensitivity and definition changes: EBITDA definition now includes non‑cash comp and certain legal contingencies; impact historically small ($12M in 2023, $17M in 2024); growth to $350M guide is apples‑to‑apples .
  • M&A funding and covenants: Preference to be a cash buyer; synergy capture (including covenant recognition) supports deal economics; disciplined approach .

Estimates Context

  • S&P Global consensus unavailable at time of analysis; results vs third‑party expectations indicate: Revenue beat ($1.36B vs $1.28B est) and GAAP EPS miss (-$0.58 vs -$0.36 est). Methodologies may differ from S&P Global and may mix GAAP/non‑GAAP; use with caution .

Key Takeaways for Investors

  • Continued luxury outperformance, stable commission splits, and disciplined cost execution supported an 86% YoY increase in Q4 Operating EBITDA despite GAAP losses; these factors underpin the FY25 EBITDA guide of ~$350M .
  • 2025 free cash flow excluding one‑time items expected to be similar to 2024, but investors should model ~$115M of one‑time cash headwinds (antitrust, legacy tax, TCPA), affecting timing of deleveraging and capital allocation .
  • Early 2025 activity (Jan closed +12%, open +4%) offers a constructive near‑term setup if macro conditions stabilize; watch California wildfire impact and broader affordability/inventory constraints .
  • Strategic positioning: strong luxury franchises, AI‑enabled efficiency, and readiness for potential listing‑policy shifts (including private networks) present optionality in multiple industry scenarios .
  • Title remains an area of opportunity but near‑term margin drag persists amid rollout and cost investments; progress on Upward Title JV expansion could help medium‑term profitability .
  • For trading, catalysts include: confirmation of improving volume trends, execution on cost savings (Reimagine ’25), clarity on one‑time cash timing, and any M&A accretive to margins and synergies .