Earnings call transcript: Anywhere Real Estate misses Q2 2025 EPS forecast

Anywhere Real Estate Inc. (HOUS) reported its second-quarter earnings for 2025, revealing a notable miss on earnings per share (EPS) expectations. The company’s EPS came in at $0.24, falling short of the forecasted $0.31, resulting in a negative surprise of 22.58%. Revenue matched expectations at $1.68 billion. In response, the stock saw a pre-market decline of 1.71%, trading at $4.61. According to InvestingPro data, the company’s market capitalization stands at $534.43 million, with the stock showing strong momentum, gaining over 29% in the past six months despite recent volatility.

Key Takeaways

• Anywhere Real Estate missed EPS expectations for Q2 2025 by 22.58%.
• Revenue aligned with forecasts at $1.68 billion, showing a 1% year-over-year increase.
• The company achieved $25 million in cost savings for the quarter.
• Pre-market stock reaction was negative, with a 1.71% decline.
• Continued focus on AI-driven innovation and operational efficiency.

Company Performance

Anywhere Real Estate’s performance in Q2 2025 was mixed. While the company achieved a 1% increase in revenue year-over-year, its operating EBITDA declined by $10 million, reaching $133 million. The company is on track to achieve $100 million in cost savings for the year, which could enhance future profitability. InvestingPro analysis reveals the company trades at a notably low Price/Book ratio of 0.36, suggesting potential undervaluation. However, with a current ratio of 0.41, the company faces short-term liquidity challenges that warrant monitoring.

Financial Highlights

• Revenue: $1.68 billion, up 1% year-over-year.
• Earnings per share: $0.24, below the forecast of $0.31.
• Operating EBITDA: $133 million, down $10 million from the previous year.
• Free cash flow: $36 million before a $41 million one-time tax payment.

Earnings vs. Forecast

Anywhere Real Estate’s EPS of $0.24 missed the forecast of $0.31 by 22.58%. This miss marks a significant deviation from expectations, potentially impacting investor confidence.

Market Reaction

The stock reacted negatively to the earnings miss, with a pre-market decline of 1.71%, trading at $4.61. This movement reflects investor concerns over the company’s ability to meet profitability targets. With a beta of 1.74, HOUS shows higher volatility than the broader market. InvestingPro subscribers have access to 12+ additional exclusive insights about HOUS, including detailed valuation metrics and comprehensive financial health scores. The Pro Research Report offers in-depth analysis of the company’s competitive position and growth prospects.

Outlook & Guidance

The company maintains its full-year 2025 guidance for operating EBITDA at approximately $350 million and free cash flow, excluding one-time charges, at around $70 million. Future projections indicate challenges, with expected EPS declines in upcoming quarters. Despite these challenges, InvestingPro data shows the company’s revenue is expected to grow by 4% in fiscal year 2025, potentially providing some optimism for investors looking beyond current headwinds.

Executive Commentary

CEO Ryan Schneider emphasized the transformative impact of AI, stating, "AI will change how real estate is done, and we plan to lead the way." He also highlighted the company’s commitment to revolutionizing the industry through generative AI.

Risks and Challenges

• Potential for continued earnings misses could impact investor confidence.
• Declining operating EBITDA may signal operational inefficiencies.
• Market saturation and macroeconomic pressures could affect future growth.
• Geographic variations, such as declining volumes in Florida, may pose challenges.
• Dependence on successful AI integration for cost savings and efficiency.

Q&A

During the earnings call, analysts probed into housing market dynamics and the company’s private listing strategies. Discussions also covered the mortgage capture pilot results and potential for further cost savings through AI-driven initiatives.

Full transcript - Anywhere Real Estate Inc (HOUS) Q2 2025:

Bella, Conference Call Operator: Good morning, and welcome to the Anywhere Real Estate Second Quarter twenty twenty five Earnings Conference Call via webcast. Today’s call is being recorded and a written transcript will be made available in the Investor Information section of the company’s website tomorrow. A webcast replay will also be made available on the company’s website. Unless stated otherwise, growth figures should be assumed to be year over year. At this time, I would like to turn the conference over to Vice President, Tom Hudson.

Please go ahead,

Tom Hudson, Vice President, Anywhere Real Estate: Thank you, Bella. Good morning, and welcome to the second quarter twenty twenty five earnings conference call for Anywhere Real Estate. On the call with me today are Anywhere CEO and President, Ryan Schneider and CFO, Charlotte Simonelli. As shown on Slide three of the presentation, the company will be making statements about its future results and other forward looking statements during the call. These statements are based on current expectations and the current economic environment.

Forward looking statements, estimates and projections are inherently subject to significant economic, competitive, antitrust and other litigation, regulatory and other uncertainties and contingencies, many of which are beyond the control of management, including, among others, industry and macroeconomic developments. Actual results may differ materially from these expressed or implied in the forward looking statements. July month to date data is through 07/21/2025, with both open and closed volume comparisons based on the same number of business days in July 2025 versus last year. Three one time free cash flow headwinds are excluded from our 2025 free cash flow guidance. First, 41,000,000 was paid in Q2 for 1999 spend it legacy tax matter that we intend to appeal.

Next, 20,000,000 that we expect to pay in Q3 for the TCPA litigation settlement. Last, the final $54,000,000 payment towards our antitrust litigation settlement will be due when the appeals are resolved, the timing of which is uncertain, but is now estimated to be made in late twenty twenty five or early twenty twenty six. Growth in business recruited pursuant to other productive agent recruiting program at advisors is measuring using the estimated last twelve months closed gross commission income of the new agents prior to joining Anywhere. The top half of agents, retained advisors, is measured using the amount of production generated by agents remaining with the company a year following initial twelve month period based on gross commission income generated during the initial measuring period. Important assumptions and factors that could cause actual results to differ materially from those in the forward looking statements are specified in our earnings release dated today as well as in our annual and quarterly SEC filings.

For those who listen to the rebroadcast of this presentation, we remind you that remarks made herein as of today, July 29, have not been updated after the initial call. Now I’d like to turn the call over to our CEO and President, Ryan Schneider.

Ryan Schneider, CEO and President, Anywhere Real Estate: Thank you, Tom. It is incredibly exciting to speak with you here in late July. AI will change how real estate is done, and we plan to lead the way. We are using generative AI to revolutionize how this industry works, both how we go to market and how we run our company. This transformation is creating better experiences faster and at lower cost, all with the goal of driving growth for our great agents and franchisees, unlocking efficiencies and improving margins.

The future of the real estate industry includes a truly end to end integrated transaction for the consumer. We are leveraging our scale across brokerage, title, mortgage and home services to deliver more seamless and connected home buying and selling experiences and to drive better economics. And while we are in a historically challenging housing cycle, we are winning and creating Oktane for the future with powerful proof points in productive agent recruiting and retention, franchise sales and especially luxury success. Most excitingly, we are seeing strong growth momentum this month that has us more optimistic for the back half of the year. Turning to Q2.

We exited the quarter with confidence, supported by meaningful operating EBITDA, a strengthened balance sheet and our unique collection of assets. This strong foundation enables us to invest in AI driven initiatives and capture scale operating efficiency across the company. We delivered $1,700,000 of revenue and $133,000,000 of operating EBITDA, demonstrating the strength and resilience of our model. Closed transaction volume was flat year over year in Q2. The quarter started off challenged due to macroeconomic volatility, but we saw volume trends improve with June closed volume solidly positive.

And we love the business momentum we are delivering in July. July closed transaction volume is up mid single digits year over year with growth in both units and price. Even more exciting, July open volume is up 9%, with this future growth indicator about equally driven by increases in both units and price. And looking even farther into the future, our July advisers listings are up significantly, over 10% compared to the prior year. Together, this paints a strong growth picture for the back half of the year that we hope continues.

Q2 also saw notable geographic variation across key markets where our advisers business is concentrated. New York City outperformed the broader portfolio, delivering double digit growth in both units and price. And Florida, by contrast, faced a more challenging quarter with volume down double digits. Now our industry leading luxury businesses, anchored by Sotheby’s International Realty, Corcoran and Coldwell Banker Global Luxury, continues to be a strategic growth engine, outperforming the broader market. Luxury delivered 3.5% year over year volume growth in the quarter and about 8% year over year growth in the first half as we obviously love this higher margin, high impact segment.

We sold three sixty nine homes priced $10,000,000 or higher in Q2, a 20% increase from the prior year. And our luxury businesses are delivering incredibly strong growth momentum in July. For example, Sotheby’s International Realty July open volume is up 13%, and Corcoran’s is up about 20%. We are also raising the bar on what’s possible in luxury real estate, bringing new innovative ways to deliver value to agents, franchisees and the consumer. Our Sotheby’s Concierge Auction JV is a great example.

It provides an innovative way to match buyers and sellers of luxury properties while enabling us to capture much higher per transaction economics. The venture continues to scale with Q2 revenue up 10% and an average sales price of $5,000,000 Now beyond our success in luxury, we’re driving meaningful growth across our broader portfolio. Our high margin franchise business welcomed 13 new U. S. Franchisees and three international expansions, strategically expanding our footprint, including in key growth markets such as California, North Carolina and Georgia.

We are seeing strong momentum in our advisers business, driven by robust agent recruiting and near record levels of agent retention for productive agents. Our compelling value proposition centered on delivering best in class products and services, great marketing and industry leading support is increasingly resonating with great agents across the country. Advisors recruited six twenty five productive agents in the quarter and saw 31% year over year growth in business recruited, with strong gains against many of our biggest competitors. And we are having even greater success retaining top talent in this highly competitive market, with advisers’ agent retention reaching 95%, about 95%, among the top half of producing agents. This is rarefied air, right around the highest rates we’ve ever achieved.

And in our great luxury brands, our retention is even higher. Now putting this all together, you can see why I’m excited about our growth potential going into the back half of the year. And in addition to growth, our other main priority is Reimagine ’25 as we leverage and harness emerging technologies like generative AI to reshape how real estate works for agents, franchisees, consumers and how we operate our company, all in the spirit of delivering better experiences faster and at lower cost and to drive growth for our great agents and franchisees, unlock efficiencies and improve margins. Anywhere is accelerating generative AI driven innovation across every corner of its businesses. We are delivering AI enabled tools to help agents and consumers better sell homes, such as listing concierges.

We are using AI for productive agent and franchisee recruiting, for smarter lead targeting, to use AI to generate higher quality content and to process documents faster and at lower cost. We have pilots and at scale examples across the whole company. And since we last spoke, we piloted Amazon Q in our contact centers and AI generated comparative market analysis as we continue to build proof points of our broader strategy to scale AI. And our open architecture approach lets us also deploy best in class third party AI driven products to agents through enterprise agreements, like our just announced Canva offering. Finally, the future of real estate includes a truly end to end integrated transaction for the consumer.

This means a seamless and connected home buying and selling experience across not only real estate brokerage but across mortgage, title, home insurance and other home services. We have all of these transaction components in our unique collection of assets and continue to innovate and succeed on this holy grail that others are chasing. In that spirit, we’re increasingly delivering better experiences to consumers by introducing the right services at the right time. This better experience of an integrated transaction also adds to our economics. So let me give you two real examples that crystallized in Q2.

First, as I told you last quarter, we see the opportunity to turn buyer agreements of perceived market risk into an opportunity and have begun using this consumer interaction to integrate the marketing of both our title and our mortgage services. While the title pilot results are still pending, our initial mortgage pilot showed approximately 2.5 percentage points increase in mortgage capture, the biggest increase that we’ve seen from any past initiative to drive this higher revenue per transaction. Second, we redesigned the consumer workflow to embed our warranty offering more seamlessly into the home sale transaction. Based on pilots in multiple markets, we’ve seen attach rates increase by approximately four percentage points. And with these exciting results, we plan to roll out both pilots nationally later this year.

By integrating more components of the real estate transaction, we enhance the customer journey, increase satisfaction and generate greater per transaction economics. This also elevates the agent’s central role in the transaction, helping them build deeper, more trusted relationships with consumers. So we’re excited to be here in July with powerful growth momentum, AI led reimagine 25 transformation progress and more proof points on our ability to integrate the transaction and generate greater per transaction economics. With that, let me turn the call over to Charlotte.

Charlotte Simonelli, CFO, Anywhere Real Estate: Good morning, everyone. Anywhere delivered another strong quarter, driving solid operating EBITDA, accelerating cost efficiencies and increasing our financial flexibility. We are continuing to build on years of disciplined operational excellence, commitment to deleveraging the balance sheet and foresight to prime the business for its next chapter of AI enabled growth. I will now highlight our Q2 twenty twenty five financial results. Q2 revenue was $1,700,000,000 up 1% versus prior year, and Q2 operating EBITDA was $133,000,000 a decrease of $10,000,000 versus prior year, primarily due to higher employee benefit costs, increased investment in reimagine initiatives and an increase in agent commission costs in our own brokerage business.

We realized $25,000,000 in cost savings in the quarter and $39,000,000 of cost savings year to date, And we are on target to achieve $100,000,000 in cost savings for 2025 with 95% of our savings already identified. Q2 free cash flow was $36,000,000 before the $41,000,000 onetime payment made for a 1999 Sendent legacy tax matter. Free cash flow was also negatively impacted by $25,000,000 in seasonal volatility from our securitization facility. This facility historically can create working capital volatility quarter by quarter due to the seasonality of the business. Consistent with our capital allocation priorities, we opportunistically issued $500,000,000 in new second lien debt and repurchased $345,000,000 of our exchangeable notes at a discount.

In addition, we utilized the excess proceeds to further reduce our revolver balance. And as of July 28, our revolver balance was $460,000,000 down to $230,000,000 from our last earnings release date. We expect to repurchase the remaining $58,000,000 in exchangeable notes outstanding over the next six months. And I remain confident in our financial position with no meaningful note maturities until 2029, ample revolver liquidity and enhanced flexibility following our recent refinancing. This continues to provide the balance sheet strength to invest organically or inorganically while fortifying the business now so we can return even stronger when the housing market normalizes.

And our normalized market target leverage remains 3x EBITDA. Now let me provide more details about our business segment performance. Our Anywhere Brands business, which includes leads and relocation, generated $163,000,000 in operating EBITDA. Operating EBITDA increased $4,000,000 primarily due to strength in our Partis relocation business. Our franchise business expanded margins in the quarter, showing improved financial leverage despite flat volume.

Our Anywhere Advisors operating EBITDA was zero, a $4,000,000 decrease versus prior year, driven by higher employee benefit costs as well as commission costs, partially offset by higher revenue and cost savings initiatives. This business generated $93,000,000 in operating EBITDA before the transfer of intercompany royalties and marketing fees paid to our franchise business. Advisors’ average broker commission rate increased two basis points year over year, increasing revenue capture per transaction. Following last year’s industry changes, we have seen changes in how and when negotiation of commission occurs, but ABCR has been sequentially stable for the last twelve months, highlighting the value that agents bring to the transaction. Q2 agent commission splits were 80.9%, up 36 basis points year over year.

The increase was primarily attributable to business mix with noncore items such as new development business and company generated leads, which have lower splits on average, having a more material impact in the prior year. About onethree of the increase was because of agent mix as our top agents continue to take a greater share of transactions. Anywhere Integrated Services Q2 ’twenty five operating EBITDA of $10,000,000 was up $1,000,000 from Q2 ’twenty four due to higher revenue and mortgage JV earnings. We continue to enhance our operations through Reimagine ’25, an ambitious multiyear transformation effort designed to set us up for greater growth and success in the future. This comprehensive program encompasses all aspects of our enterprise, and we expect it will significantly contribute to our savings targets for 2025 and beyond.

By leveraging AI enabled technology to reduce manual processes, we aim to enhance our value proposition and unlock growth opportunities. No area of our business is out of scope for this transformation, and all our core businesses and corporate teams are engaged, finding new and innovative ways to deliver better experiences faster and at lower costs. Some of our most recent examples include leveraging generative AI to improve our brokerage transaction processing. Our brokerage operations team receives about 15,000 documents every day. One third of our Coldwell Banker brokerage document submissions are now automated with a path to 90% by the end of this year.

This substantial automation not only lets us accomplish these tasks faster, but lets us operate twenty four seven, delivering better quality with meaningfully lower costs. Our carts relocation business continues to leverage transformation initiatives to enhance both revenue generation and operational performance. These efforts have proven effective in helping secure new clients and expand current relationships to drive top line growth. At the same time, automation and workflow improvements have significantly boosted operational efficiency, resulting in the highest quarterly margin since Q3 twenty twenty two. Now turning to our ’25 estimates.

We reiterate our guidance and expect operating EBITDA for the full year to be about $350,000,000 and free cash flow, excluding onetime charges, to be about $70,000,000 with the biggest swing factor being the housing market itself, which is inherently volatile. Let me now turn the call back to Ryan for some closing remarks.

Ryan Schneider, CEO and President, Anywhere Real Estate: Thank you, Charlotte. In closing, we are using generative AI to revolutionize how this industry works. We are moving to the future of a seamless end to end transaction experience for the consumer, and we are winning across multiple growth vectors that build Oktane for the future. And most excitingly, we are seeing strong July growth momentum, increasing our optimism for the back half of the year. It’s an incredibly exciting time.

With that, we are happy to take your questions.

Bella, Conference Call Operator: Your first question comes from the line of Matt Bouley with Barclays. Please go ahead. Your line is now open.

Matt Bouley, Analyst, Barclays: Hey, good morning everyone. Thank you for taking the questions. Maybe just one around the overall housing market. I guess kind of thinking about this interplay between home prices and transaction sides, Ryan, you called out a lot of geographic variation. And so my question is in those markets where you may be starting to see lower home prices, is it actually starting to, on the other hand, spur some transactions?

And then if you kind of think about the markets where you still have inventory really tight, kind of how are you thinking about the actual unit volumes in those type of markets? Thank you.

Ryan Schneider, CEO and President, Anywhere Real Estate: A couple of things I’ll say. Matt, thank you for the good question. So first off, something’s happening, at least in our portfolio, in July. Because in July, we are seeing units up and price up. I kind of gave the numbers on our closed volume in July and our open volume in July and our open luxury volume in July.

And it’s at least fifty-fifty units up and price up. And in luxury, it’s actually mostly units up. So in July, we’re seeing something happen where units seem to be having a little bit of a renaissance, which is awesome because most of the gains this year so far have been price driven. When you look at the markets out there, there’s really very few where price is actually dropping. And I think sometimes how the newspapers do comparisons is a problem, but we always look at year over year.

And so like when we look at our portfolio and you look at Q2, there were only two states where prices dropped at all. One was or at least among the the meaningfully sized one. Right? You know, one was Florida, and the other was was Colorado. And and like in Florida, the units dropped more than the price did.

So it’s not like price is going down and it’s spurring more units. In fact, in Florida, it was mostly a unit decline with a little bit of price decline. So I think there is still this dynamic out there, Matt, that demand is actually greater than supply still even at these higher affordability levels. And so almost all states we’re looking at have prices still rising no matter what’s happening with their units. And then the few places where prices are going down, it’s pretty it’s not spraying more units.

And then the other thing that’s unique to us is part of the reason our Florida prices are down bluntly, is last year, we sold nine homes in the second quarter over $50,000,000 And this year, I believe we sold one. And a number of those were in Florida. Even a little bit of the Florida price drop in our book is driven by the mix, not actually same store home prices going down. So I think the talk of prices falling is a little overstated out there. And it hasn’t spurred units, but we have seen units in July come back, but still with some price growth.

So it’s a weird market out there.

Matt Bouley, Analyst, Barclays: Got it. Well said. And yes, understood and great color. Very helpful. So the other question is just obviously given everything in the background around this sort of private and exclusive listings, I guess dispute for lack of a better term.

Are you seeing any I guess disruption out there related to that? And given your public stance on the issue, is it actually kind of, I don’t know, helping with the kind of recruiting and retention here? Or just any update to sort of how that’s playing out from your perspective?

Ryan Schneider, CEO and President, Anywhere Real Estate: Yeah. I’ll give you I’ll give you a a I’ll touch on a number of different things because I think it’s an important industry topic. So one is it absolutely is helping us in recruiting. You know? And, you know, we are, you know, winning, you know, this year, you know, more than we did in ’24 or ’23, you know, not just with the overall numbers I gave you on recruiting, but against, you know, some of our you know you know, many of our direct competitors.

And one of the things that I think is helping us win is this, kind of stance on we want to do what’s best for the consumer, and that’s typically getting as many people looking at your listing as you can. And so while, again, we sell 6% of our listings privately, we think the vast majority of people, you should have a broad distribution of listings. And that resonates with agents who want to do business that way, and it’s helping on recruiting. There is a little bit of disruption starting to happen. I think different policies that portals are put into place have started to bite a little bit, and you can see people getting kind of worked up over that.

But again, given our stance, it hasn’t really affected us, and we believe in our stance. And then we rolled out in the second quarter, we did it in June, we rolled out some technology we use in our own brokerages, Matt, to all of our franchisees that lets our brokerages do, you know, private listings that they want within their brokerage just like we do and totally compliant with, you know, all the industry parameters and Zillow’s, you know, Zillow’s approach, etcetera. But we also have other features in that thing that let people do things like sneak peeks and wants and needs kind of at the brand level. So you can share things across Better Homes and Gardens Real Estate or Coldwell Banker. And then in August, we’re going to be enhancing that with some more of that stuff that will let you share it across any part of the Anywhere network.

And then finally, embedded in that is the ability to turn on private listings, if we really ever want to, if the market goes that way. I view that as more of a, again, kind of a if the market goes that way, we’re going to be ready and make sure our people are in an advantaged position. But we’ve made that strategic progress in getting that to all of our franchisees since we talked to you last. And we like both the way it’s going to let us do more things on, like I said, sneak peeks and wants and needs to do more kind of things within and across brands. We think that’ll be additive, just a great thing to be doing out there in the world.

And then we like the kind of, you know, preparation for, you know, a defensive play if the world does go more toward private listings, that we’ll have our whole ecosystem ready to succeed on it.

Matt Bouley, Analyst, Barclays: All right. Well, great color. Thanks, Ryan. Good luck, guys.

Ryan Schneider, CEO and President, Anywhere Real Estate: Yeah. Thank you, Matt.

Bella, Conference Call Operator: Your next question comes from the line of Nick McAndrew with Zelman. Please go ahead.

Nick McAndrew, Analyst, Zelman: Hey, guys. Thanks for taking my questions. Ryan, maybe just to start, I think the pilot to introduce title and mortgage at the buyer agreement stage sounds pretty promising. And I’m just wondering as mortgage capture improves, is that being driven primarily by better timing and introduction during the process? Or are there also tangible cost savings for the consumer such as, I don’t know, closing cost discounts, for example, when they choose to bundle ancillaries?

I’m just trying to think about kind of the potential levers.

Ryan Schneider, CEO and President, Anywhere Real Estate: So Nick, a great look, we’re really excited about this, right? I mean, again, this whole buyer agreement thing was so much work last year, but let’s turn it into a positive. So far, all the upside we’ve seen and it’s early, and we think there can be more, and we’re going to test and optimize. But we so like the 2.5% increase in capture. We’ve never seen anything like that, that we’re going to go naturally just with what we have, and we want to keep making it better.

So far, Nick, it is 100% driven by getting to the customer early with a good value proposition and communicating with them right at the start of their home buying journey as opposed to waiting until they’ve purchased a house. We have done no discounts. We have done no lower rates. And we know there’s a few people out there in the world that will say, Hey, if you use our stuff and bundle it, we’ll give you 50 basis points off your mortgage. Maybe that stuff will be in our future, but that will be upside to what we’re achieving now.

So the real benefit is getting there to the consumer right away at the start of their home journey with mortgage. The title results will come in soon, and we’re still we’re optimistic we can get benefits there, but I don’t have anything to share with you yet. And then even getting the insurance, we haven’t done this yet with, but we’re going to definitely be piloting that. And then I showed you that on like this warranty home service, we’ve been able to get some of that similar effect. So, so far, it’s all get to the consumer, get there at the right time with a good product, get to them directly is where the benefit and get to them early, that’s where the benefit is coming from.

We haven’t had to give economics a way to drive these benefits yet, and, and that’s really exciting.

Nick McAndrew, Analyst, Zelman: Yeah. That’s very helpful. Thank you for the color. And, Charlotte, maybe just one for you. While I know there’s no formal guidance on cost savings for 2026, I’m just wondering, can you speak directionally about the potential for any additional cost action as most of the low hanging fruit already been addressed?

Or are there further actions that could occur even in an improving housing environment?

Charlotte Simonelli, CFO, Anywhere Real Estate: Yeah. It’s a great question. And I kinda nodded to it a little bit in my prepared remarks around that reimagine should deliver meaningful cost savings this year and beyond. So, So as per typical starting in q three or at the year end release, I will give more specific guidance. But there is still meaningful cost opportunity from my perspective.

I think if you look back five years ago, that was the low hanging fruit. This is more about transforming our business and using, you know, AI and things that were not as widely used five years ago to make this place, like, super bulletproof when the market does come back that we won’t be adding back cost in the same way to support much higher volume and transactions. So I think there’s a lot left to be done. I’m excited to be able to share a number with you later this year. It will be meaningful like it has been.

I think on average, in the six years I’ve been sitting in this seat, you know, give or take, it’s been about a $100,000,000, and that’s meaningful. And I I do believe there’s more meaningful cost to go get. So more to follow on specific numbers, but it really should be the transformative step. The low hanging fruit is probably gone a long time ago, and this is just, you know, sort of rightsizing the business and automating what we can for better experiences as well as lower cost.

Ryan Schneider, CEO and President, Anywhere Real Estate: Yeah. Nick, if I can just build on that because you triggered me with the with the low hanging fruit. I mean, Charlotte said, the low hanging fruit is gone. Right? That’s been done.

Good stuff. This the exciting thing and I’m gonna talk about this on on stage at an industry conference in in in forty eight hours, is is just how every day, you know, some of the advances of, like, GenAI are creating new cost efficiency opportunities. But they’re also creating new speed opportunities and new better experience opportunities. And even like the brokerage document processing example Charlotte gave, you know, that wasn’t technically possible three years ago, and you just couldn’t do it. And now, you know, it’s doable.

You know, it’s not only more efficient, but it runs twenty four seven and, you know yeah. I mean, it’s and so I want I’m trying to shift everybody’s mindset to it’s not about, like, low hanging fruit and, you know, how high you can get on the tree anymore. It’s literally just the the new opportunities are getting created, the touch efficiency, the touch speed, the touch the experience. And they’re coming out all of this pretty fast, and and it’s true for every industry. And, you know, being a leader in using that kind of thing like generative AI to do those things has these awesome benefits, including, you know, letting us continue even if we label it a cost program to to kinda drive, you know, changes to our margins in the bottom line, but also all those other, you know, speed and experience things.

And so, it’s it’s really exciting that it’s opening up just areas that, you know, three years ago, could have never thought about for a cost program or the kind of economic changes.

Bella, Conference Call Operator: Your next question comes from the line of Tommy McJoint with KBW. Please go ahead.

Tommy McJoint, Analyst, KBW: Hey, good morning guys. Can you help us out with how we should think about modeling the brokerage commission split just as we contemplate a gradual reversion to a more normal, what we’ll call a $5,000,000 existing home sale market? We understand there are inputs of mix by top performing agents and agents moving up commission ladders and the impact of new business development. Is there any way to rank order or even provide some magnitudes, to help us quantify these factors?

Charlotte Simonelli, CFO, Anywhere Real Estate: Yeah. You know, I think the best thing I can point you to is, like, all the prepared remarks I’ve had over the past few years. Agent mix started and was really pronounced during COVID, like, far back as 2020. And you would think at some point, you’re laughing it, and then it kinda goes away, but it really hasn’t gone away. And and so the the theory is that it does improve as there are more transactions to be shared, but I think that remains to be seen.

And I think the agent next thing is probably the the biggest contributor over over time, but also has the possibility of, you know, more normalizing if it’s, you know, sort of five, five and a half, or 6,000,000 units again. As far as new business development, on average, that’s sort of flattish in a full year basis. It it kinda gives us, some noise quarter by quarter, but I don’t think you should expect that to be a big benefit or hurt on an annual basis going forward. So I think that’s just it’s just seasonal and quarterly variations. And then as far as, like, you know, the the split tables, not all agents are on a table.

In fact, it’s, like, half ish. And so, you know, it it kind of works in concert with agent mix because usually, the highest producing agents are not on a table. They’re on a fixed rate. So if they’re getting more of the transactions, you’re also not gonna see the uptick from what’s what’s implied in a table. So I think I’d look at agent mix first, and then, you know, the table thing.

Yeah. Sure. It’s it’s gonna have a little bit of an impact, but, it’s it’s just not all the agents are on a table.

Tommy McJoint, Analyst, KBW: Okay. Great. That’s a helpful color. And then switching over just a housekeeping one. The corporate operating EBITDA was down quite a bit year over year.

What caused that in the second quarter? And then when we think about a good run rate to assume for that corporate segment going forward, what you

Nick McAndrew, Analyst, Zelman: would use or if you have

Tommy McJoint, Analyst, KBW: a full year expectation that that could

Ryan Schneider, CEO and President, Anywhere Real Estate: help too.

Charlotte Simonelli, CFO, Anywhere Real Estate: On a full year basis, the the corporate costs really do tend to stay about the same. There’s only some variation, and that usually is driven by, like, bonus bonus timing and, like, benefits where it’s just like we haven’t, like, spread it out to the the business units. There was an impact in the the second quarter from some charges that remained at corporate that will probably be allocated out to the business units in the future. But it’s it’s largely driven by bonus and by benefits. So as far as, like, on a full year basis, the corporate costs have actually kind of stayed flattish, like, so cost savings are helping to offset inflation, but there was a little bit of a more pronounced impact in the second quarter of things that that resided in corporate.

Tommy McJoint, Analyst, KBW: Okay. So is there anything in 2025 that’s happening now that, I guess, we should think about backing out as we think about what the ’26 kind of run rate should be and and beyond?

Charlotte Simonelli, CFO, Anywhere Real Estate: The biggest challenge and this is I called it out in the script. It’s kind of, like, unusual, but we’re not the only company facing it. Materially higher employee benefit costs. Like, what we’re seeing, and I think other companies are seeing, is that, there’s more usage. So it’s it’s it’s a bit of a price implication, but it’s also usage.

More people are going to the doctor than they have in the past, and it’s actually material. It’s material in our first half results, which is why I called it out. That’s the only, like, so what that I’m not sure about for next year. If this continues, like, then you would see that, flow through into 2026. Obviously, you know, on an annual basis, you make decisions about your benefit plans.

We’re we’re about to go through that process before we launch, you know, sort of people, renewing their benefit programs and things like that in the fall. But, that’s kind of the single biggest factor that could potentially, you know, sort of move into 2026 with us.

Tommy McJoint, Analyst, KBW: Got it. Thanks, Robert.

Bella, Conference Call Operator: That concludes our q and a session. Ladies and gentlemen, thank you all for joining. You may now disconnect. Everyone, have a great day.

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