Q2 2024 Anywhere Real Estate Inc Earnings Call

Speaker Change: Good morning and welcome to the Anywhere Real Estate second quarter 2024 earnings conference call via webcast.

Speaker Change: 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.

Operator: A webcast replay will also be made available on the company's website. Please go ahead, Alicia.

Speaker Change: A webcast replay will also be made available on the company's website.

Speaker Change: At this time I would like to turn the conference over to Anywhere Senior Vice President, Alicia Swift. Please go ahead, Alicia.

Alicia Swift: Thank you, Eric. Good morning, and welcome to the second quarter 2024 earnings conference call for Anywhere Real Estate. As shown on slide 3 of the presentation, the company will be making statements about its future results and other forward-looking statements during this call. 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 those expressed or implied in this forward-looking statement.

Alicia Swift: The first headwind is our approved $83.5 million litigation settlement. In the second quarter of 2024, we paid $20 million of this, which means there are $53.5 million remaining, which will be due when the appeals are resolved. The appeal's timing is uncertain, depending on developments in the proceedings, and could be delayed until 2025. Second, the 1999 Senate legacy tax matter, approximately $40 million, is due shortly after notice is received, which has not yet happened, but is still anticipated in 2024.

Alicia Swift: Thank you, Eric. Good morning and welcome to the second quarter 2024 earnings conference call for Anywhere Real Estate. On the call with me today are Anywhere CEO and President Ryan Schneider and Chief Financial Officer Charlotte Simonelli.

Speaker Change: As shown on slide 3 of the presentation, the company will be making statements about its future results and other forward-looking statements during this call.

Speaker Change: These statements are based on the current expectation and the current economic environment.

Speaker Change: Forward-looking statements, estimates, and projections are inherently subject to significant economic, competitive, antitrust, and other litigations, regulatory, and other uncertainties and contingencies, many of which are beyond the control of management, including, among others, industry and macroeconomic developments.

Speaker Change: Actual results may differ materially from those expressed or implied in the forward-looking statement.

Speaker Change: As we shared before, we have two large expected one-time free cash flow headwinds.

Speaker Change: The first headwind is our approved $83.5 million litigation settlement and a reminder that $10 million of that was paid in 2023.

Speaker Change: In the second quarter of 2024, we paid $20 million of this, which means there is $53.5 million remaining, which will be due when appeals are resolved. The appeals timing is uncertain, depending on developments in the proceedings and could be delayed until 2025.

Speaker Change: Second, the 1999 Senate legacy tax matter, approximately $40 million is due shortly after notice is received, which has not yet happened.

Speaker Change: but still anticipated in 2024. We previously estimated over 100 million of these free cash flow headwinds in 2024, and our current best guess is approximately 60 million for 2024.

Alicia Swift: We previously estimated over $100 million of these free cash flow headwinds in 2024, and our current best guess is approximately $60 million for 2024. For further discussion of these matters, see our SEC periodic reports, including the Form 10-Q we filed this morning. Our free cash flow estimates referenced do not include any potential impacts relating to the implementation of industry settlement practice changes, which remain uncertain. The reference to core franchise in these remarks is the franchise segment excluding relocation and leave.

Speaker Change: For further discussion of these matters, see our SEC periodic reports, including the Form 10-Q we filed this morning.

Alicia Swift: For those who listened to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, August 1st, and have not been updated subsequent to the initial earnings call. Now, I will turn the call over to our CEO and President, Ryan Schneider.

Ryan M. Schneider: During the second quarter of 2024, we delivered 1.7 billion of revenue and 139 million of operating EBIT. We realized approximately $30 million of cost savings and increased our full-year savings target to $120 million. We generated $83 million of free cash flow in the quarter, excluding the $20 million litigation settlement.

Speaker Change: And the practice changes coming out of the industry-wide litigation settlement are creating uncertainty.

Speaker Change: While the entire industry faces these two uncertainties, we are using this time of change to position us for growth and further differentiate versus the competition.

Speaker Change: We grew transaction volume 3% year over year, consistent with the market results. The dynamics we are seeing include continued unit transaction weakness, driven by the combination of high interest rates and the lock-in effect hurting supply.

Speaker Change: We generated $83 million of free cash flow in the quarter, excluding the $20 million litigation settlement payment.

Ryan M. Schneider: And we received final court approval for our nationwide settlement in the Sellside Antitrust Class Action. We are incredibly focused on ensuring that our agents and franchisees are prepared for the upcoming industry practice changes and our best position to win in the market. Turning to our strategic progress in the quarter, we continue to leverage our competitive advantages to transform Anywhere Real Estate with strategic investments to drive growth and streamline operations. And our Coldwell Banker Global Luxury agents also substantially outperformed the market and our book in both units and price. We had over 300 $10 million plus transactions in the quarter, with our volume from $10 million plus deals up 41% versus the prior year.

Ryan M. Schneider: This includes multiple record sales in different geographies, a number of iconic properties, and 15 sales above $50 million. We expanded our upward title JV offering to franchisees into its sixth state, and we have five more states in the pipeline. And, as we told you last quarter, we are integrating and digitizing our brokerage and title operations. This benefits agents and consumers, makes it easier to capture title and mortgage economics, and contributes to lower costs. Since we last spoke to you, we've doubled our implementation to two-thirds of the country, and we will finish our national rollout later this year.

Ryan M. Schneider: And finally, we are actively engaging and executing our AI agenda to drive innovation, speed, quality, and lower costs across many parts of our company, with recent successes deploying new generative AI solutions in marketing and in multiple operational areas. So, for example, we recently introduced new AI capabilities to our listing concierge. Using photos from the home, our generative AI tool automatically drafts listing descriptions, photo captions, and property tags for the over 50% of our Caldwell Banker Realty agents who utilize this great product.

Speaker Change: Anywhere Real Estate with strategic investments to drive growth and streamline operations

Speaker Change: Some examples include, we are disproportionately invested in luxury and we love our luxury leadership results.

Speaker Change: We had over 300 $10 million plus transactions in the quarter, with our volume from $10 million plus deals up 41% versus the prior year.

Speaker Change: We continue to strategically grow our great franchise business.

Speaker Change: We expanded our upward title JV offering to franchisees into its sixth state, and we have five more states in the pipeline.

Speaker Change: We love the upward tidal momentum in the business because it opens new earnings opportunities for our franchisees. It enhances our value proposition, deepens our relationship with participating franchisees, and we like the economics.

Speaker Change: And as we told you last quarter, we are integrating and digitizing our brokerage and title operations. This benefits agents and consumers, makes it easier to capture title and mortgage economics, and contributes to a lower cost base.

Speaker Change: Since we last spoke to you, we've doubled our implementation to two-thirds of the country, and we will finish our national rollout later this year.

Speaker Change: And finally, we are actively engaging and executing our AI agenda to drive innovation, speed, quality, and lower costs across many parts of our company, with recent successes deploying new generative AI solutions in marketing and in multiple operational areas. So, for example, we recently introduced new AI capabilities to listing concierge.

Ryan M. Schneider: And our brokerage operation team that processes transactions receives around 15,000 documents every single day. I'm excited by our strategic progress as we invest in the business for the future. And remember, our other top capital allocation priority is reducing debt.

Speaker Change: And our brokerage operation team that processes transactions receive around 15,000 documents every single day.

Speaker Change: Leveraging generative AI, we are automating much of this work, including opening emails, recognizing documents, reviewing them, and applying them to the appropriate transaction.

Speaker Change: This substantial automation not only lets us accomplish these tasks faster, but lets us operate 24-7, delivers better quality with meaningfully lower error rates, and critically lowers our costs.

Speaker Change: I'm excited by our strategic progress as we invest in the business for the future. And remember, our other top capital allocation priority is reducing debt. I continue to believe the medium-term outlook for housing should be quite strong, fueled by demographic trends and a continued desire for home ownership.

Ryan M. Schneider: I continue to believe the medium-term outlook for housing should be quite strong, fueled by demographic trends and a continued desire for home ownership. Now, before I turn over to Charlotte, I'd like to discuss the August 17th industry practice changes mandated by the National Association of Realtors Litigation Settlement. While we expect there to be challenges and uncertainty as these complex changes are implemented, there's an opportunity for anyone anywhere among our agents and franchisees to embrace the future with confidence and differentially succeed. Something we've been focused on delivering for our agents and franchisees since we announced our settlement in Q3 of 2020. One of the key changes is mandatory buyer.

Speaker Change: Anywhere has a proven track record of delivery and we are seizing this moment to further transform our company to capture greater strategic and financial results in the future, especially in stronger housing markets.

Speaker Change: Now before I turn over to Charlotte, I'd like to discuss the August 17th industry practice changes mandated by the National Association of Realtors Litigation Settlement.

Charlotte: While we expect there to be challenges and uncertainty as these complex changes are implemented,

Ryan M. Schneider: We support these agreements for the transparency they offer consumers. Anywhere is committed to a thoughtful rollout of buyer agreements with two core concepts guiding our approach. The first is simplicity.

Charlotte: One of the key changes is mandatory buyer agreements.

Charlotte: We support these agreements for the transparency they offer consumers.

Ryan M. Schneider: Buyer agreements must be clear, concise, and free of legal jargon. So, for example, if the agreement cannot be understood and executed electronically in just a few minutes before showing a home, it's too complex. Consumers and agents will likely want different options for buyer agreements depending on the scenario. For example, we imagine consumers and agents wanting a buyer agreement that just covers showing a home, or a buyer agreement that helps a customer purchase a specific home, or a buyer agreement that covers a multi-month journey to find the right home for a family.

Charlotte: The other principle is flexibility. Consumers and agents will likely want different options for buyer agreements depending on the scenario. For example, we envision consumers and agents wanting a buyer agreement that just covers showing a home.

Ryan M. Schneider: And to this end, we're providing multiple buyer agreement templates so consumers and agents can select the version that best suits their needs. Another significant change is the display of buyer-broker compensation. We believe voluntary offers of buyer-broker compensation help sellers secure the best offer for their home and the highest certainty in their transaction. We encourage agents to educate sellers on their options and, as always, to act in the seller's best interest. And to date, we see sellers in the market continuing to see value in offers of buyer-broker compensation.

Charlotte: Another significant change is the display of buyer-broker compensation.

Charlotte: We believe voluntary offers of buyer-broker compensation help sellers secure the best offer for their home and the highest certainty in their transaction.

Charlotte: We encourage agents to educate sellers on their options and, as always, to act in the seller's best interest.

Ryan M. Schneider: And we will be displaying offers of buyer-broker compensation on our owned brokerage website. Now, remember, these changes affect everyone in the industry, and that means opportunity for those of us who can best embrace the new reality and help agents and franchisees navigate it successfully. And we believe we're in a unique position to do that best. We have an advantage because of our first mover decision to settle commission-related litigation last year, as we've been implementing the changes for longer than others.

Speaker Change: Now remember, these changes affect everyone in the industry, and that means opportunity for those of us who can best embrace the new reality and help agents and franchisees navigate it successfully. And we believe we're in a unique position to do that the best.

Speaker Change: We have an advantage because of our first mover decision to settle commission-related litigation last year, as we've been implementing the changes for longer than others.

Ryan M. Schneider: And we have a nationwide network of agents and franchisees that provide us insights on how these industry practice changes are playing out differently across both geographies and price. Having more data and insights enables us to adjust faster and adopt best practices better than our competitors who don't have our skills. We're leveraging these advantages to cut through the noise and to clarify confusion, and we delivered our first session in mid-July focused on Byron.

Speaker Change: And we have a nationwide network of agents and franchisees that provide us insights on how these industry practice changes are playing out differently across both geographies and price points.

Speaker Change: Having more data and insights enables us to adjust faster and adopt best practices better than our competitors who don't have our scale.

Sue Yannicone: Frankly, the industry needs more leadership helping real estate professionals navigate these changes, and that's why Sue Yannicone, the CEO of Anywhere Brands and Advisors and I recently launched Anywhere Voices, a new publicly available series to provide guidance to the industry and its professionals as we all navigate the future.

Ryan M. Schneider: I remain incredibly proud of the excellence our affiliated agents, franchisees, and employees have demonstrated during this ongoing industry uncertainty. And while the road ahead may present challenges, we believe our agents and franchisees will be best positioned to succeed as we lead real estate to what's next. With that, I'll turn it over to Charlotte.

Speaker Change: I remain incredibly proud of the excellence our affiliated agents, franchisees, and employees have demonstrated during this ongoing industry uncertainty. And while the road ahead may present challenges, we believe our agents and franchisees will be best positioned to succeed as we lead real estate to what's next. With that, let me turn it over to Charlotte.

Charlotte C. Simonelli: Good morning, everyone. Our second quarter financials demonstrate our continued resiliency with volume growth, strong profitability, and solid free cash flow generation. I will now highlight our second quarter financial results. Q2 revenue was $1.7 billion, essentially flat versus the prior year, as transaction volume growth was offset by softness and relocation. We are encouraged by two consecutive quarters of volume growth and are optimistic about housing to recover.

Charlotte: Good morning, everyone. Our second quarter financials demonstrate our continued resiliency with volume growth, strong profitability, and solid free cash flow generation.

Charlotte: We believe Anywhere's unique strengths and continued holistic financial discipline drive differentiated performance versus our competitive set and will enable us to emerge even stronger when the housing market improves.

Charlotte C. Simonelli: Q2 operating EBITDA was $139 million, an increase of $13 million versus the prior year due to 3% transaction volume growth and lower expenses across the enterprise. We delivered approximately $30 million of cost savings in the second quarter and are increasing our full year cost savings target by $20 million to $120 million this year. We continue to prudently manage our cash.

Speaker Change: I will now highlight our second quarter financial results.

Charlotte: Q2 revenue was $1.7 billion, essentially flat versus prior year, as transaction volume growth was offset by softness and relocation.

Charlotte: We are encouraged by two consecutive quarters volume growth and are optimistic for housing to recover.

Charlotte: Q2 operating EBITDA was $139 million, an increase of $13 million versus prior year due to 3% transaction volume growth and lower expenses across the enterprise.

Charlotte: We delivered approximately $30 million of cost savings in the second quarter and are increasing our full-year cost savings target by $20 million to $120 million this year.

Charlotte C. Simonelli: Cash on hand at the end of Q2 was $128 million, and Q2 free cash flow was $63 million. Free cash flow, excluding our partial legal settlement payment, was $83 million. And if you exclude timing on our securitization working capital, free cash flow was about $100 million, which was in line with Q2 2023 on a like-for-like basis. Our Anywhere Brands business, which includes Leeds and Relocation, generated $159 million in operating EBITDA. Operating EBITDA decreased 5 million dollars year over year primarily due to lower client volumes in the relocation business.

Charlotte: We continue to prudently manage our cash.

Charlotte: Cash on hand at the end of Q2 was $128 million and Q2 free cash flow was $63 million.

Charlotte: During the quarter, we paid down a portion of the revolver balance to end the quarter at $410 million, which now sits at $400 million.

Charlotte: Now let me go into more detail on our business segment performance.

Charlotte: Operating EBITDA decreased 5 million year-over-year primarily due to lower client volumes in the relocation business.

Charlotte C. Simonelli: We love our core franchise business and its margin stability over time, and in Q2, our core franchise margins were approximately 73%, our strongest performance over the last seven quarters. Commission splits in Q2 were 80.5 percent, up 40 basis points year over year. The increase was attributable to higher brokerage volumes, particularly in higher split rate markets such as California. However, these increases and splits were partially offset by reduced amortization of prior recruiting and retention payments and some reclasses for one of our brands. The average broker commission rate declined in Q2 versus the prior year for both brands and advisors by 4 and 7 basis points, respectively.

Charlotte: We love our core franchise business and its margin stability over time and in Q2 our core franchise margins were approximately 73%, our strongest performance over the last seven quarters.

Charlotte: Commission splits in Q2 were 80.5% up 40 basis points year over year. The increase was attributable to higher brokerage volumes, particularly in higher split rate markets such as California.

Charlotte: AgentMix, as our top agents, continue to take greater share of transactions and the remainder of the increase, about one-third, coming from other non-core items such as lower new development business and lower company generated leads due to the softness mentioned in the relocation business.

Charlotte: These increases and splits were partially offset by reduced amortization of prior recruiting and retention payments and some reclasses for one of our brands.

Charlotte C. Simonelli: The decline is driven in part by the meaningful outperformance of our luxury portfolio, especially the substantial volume growth Ryan mentioned on transactions north of $10 million, many of which we spoke about during our Q1 earnings call. And we love the economics of these high-end transactions, independent of their effect on ABCR. The decline versus prior year is also driven by a tough prior year comparator as ABCR increased in 2020. Other than the luxury effect, our Q2 results are similar to what we saw in Q2 2022.

Speaker Change: The decline is driven in part by the meaningful outperformance of our luxury portfolio, especially the substantial volume growth Ryan mentioned on transactions north of $10 million, many of which we spoke about during our Q1 earnings call.

Ryan: And we love the economics of these high-end transactions, independent of their effect on ABCR.

Speaker Change: The decline versus prior year is also driven by a tough prior year comparator as ABCR increased in 2023.

Charlotte C. Simonelli: And remember, ABCR fluctuates by quarter and annually, depending on the market, price mix, and geography. Anywhere integrated services generated $9 million in operating EBITDA in Q2. However, operating EBITDA declined $1 million year-over-year due to a decrease in the mortgage JV earnings.

Speaker Change: Anywhere Integrated Services generated 9 million in Operating EBITDA in Q2. Operating EBITDA declined 1 million year-over-year due to a decrease in the mortgage JV earnings.

Charlotte C. Simonelli: Title EBITDA would have increased slightly, excluding the mortgage JV. Title purchase closings were down 1% versus prior year in the quarter, which is an improved trend versus Q1. The increase is driven by our relentless focus on driving efficiency in our business, and we continue to focus on streamlining processes, reimagining roles and footprints, and using generative AI to automate certain tasks. Ryan shared examples of where we are leveraging AI. And let me remind you, this can meaningfully improve the speed and quality of our operations and reduce our costs.

Speaker Change: Title EBITDA would have increased slightly excluding the mortgage JV.

Speaker Change: We have delivered approximately $60 million of cost savings year-to-date and are increasing our full-year cost savings target by $20 million to $120 million this year.

Speaker Change: The increase is driven by our relentless focus on driving efficiency in our business, and we continue to focus on streamlining processes, reimagining roles and footprints, and using generative AI to automate certain tasks.

Charlotte C. Simonelli: We're excited by these results and also by the opportunities that remain in front of us to drive further cost savings. And to give further clarity on our cost structure, here are some additional details by reported business segment. The brand's business segment, with its high margins, is approximately 75% fixed and 25% variable. Title expenses are approximately 70% fixed and 30% variable.

Speaker Change: We're excited by these results and also by the opportunities that remain in front of us to drive further cost savings.

Speaker Change: And to give further clarity on our cost structure, here are some additional details as by reported business segments.

Speaker Change: Our owned brokerage business is approximately 85% variable, including commission expense, and 15% fixed.

Charlotte C. Simonelli: All that said, we are benefiting from improved margins on each of these businesses year over year in spite of continued historically low volumes, which further inflate the fixed percentages. And we believe, as we continue to drive cost savings, this will further favorably impact our results, especially in more normal housing markets. Our focus on optimizing our balance sheet is always a priority. We will address our term loan A by Q4, which will be approximately $190 million at that time.

Charlotte C. Simonelli: We are evaluating many options, including repaying it with a combination of our revolver and free cash flow or refinancing it with other debt. And we expect our full year 2024 free cash flow, excluding one-time items, to be about 100 million, as favorable working capital, robust savings programs, and our cash management discipline will help counterbalance yet another tough year in housing. Overall, our second quarter results highlight Anywhere's resilience and strategic focus.

Speaker Change: We are evaluating many options, including repaying it with a combination of our revolver and free cash flow, or refinancing it with other debt.

Speaker Change: Our free cash flow delivery is quite strong in both good and bad markets given the stability of our free cash flow generation in the last three quarters of each year.

Speaker Change: This free cash flow generation is a true differentiator in our industry and gives us tremendous flexibility to continue to invest for the future and reduce debt, which remains a top capital allocation priority.

Speaker Change: Overall, our second quarter results highlight Anywhere's resilience and strategic focus.

Charlotte C. Simonelli: We remain committed to driving efficiency, managing costs, and optimizing our balance. As we navigate the current housing market, our unique strengths position us for continued success and growth. Let me now turn the call back to Ryan for some closing remarks.

Speaker Change: As we navigate the current housing market, our unique strengths position us for continued success and growth.

Ryan M. Schneider: Thank you, Charlotte. I'm proud of how the Anywhere team is leading and delivering in the challenging housing market in the ongoing industry uncertainty. We continue to seize this moment to further transform our company, leveraging our market-leading position, including resilient profitability, luxury leadership, scaled ancillary services, and some of the most iconic brands in the industry with the best agent and franchise network. We are executing on what we can control, delivering on our strategic agenda, and utilizing our competitive advantages to position us for future growth, to outperform the market, and to deliver value for our agents, franchise With that, Nat, we will now take your questions.

Speaker Change: Thank you, Charlotte. I'm proud of how the Anywhere team is leading and delivering through the challenging housing market and the ongoing industry uncertainty.

Speaker Change: We continue to seize this moment to further transform our company, leveraging our market-leading position including resilient profitability, luxury leadership, scaled ancillary services, and some of the most iconic brands in the industry with the best agent and franchise networks.

Speaker Change: We are executing on what we can control, delivering on our strategic agenda, and utilizing our competitive advantages to position us for future growth, to outperform the market, and to deliver value for our agents, franchisees, and shareholders. With that, Nat, we will now take your questions.

Operator: We will now begin the question and answer session. In order to ask a question, press star, then the number 1 on your telephone keypad. We ask that all participants limit themselves to one question and one or two follow-up questions. Soham Bhonsle with DTIG.

Nat: We will now begin the question and answer session. In order to ask a question, press star then the number 1 on your telephone keypad.

Soham Jairaj Bhonsle: Hey guys, good morning. Ryan, I guess, first one for you.

Nat: Hey guys, good morning.

Soham Jairaj Bhonsle: One of your peers last night painted a picture that suggests that there could be some thought given to managing their inventory more tightly going forward. And you noted your intent to display commissions on your own listings on the website. So I'm just wondering, how does this, in your view, change agent workflow or consumer behavior as we go forward? And then maybe just highlight any other way that you're looking to leverage your combined market share. On units, which is still the largest in the industry.

Speaker Change: And you sort of noted, you know, your intent to display commissions on your own listings on the website.

Speaker Change: I'm just wondering, you know, how does this, in your view, sort of change agent workflow or consumer behavior as we go forward? And then maybe just highlight, you know, any other ways that you're looking to leverage sort of your combined market share on units, which is, you know, still the largest in the industry. Thanks.

Speaker Change: I'm talking about just inventory being managed more tightly right going forward by brokerages potentially and then you know how you think just displaying commissions on your website can change workflow for either the agent and then just consumer behavior going forward.

Speaker Change: So that's that's you know, that's pretty easy, you know, look inventory is pretty tough out there right now, but we have a market leading position, you know, I think what your question really gets to is and we'll see is just you know Bluntly what role the MLS is play in the future

Speaker Change: Then scale companies like us, you know, may have other options for how we, you know, display and use our inventory.

Speaker Change: If MLSs do a good job serving their customers, who are the agents, then we may kind of continue as is. But I think that's one of the TBDs of how the ecosystem evolves.

Speaker Change: So, so, like, I don't have a crystal ball, but, you know, I think we've got a little bit of a track record of being more thoughtful about this than most people.

Speaker Change: Whether it's in terms of kind of how we approach the litigation and the differential success there, or what we're doing now, you know, to position our agents and franchisees to do better, and kind of what happens with our inventory.

Speaker Change: And it's way too early to say what's the winning approach, but we have the asset that you would want, which is the most scale, no matter how that plays out.

Speaker Change: Okay, and then Charlotte, on splits this quarter, you sort of walked through the moving parts there, but it was higher than sort of the last few quarters, so how should we just be thinking about it sort of in the back half of the year here, and just give us sort of any other moving parts there? Thank you.

Charlotte: Yeah, I mean, I think we expect the full year to look sort of similar to what we experienced in the quarter.

Speaker Change: Great, thank you.

Speaker Change: Your next question comes from the line of Anthony Paolone with JP Morgan.

Soham Jairaj Bhonsle: What is the difference?

Speaker Change: Please go ahead.

Anthony Paolone: Yeah, good morning. Hi. So, Ryan, I appreciate the brackets around sort of how you guys are approaching the buyer agreements. Maybe can you give us an example, perhaps, of like what an agreement where you're just, the buyer just wants to be shown a house and what that looks like versus some of the other examples you gave?

Soham Jairaj Bhonsle: Just displaying commissions on your website can change workflow for both the agent and then just consumer behavior going forward.

Ryan M. Schneider: Well, look, you know, displaying commissions on our website and our franchisees displaying them on their websites and competitors displaying them on their websites, I tend to think that's a good thing just because it shares the information that people want out there in the ecosystem. And there was even a push three or four years ago by a lot of stakeholders in the world to display that stuff publicly, which we've done. And so we're gonna keep doing it. So that's pretty easy.

Ryan M. Schneider: Look, inventory is pretty tough out there right now, but we have a market-leading position. I think what your question really gets to is, and we'll see, just bluntly what role the MLSs will play in the future. If MLSs don't do a good job serving their customers, then scale companies like us may have other options for how we display and use our inventory. But, you know, if MLSs do a good job serving their customers, who are the agents, then, you know, we may kind of continue as is.

Ryan M. Schneider: But I think that's one of the TBDs of how the ecosystem evolves. You know, and I talked about the complexity of all the industry changes. You know, you have 500 MLSs writing different rules at the moment, which will be an interesting thing to watch kind of play out. But look, we love our advantaged position, right? I mean, to your point, if there is a change in how, you know, inventory is managed in our industry.

Ryan: Sure, let me, I'll just kind of go through all three. One, and again, there's tons of versions of these, but I'll give you, you know, one thing that happens all the time, right? Somebody flies down to Florida, wants to see a neighborhood and see some houses, but has no idea where they're going with their life and their future.

Anthony Paolone: You know

Anthony Paolone: That probably lends itself to just a showing agreement, right? You don't have to get into...

Speaker Change: You know, all the compensation and stuff like that. You just agree, look, I'm going to show you the home. So that's kind of how the world works today.

Speaker Change: Right, people show people homes and neighborhoods all the time, you know, we kind of know, you know, we'll see what comes of it. But, you know, that meets the requirements of the, of the mandatory agreements, but just give people kind of an easy, flexible way to do it. We call it a touring agreement.

Speaker Change: and you know you can see people using that a lot.

Speaker Change: Second is, you know, I'm a customer, I know the home I want to actually go after.

Speaker Change: I contract with the agent you know hey let's let's go bid on this home and the nice thing about that is if you're bidding on a specific home you know you can negotiate the compensation but you also know what seller offer a compensation is being given on that home so you can just write that into the buyer agreement and boom you're on your way.

Speaker Change: And then the third is the little more kind of, you know, hey, I know I want a home. It's, you know, it's probably going to be a long journey. Let's do an agreement for 180 days to take me on this journey, you know, and, you know, and that one probably has a little more,

Speaker Change: A bunch of stuff in agreements that don't apply to people, and you've got to start crossing stuff out. So we're taking this flexibility and simplicity approach. Put our NR agreements to be public. If other people want to use them, that's great, right? And we'll learn from others' agreements if someone does a better one.

Speaker Change: We just think there's enough difference in how people actually approach buying a home or looking at homes.

Speaker Change: I understand and I mean the showing one sounds fairly simple like at what point does there need to be some agreement on dollars and cents as to what's actually paid there?

Speaker Change: You know, including what you want to do with seller offers of comp, but it'll be easier, I think, if you know what your customer is trying to accomplish, as opposed to a single form.

Speaker Change: Okay, great. Thank you.

Speaker Change: Next question comes from the line of Matthew Bouley with Barclays.

Matthew Bouley: The seven basis point reduction on the brokerage side and then four basis points on the franchise side. Is the difference between those two a good way to think about what the mixed headwind was that you mentioned with the higher price transactions? Obviously trying to get a sense of kind of what's happening with core.

Speaker Change: And so, you know, in our business, if you look versus two years ago, it's pretty consistent with what we saw then, excluding this luxury effect.

Speaker Change: Got it. Okay, that's helpful.

Speaker Change: And secondly, you know, there was a fair bit of talk last night with your competitor around kind of M&A and sort of consolidation towards the bigger players.

Speaker Change: or sort of how, you know, where some of these targets may be in the settlement with the, you know, with the NAR process, how that plays into M&A, just kind of your broader thoughts on that. Thank you.

Ryan M. Schneider: We're going to be the number one beneficiary. Right, because across our six brands and our networks, we have by far the most. So, like, I don't have a crystal ball, but, you know, I think we've got a little bit of a track record of being more thoughtful about this than most people, whether it's in terms of kind of how we approach the litigation and the differential success there, or what we're doing now, you know, to position our agents and franchisees to do better, and kind of what happens with our inventory, no matter how the market evolves, we're going to be in the advantage position with our scale.

Speaker Change: On the other, there is a lot of industry uncertainty here.

Speaker Change: So, you know, but we think it's inevitable, but the big question for everybody is price, right? And if there's one thing you need to remember about us is we are incredibly focused on margin.

Speaker Change: We're pro-M&A. We think we'll be a beneficiary of that. We think consolidation is inevitable, but it's got to be at good prices.

Speaker Change: Got it. Thanks, Ryan. Good luck, guys.

Ryan M. Schneider: So, it's a great topic, but it is wound up in kind of the future of the MLSs, and it's way too early to say what the winning approach will be, but we have the asset that you would want, which is the most scale, no matter how that plays out.

Charlotte C. Simonelli: And then Charlotte, on splits this quarter, you sort of walked through the moving parts there, but it was higher than sort of the last few quarters, and so how should we just be thinking about it sort of in the back half of the year here, and just give us sort of yeah, any other moving parts there?

Speaker Change: Hey, good morning guys.

Tommy: Morning. Tommy.

Speaker Change: You know, be good stewards of our responsibilities there. We're pumped about our rollout, man. We think we're in a great spot, especially on a relative basis, when we hear the stories from others. And again, part of that is because we...

Speaker Change: You know, we thought we kind of saw a little farther ahead, I think, on this stuff than others have been working on it longer. But, you know, we've already got training being rolled out, agents, franchisees, etc. We're in kind of weekly

Tommy: kind of communication, you know, Sue and I, like I said, are even going public with some of our thoughts, we want people to know. And, you know, we're getting a ton of learning from our nationwide network, right? There are parts of the market where there have been buyer agreements in place.

Tommy: We can share with each others. There's certain markets, by the way, where MLSs have made changes already that we already are learning from and kind of, you know, making us better kind of nationally and.

Tommy: what they need from their brokers, so they're coming to our stuff, and that's both a recruiting opportunity, but also making the industry better. And then again, we're going to do another one of these Anywhere Voice

Tommy: series, totally open to the public. It'll be in, in, in, in, in, in, you know, second half of August and

Speaker Change: And just has the process through which, you know, prospective homebuyers sort of find and contact agents when starting their home search process, has that changed much over the last year? You know, thinking about the sort of the dependence on the portals or kind of your own websites generating traffic or other advertising methods, have you seen much of a change kind of over the past year in that?

Speaker Change: No, but you know, most people don't find their agents.

Speaker Change: Your next question comes from the line of John Campbell with Stevens.

John Campbell: Hey guys, good morning.

John Campbell: Hey, from a price growth standpoint, obviously advisors and brands that was well out of the market, you know, you guys have called out the luxury strength. I know you've also got heavy exposure to the, you know, the higher price Western region, that seems like that bounced back a good bit in the quarter as well. But two part question. First, can you maybe unpack the overall price strength across those two components, which one had the biggest influence? And then secondly, just looking ahead, do you expect kind of a similar dynamic where you feel like you can outpace the market relative to price growth?

Charlotte C. Simonelli: Yeah, I mean, I think we expect the full year to look sort of similar to what we experienced in the quarter. You know this agent mix thing is a phenomenon that's been with us a while, and then when you add in the results that we had in the quarter with all the you know the luxury over delivery and some of the geography that we saw, you know, assuming those things continue, we expect the full year to kind of look like what we saw.

Speaker Change: Yeah, so we saw a lot of what you talked about, right? I mean, we saw literally, like I said, kind of 10 states with double-digit price growth. You know, New Jersey, California, Massachusetts.

John Campbell: So, you know, so we saw a lot of that and I think there's a clearly a demand supply thing happening out there that does show up on the on the on the price side. So what's the second, can you repeat the second part of your question?

Speaker Change: We're doing that, and you get these Coldwell Bank or global luxury agents and how they're crushing it, and then what Corcoran and Sotheby's International Realty are doing, and I think the trends that we're differentiating on will continue.

John Campbell: Okay, that's helpful. And then on the additional $20 million in costs saved, Charlotte, maybe if you could talk to or give some flavor on where you're sourcing those savings from and then if you could remind us of what your kind of multi-year cost reduction target is and where you expect to be, how much of that you expect to capture, you know, by the end of the year.

Charlotte: As we go forward, we're looking to literally transform how we operate, and so this is more about advancing our journey. I think it's exciting, some of the developments in using generative AI.

Charlotte: But it's exciting because it's a better quality product, it's faster, it's better for the agents, so we're really excited about it. As far as a multi-year journey, you can see what we've delivered over the past several years, and it's on average

Speaker Change: A hundred million dollars or greater and so we haven't given like a Prospective target for the next couple of years But I think our last five years track record sort of speaks for itself and you know Being in the two worst housing market years and decades

Speaker Change: We're pushing it as hard as we can. Now, we have to deliver service and quality, so we're not going to do it at the expense of our business. But while the market is actually softer, we're using that time to actually drive this stuff faster.

Speaker Change: The next question comes from the line of Ryan McKeveny with Zellman & Associates.

Ryan M. Schneider: Good morning. Hi Ryan. I appreciate the brackets around sort of how you guys are approaching the buyer agreements. Maybe, can you give us an example, perhaps, of an agreement where you're just, the buyer just wants to be shown a house and what that looks like versus some of the other examples you gave?

Ryan M. Schneider: Sure. I'll just kind of go through all three. One, and again, there are tons of versions of these, but I'll give you one thing that happens all the time, right?

Speaker Change: Please go ahead.

Ryan M. Schneider: Somebody flies down to Florida, wants to see a neighborhood and see some houses but has no idea where they're going with their life and their future. That probably lends itself to just a showing agreement, right? You don't have to get into all the compensation and stuff like that. You just agree, look, I'm going to show you the homes, and that's kind of how the world works today, right? People show people homes and neighborhoods all the time with a kind of no, we'll see what comes of it.

Ryan M. Schneider: But that meets the requirements of the mandatory agreements but just gives people kind of an easy, flexible way to do it. We call it a touring agreement, and you can see people using that a lot. Second, you know, I'm a customer, I know the home I want to actually go after, I contract with the agent, you know, hey, let's, let's go bid on this home. And the nice thing about that is if you're bidding on a specific home, you can negotiate the compensation, but you also know what seller offer is being given on that home.

Ryan M. Schneider: I understand, and I mean the showing one sounds fairly simple, like at what point does there need to be some agreement on dollars and cents as to what's actually paid there?

Ryan M. Schneider: So you can just write that into the buyer agreement, and boom, you're on your way. And then the third is a little more kind of, you know, hey, I know I want a home, but it's, you know, it's probably going to be a long journey.

Ryan McKeveny: Hey, good morning. Thank you for taking the questions. Ryan, I wanted to drill in a little on the unit transactions, so down about 5% year over year, but you called out the growth in Corcoran and Sotheby's.

Ryan M. Schneider: Well, everything's negotiable. So agents and customers can do whatever they want. But you know, for us, the showing agreement is kind of just how the world works today.

Ryan M. Schneider: Let's do an agreement for 180 days to take me on this journey, you know, and, you know, and that one probably has a little more, you know, flexibility or nuances to it. But the point is, I think just we want it to be flexible and simple. And the idea that there's like one agreement that's going to cover all these cases, I don't think it probably works. And that's when you also get into like, a bunch of stuff in agreements that don't apply to people, and you have to start crossing stuff out.

Ryan M. Schneider: And they're probably, I don't recommend agents put a lot of time into compensation for just, you know, giving somebody a neighborhood tour showing one home, you know, but when you get into a situation where there are homes we want to bid on, or I want to be in a longer-term relationship here, then absolutely, you want the compensation there. And again, you know, like I said, if, you know, if you know the home, you can go look up the seller's offer of compensation, and you can put that in the agreement, and boom, you're on your way on that side, plus anything else you negotiate.

Ryan M. Schneider: So we're taking this flexibility and simplicity approach, putting our agreements out there so that other people want to use them, that's great, right? And we'll learn from others' agreements if someone does a better one. But we just think there's enough difference in how people actually approach buying a home or looking at homes that it lends itself to different types of agreements.

Ryan M. Schneider: You know, and, and if you're on a longer-term one, then you do have to come to an agreement, you know, including what you want to do with seller offers of comp, but It'll be easier, I think, if you know what your customer is trying to accomplish, as opposed to a single form.

Speaker Change: Just the price point dynamics, geography is like less luxury exposure.

Speaker Change: You know price point in some of our mass-market brands is more in that, you know, three to four hundred thousand dollar area

Speaker Change: You know, like I talked about, every one of our franchise brands added new franchisees in the quarter and that includes all of our ones that play at those kind of lower price points.

Speaker Change: but is a bit of a headwind for anyone playing in that pure mass market area, and it does show up in the mix, you know, in our book.

Ryan M. Schneider: Got it, I understand. And then just my follow-up question is any color around what July and August, you know, what the pipeline sort of looks like? July, so I've got the data.

Ryan M. Schneider: So if people don't adjust for that, July actually looks quite strong, with units up and prices up meaningfully. If you adjust for the two business days, you see this trend of still struggling with units, but price is still up. So the headline numbers are units up and price up, but the real numbers are, you know, unit weakness continuing, but price is up in July. So, very similar to the trends in the market that we saw in,

Ryan M. Schneider: I think Charlotte covered it. Look, the big difference between advisors and brands is that advisors skew even more luxury. But, you know, when we look at the data, we don't see any change in seller offers of compensation. We don't see any change in unrepresented buyers. You know, what we did see was a heck of a lot of luxury success, and it affected both of our businesses, ABCR, but, you know, advisors skew more towards luxury, hence the little bit bigger effect.

Speaker Change: investors or SFR companies actually looking to to meaningfully exit portfolios at this time or is it more just

Speaker Change: you know, repositioning and things.

Speaker Change: like that.

Speaker Change: Thanks.

Speaker Change: Yeah, so I don't I don't pretend to speak for them. You should ask them obviously, but let me tell you a couple things So first off, you know, we like the we like partnering with SFR buyers I mean, it's a and sellers because it's a great way for us to

Speaker Change: Help them generate more leads for us, generate more transactions for us, and we have some relationships that are continuing. You know, I met with another SFR prospect, CEO ,

Speaker Change: They're just, you know, they've got to kind of continually trimming their portfolio around the margins. They're going to still be buyers, they're going to be sellers.

Speaker Change: that the numbers add up to a meaningful number of transactions for us to help them with. And we like it as kind of a niche area that we think with our, you know, scaled ancillary services, our integrated, you know, brokerage and title that we can do.

Speaker Change: Sure, that makes a lot of sense. Thank you very much.

Speaker Change: Please go ahead.

Speaker Change: Thanks, I hopefully just got two quick maybe follow-ups for Charlotte. One, can you maybe give us senses to what RELO revenues were in the quarter and same thing for the year ago quarter, just trying to understand what the drag was there.

Ryan M. Schneider: So keep in mind what I said about our prior year comparator, like in our book of business, last year, ABCR was actually up. And so, you know, in our business, if you look versus two years ago, it's pretty consistent with what we saw then, excluding this luxury effect.

Speaker Change: Yeah, so in the first quarter, Relo was down because the prior year comparator was still strong. There were still higher volumes.

Ryan M. Schneider: Got it. Okay, that's helpful.

Ryan M. Schneider: And secondly, you know, there was a fair bit of talk last night with your competitor around kind of M&A and sort of consolidation towards the bigger players. You know, from Anywhere's perspective, how are you thinking about that now going forward? Are there kind of any limits around how you think about M&A, whether it be either the balance sheet or sort of how, you know, where some of these targets may be in the settlement with the, you know, with the NAR process, how that plays into M&A? Just kind of your broader thoughts on that. Thank you.

Ryan M. Schneider: Yeah, look, I mean, we've been public for a long time. I think consolidation is inevitable. I think the bigger players, including us, will benefit from that. And, you know, it's a little easier, probably, on one dimension. It's a little easier on the settlement side, because people have started to work out settlements. On the other hand, there is a lot of industry uncertainty.

Soham Jairaj Bhonsle: Got it. Thanks, Ryan. Good luck, guys.

Thomas Patrick Mcjoynt: Hey, good morning, guys. Tommy Can you talk about just sort of the process of getting your house into shape for the upcoming business practice changes, you know, thinking about, you know, the training programs for your agents, you know, whether or not they're mandatory, and then just whether, you know, is the onus going to be on you as the broker to sort of monitor and enforce your own agent base to make sure that they're kind of compliant with these new changes?

Speaker Change: In the current quarter, you know, if you look at the total reported brand segment, you know, it was a pretty material piece of the decline in revenue.

Ryan M. Schneider: Well, a couple things. Our duty to supervise our agents is a critical thing, and we take it very seriously. And, you know, we apply it to everything, right, you know, and we're here to support and help our agents, whether it's on, you know, data security, or, you know, fair housing, or, you know, anything else. So this is just another place where, of course, we're going to be good stewards of our responsibilities there.

Ryan M. Schneider: We're pumped about our rollout, man, and we think we're in a great spot, especially on a relative basis when we hear the stories from others. And, again, part of that is because we, you know, we thought, we kind of saw a little farther ahead, I think, on this stuff than others that have been working on it longer. But, you know, we've already got training being rolled out, agents, franchisees, et cetera. We're in some kind of weekly communication.

Ryan M. Schneider: You know, Sue and I, like I said, are even going public with some of our thoughts we want people to know. And, you know, we're getting a ton of learning from our nationwide network, right? There are parts of the market where there have been buyer agreements in place, and we can share with each other. There are certain markets, by the way, where MLSs have already made changes that we are already learning from and kind of, you know, making us better kind of nationally on what they need from their brokers.

Ryan M. Schneider: So they're coming to our stuff, and that's both a recruiting opportunity and also making the industry better. And then again, we're going to do another one of these Anywhere Voice series, totally open to the public. It'll be in, you know, the second half of August, and we'll take this stuff head on for everybody. So we feel great, and I think we got a chance to, you know, have our folks be in a better position than a lot of others and, you know, potentially even get some recruiting and everything else.

Thomas Patrick Mcjoynt: Got it. And just how has the process through which, you know, prospective homebuyers sort of find and contact agents when starting their home search process changed much over the last year? You know, thinking about the sort of dependence on the portals or kind of your own websites generating traffic or other advertising methods? Have you seen much of a change in that over the past year?

Operator: Your next question comes from the line of John Campbell with Stephen.

Ryan M. Schneider: No, but you know most people don't find their agents online. Let's be incredibly clear about that, right?

John Robert Campbell: Hey, from a price growth standpoint, obviously advisors and brands that were well out of the market. You know, you guys have called out the luxury strength.

Ryan M. Schneider: Most people will find it through a really trusted referral. You know, that's why the, you know, conversion rates on online leads are as low as they are, whether it's for portals or for, you know, other companies. But no, we have not seen a change.

John Robert Campbell: I know you've also got heavy exposure to the, you know, the higher price Western region, and that seems like that bounced back a good bit in the quarter as well. But a two-part question first: can you maybe unpack the overall price strength across those two components? Which one had the biggest influence? And then secondly, just looking ahead, do you expect kind of a similar dynamic where you feel like you can outpace the market relative to price growth?

Thomas Patrick Mcjoynt: Got it. Thanks, Ryan.

Ryan M. Schneider: Yeah, so we saw a lot of what you talked about, right? I mean, we saw literally, like I said, kind of 10 states with double-digit price growth. You know, New Jersey, California, Massachusetts had pretty really strong price growth, you know, but we even saw it in the southeast, right? Georgia, North Carolina had double-digit price growth in our book, and Florida did, also. So, you know, we saw a lot of that. And I think there's clearly a demand-supply thing happening out there that does show up on the price side. So what's the second key to repeat the second part of your question?

John Robert Campbell: Just looking ahead, if you expect kind of a similar dynamic, do you feel like you're positioned to outpace the market from here?

Speaker Change: So that's why we called it out. I think the good news is, you know, we're starting to see a little bit of stabilization in that business, but it was definitely a drag on the quarter.

Ryan M. Schneider: Yeah, I mean, yes, just because of the supply and demand thing. Now, again, I would rather have stronger units and less price growth. I think it'd be healthier for the market and get more people into homes, etc.

Ryan M. Schneider: But, you know, we kind of have the geographic and then the luxury skew that we've got. And, you know, we're getting a benefit from both the strength and luxury, driving some of our success there, as well as the geographic thing driving some of the success there you talked about. And so, you know, like I said to Tony's question, you know, again, in July, if you adjust for the business days, we're seeing the same thing, you know, some unit pressure, but our prices are up pretty meaningfully in the first 26 days of July.

Ryan M. Schneider: So we're doing that, and, you know, you see these Coldwell Banker or global luxury agents and how they're crushing it, and then what Corcoran and Sotheby's International Realty are doing. And I think the trends that we're differentiating on will continue.

Charlotte C. Simonelli: Okay, that's helpful. And then on the additional 20 million in cost savings, Charlotte, maybe if you could talk to or give some flavor on where you're sourcing those savings from, and then if you could remind us of what your kind of multi-year cost reduction target is and where you expect to be on how much of that you expect to capture, you know, by the end of the year.

Operator: The next question comes from the line of Ryan McKeveny with Zellman & Associates. Please go ahead.

Charlotte C. Simonelli: Yeah, so where the savings are coming from, I think it lends to what Ryan talked about in the transformation of our business. Like, these are, as we go forward, we're looking to literally transform how we operate, and so this is more about advancing our journey.

Ryan McKeveny: Hey, good morning. Thank you for taking the questions. Ryan, I wanted to drill in a little on the unit transactions. So down about 5% year over year, but you called out the growth in Corcoran and Sotheby's. So I guess when we think about the brands or the pieces of the business that are down more than 5%, would you attribute that mostly to just the price point dynamics, geographies, like less luxury exposure?

Charlotte C. Simonelli: I think it's exciting, some of the developments in using generative AI, and so basically the extra $20 million is us just trying to pull forward and drive the agenda faster. I think you saw a lot of that last year too, where we increased our target as the year went on, just because we're moving with a little more speed and agility at driving the cost savings. So it's going to hit the same line items that it always does, because it's relative to where the costs sit in the business, and if he's speaking about the brokerage and title integration, which is where the majority of the costs are in our business, you can expect that it's going to hit there, but it's exciting because it's a better quality product, it's faster, it's better for the agents, so we're really excited about it.

Ryan McKeveny: And if not, I guess I'm just wondering, are there opportunities or strategies you have in place to potentially reinvigorate some of the growth within those non-luxury brands that might be on the underperforming side of the scale?

Charlotte C. Simonelli: As far as a multi-year journey, you can see what we've delivered over the past several years, and it's on average $100 million or greater, and so we haven't given a prospective target for the next couple of years, but I think our last five years' track record sort of speaks for itself, and being in the two worst housing market years in decades, we're pushing it as hard as we can. Now we have to deliver service and quality, so we're not going to do it at the expense of our business, but while the market is actually softer, we're using that time to actually drive this stuff faster. It makes a lot of sense. Thanks.

Ryan M. Schneider: Thank you. Yeah, it is.

John Robert Campbell: Makes a lot of sense. Thanks for all the color.

Ryan M. Schneider: Yeah, it's a great question, Ryan. And look, we love our franchise business, which is anchored by some of our more mass market brands like Century 21, ERA, and others. But the biggest driver Bluntly is the price point thing, right? You know, I mean, our luxury businesses kind of speak for themselves, and they're doing awesome, and they obviously play in the luxury area. But, you know, our average price point for some of our mass market brands is more in that, you know, three to four hundred thousand dollar area.

Ryan M. Schneider: And if you look at the data that, you know, other people publicly put out for the market, you know, that's the part of the market that has the biggest challenges in terms of inventory, in terms of listings, in terms of units, etc.

Operator: Your next question comes from the line of Anthony Paolone with J.P. Morgan.

Ryan M. Schneider: And so I actually think that whole segment of the market lags behind the overall market. And because some of our brands play there, we, obviously, you know, are subject to some of that effect. And it just kind of plays out with the portfolio dynamics you talked about. Now, you know, you know, but we're excited to do anything we can to grow those brands. And, you know, like I talked about, every one of our franchise brands added new franchisees in the quarter.

Anthony Paolone: Yeah, so in the first quarter, Relo was down because the prior year comparator was still strong, and there were still higher volumes. In the current quarter, you know, if you look at the total reported brand segment, it was a pretty material piece of the decline in revenue. So that's why we called it out. I think the good news is, you know, we're starting to see a little bit of stabilization in that business. But it was definitely a drag on the quarter.

Ryan M. Schneider: And that includes all of our ones that play at those kind of lower price points. You know, those companies are big participants in the upward title joint venture, you know, just helping to grow and drive their economics and ours and then deepen our relationships. And so, you know, we love all of them. But there is that market dynamic that, right now, is, frankly, a bit of a tailwind for us on luxury, even though we are outperforming, you know, the competition on luxury, but is a bit of a headwind for anyone playing in that pure mass market area, and it does show up in the mix in our book.

Ryan McKeveny: Thank you. That's very helpful.

Ryan McKeveny: And then a more qualitative one. Last quarter, you mentioned some single-family rental companies partnering. Yeah. Holmes, Jarrett.

Ryan M. Schneider: I guess, curious, are you seeing that continue? You know, the bigger picture is your sense that that's kind of a mixed thing where we're a single family rent, is selling to a, https://www.youtube.com sense, like is there a bigger macro? Yeah, so I don't I don't pretend to speak for them. You should ask them, obviously.

Ryan M. Schneider: But let me tell you a couple things. So first off, you know, we like partnering with SFR buyers. I mean, it's a seller because it's a great way for us to help them generate more leads for us and generate more transactions for us. And we have some relationships that are ongoing. You know, I met with another SFR prospect, the CEO. It was either Monday of this week or Friday of last week, but it was relatively recent. And it was last week was the last week.

Ryan M. Schneider: So, you know, we can continue to actually look into that. Look, I think most of what's happening is not anybody exiting the business. I think it's that they've shifted from selling blocks of homes to other SFR buyers to realizing that at today's price points, they're better off selling direct to consumers. That is a different model.

Ryan M. Schneider: That's why someone like us, not just to sell the home but to do the title work, for example, can be a really good partner. And, you know, the sense I get from talking to multiple of them and partnering with, you know, a few of them is that they're just, you know, they've got to kind of continually trim their portfolio around the margins; they're going to still be buyers, they're going to be sellers, and the numbers add up to a meaningful number of transactions for us to help them with.

Charlotte C. Simonelli: Yeah, you know, we've tried to be super judicious with our cash. I think you can see how we trimmed it last year. We're probably kind of in line with what we spent last year. Hopefully, it's more of a shift to some of these, you know, transformation type projects, a little more on the tech side, but you know, similar to what we spent last year.

Anthony Paolone: Okay, and then just on the second one, any forecast for CapEx for the full year? Yeah, you know, we've tried to be super judicious with

Ryan M. Schneider: And we like it as kind of a niche area that we think, with our, you know, scaled ancillary services, our integrated, you know, brokerage, and title, we can do a good job for them. And so we continue to like it, but that's how I see it. But again, I don't want to speak for them strategically, but it's more trimming and, you know, inflow and outflow than it is. Actually, anybody. That makes a lot of sense. Thank you very much.

Speaker Change: Yeah, you know, we've tried to be super judicious with our cash. I think you can see how we trimmed it last year, we're kind of probably in line with what we spent last year. Hopefully, it's more of a shift to some of these, you know, transformation type projects a little more on the tech side, but you know, similar to what we spent last year.

Operator: Ladies and gentlemen, this concludes today's conference. Thank you all for joining us, and you may now disconnect.

Tony: Thanks, Tony.

Speaker Change: Ladies and gentlemen, this concludes today's conference. Thank you all for joining, and you may now disconnect.