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Anywhere(HOUS) - 2024 Q4 - Earnings Call Transcript
HOUSAnywhere(HOUS)2025-02-13 21:52
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Financial Data and Key Metrics Changes - The company generated 290millionofoperatingEBITDAin2024,anincreaseof290 million of operating EBITDA in 2024, an increase of 35 million from the prior year, and delivered 50millionoffreecashflow,50 million of free cash flow, 70 million excluding a 20millionlitigationsettlementpayment[14][34]−Q4revenuewas20 million litigation settlement payment [14][34] - Q4 revenue was 1.4 billion, up 9% year-over-year, and operating EBITDA was 52million,anincreaseof8652 million, an increase of 86% year-over-year [34] - Full year revenue was 5.7 billion, up 1% year-over-year, and operating EBITDA was 290million,anincreaseof14290 million, an increase of 14% year-over-year [34][35] Business Line Data and Key Metrics Changes - The Anywhere Brands business generated 521 million in operating EBITDA, down 6millionprimarilyduetoforeigncurrencyimpacts[40]−AnywhereAdvisorshadanoperatingEBITDAofnegative6 million primarily due to foreign currency impacts [40] - Anywhere Advisors had an operating EBITDA of negative 93 million, an improvement of 42millionyear−over−year,drivenbyhigherrevenueandloweroperatingcosts[41]−AnywhereIntegratedServicesreportedanoperatingEBITDAofnegative42 million year-over-year, driven by higher revenue and lower operating costs [41] - Anywhere Integrated Services reported an operating EBITDA of negative 13 million, an improvement of 3millionyear−over−year[43]MarketDataandKeyMetricsChanges−Closedtransactionvolumegrewby133 million year-over-year [43] Market Data and Key Metrics Changes - Closed transaction volume grew by 13% year-over-year, with luxury volume up nearly 10% for the year and approximately 20% in Q4 [14][19] - The company sold over 1,000 homes priced at 10 million or more in 2024, indicating strong performance in the luxury market [20] - January 2025 saw a 12% closed volume growth year-over-year, driven by price gains, while open volume was positive at 4% [25] Company Strategy and Development Direction - The company is focused on new technologies and automation to unlock cost-saving opportunities, targeting another 100 million in savings for 2025 [15] - The Reimagine '25 initiative aims to transform operations and leverage generative AI and other technologies to enhance customer experiences and reduce costs [24][39] - The company is exploring M&A opportunities to augment growth, emphasizing a disciplined approach to profitability [29] Management's Comments on Operating Environment and Future Outlook - Management noted that the housing market remains challenged, particularly due to a lack of supply and pressure on unit transactions [25] - The company expects operating EBITDA for 2025 to be about 350 million, with the housing market being the biggest swing factor [46] - Management expressed confidence in the company's ability to deliver results regardless of market conditions, highlighting industry-leading profitability and solid cash flow generation [49] Other Important Information - The company updated its definition of operating EBITDA to include adjustments for noncash stock-based compensation and certain legal matters, enhancing comparability with industry peers [5] - The company is actively monitoring the impact of California wildfires on its operations and employees, with about 1,000 agents affected [44][45] Q&A Session Summary Question: What are the underlying assumptions for the 350millionoperatingEBITDAoutlookfor2025?−Managementindicatedthatthehousingmarketisthebiggestswingfactorandwillprovideupdatesquarterlyasconditionsevolve[54][56]Question:Whatisthecompany′spositionontheClearCooperationPolicy?−Managementadvocatesforarelaxedversionofthepolicytoprovidemoreflexibilityforsellerswhilemaintainingtransparencyandaccesstoinventory[26][61]Question:Canyoudiscussthefranchisepipelineheadinginto2025?−Managementnotedastrongpipelinewithinterestfrombothestablishedindependentbrokeragesandnewplayers,highlightingthevaluepropositionofferedtofranchisees[70][75]Question:Howdoesthetaxrefundtimingimpactfreecashflow?−ThetaxrefundwillbenefitfreecashflowbutdoesnotimpactEBITDA,withtherefundexpectedinthefirsthalfof2025[78]Question:Howdoestheadjustmentfornoncashcompensationimpactthe2025guidance?−Theadjustmentshavearelativelysmallimpactonpastyears,withnosignificantheadwindortailwindexpectedinthe350 million operating EBITDA outlook for 2025? - Management indicated that the housing market is the biggest swing factor and will provide updates quarterly as conditions evolve [54][56] Question: What is the company's position on the Clear Cooperation Policy? - Management advocates for a relaxed version of the policy to provide more flexibility for sellers while maintaining transparency and access to inventory [26][61] Question: Can you discuss the franchise pipeline heading into 2025? - Management noted a strong pipeline with interest from both established independent brokerages and new players, highlighting the value proposition offered to franchisees [70][75] Question: How does the tax refund timing impact free cash flow? - The tax refund will benefit free cash flow but does not impact EBITDA, with the refund expected in the first half of 2025 [78] Question: How does the adjustment for noncash compensation impact the 2025 guidance? - The adjustments have a relatively small impact on past years, with no significant headwind or tailwind expected in the 60 million growth for 2025 [122][123]