Anywhere Real Estate Inc.

Good afternoon and welcome to the Anywhere Real Estate first quarter 2023 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. At this time, I would like to turn the conference over to Anywhere Senior Vice President Alicia Swift. Please go ahead, Alicia.

Thank you, Brianna. Good afternoon and welcome to the first quarter 2023 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. As shown on slide three of the presentation, the company will be making statements about its future results and other forward-looking statements during this call. These statements are based on the current expectation and the current economic environment. Forward-looking statements Estimates and projections are inherently subject to significant economic, competitive, litigation, regulatory, and other uncertainties and contingencies, many of which are beyond the control of management, including, among others, industry and macroeconomic developments and the incurrence of liabilities that are in excess of amounts accrued or payments made in connection with pending litigation. Actual results may differ materially from those expressed or implied in the forward-looking statements. 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 issued today, as well as our annual and quarterly SEC filings. For those who listened to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, May 3rd, 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.

Thank you, Alicia. Good afternoon, everyone. Even in the face of a challenging housing market, Anywhere continues to charge ahead and make meaningful progress, setting up our company for even greater success in the future. In the first quarter of 2023, we stayed focused on positioning our existing businesses for future growth, especially franchise and luxury, with specific successes in own brokerage, agent recruiting and retention, and franchise sales across our great brands. We significantly lowered our cost base, including permanently changing how we operate as we work to execute $200 million in cost savings for the year. And we continue to invest in reimagining the agent and consumer experience to create a simpler, more integrated real estate transaction that also lets us capture greater economics. I will share more on each of these later in the call, but I want to start by thanking our great employees, agents, and franchisees for helping our customers navigate a tough environment as anywhere stays laser-focused driving our strategic priorities, including an intense innovation agenda. In that spirit, our company got a lot of energy from being named one of Fortune's most innovative companies for the first time ever. Now, turning to the housing market, there's no hiding from the fact we are in the midst of a very challenging year. Most forecasts predict home sales in the low $4 million range, which would be one of the worst years we've seen in a long time. And we still believe the year over year volume comparisons will improve throughout the year. And I'm starting to hear from some agents and franchisees about greater optimism for the market improving going forward. And we have a few of those positive indicators in our portfolio. In Q1, our business performed right around expectations. We delivered $50 million of cost savings in a tough quarter when volume was down about 30%, both of which we signaled in advance to you. The volume decline was almost all unit driven, with a 29% decline in home sale units. While home sales were down substantially across all markets, there was significant geographic variation in price changes. A few markets, in particular California and New York City, had prices down 5% to 10% versus prior year, while about two-thirds of the states, including large ones like Texas and Florida, saw prices hold steady or even increase versus last year. Revenue was over $1 billion and operating EBITDA was minus 52 million. However, our operating EBITDA was meaningfully impacted by new legal accruals in the quarter. As a reminder, in addition to the two other class action jury trials later this year, a second large industry antitrust transaction was certified in March. Now, legal accruals aside, We were pleased that March operating EBITDA was solidly positive. We expect that trend to continue. We are also glad to see open volume metrics continuing to outperform closed volume metrics in Q1, which indicates positive future volume levels. And our numbers for April so far are continuing the trend of open volume metrics running better than closed volume metrics. We are most excited about our strategic progress to set us up for greater success, especially in stronger future housing markets. So first, we're working hard to position Anywhere to achieve share growth, especially as the market rebounds, with a particular focus on our franchise business and our luxury leadership. Our Anywhere Advisors agent base again grew year over year, and we continue to have record agent retention levels. Our Anywhere Brands business is delivering robust franchise sales both domestically and internationally. And we continue to see agents and brokers attracted to our compelling value proposition that includes innovative technology, data and marketing products, and high-quality lead generation programs. Second, we are moving our business to a permanently lower cost base. As you can see from our cost results in 2022 and Q1 of 2023, we are re-architecting and reducing our real estate footprint and automating our operations. This includes our most recent actions as we bring together our title and brokerage physical footprints and operations to better serve agents, lower costs, and improve the transaction experience. And third, we continue to invest and make progress since our goal to simplify and integrate the agent and consumer transaction experience. We believe this will have multiple benefits, including capturing additional economics in the transaction, and further reducing the stress and friction for consumers, agents, and franchisees. A few examples include the following from the quarter. Our Real Vitalize product provides a turnkey solution to help sellers prepare their home for sale. This adds to our value proposition by simplifying the agent and consumer transaction experience and enables us to capture additional economics. So, for example, in Q1, we captured title on over 80% of the Real Vitalize transactions in seller-controlled markets. We've scaled up our Leads Engine product, which simplifies and speeds up the process of matching consumers with agents. Leads Engine is part of our ongoing successful effort to shorten the time to connect interested consumers with agents and more broadly meet consumers where they are even earlier in their home buying and selling journey. One Click Title, which as the name suggests, simplifies and integrates the title ordering process to a single click across our title and brokerage operations. launched last year in Caldwell Banker Realty, and in Q1, nearly 30% of our CBR agents who close transactions use the feature. So in addition to better integrating the transaction, One Click Title is also an example of changing how we work by automating a complex part of the transaction. And finally, Upward Title, our new multi-franchise title joint venture program, went live in its first market, Florida, and is on track to launch in our next planned markets of California and Pennsylvania later this year. This program allows our franchisees to benefit from our scale and title and extends the reach of our integrated title offering to our franchise network. So in the midst of a clearly tough housing market, I'm excited by our strategic progress, our team's continued track record of delivery, and how we're seizing this moment to further position anywhere to capture the opportunities ahead of us, especially in stronger housing markets. Now I will turn over to Charlotte to discuss our results in more detail.