Anywhere Real Estate Inc.

I would like to turn the conference over to Anywhere Senior Vice President Alicia Swenson.

The company will be making statements about this 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, 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 development, as well as uncertainty related to the California wildfires. Actual results may differ materially from those expressed or implied in the forward-looking statements. Effective December 31, 2024, the company updated its definition of operating EBITDA to include adjustments for non-cash stock-based compensation and certain legal matters. These revisions enhance comparability with industry peers, and all the figures discussed in this call and in our reported materials are adjusted to reflect this change. The inclusion of these adjustments does not materially affect segment level trends or conclusions previously disclosed. Reconciliations of operating EBITDA to the most directly comparable gap measure are provided for all periods reported. The references made to January in these remarks are preliminary results for the month. January 2025 has the same number of business days as January 2024. We have three large expected one-time free cash flow headwinds in 2025, which total approximately $115 million. The first headwind is our approved $83.5 million litigation settlement. We have made $30 million in payments. The remaining $53.5 will be due when the appeals are resolved. The timing of the appeals is uncertain, depending on the developments in the proceedings, and we currently expect the payment to occur no earlier than mid-2025. Second, the 1999 sentence legacy tax matter of approximately $40 million is due shortly after the notice is received and is anticipated in 2025. Third, in January 2025, the company entered into a settlement of the bumpus or TCPA litigation for $20 million. We anticipate making this payment in Q3 2025, which is subject to preliminary and final court approval. For further discussion of these matters, see our SEC periodic reports. The reference to core franchise in these remarks is the franchise segment excluding relocation and leads. 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, February 13th, 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 morning, everyone. I was recently reminded of a famous Da Vinci quote that states, people of accomplishment rarely sit back and let things happen to them. They go out and happen to things. And this is exactly what Anywhere Real Estate did in 2024 and is going to do in 2025. In 2024, we delivered industry-leading EBITDA, We helped our agents and franchisees navigate both the tough housing market and the industry practice changes with competitive edge. And we continue to invest in and accelerate our strategy, enhancing our market position to fuel growth and deliver long-term value for our stakeholders. As we take on 2025, we're prepared to lead with the same proactive energy to power our future success. Now, reflecting on our 2024 performance, we generated $290 million of operating EBITDA, up $35 million from the prior year, and delivered $50 million of free cash flow, $70 million excluding our $20 million litigation settlement payment. We closed the year with strong momentum, earning $52 million of operating EBITDA in the fourth quarter, up $24 million year over year, with 13% closed transaction volume growth. We exceeded our cost-saving target by 25%, achieving nearly $125 million in savings, by simplifying, automating, and streamlining our operations. Now, looking ahead, we're focused on new technologies and automation to unlock new cost-saving opportunities that really didn't exist before. And we have targeted another $100 million for 2025, reinforcing our commitment to permanently lowering our cost base and enhancing our earnings power. And we accelerated our aggressive AI agenda, deploying generative AI at scale across many parts of our business to drive better experiences faster and at lower cost. Our efforts include both customer facing examples and internal solutions that are transforming how we operate. For example, our listing concierge product with its new AI integration drove significant adoption and was named best use of AI by a brokerage in 2024. New AI integration in our leads business is better identifying and targeting consumers most likely to become buyers. We are now able to better match these higher-quality leads with our best-performing agents faster than before, and these leads are seeing a 40-plus percent improvement in conversion rate. And generative AI continues to improve our operations. We currently process about 15,000 documents a day to support our brokerage transactions. With generative AI, we have the ability to process these with fewer than half the team in a fraction of the time, with a significant reduction in error rate. And in our most recent pilot, we've seen error rates fall to as low as 1 in 5,000 documents processed. Now, turning to growth, we immediately expanded our luxury leadership across Sotheby's International Realty, Corcoran, and Caldwell Banker Global Luxury. Our luxury volume was up nearly 10% for the year and approximately 20% in the fourth quarter as we gained meaningful market share here. The most exciting thing about our luxury outperformance is the powerful unit growth. which grew 4% year over year for the full year and by 12% year over year in Q4, both substantially exceeding the market's unit results. We continue to lead the industry selling the most luxury homes at all luxury price points. So for example, we sold over 1,010 plus million dollar homes in 2024 and have over 1,010 million dollar plus listings in our current portfolio. Our Sotheby's Concierge Auction business, where we are paid both a buyer premium and a seller commission continues to grow and had a $5 million plus average sales price in 2024. And this luxury success is driven by our distinctive value propositions and the talented agents who continue to flock to and stay with our great luxury brands. We grew our high margin franchise network, adding 67 new franchisees in 2024, with 28 new franchisees in Q4. And in Q4, we were especially proud of the addition of a 400-agent, long-time independent family-owned brokerage in the D.C. area to our growing Corcoran brand. We broadened our upward title joint venture from three to six states in 2024, with now over 20 franchise partners in place and three more states in the pipeline. We love the upward tide of momentum in the business because it opens new earnings opportunities for us and our franchisees, enhances our value proposition, and deepens our relationship with participating franchisees. We successfully implemented complex industry practice changes, providing our network with clear guidance and innovative solutions, giving them a significant competitive edge. For instance, our Keysign product enables agents to effortlessly create and collect digitally signed buyer agreements by simply scanning a client's license with their mobile device. And finally, in late 2024, we launched Reimagine 25 to transform how we operate as a company going forward, seizing new opportunities to unlock by generative AI and other emerging technologies to deliver better experiences for our customers faster and at lower cost. Reimagine 25 enables us as early adopters to jumpstart a more innovative future and will serve as the foundation of our continued efforts to lower our cost base. Now turning to 2025, January started off much like the end of 2024. The housing market remains challenged, especially with a lack of supply and real pressure on the number of unit transactions. However, We had a robust January with 12% closed volume growth year over year, driven by price gains. And our open volume in January, while softer, was still positive at plus 4%, also driven by price gains. Now, even more important for 2025, there's two industry topics I want to be clear on. The first is NAR's clear cooperation policy, which requires all listings to be put on the MLS within 24 hours of publicly marking a property. Our position is that the rule should be relaxed to provide more flexibility to sellers. However, we oppose a blanket repeal as we believe transparency and access to all available inventory are in the best interest of both sellers and buyers. Those advocating for full repeal are primarily advancing their own interests, as there's clearly an opportunity for players with listing scale to create private off-market listing networks that only select agents can access, which clearly could enhance near-term economics. We believe this is bad for consumers and we think it's best to do what's in the long-term interest of the consumer. However, let me be clear. We actually have the most listings in the industry across our brands. If the market evolves to favor private off-market listing networks, we are ready to capitalize and we will ensure our agents and franchisees are never disadvantaged. The scale of Anywhere offers significant benefits and we're prepared to leverage all of our advantages to make sure our agents and franchisees have everything they need to succeed in a private listings world. The second topic is industry consolidation. We're seeing more firms looking to sell across brokerage, adjacent services, and prop tech. We're well positioned to explore these opportunities, not only because of our liquidity, but also due to the competitive edge that we offer. We believe our assets enable us to provide unique solutions with the most synergies the easiest integration and ready-to-use technology. We would be excited to augment our growth through M&A opportunities at Attractive Economics. And to be clear, we will maintain a disciplined approach to profitability with deals that enhance the bottom line, not just the top line. With that, let me now turn it over to Charlotte for more details on 2024.