Anywhere Real Estate Inc.

Good morning and welcome to the Anywhere Real Estate second quarter 2025 earnings conference call via webcast. Today's call is being recorded and a written transcript will be made available in the investor information section of the company's website tomorrow. A webcast replay will also be made available on the company's website. Unless stated otherwise, growth figures should be assumed to be year over year. At this time, I would like to turn the conference over to Anywhere Vice President Tom Hudson. Please go ahead, Tom.

Thank you, Bella. Good morning and welcome to the second quarter 2025 earnings conference call for Anywhere Real Estate. On the call with me today are Anywhere CEO and President Ryan Schneider and CFO Charlotte Simonelli. As shown on slide three of the presentation, the company will be making statements about its future results and other forward-looking statements during the call. These statements are based on current expectations in a current economic environment. Forward-looking statements, estimates, and projections are inherently subject to significant economic, competitive, antitrust, and other litigation, regulatory and other uncertainties, and contingencies, many of which are beyond the control of management, including, among others, industry and macroeconomic developments. Actual results may differ materially from these expressed or implied in the forward-looking statements. July month-to-date data is through July 21, 2025, with both open and closed volume comparisons based on the same number of business days in July 2025 versus last year. Three one-time free cash flow headwinds are excluded from our 2025 free cash flow guidance. First, $41 million was paid in Q2 for a 1999 Spend-It legacy tax matter that we intend to appeal. Next, $20 million that we expect to pay in Q3 for the TCPA litigation settlement. Last, the final $54 million payment towards our antitrust litigation settlement will be due when the appeals are resolved, the timing of which is uncertain, but it's now estimated to be made in late 2025 or early 2026. Growth and business recruited... pursuant to other productive agent recruiting program at Advisors, is measuring using the estimated last 12 months closed gross commission income of the new agents prior to joining Anywhere. The top half of agents retained at Advisors is measured using the amount of production generated by agents remaining with the company a year following the initial 12-month period, based on gross commission income generated during the initial measuring period. Important assumptions and factors that could cause Actual results of different material from those in the forward-looking statements are specified in our earnings release dated today, as well as in our annual and quarterly SEC filings. For those who listened to the rebroadcast of this presentation, we remind you that remarks made herein as of today, July 29th, have not been updated after initial call. Now I'd like to turn the call over to our CEO and President, Ryan Schneider.

Thank you, Tom. It is incredibly exciting to speak with you here in late July. AI will change how real estate is done, and we plan to lead the way. We are using generative AI to revolutionize how this industry works, both how we go to market and how we run our company. This transformation is creating better experiences faster and at lower cost, all with the goal of driving growth for our great agents and franchisees, unlocking efficiencies and improving margins. The future of the real estate industry includes a truly end-to-end integrated transaction for the consumer. We are leveraging our scale across brokerage, title, mortgage, and home services to deliver more seamless and connected home buying and selling experiences and to drive better economics. And while we are in a historically challenging housing cycle, we are winning and creating octane for the future with powerful proof points in productive agent recruiting and retention, franchise sales, and especially luxury success. Most excitingly, We are seeing strong growth momentum this month that has us more optimistic for the back half of the year. Turning to Q2, we exited the quarter with confidence, supported by meaningful operating EBITDA, a strengthened balance sheet, and our unique collection of assets. This strong foundation enables us to invest in AI-driven initiatives and capture scale operating efficiency across the company. We delivered $1.7 million of revenue and $133 million of operating EBITDA, demonstrating the strength and resilience of our model. Closed transaction volume was flat year-over-year in Q2. The quarter started off challenged due to macroeconomic volatility, but we saw volume trends improve with June closed volume solidly positive. And we love the business momentum we are delivering in July. July closed transaction volume is up mid-single digits year-over-year, with growth in both units and price. Even more exciting, July open volume is up 9%, with this future growth indicator about equally driven by increases in both units and price. And looking even farther into the future, our July advisors listings are up significantly, over 10%, compared to the prior year. Together, this paints a strong growth picture for the back half of the year that we hope continues. Q2 also saw a notable geographic variation across key markets where our advisors' business is concentrated. New York City outperformed the broader portfolio, delivering double-digit growth in both units and price. And Florida, by contrast, faced a more challenging quarter with volume-down double digits. Now, our industry-leading luxury businesses, anchored by Sotheby's International Realty, Corcoran, and Coldwell Banker Global Luxury, continues to be a strategic growth engine, outperforming the broader market. Luxury delivered 3.5% year-over-year volume growth in the quarter and about 8% year-over-year growth in the first half, as we obviously love this higher margin, high impact segment. We sold 369 homes priced $10 million or higher in Q2, a 20% increase from the prior year. And our luxury businesses are delivering incredibly strong growth momentum in July. For example, Sotheby's International Realty July open volume is up 13%, and Corcoran's is up about 20%. We are also raising the bar on what's possible in luxury real estate, bringing new innovative ways to deliver value to agents, franchisees, and the consumer. Our Sotheby's Concierge Auction JV is a great example. It provides an innovative way to match buyers and sellers of luxury properties while enabling us to capture much higher per-transaction economics. The venture continues to scale, with Q2 revenue up 10% and an average sales price of $5 million. Now, beyond our success and luxury, we're driving meaningful growth across our broader portfolio. Our high-margin franchise business welcomed 13 new U.S. franchisees and three international expansions, strategically expanding our footprint, including in key growth markets such as California, North Carolina, and Georgia. We are seeing strong momentum in our advisors' business. driven by robust agent recruiting and near-record levels of agent retention for productive agents. Our compelling value proposition, centered on delivering best-in-class products and services, great marketing, and industry-leading support, is increasingly resonating with great agents across the country. Advisors recruited 625 productive agents in the quarter and saw 31% year-over-year growth in business recruited, with strong gains against many of our biggest competitors. And we are having even greater success retaining top talent in this highly competitive market, with advisors' agent retention reaching 95%, about 95%, among the top half of producing agents. This is rarefied air, right around the highest rates we've ever achieved. And in our great luxury brands, our retention is even higher. Now, putting this all together, you can see why I'm excited about our growth potential going into the back half of the year. And in addition to growth, our other main priority is Reimagine 25, as we leverage and harness emerging technologies like generative AI to reshape how real estate works for agents, franchisees, consumers, and how we operate our company, all in the spirit of delivering better experiences faster and at lower cost, and to drive growth for our great agents and franchisees, unlock efficiencies, and improve margins. Anywhere is accelerating generative AI-driven innovation across every corner of its businesses. We are delivering AI-enabled tools to help agents and consumers better sell homes, such as listing concierge. We are using AI for productive agent and franchisee recruiting, for smarter lead targeting, to use AI to generate higher quality content, and to process documents faster and at lower cost. We have pilots and at-scale examples across the whole company. And since we last spoke, we piloted Amazon Q in our contact centers and AI-generated comparative market analysis as we continue to build proof points of our broader strategy to scale AI. And our open architecture approach lets us also deploy best-in-class third-party AI-driven products to agents through enterprise agreements like our just-announced Canva offering. Finally, the future of real estate includes a truly end-to-end integrated transaction for the consumer. means a seamless and connected home buying and selling experience across not only real estate brokerage, but across mortgage, title, home insurance, and other home services. We have all of these transaction components in our unique collection of assets and continue to innovate and succeed on this holy grail that others are chasing. In that spirit, we're increasingly delivering better experiences to consumers by introducing the right services at the right time. This better experience of an integrated transaction also adds to our economics. So let me give you two real examples that crystallized in Q2. First, as I told you last quarter, we see the opportunity to turn buyer agreements of perceived market risk into an opportunity and have begun using this consumer interaction to integrate the marketing of both our title and our mortgage services. While the title pilot results are still pending, our initial mortgage pilot showed approximately 2.5 percentage points increase in mortgage capture, the biggest increase that we've seen from any past initiative to drive this higher revenue per transaction. Second, we redesigned the consumer workflow to embed our warranty offering more seamlessly into the home sale transaction. Based on pilots in multiple markets, We've seen attach rates increase by approximately four percentage points. And with these exciting results, we plan to roll out both pilots nationally later this year. By integrating more components of the real estate transaction, we enhance the customer journey, increase satisfaction, and generate greater per-transaction economics. This also elevates the agent's central role in the transaction, helping them build deeper, more trusted relationships with consumers. So we're excited to be here in July with powerful growth momentum, AI-led Reimagine 25 transformation progress, and more proof points on our ability to integrate the transaction and generate greater per transaction economics. With that, let me turn the call over to Charlotte.