Realogy Holdings Corp.

Good morning and welcome to the Realogy Holdings Corp. 3rd Quarter 2021 Earnings Conference Call via webcast. Today's call is being recorded and a written transcript will be made available in the Investment 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 Realogy Senior Vice President Alicia Swift. Please go ahead, Alicia.

Thank you, Mary. Thank you. Good morning and welcome to Realogy's third quarter 2021 earnings conference call. On the call with me today are Realogy's 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 expectations and the current economic environment. Forward-looking statements and projections are inherently subject to significant economic, competitive, and other uncertainties and contingencies, many of which are beyond the control of management, including, among others, the ongoing COVID crisis, inventory levels, and uncertainties related to the continued strength of the housing market. Actual results may differ materially from those expressed in the forward-looking statements. For those who listened to the rebroadcast of this presentation, We remind you that the remarks made herein are as of today, October 28th, and have not been updated subsequent to the initial earnings call. Important assumptions and other important 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 in our annual and quarterly SEC filings. Also, certain non-GAAP financial measures will be discussed on this call, and per SEC rules, Important information regarding these non-GAAP financial measures is included in our earnings press release. NAR data referenced during today's call is based on NAR's most recent public estimates, which are subject to review and revision. Factors that impact comparability of our home sales statistics to NAR are outlined in our annual and quarterly reports filed with the SEC. Last, the references made to October months to date in these remarks reflect data through October 22nd, 2021. For closed transaction volume, October 2021 will have one less business day than October 2020. However, our discussions on both open and closed volumes on a month-to-date basis have been adjusted to reflect like-for-like number of business days. Now I will turn the call over to our CEO and President, Ryan Schneider.

Thank you, Alicia. Good morning, everyone. Realogy delivered excellent top and bottom line results this quarter as we innovate the future of real estate. We are driving outsized growth with Q3, our fifth consecutive quarter of market share gain. We are simplifying the home sale transaction for consumers, both in our existing business and with real sure. We are strengthening our capital structure with debt reduction and a very strong cash position. and we entered into a title underwriting venture designed to unlock future growth upside and return capital to reinvest in our strategic priorities. So let's dive straight into our terrific financial results and strategic proof points demonstrated in Q3. Realogy delivered 12% transaction volume growth year over year. We outpaced NARS 9% volume growth again in Q3 and gained market share for the fifth quarter in a row. We saw even higher transaction volume growth in our own brokerage business at plus 17% year-over-year, driven in part by an exciting comeback in the New York City market, one of our largest markets where we have the market-leading position with Corcoran and Sotheby's International Realty and now Coldwell Baker. Revenue grew $277 million to $2.2 billion, with strong momentum across our brokerage, franchise, and title businesses. We generated $273 million in operating EBITDA in the quarter. And this is flat to last year after excluding $40 million of 2020 temporary cost savings and is up $50 million, 5-0, versus Q3 of 2019. We produced significant free cash flow, $282 million. And finally, we made continued progress strengthening our capital structure. We ended the quarter with a 2.3 times net leverage ratio and $700 million of cash even after repaying $435 million of debt in September. Now these accomplishments would not be possible without Realogy's strong culture and talent. We are demonstrating incredible agility in how we operate our workforce, supporting hundreds of thousands of agents in the field, shifting to remote work, and transitioning our corporate offices into collaboration and innovation hubs. We continue to be recognized for attracting and retaining great talent. Forbes just named Realogy to its list of world's best employers earlier this month, which follows LinkedIn's top 50 company recognition earlier this year. And Realogy was just awarded a Great Place to Work designation for the fourth consecutive year. Now let me update you on some of our exciting growth vectors. First, we are enthusiastic about our Realsure progress. Remember, Realsure is our joint venture with Home Partners of America. Our current product is in 24 cities today, It's real sure sell, and simply put, a homeowner can get a guaranteed 45-day offer with the option to also list their home on the open market with one of our major agents. The consumer can accept the offer they prefer, giving them the best of both worlds and putting them in control of how they sell their home. Excitingly, 70% of customers who request a real sure offer are actually listing their homes with one of our agents. Now, we recently appointed Katie Finnegan as Realtor CEO. Named one of Fast Company's most creative people, Katie has a successful background launching and scaling consumer-centric companies, including companies that she founded. Katie also has experience incubating innovation and driving growth within much larger corporate enterprises, such as Walmart. And we're incredibly excited to have Katie leading Realtor. We are launching our next Realtor product in five cities later this year. It's called RealSure Buy, and it helps a buyer provide a cash offer when bidding on the home, something increasingly important in today's very competitive market. And like our sell product, our buy offering has mortgage and title integration as a core component to the value proposition. Finally, our RealSure investment will step up meaningfully in Q4 as we continue to scale, launch this new product, expand our direct consumer marketing, and substantially build out the business and the team even more under Katie's leadership. Shifting to another strategic growth factor, we continue to invest in and love the growth results we're getting from our luxury leadership position. Sotheby's international realty volume is up over 50% this year, with its international business growing even more, with royalties up over 80% year-to-date. Corcoran has doubled its volume from where it was a year ago, driven by strong growth in our owned business, especially as New York City rebounds, and even more importantly, driven by the substantial growth in the franchise business we launched last year. And finally, we recently made a luxury brokerage acquisition. We acquired the iconic Warburg Realty Company in the important New York City markets. Strategically, we are excited to operate this new part of our company under the Coldwell Banker global luxury brand. This strengthens our luxury network and enhances the Coldwell Banker brand with its New York City presence. Now, similarly, we remain incredibly focused in investing in technology and product innovation. Our open architecture approach to technology is a competitive differentiator. And one proof point is how it enables our agility. Since we last spoke, we've taken a new product in our open ecosystem, Moxieworks, and deployed it to hundreds of companies and tens of thousands of agents in just a few months. And clearly, our continued focus delivering great and new technology, marketing, and data products to our agents and franchisees is helping drive our growth. Finally, as you know, we operate a national title settlement and escrow business, which works directly with customers and agents to close real estate transactions. This business is very strategic and is a core part of creating a more seamless consumer and agent experience as we innovate the real estate transaction, both in our existing business and with Realtor. Now, separate, though, from our title settlement business, we also have a title underwriter that provides the actual title insurance behind customer-facing home transactions. We were very excited to announce a new underwriter venture this month. We found a great partner in Centerbridge, which is purchasing a 70% stake in our underwriter business, especially given Centerbridge's track record driving growth. This lets us maintain a meaningful stake in this business to capitalize on future growth, while at the same time freeing up capital to invest in our strategic priorities. Now let me close with what we're seeing in the housing market. Housing demand remains very strong, driven by remote work, strong relocation, especially to attractive tax and weather geographies, low mortgage rates, and positive demographic trends. Lack of supply is increasingly an issue given the strong demand, and you can see that in both the substantial price appreciation and the unit sales declines in our business and in the market. Now, looking forward, our September open volume and October month-to-date open and closed volume data are all basically flat versus 2020. But it's a little too early to extrapolate the whole quarter from those numbers. You know, the Q4 2020 comparison was extremely strong. You know, we were up 45% year-over-year in volume last year, substantially above the market. So given the supply and the unit pressures that the market is seeing today, we would expect, like NARA is forecasting, that overall Q4 2021 volume is likely to be slightly down versus the extremely strong Q4 of 2020. So as we near the end of 2021, let's just look back and remember, housing has been about a five to five and a half million resale unit transaction market for basically the last decade. 2020 had 5.6 million unit sales, but those were largely concentrated in the second half of the year. And here in 2021, the market is trending to about six million units. which is great for Realogy given our market-leading position and our meaningful share gain during this time. And so while heading into Q4, unit sales as the market seem to be trending a little lower than the surge in the second half of 2020, both for Realogy and the market, units are still settling in at a higher and healthier number than the past decade, which we like a lot. So between the high demand and that fact, we remain very excited about the housing market and our growth potential. And so pulling up, you know, it was a terrific quarter both financially and in strategic progress, and we're very excited to drive further innovation and growth. With that, I'm going to hand it over to Charlotte to discuss the financials.