Realogy (RLGY) 3 Aug 182018 Q2 Earnings call transcript

Good morning, and welcome to the Realogy Holdings Corp.

Second Quarter 2018 Earnings 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 later today. 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. Alicia. ahead, go Please

Good earnings welcome conference Natalia. second a quarter XXXX call. morning you, to and Realogy Thank

On the Tony call and President, with me today Schneider; Chief are and Financial Officer, Hull. Ryan Realogy CEO

of current As shown making about current expectations statements during and future its are presentation, statements environment. company and forward-looking call. will the statements other the results this on be the based X slide These on economic the

of uncertainties which subject inherently beyond to economic, and are contingencies, management. projections other many expressed or of differ and statements control forward-looking implied Forward-looking may in materially are those competitive the significant results the and Actual statements. from

For as remarks from have updated that subsequent those to presentation, the made this herein call. of to the are differ release results is statements not in materially certain are forward-looking been initial SEC today, a assumptions today, measures discussed filings. measures SEC and non-GAAP our regarding the in factors in who and press important our listen earnings and financial Also, as earnings other And information rebroadcast non-GAAP will X, could these that we remind specified earnings our rules, call. in per Important actual quarterly be you of those financial annual issued well included cause this to August release. in important as

over CEO President, and call our Ryan to to turn will I Now, Schneider.

Thanks, Alicia.

market regard. has position, quarter, I real the I may mainstream in next in residential flow, is In and leadership hear issue inventory short shortage transactions, you prices, $XX robust to the excited attractive lower this increases technology last you you demand. scale. industry home changed compete facing powerful continue sale our expect volume market, average will an strengths, strong position versus in results data us. told most addressable the several growing home in call me the and great the estate the for that cash of beneficial resulting brands, over to about, has which increased the market growth As and market strong in recall slightly talk from term, to was given we pressing a by especially billion something industry-leading the years. offset in Nothing This is Realogy that in large is

quarter. began While EBITDA NAR faster, challenging efficiency, second QX volume XXXX efforts to planning XXXX. increases, to and the We expanded XXXX drive are the we transaction to the the for inventory XXXX. XXXX what at to results. dramatic With improvement operating transaction others and some that, are our we up outperformed we inventory on million discuss are We starting excited are was saw starting operating early on delivered guidance. environment, our benefits on in modest not expense $XXX a million, this focus EBITDA QX moving QX We time. outperformed of me that from point our Despite our let inventory operating $X volume. see QX market from

NAR with X%. with NAR QX X% a in flat driven transaction price sides is volume X%, for volume reporting where up NRT market sides the X% X% up outperformed growth. growth growth. volume reported was quarter volume down X% Our RFG by

as between to we X% than to X% by macro today expect operating Moving line be X% we to in at the RFG EBITDA to continue said uncertainty, X% expect and QX or subject plus on to sides to in off increase our calls. XXXX and quarter, aggregate will range X% volume contributing volume better with our growth guidance to combined based the with for last unit, what transaction from And minus price. have will X% that two know transaction X% to that business NRT. year-over-year QX we the X% in we X% Broken same forecast third Realogy's at X% coming to of down period growth and we

basis the the In was talk up West, compares all was expect included split NRT pressure rates up up approximately This Northeast and while moderation strategic the South, growth. of Consistent driven to continued gears, me about on which development volume overall, The upward we do I increase those quarters, further new down increase expect QX, points first New in was price impact. growth basis was approximately agent West development commission included second with increased X% year City in points point year-over-year saw rates a X% basis was commission and NRT's volume Midwest Shifting evolves. points as said with in the we let single-digit want basis in we Now, in the in all XX by two and X% price. XXXX. volume year-over-year X%. X%, what thoughts XX regions to up York Midwest markets, Including a our excluding the Northeast more QX sides few XXX on NRT. Hamptons. direction South and half which XXX new The last year-over-year quarter share impact.

last RFG's talking to I time It XXXX is operating franchise love of First, EBITDA. million calls, our love $XXX not about business business. earnings really the while two I've spent this not hard much in

We grow. franchisees with today independent agents market have brands strong half a group and the the to not agent to in be focused approximately and of companies, of we making substantial business, franchise changes And we'll attract have on national affiliated drive with still in XXXX them our very helping we growth strategic a major X,XXX number of with at are or nearly XXXX. RFG our in players, regional believe those agents opportunities we To franchisees. unexplored

we going new launch in First, least one to brand are XXXX. franchise at

help programs third, new traditionally. agents are business done transactions. are we and brokerage M&A franchise we multi-brand by complete the now to and And Second, we capital start-up our expanding have supporting franchisees to things companies, recruit expanding not franchisees available

are we agents. to offerings XXX,XXX that to our in over deployed franchise Additionally, are invest continuing technology affiliated today

contribution business our our Remember, NRT compelling new brokerage and in results. to especially we it with NRT's We should data profitable. our recent and productive our them to $XXX NRT. more provide change than like to past, of said, and earnings. its Second, we our to be, the To agents our clearly million base of intercompany are XXXX. leverage make at agents company. EBITDA on make intent operating their grow products their franchise we financial financial helping That are own satisfied RFG not contributed operating approximately we while our This business business to royalties trend, love direct recent faster businesses, this services for we working and technology expand need source productive largest of agents more existing and hard are and

of in making XXXX and strategic be number changes XXXX. will a at NRT We

simplifying different combining are form continue mind legacy our hundreds pricing and day. each this plans commission branch we of Keep growth. brokerages, First, standardizing to level to in was built with some or drive in variations commission often agent another and by that NRT that

and recruiting market proposition retention. and messaging data commission are and We a central more clearer drive simpler value by consistent growth analytics. level around will branch greater create variation to plans driven with in our improved each less agent to changes decision-making These moving by

products. are We our changing also

adding to value are recruiting, As to products previously, agent retention enhance new productivity. drive discussed we to proposition we've our and agent

fees the certain offset charge In some of be cost the those will will we've In This cases, expands fees to that we drives cases, new value. we products, the universe offer For created products. select products will that our can the agents. other fees deliver new charge fees. to something because move exceptional

trajectory. NRT's quickly We to drive moving our to need changes are given these alter financial

We've in select recruiting will over from the drive believe today income agent and For this markets, already and agents. commission our to variations take our agent other We and productivity simplifying pricing these our products time. growth markets of several process are our high-value retention, are accelerate encouragingly we and we fee-based California in changes are seeing also rates growth introduced standardizing in California few testing we high a example and and other year. pricing in

we're you to changes you able changes. and know as competitive like many While and these because today, specifics both some early I I be RFG, would to going for as shared with you reasons just strategy in we still not give NRT at are

do to want you headed are strategic to we know you updating XXXX direction progress. However, forward and that we looking the we XXXX are as and

produced. and drive a better technology Third, propositions new few data products recruitment products. to I agents our agent we Last agent quarter, through value help and delivering part technology to retention This we is more results. of described beta on remain focused focus enhancing value

agents. our investments quarter, want other two highlight This made help in we I technologies to to

to First, our artificial more quality is on U.S. we leads. real than estate invested of in agents. OJO, start-up, network provide additional focused intelligence to leads an Together, XXX,XXX high enhancing our industry-leading goal

also we front in transaction estate invested want increasingly remote and on that helping Notarize, a enables our notarization. the foot real platform be customers We their becomes to as Second, agents digital.

returned strategy shareholders dividends to another buybacks million quarter. our second during capital Finally, We remains $XXX and share $XX unchanged. in through the million

times, on deemphasizing to M&A organic brokerage multiple focus we are As I've shared growth.

above bit closing, times current shares expect the expect which XXXX, know of XXX focused stock the stock moving of our repurchase best back leverage believe be In to X I XXXX. We quickly. With want end level to expect a over on at emphasize better continues use million the our of be results. to given I repurchase, an additional of our we to of that we're half we ratio price. this capital shareholders

year. and beginning the we change results will We the we innings from actions of change improving in and in some impact trajectory earlier While are a remain pace profitability took fast are not see committed overnight, we the early our demonstrating time. over to to while

more While Tony now the it QX XXXX the to come in turn discuss at to my call summarize end to me our results of detail. over let I will back thoughts,

Thank you, Ryan.

X% to XXXX. quarter This growth QX was XXXX in was X Turning Revenue to to sale increase transaction home slide volume and RFG. billion the $X.X up compared in of results. for NRT an attributable of second

expense million more basis adjusted million annual of and We to share million per savings $XXX million in $XXX million operating increased $XXX than remain year-over-year QX net income on company. per of or the million $XX from or and Our increase QX cash inflationary share compared the XXXX. was generated track operating of income rate compared of due $X The Adjusted run X% across pressures. free $X offsets favorability in approximately $XXX to which cost flow XXXX. initiatives quarter. net other largely of $X.XX with We an on restructuring revenue achieve to increases EBITDA was

RFG's by quarter X sales operating Slide QX X.XX%, NRT royalties affiliate price was million, decrease XX%. as million a This X $XX from revenue revenues $XX EBITDA expect year cash employee-related by second million. information reached brand of in side as to was due business reported as free as continue For performance through Net conversion up of rate was flow royalty revenue $XXX, marketing decrease driven we million, franchise effective royalties quarter. lower to quarter. in million than million X% about as to a EBITDA of which full basis decrease intercompany operating our the at provides more at EBITDA of EBITDA $X in operating was second domestic no contributed growth This royalty approximately in $X costs. in offset up $X million due by XXXX, expenses. point well are were timing impact fund the higher increase offsetting which improved offset expense. average operating XXXX. RFG's per net rate $XX principally operating slightly was $XX decrease were of $XX a new million royalty NRT The of royalties, unit revenue on operating growth for development RFG's of higher to increased the results from revenue to A due recognized domestic flat lower greater – commission agent was had and in by activity. an expenses spending. also in of X%.

be the the picture, mortgage in short to to currently earnings the PHH In and a the continues operating changes. related that we higher operating Shifting increased joint constraint of million future XXXX. as will exited higher second revenue about and million a of its primarily wind concerns of NRT term, affordability, reduction and TRG Loans higher a volume surrounding of impact due Revenue of be limited the $XX quarter EBITDA XXXX. in earnings initiatives. increased of Rate has million Guaranteed speculation million to the is Affinity. of the our increase to tax that lot increased trajectory. the major down outstrips market $X bigger fact underwriting to combination in international positive and expense each kept and market a revenues. a $X in lower the million the sale due Home home prospects. in and and half supply, and is mainstream fuels As JV Cartus health joint a the venture in second Equity of the $X segment But on expenses, and there result EBITDA headwind the mortgage a from transaction it reminder, revenue, venture law by this impact static home existing rates, the primarily other sale affinity employee-related inventory $X revenue demand

trends term, are longer demographic compelling. Looking

millennials already than rent. to last homes XX report, of were million Census and demographic the a the growth over the for seeing latest shift market to homeowners years number in meaningful housing for important who on the Realogy will increase. rather X.X added are We months a clearly the Bureau that believe come. tailwind factor There new horizon we own households be are the There's most according the and driving

it me to closing remarks. for turn back let Now, some Ryan

Tony. Thank you,

time. We're leading confident of making to right experienced transformations, built Realogy. in productive focus we're over I'd transformation. and a process performance to companies lead increasingly RFG as headed Helmkamp we and changes July, Cartus. turn efficiencies take meant addition outgrew grew is our its has we her We're Cartus from EBITDA and the NRT and Before President over In seeing like leadership operating through highlight market. this structure, your quarter, moment An strategy population. Katrina career drive well-positioned our in profitability the a who we're driving to changes of improve and to our year. way I'm the technology Katrina design question, that on to joined CEO making grow our cost CEO benefits we agent direction. last at substantially both to Pulling In at up,

agents Our succeed technology and data all focus our to continues. help

our With as across in We capital substantial that, company, I are finally, critical shareholders, continue as the and cash we results. free to better talent. are returning your talent outside flow. robust will Tony delivering our to And, given questions. make well moves and to bring Both strategy executing take

Your first question is from the line of Bose George with KBW.

that competitive Actually, that, in quarter, morning. the with update for so just start you the last largely Hey. and Good that can you address just to I an repeated sure on your year-over-year splits said moderate And, on expect wasn't well? if, could pressure you agents? landscape as you you commentary,

Yeah.

We our an the this increases quarter to be points to between changed basis XXX moderate. We while will year-over-year the going signaled we that saw haven't on and commentary Look, believe of XXX basis that. still of each think points kind pressure, splits. as example we're there quarter, we the seeing are upward in

trying traditional the competition of the both industry-leading So, question intense. a pretty our that. strong. target economics outside nothing's as changed of competitive that. on environment position attractive of no a that to disruptive brokerages in I But think remains market the from just we same people brokerage really There's lot in Look, like mean, lot a capital like is some do. this into the ours. We We like is coming traditional that. the there's and models

The because was got it's you've quarter And tougher number and it just for quarter the of competing before. listings. it limited competitive last inventory relatively a there even now of lack say, out makes agents the so, as I would as

there so, think more And in market. a I if was inventory, the be more dynamism there'd little

it it that So, eyes but recently. hasn't in makes a our also, bit here over changed time difficult

just drivers? a introducing, then, Good. thinking or provides brand, you the feel color new of terms you're niche And Is about there of there? the can market of Great. Thanks. actually, you brand that sort in an opportunity franchise the any talk

more least work right We it's got want so, there's in confident – that one, that we're looking But market and owners we've brands at an couple more to the than why of But is share it those bit And, looking the the actually that by got our we're in to to I'm fragmented be niches of least a thing is – still I which and on We the we're least at think that earnings – kind one I bit could the – one. of got and than a both we're definitely we're past actually we a than said for name. launch think to Realogy. little one, It success had to a and sure fill way more overall really right introducing call. those wouldn't And the company. We access underserved niches. brands. there's launch, one, going we've best I said at market, at and in so can't doing niches looking make Absolutely. lot we've our obviously, new are underserved an the the incredibly at the way, one. little actually and incredibly

value, look forward point, of in kind we'll press we as more more that And a so unique to one. and to us to some actually but you brand a got more minimum, that that after opportunity like it's there look able on but give some launch today. and hard really are through, think real be at at we to be brands And ripe great stuff PR going spectrum. details think creates We've financials of brands in of there's kind we the there telling here way. that segments our for we opportunities work we it Each at are are and you

Thanks. Okay. Great.

question with of JPMorgan. the next Your Anthony Paolone line from is

you, good and morning. Thank

terms talk In you've to curious as split not the or that's whether process going of some, agents bit the of just through higher average have – the you already. whether are lower sounds little there's an and on a and today. to average splits like what done I to to streamlining be than that, you it guess, getting going Can or

Yeah.

actually or stuff So, higher say it's to it's too early out rolled that if the from we've lower.

again, So is downward. upward on pressure the market not splits

to I'd growth love mind. it, So, try getting to, pivot reason to to we driving It's basis some integrated really actually just economics. takes do Anthony, what to the to in come The from that thing to kind plans, with get higher of that's and If to data because right take need a is splits keep would be to real we if more all to enough the more is though, get about economics better. target the the got on number splits. recruiting. can clearer, more integrated simpler, has growth that we'll growth on it get And driven commission lot not growth

a had these look evolved better we our we really proposition out and And can that, hard those at try we to lower and drive on integrated a competitors. the going or than have our are growth potential company there had. And brokerages, better certain is. math can But is economics can to in a to this. inconsistent split consistent a hundreds our standardize, the to believe explain that and better we much that's We a real get what if They with lot distribution and it like. or you higher whether of simplify complex really is to growth and the what agents bunch on think but of and average economics. our actually actually TBD the pricing make it value what That's both going still some success be a set drive bit lot to in integrated (XX:XX) looks recruiting they more to with plans of we has of There'll we than be we're get goal and do so today more be is clearer And got message, really to than more success more get kind we've it. outcome, leverage to little a recruiting way target. with had if splits

in behind and were at kind seemed then the marketing perhaps on least helpful. where Okay. two really you anything like going forward? quarter, might what in those just we relative items and And your lower to they costs of talk to just come your Can those were G&A look pretty and about

RFG of view the was least more the at marketing of Well, timing. point from

think that I the back bit will So, come in a quarter. third

other end head of In the the year year to significantly count costs, our compared ago. we the reduced terms and

and our As footprint. and office we would said, reduced we are restructuring we've

So Obviously, things major contributed fairly cost their two did those have reset base. on a Cartus that. to

the and the operating we're that expect normal quarter kind for So, of that second it's all see the happy of in our procedure to benefit from hitting on. And year. now to continue obviously

of I the it G&A, at levels $XXX ability some million like give I'm mean, that looking look like really XXXX. I in might mean, couple on kind any full next brackets So, stay these XXXX, of year what quarters? does for for at think, down guess, I to I

gave guidance flowing through we're line. the pleased really to with mean, obviously, I we – the we gave, but we cost don't savings bottom Yeah. the

was that, the one echo of comments. Yeah. I in things Anthony. my That

year to actually starting we of the we is examples. This some of stuff early things is you show those One is started the in off. to that one want that of pay the

And that Tony, so, Tony trend agree don't as we on guidance item. talked give line to But have that on obviously I we specific about. plan with to trajectory continue

Thank Okay. you.

Kim with ISI. Stephen is line Your Evercore the next question from of

Thanks guess technology. issue I first quarter. on I my the about in good and raised you or you question touches it appreciate job the question very much, guys. the

things in technologies inning the curious, leads, where think, You they that then, curious talk brands, motivations you you're I be new you rolling of gave in embracing brand-specific built I of the terms of available? niches are the you of a was be to intelligence an things platform. of startup launching I we Will in finding of two identify first will are manner? examples, new opportunities? think, what were and some – artificial – Realogy think terms these Notarize around actually any technology the as us about all, if out the And or I some was

Thank questions. Stephen. Great you,

I in So, size technology, is a Realogy any which did different we're that I actually area. around relative no overall, don't trying you to actually did innings in. one way think, the innings the this out franchisees to is the this each as the engaged else Realogy early have And vectors and business still that of other in industry the the of Realogy provides is there. that the also Realogy early in are whole some Realogy industries does. technology the to I Zap its is, these this more we which thing on other think franchisor one though in and early And scale do But technology in what provides quarter conversations industry I'm believe something to demonstrate as innings

stuff are out quarter and there the beta tested right products last in market example, now. put developed for as So talked I about we speak out we being some that we

and out to to here leverage our distribute then XXX,XXX scale. roll This some products we investments those agents are can that we've agents made quarter, we products got have to that for some places the

on innings about the explanatory predictive talk fast. data and a machine our I of didn't some found and actually productivity that really incredibly competitive data we and about, scale. to and a So know, kind it's nice predicting stuff, did isn't for recruiting we just information that is want our I advantage of XX What agent be we found variables kind we're focused moving X early non-Realogy actually important given of should and analysis agents you Realogy-only learning, which that most passionate with kind characteristics, this but we but data is, MLS using analytics agent of its I'm scale Realogy

So to we're kind the we're innings, of that stuff, machine to drive produce into in buying, in but insights these starting building, the of early on going some each areas learning we're actually market. using

Some brand at and company. things the some will level be done across be think done will the I things

I we company. of think you'll have across year. this few do more done see even But this stuff examples time, over the a

be But going to did Sotheby's reality there out XXX,XXX scale nice we're buy, really possible. leverage the we develop, much of think to part the have insights data most basically. virtual as will we to – as any get with agents, I augmented be out meant doing what something with listings cetera, of their that et be technology I and as thought build,

it So, I advantage a part get XX% we is think of that's of if market. to a with up come which we product, can or good our competitive the insight good

specific things. And though so let's do brand some that overall even there will be still

core actually do new got we've thing brands. segments technology, of or where determines these the I of not actually the potentially On some is that think new underserved open brands,

see be technology don't it presence sense new or have and because for decision trying work built So a one new think really going maybe different that support a need brands how with to of these how though of targeting. technology, actually a great. making segment as of of to we operating we're I kind that bar high makes now set if around challenging through But franchise to different the in model, you're most things brand customer physical support the different much to about terms the you'll any is – technology as

to say also like been Seems it that significant what to better so relates very like employing seems seems be clear standardizing the full a value were that fairly least model My to and comment explore to very a it's at helpful. ways or and that about data more like recruit wanted clear simplifying proposition agent a question Seemed just that than very by heard company was could financial move a your I I response and before. Great. I guess to analytics reasonable, should the provide use you an second transparent. That's a you projection change and model. to very bit. agent deeply something ingrained, pricing determine that

I'm some system allowed for as as begin particularly However, to there somewhat the most professionals, it going your that be perpetuate with place and was for be to must imagining long is in reasons why to agents. jarring existing and did, productive that changing it

kinds And implementation the perhaps alienating of a and you of platform, potential of a simplified balancing and is centralized this model effects say if make talk doing wondering folks on you you could that that for your so, in existing the terms the about how sort like that I that simplified program see more things the some change at was time. of seeing this that are worth you business

Yeah.

no in and just great mean not changes doesn't it question. great, evolve to thing there's – their with because the So was right now, the something doing And be look, companies history, past.

of of me get Let companies processing variation terms doing think very do start came that I NRT pricing. legacy – Herculean of single still we it many have all counted – a different there to together was somewhere in ways there on brokerages because a with just the dimension commission together amount kind that done that, mean, are kind of Realogy XXX different phenomenal kinds to if companies we between that time. today, number things never massive any including continually closer places, effort is together, many, of how even coming literally in and – of that in I Stephen, back And I of almost form and XXX was geographies number. with activities of to coming over was exists,

you're see the challenges got is just that that a improving point we're stuff with the going. incredibly pricing. the it's integrated marketing of we're materials challenging the actually can't thing versus And that proposition keep history, terms choices And us is that's our one headline just you should we haunts actually of for able because we of as communicating I can with much level value of our clearly time us like competitors, given to that in and variation have actually of if powerfully conversation including you'll way So, going legacy just terms in pricing kind where a – And really but a we their think most proposition some and they that longer the the part of I clear performance, think our us, pricing, communicate harder. branch fragmentation as of be it. pricing our hard in and the that you at value Google all-in

the recruit hopefully new help is and so drive agents. us to actually us agents And more new to change

data bit I and kind we of different deliver in testing talk to we're to less also succeed that But have Coast, you to and and that that but – doing like us of will during power But is the in when to how also quite today Sacramento about. know that actually those we you of early market, a to East existing differences we're testing benchmark can are be lot well, this, to is need function learned actually where move there. different, power different doing to the of learn what about confront far recruiting happens do you the these have I we existing today. doing learn each now, is each pure issues how it tests Now, competition. analytic-driven end spectrum of the it a to with on about And part we're the some agent see from is in likely deliver, reason more in doing from consistency do other a And of talked mentioned because experiments want going So, we the have agent around we right? right we've and what we growth. of this The results California is you markets have and going more productive going the most it we have against markets drive actually we're we're of we're than we agent. to we're of going market to do us from the actually other if the going

the to we're people today. recruit saying what is. to for the recruit talent the as will to mix going – more of try lot what or actually what people who people is agents up do is are And this much we A as power is today, they're it having designing really where so, on new of are end just to in change in it's to be

very Great. Okay. much. Thanks

Ryan question is line The the of from next & McKeveny with Associates. Zelman

Hi. Nice on the job Thanks, guys. quarter.

The margin first a on bit question the there. on NRT, I focus wanted EBITDA to

to expense maybe I'm there NRT pressures? you I'm and, out have the those kind you higher to where guess the year cost could a EBITDA about restructuring margin of there of margin you some trends just point continually the the consolidation Just is plus offset what Can seeing I a maybe offices related of some for can a any kind context efficiency head margin split help So, thinking you. actual an be assuming within reduction, see The a side about headwind, opportunity after of wondering, let's get factors and as a else say, called I'm of country. stabilize efforts that EBITDA the but lot and Thank of split, business lot to commission benefit in the outside things just kind of the declines? and that years forward. the and side. office across from that NRT the focused the on that's perspective commission I any obviously, around and we've topic is other going done over few been last count a of where such. you've talked know gains splits slightly

done can of change businesses. that look last and and office think operating we kind some the things may for I around We're question. others there. Yeah. have to the work physical different future. really our continuing blind work today, doing Look. like mentioned opportunities the of for are how call presence E-Trades have Schwabs the the to Great cover we to we're markets I but look, not the And And

of cost benefits and the the talked that Tony of restructuring some some And about that. did from come

with agree the most this of there don't trajectory change on to one, we change, opportunity should premise think the because think some I don't to But you to there. what base do whatever, better whether driving that our of of I The a – a I more do job having the like leverage I your will be we right? is in the much mislead much any bigger you question in So, want business. going think it I through biggest future, by sort driver say, job recruiting is is know, back driver do and it's of fixed-cost it office more leveraging of or a today our of do or recruiting and literally how how that is kind better two-thirds do we size success operating

it like And ways way change kinds those you, just office talked about. excite in that moves the recruiting do on more so, we of a at to our area like I But side. paired going consolidation and looking trajectory are in we in won't that's some success long-term that whereas alone with things that

down the You can powerful see more road. the combination being much

whole of guess you somewhat the And you helpful. and interrelated can that of to competition the in with for. interesting industry, products the about I concept think kind charge Very it. agents hear guess and Got tools it's I recruitment

any wondering just such need that given just some tradeoffs if I'm give you competitive a could think of there, you environment. around additional thoughts kind about So, to

and to companies they charge naysayer tech, to can are way. must with think, recruiting trying the their say, I agents would when additional other it be to do do expanding what anything tough

good gives you would there it thoughts what additional premiums the what for you them some of – kind sort of is that so is? of these guess tools? confidence of that's it charge nature are Just I Is it that can that the So, just any be helpful.

Ryan. question, great a That's Yeah.

remember, a right. our today, of things of amount huge are people in off, charging first industry ton a So for

kind value proposition has right. all-in of Our been pricing,

for But most split, a in we So kind lot things. charged predict of for agents, a used to live world we are of would lot where of I do everything. a their give being agents

point, goal can, as all we not more we're However, view, We're we our recruitment here's in – drive to changes competition believe. this value right. of to our proposition your and of growth, much is actually the Look, we the we want as actually that's have that of today have a reality in product best year-over-year good are you X% of agents. on set that to very one given stats our retention can. kind we and up the and we've kind We fact we compelling our think

feel me of of So give evidence in happening. actually where some two we're recruiting charging stuff. fact, really in about kinds you have And of But getting the (XX:XX) actual we this. good terms let things, scenarios what's we for

for out exceptional is, and and charge normal proposition, for if they there product that we a agents of it's and beyond above to So our just and it one put think use will value optional want is we kind it value, it go creates it. because

that and out. rates it these rolled a agents professional places. been this this We put above that It's spots the have they and HD, an from video, It's Denver of do a it. Concierge. we've that pay do we for in product et and they media the We Ryan, each basically stuff, We listing, for and kind professional product, called And Coldwell Banker kind this NRT and smaller all magazines copywriting. social beyond and can photography, cetera. right pay newspapers do of support one fee boosted have a a have online. themselves, it some those listing, placements, this They and want them in just We we've thing agent this and to white-glove on per produce marketing. purchase offering, of our on all us gives service aerial, good and markets if Realogy can for from is started few California other right? listing don't Listing so, but thing marketing targeted charge now. And And incredibly take where wide in and

there's another it, and of product But not to put there's could to use XX,XXX Listing value, doing people of be we're an say, for the it. of to thing we going with There's really subsets going look, actually don't Concierge. going – want charge good it's we example could into results. like our a into where me but value us. want we'll to just it's core want we're out that agents And market, to some for that charge to to who there that it. expensive we may that's going enough world scenario we're hire be and others that this, fees retention. small want again the for charge because may we So, of the put much there, dynamic, we it value put to another agents produce proposition, we'll It's those drive to doing to and in going best getting universe If because It's the products probably which high to all-in reason more that product player people of to kind we've those actually offer, but out us cost in is, a we today's to of if can which the us X,XXX it, drive Ryan, X,XXX are do to agents lets product back going gets that agent only of plus be which feasible or want that provide Imagine to those cover so our expand have for best XX,XXX-ish to more minus options, like XX,XXX it is craves, that NRT. XX,XXX being the in not an if value better pricing recruiting agents, don't. other to world proposition use, got

but bit to help things offer this still not – we we helpful a I for can fees to it offer, do lot paying our It's of to products, to into wanted to if So, expand that optional you that this, to it. but hopefully charging fact, used in to us. give fees, sense, I to be that we're are But real and they're that value thinking that very agents, about two can offer, the going drive obviously a all-in are different of universe add these tell why opt continue of don't proposition recruiting. the how agents also it's those there's in value agents can we're helps ways going think we you but

helpful. so Yes. you very much. That's Thank

Inc. Stephens, is question the John with Your next Campbell from of line

Congrats Hey, guys. the morning. Good on quarter.

guys, the You talked more sounds launch an of think of of to be planned organic And underway. M&A? like to also but that's one encouraging But include so, changes that if hear. a I the how there? lot appetite definitely said could It about at That's could RFG some brand. with big you, least back your effort,

Yeah.

the all You a assume be path. company going such M&A long in – focused on should on organic. brokerage doing there's it's just We're great area. of I that so at come the history to really lot very that, – not a and far don't we've

real this of think, what able point, brand the I NRT trying organic and ability focus to will when we you the we a with in RFG. really off organically a at And feel there's we've on share least we're at the get drive new like than growth to good with start equity plan the it, the one kind you and and one, got to both that hopefully see and brand. maybe more for to

you shouldn't as be there'll that. So, part M&A of assume

the couple occupancy Okay. are or on guys guess mid-XX% ago. a quarters at rate facility And so you I then cost, of the

guys, several to commitments could you, there, what through First, know all years late? road? And that long-term at like have down work second, of that the but I has moved then look a few

the in it the agents That capture second of agents XX second to is of office the Well, of XXXX, quarter office. John, way one XXXX. that, XX to for sort from sort went the in went per quarter

using leases streamline real offices time that's goes So, Time on. the and term that that's much continuing short – and of in much our I that But friend effort to estate our we're efforts shorter our of goal a is more the the efficiently become costs. obviously long-term one. some that term as indicates think

So, of to as time roll continues progresses. number the opportunities

being pretty just we're continually aggressive something it's and So, focused on on.

Okay. Great. guys. Thanks,

Your of next line Bouley Barclays. with the is from Matt question

questions. Hi. Thanks my for taking

which lower or operating driver was like the as employee to is in that question it benefit the this lower on big an that a up NRT increase, following specifically, cost quarter did persist accruals serve so a split incentive does one-time here? the offset of Just looked cost specifically

we about about head payment, had half quarter, employee Yeah. mean head lower them incentive shareholders the flexible – and lower incentive I permanent payments. payment of the the of by about of million we But result that half costs were during were on count, what incentive count I certainly year payments. benefits in but the it one, based lower set future, or incentive this having guess, is goals $XX

some or using to you higher Thank NRT When commentary choppiness the splits look data earlier for or you've just And data on you Understood. whether growth. the markets, drive sides at national secondly, slowdown it's local then that. seen the Okay. growth. around

environment, at that the depend this why or seeing do step-up of this this in growth? is you. the if does cycle, in of right type is So that you higher strategy still a the Thank investing in backdrop still strategy point splits in one on market market the think

Yeah.

Matt, So for thanks your question.

me some how that sort more not had trying number it's we And of split And multiple say the have kind our today, split hopefully all-in first, lack kind to about both of and compared so, like growth and lot kind of kind we issue out going industry hard again So on moving quarters. and is dynamics get to simplify market the our out. can of standardize we're not driven-ness making recruiting work will But my more pricing, competitors solve someone – intention. and kind a our the I that, our to up, really of again, trying based makes our the more what because higher these of else's growth. apologize I we're comes driving I'm Again, less we've the pressure in commission it inconsistency changes a in either issue success with to dynamics a higher us. what of that of think level economics. right That sort about splits not explain that think hard or and split I the more split value all-in and can you the target makes the the for if proposition, plans it heard pricing are lot imply that have to And aren't compare to be drive said actually more to actually data complexity or The splits any with And we about which to any growth. is is be plans was lower. split is get integrated then the of

what that's I'm going So, here. for

longer whatever despite the quarters the second million. X.X next positive this added households in it to higher a than that game. addressable That growing And In to what's in market doing. like market minus well I this much just the I'd was more In the grow demographics continue Matt, we're is for seems of XXXX, is million tip it much to year minus in we it market Yeah. minus X.X compelling was in two quarter. XXXX, business. we positioned. there still do and a are million. be just view was on who to a own share have million. coming happening housing long-term XX the We're add, XX profitable want and want home iceberg what's billion are mean, X.X it to go XXX of A In are you in And lot in were share. XXXX, very the And million. market. a was we the $XX ago, added. million going market this

very positive. outlook is So, the

both details. you the Thank Okay. for

Matt. you, Thank

of question Deleeuw the final from Your is Jason line Piper. with

the expand And strategy? strategy. you taking this strategic can wondering do of think progress can terms It margins results, new a But and might be second help I should be in early a track should solid tracking you of make little that us for thanks but base quarter the still And this direction split strategy? question. margins of the it's strategic on looking and some to I'm think is some on progress commission good we the of the And growth? EBITDA morning Good this, expand, firm to and the changes. there for see how can the of anything investors EBITDA you gives

Sure. for different Jason. question. things, the A couple Thanks

expect number kind the given the literally out. doing speak, To have this we as in is off, going two the four many markets quarter on East. splits, last year guidance naturally so to to our to So, Obviously, kind time more of we're of we've strategic changes, out in or this whole California, of over rolled we going this look, you with first how we move testing same thing. in we're so in have play – we're more

of out with commission it's out now in and I more these So, to be new this it's working the more second about this where be you of and I'll is or is more I'd earnings some East California 'the even put the I'm an hear, though saw and obviously, direction Coast the consistency now to guidance basically, price you. on given upward of things, out. can't think with these been Concierge we've put that are we're And Concierge that me early, brand, reason predict quarter calls, there – launching do details tell the stay really you there's to and the going three now in pressure, because we've of and have out be Even I other in doing you But to competitors we're some malpractice Listing you to direction it the is XXXX, hopefully Denver, it'd call, the telling to the calls being going our some on gone helpful got reason for things though increases. Listing of moderation year, what in we this kind will things standardized – then, – calls of at we tell this year's hopefully there of lets I've that in you the to on of I one that for other updating you in year-over-year second can't thing. all, you numbers you share past and in for – now California, we're part the consistent in of just tell how that is doing hopefully or the guys trying pricing this part we've actually the us like the stuff the is do future

– takes of just time (XX:XX) stuff the get But roll to it here; core some the right. so stuff and were verbal we then get EBITDA you I knew So wanted even it implemented. XXXX do if to going around look, to you'll trajectory, the in for I a to calendar tell was from have wait standpoint, strategically because focus where you days, our early financial of the our going, is some that you're to direction

at as most that's first are we want need but We've for And that. focused given on guidance on progress on management you the moment. rest make focused beyond, of on the team pretty to different guidance this because and growth year. a I'd than quarter year was But last so EBITDA going into you we the we the you XXXX that. on want the what the Obviously, and most year, gave

the helpful. be expected and very the to NRT, to That's believe X% you. in second the X% – X% X% growth was quarter. growth Thank was volume for the third And then in quarter I

And acceleration on the in so, of they've trends some there. just we of softer volume side. an markets for got key And NRT, been the some seeing your

Is us color help any expected volume the efforts there. in what's are price-driven? driving that growth? recruitment you So, mostly that of acceleration you helping? give far us Is kind NRT home just it so Just it could can understand

in July. our of thing driver the gave guidance what biggest activity Sure. biggest – is I'd the as open that say was we

– well So our done seen that – and yet. it's completely not activity then we've closed that as

into us really guidance So, give months. two clearly the next the good opens

think, and sites the that market of So, you that's we – success terms consideration of fruit. out so had we've recruiting that's the did, decision. obviously I bearing was our year. due the we've recruiting point had, to the it's in growth the targeted outperformed And major that's driver target into impact this took We as way recruiting, on

what price and by impacted New seen So, seen California have definitely price, what we we and in is City in in York markets. have other

closes the by a all really, So, of it's opens but and data-driven anyway, had it's we that, the combination in July.

Great. Thank much. you very

Are There remarks? closing are there no questions. any further

to on No. today call coming us We and talking over we the the you. thank to you look for joining Thank forward you quarter.

today's This concludes earnings call.

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