Realogy (RLGY) 30 Jul 202020 Q2 Earnings call transcript

Good afternoon, and welcome to the Realogy Holdings Corp.

Second Quarter 2020 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’d like to turn the conference over to Realogy’s Senior Vice President, Alicia Swift. Alicia. ahead, go Please

Good conference welcome call. Chris. quarter Realogy’s XXXX earnings afternoon, you, to and second Thank

Officer, On Realogy’s Ryan Financial CEO call and Simonelli. the with President, Schneider; me and today are Charlotte Chief

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

many and projections statements and to inherently which statements. other control uncertainties the are those contingencies, to we expectations any competitive statements Forward-looking with the significant of and forward-looking results Actual expressed respect materially subject crisis. may of related including from beyond implied are or to the economic, management, COVID-XX differ ongoing make in

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

the to business operations. continued be second reported the discontinued for quarter relocation Lastly, as XXXX, of

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

their also especially by and sell takeaways. to inclusion, and affiliated all and this us better thank understand about all challenges helped come a brief housing the call support employees last for will like you us I healthy. challenges today, joining July. to helping safely implement hard discussion people us in better agents franchisees markets And move summary what Then talk COVID these will unique early Charlotte I to the sharing for of for that their for quarter. remarks and all our experiences want and start results solutions today. company diversity you joining And thanks I of dialogue key of employees, dedication who help afternoon. back seeing customers. over face different created to overview agents in we’re finally, Today’s local and as during employees on quicker their start times. ones buy of and want to work, will from loved customers openness challenging you I their houses shared thoughtful I for agents And the and safe that Realogy a Thank to thanking remain openness those including with for to the be and structured our turn your financials. hope our market,

of strategic the even operating I’m continuing QX turbulent the in our incredibly So million a to demonstrated COVID progress depths time. strong continued during delivering EBITDA and QX, share excited results our We of crisis. in $XXX performance this from operations

operating three Our by in driven the was performance things. EBITDA quarter

April across and dramatically brokerage our fell and transaction markedly businesses both in volume franchise First, closed but owned in June. May, improve

by I volume in improvement which July, continued in June we open the the July, are are seen very in and share We with have transaction we transaction strong volume call. closed excited you seeing new will particularly later and

a with XXXX. quarter. EBITDA This year, in the our strategic we integration our mortgage especially quarter, help operating in reductions, strategic the good and with reduction results. in cost very permanent quarter. strong combined business drive quarter’s expanding progress with progress business drive And our we the We substantial you past strong savings in second strategic along we shared our and the delivered coverage brokerage had delivery, we the both our last Second, obviously in trends, And this on with temporary in to call business. implemented third, continue greater market agenda refinancing our and the made invest

expansion We mortgage title first, in So innovations staging, virtual virtual houses, the are closings. delivering virtual and We focus technology our of delivered capabilities substantial in months, quarter. four virtual past our tours, closings, the virtual results. virtual adoption acceleration had products our open real of

adoption estate volume crisis. capabilities, And transaction continue increased and simplify agents marketing to to future. safely real more in excited we generation lead products the agents combination other deliver also help strong and virtual drive are to the successfully and products We The of helped and do this deals. during virtualize

grew and than quartile Second, a X% overshadowed ago. two the pretty retention rational year a from being agent environment bit. year-over-year much improved QX we our agents The by but of continued QX of brokerage top XXXX more was COVID, competitive trend

growth our strategic to initiatives. continue we other Third, expand

closely in call. watching growing $XXX COVID And to and More market, about debt and virtual the franchise what in refinance the are forward opportunity we’re the seeing to and of well the us marketing uncertainty. in retired serve are our seeing we for feel improving like XXXX June macro thoughts more like in attractive pace an lead our future, our increasing improving we for on franchise. We behavior of forth, our generation new we notes, especially in are to sales our franchisees at are in we seeing been But are our during the maturity look given resiliency really position our our trajectory. we what efforts, of this market even and July. I new volumes and later we high-quality on and will demonstrated broadly, consumer of seize detail our sheet. manner, sales, sharing we times. million And future And we program. the the able about We the We’ve unsecured We balance debt franchise debt tough like price. performance profile term AARP all housing Corcoran Putting the onboarding the together, do which COVID. lengthening good the purely future. in a

So to discuss I to will financials. Charlotte the briefly now turn over

Ryan. Good afternoon, you, Thank everyone.

getting say, uncertain pleased on effectively our like strategic has business stronger that I I’m into would swift control. our Before financial new and working and the Realogy under both to as we managed other the Amid of time, of more as focused side. agile very our our become this and adapted ways has Realogy, well efficient emerging areas remained the the on by delivering performance, across on actions priorities. We took progress

the was versus billion, closed revenue transaction onto QX quarter down lower due second performance. to Now XX% $X.X prior year volume.

prior new were of midst open in this volume crisis While in and expected, in operating the the in of management, was the latter we retention million. the in pleased strong driven primarily and quarter. rebounding, QX basis points in year-over-year Despite quarter a July. with exceptional part the on transaction by margin agent GRA decline decline, have delivery splits the operating shift now at commission a year, commissions closed versus volume we decline closed volume our over the cost transaction mixed a $XX primarily the management. $XXX QX benefited efforts pressure later year-over-year performance EBITDA from volume from JV the the XX XXX from Operating improving million level the with EBITDA cost driven performing months higher was The transaction mortgage increase year-over-year and upward to focus flat agents and by We was seen down from last held higher Realogy in strong split. and especially continuing by quarter. was operations

of the We second expect continue this to pressure in half XXXX.

over contributed and This was strong $XX the of progress growing EBITDA. to operating million loan JV coverage, capture enabled business. in service result made us the improving we the past officers mortgage which GRA more combination year, expanding geographic strategic quality Our

and We financials. and a has We which costs This a been the boom. fruition also in to cost power deliver, advantage, we mortgage Collectively, with executed declined and the of a along quarter reallocated we reduced benefited which $XX refinance attractive spend. strategic permanent ancillary we very driving operating really to our reductions, successfully is marketing The demonstrates to to action businesses, QX. continued liked hard million realized and contributed expenses quarter. temporary in the come and the the from G&A QX environment, worked

transaction savings the will we the of Given million the many pulled temporary improved third anticipate volume, of cost $XX that are we in We back saying, have temporary remain actions. cost quarter. approximately the

lifted also cost temporary expect actions by QX. nearly We will all be

we to encouraged permanently Finally, we using on early lower cost, we ways our identify but findings. early we for give XXXX, numbers still are this do, and Realogy. have the from our crisis It’s overall to learnings can cost work to you base across are by too

$XX flow operations, by the use to cash $XX operations expect annual Just million of quarter including to and example, one million million of million, capital you $XXX facility. the drew a by cash our working generated inclusive at of free revolver we to million, We securitization free in in lease borrowings with $XX ended from continuing give COVID of driven was administrative expense. proactively we onset discontinued cash, $XXX down we flow as saw reduce facilities

eliminating lien supporting executed balance deleveraging. We sheet committed we June, also while have our million and XXXX, liquidity. our $XXX term thereby overhang. profile with notes been lengthened the transaction near XXXX maturing The notes our second remain in to offering early proactive In oversubscribed an maturity

X.X X.XX compliance net within total quarter. of secured And times. ratio leverage as Our our financial times the leverage ratio XXXX, the covenant senior June XX, well with in was second was

secured minimal for our to Finally, cost gradual X.XX pricing. week, quarters, with times original the ratio, in senior level the mid upfront ease change to with by XXXX. financial no commencing agreement QX X.X in amended return covenant leverage a This XXXX accomplished a for last to was credit we four times

pleased risk with well our show, we original we proactive successfully and our Despite remain quarter. measure expect four the next operating compliance managed volume but eight As to ensure our for QX EBITDA am costs I this tail Overall, very related in in quarters. cash to took covenant, in the in QX. with flow free performance declines, as to and are insurance delivery results COVID

to discuss strategic continued turn We quarter during back continued what to seeing across we to more call key priorities Ryan the will business. momentum. the I are now ensure broadly the delivering also

What want in Charlotte. we’re in expect you, what tell you to and future. the we the I world is do what seeing now Thank

let So start me our with numbers.

the transaction the between franchise XX% the And that X%. QX, quarter, same XX%. volume difference in with in down XX%. last is transaction and transaction brokerage Franchise main referenced closed variation quarter, is closed with closed quarter. Realogy’s geographic So volume XX% down transaction down in the only Brokerage volume volume is down June June was down numbers closed our we

QX, For example, City New XX%. transaction was closed York in than volume down more

fewer dollar to the some more price by highest the in closed delta e.g. heavily through is XXXX. where data July, excuse is in homes based Now of most trends me, plus up our versus preliminary transaction there driven volume improve about brokerage closed QX up just volume XX% brokerage the But since volume, transaction were XXXX on of business closed is represent. X% ranges, transactions million continue price, and July is franchise about versus

new versus And which open in up the the growth. delta on of the preliminary is trend volume improving in again, future XX% interesting was remember July, side, to happening with improve More data both is In brokerage. And the from is most getting by on strong franchise what’s and the very volume with was And price. driven X% price. volume, variation. up based the franchise brokerage the approximately showing improvement volume of XX% and brokerage is is up versus driven geographic both the closed most side, franchise signed. units XXXX, for Open open June, by On contracts transaction up volume open this continues XX% through and XXXX. transaction

So our across and franchise such both brokerage businesses. strong, driving growth open volume what’s

to and pay societal at when by second inventory price April both March, is seeing there’s more before. especially all transactions shift COVID demand homes. pent-up we from people third, rates up people tenured a definitely and in inventory the lows. and are XX% price. depth May. crisis. that more we at say first, was a all And really massive let’s low every there’s are the bands for decline the historic already down saw year driving at incredibly here, or they And off compared Today, because buy inventory mortgage more have more And then in to we Realogy, not of seeing inventory incremental no band finally, So the the inventory doubt, price down across But that least industry ago and something the late seen some helping drop leaders low fact of driven our willing is housing is most house are

geographies, We are living in seeing driving higher increased demand more prices. transactions multiple for suburban and

increased putting space, ability seeing greater in outdoor a a markets within are people’s work. virtual e.g. changing, rotation are given We in needs the suburban e.g. geography needs, e.g. different home to office on as live premium homes

consumers to when seeing purchases. the destinations agents mentioned, we consumers consumer tax shifts, we I data well-off home and And and our large seeing ongoing numbers we survey We’re the weather of – transaction four just attractive accelerated. look accelerate the and get flights brands. we second both we’re across see anecdotes frankly, when across And already these

uncertainty. in will we’re new away volume here and trends is how either, But changes was is In and like we’re long March, we’re shouldn’t hard and COVID is strong. the growth also by what seeing long excited excitement, right? know right? the seeing open volume much and don’t how last. And this with open The So July in There’s macro June to predict, And you running not and continue behavior unprecedented. like in May seeing will June just really demand pent-up we’re we consumer drop we incredibly The are unprecedented. increase volume, April and in right? our July, too

uncertainty, that, on sharing today focused and with is very of So what you. are happening we actually because that

actually not far extrapolating are the too We into future.

on continuing though tremendous quarter, excited operating with with too strong amount was in moved execute volume wrapping demonstrated the the unprecedented So unprecedented are uncertainty in results even EBITDA began there very start drop in we an of QX up, We look, million and the operations. We challenges of from industry. $XXX a at in rapidly our to crisis. And cost.

and success We technology and even how expansion, drive our we’ve launched to We strategic continue balance mortgage. to strengthened and this corporate position and we especially operate growth, re-imagine business in our our agent all the with delivery, like Putting very really efforts the June sheet July. and re-imagine open we’re the seeing for coupled improving volumes together, company. We strong future. like

today. So Charlotte and I your taking look forward questions to

of Our question KBW. from comes with Tommy first line Instructions] McJoynt [Operator the

is now Your line open.

appreciate and you. trends. Good the I evening, June guys. Thank metrics on July

down all that how you what do transaction size like you think up, will versus for squaring look have XQ expectations volumes Now in and by that would price? break

guidance I June our the month on July date. we’re for the for of month month both giving look, just month. of you, whole volume And but gave Well, XQ the July open transaction gave in to volume basically most you I and closed not the volume, actual

those look, XX takes turn numbers. around a to typically XX volume. there close volume open wide range Now to days And into is

Some closing deals day. one

Some months. take six

uncertainty closings. restriction, cancellation we you here a there’s in bit. – a little can they we’ve extra delay bit sometimes So And them. then with problem, big a if because a can there’s And did back a see range around wide March got spike COVID

are So the But that could things. XX-plus look, percent. kind of always change up opens

world’s week and And give do those actual let trends. numbers it’s own things distributions. the give be your in what macro. future. And we to own what can’t how we of up what detail so you and think as of giving say can we the would much will your the helpful decide as through on most September you love going last and But much prediction we COVID assumptions We happen go. really because think market that you and thing as the could thought we’re you We don’t the again, about and you the helpful boy, effectively our as seeing with and math to exactly applies the August love trends you to for

of through pieces there’s the Could Obviously, and Okay. this and you had in less termination listing few spend Got a an bottom switching thank pieces gears, just segments marketing line? impact those And that contracts. moving franchise have business kind the you. walk and the made you some moving fee it, announced quarter.

Yes.

have franchise expenses. So of side marketing did the lower on things, we

a the had contribution marketing also lower We brand fund. into

correlated recognize revenue, And absence of more absence so actually also are spend. that gets in of basically the the P&L the those We it as but the the spent.

cost for So absence and sort neutral. Q, the side in the that’s P&L the savings, a on and There cost the P&L. be the impacts expense, franchise through then employees EBITDA think, available we when more And of the pro plowed across additional an savings more But were information minor I of was the on bigger on the the business. brand of publish marketing our basis, of some that. That’s in the you there’ll the marketing fund impacts we then rata number temporary have. that based driver

Thank it. Got you.

our Thank next from question with Anthony Paolone of the you. And JPMorgan. line comes

Your line open. now is

Any as my and question market, for bring compared like that few competitive Does things were change seems the than good months we a that a different heated color does impacting in what you about few competition do think to that the think maybe things maybe were afternoon. ago, ends bit landscape stronger be which or that you I guess you little is, great. and ago. here like working splits? what there some months back that’d Thank way? first housing How a

times has XXXX of XXXX the down less. just with of not kind really markets cases, in Yes, some been strength. parts environment, at housing the I flatten, even housing were bluntly correlated competitive Look, draw and with the competitive environment and incredible. market

of like in the market. much there. before, tough still is, there year The tough rational the competition on to there. out is the part more thing felt more competitive kind can splits people like the a QX, bigger up way like the of out And tables. we’re probably The for out environment that happy their volume remember – stronger QX, We’re work

And won’t people the as housing you as from people but have to more comes have a going then we so especially I that And, pay talked kind volume, back, the agents bulk do. much like been have into do rather think the stronger move don’t pay hypothesis and volume the much in that you volume COVID there years. the Charlotte as don’t business move Maybe because as may people about, up stronger of to higher people higher that up look, of But kind the we’d splits, the tables end coming get reverse. tables. then split

with driven So okay have market just that. there the really But environments competitive And think not the the about what’s we is, relationship correlated. don’t But have splits environment. been ever volume really is the I pure with strengthened and before. competitive that that we’re talked and

mortgage Any the you and title really quite all just, share. the it in sounded senses also, strong, of was did just which sheer market like then but maybe business, to gained much And it. amount how Got is well. refinancing

guess, venture I joint the doing was it $XX like a rate versus million guaranteed particularly ago. year like so And something million $X

had If of last would of you year what to been as trying think about the dissect share, we future those this market level just these?

refi on it kind is, our of new we of because we quality up right, we started worked falling which stuff, number gotten team’s the that side. But rip funny we lost were boy, we year of officers off of harder the the guaranteed little building to hard. coverage off years bit the the were rate But the thing let the expanded on first look, started title ago of better. mortgage couple position We’ve not as me expanded really before. with over a something couple officers this it’s We’ve and apart geographic last our of just loan us and, greatest the loan apart. substantially, been had story, you all building tell money it that a It’s and years,

our excuse we this Our our much integrate brokerage lot it into our own. the taken me, improve owned last through capture business, And from mortgage here. that or all brokerage have year’s effectively to big And would business has made chunk better through work business to brokerage business. and done that comes a a clearly of definitely on of just its the was bigger thing how then number there market

about get ancillary the it. So from really the the of we to we about, services we’re in shows someday and it it financials. better power but money we decimal talking haven’t actually now you’re liked points trajectory. of this ripped ancillary was of apart And liked the services, And to a talk lot quarter our make doing but one examples right people of they’ll this

one sneak more in? I Can Okay.

Sure.

in and about through high there thoughts how one extreme downs. because bridge a of So the Any people I’m curious been that and a you unemployment how a lot to to that’s thing have organization on showing that be ups seems just have a recovery rate bit market be? housing and think sustainable trying that just here stalling to might little maybe with trends strong about pretty very

day the it as our Even speed have speed is one at had help No in ever I’ve seen we’ve here about Like to March, get we April, June, people other We’ve of were our team to company know. seen that And going happened back especially, happened taking great been to, don’t closings ever that’s but speech. of ever talked our talking about talking the all and were the busiest in comeback the years, title from since a has few closing talked no I’ve of done. of to we you No July. parts here the only tomorrow. we’re literally to if unprecedented. has the the late veterans, has recession, one that been go we seen. look, one one no I We Realogy, this drop

economy There’s economist thankfully that never GDP we’re environment the unique things to has this by whenever just training, very numbers And hard but And so way in. practice or seem it’s yesterday today, like down or now down, in like and bunch just square up. way a were an the we’re unprecedented thing. in income right we’re personal of the numbers

I answer just is down that that You’ve what And road. have on the then hurt we’re hit you, I just what seeing market. but another in we’re one. also about what actual that an But for the think I momentum answer economy company But there’s four that our like don’t has. our there question, and right is big an squares this contradictions circle market housing macro or like on now. data the the don’t kind your worried have the three other of could out do in more just

enough. Thank you. Fair Okay.

Thank of you. our Trent comes question And next Carter Stephens. the with from line

line Your open. is

Hey guys, thanks my for taking question.

stricter getting are they banks who to. So lend on

hearing credit kick of any a with And housing it kind in a So that way buyers to Do slow down are guys that get tightening because are through, expect falling transactions any? can’t mortgage? the anecdotally, you is. you about

last not up not it going the could how would the seeing in team or same. ago, even and uncertainty of We that there market I my But got time the I topic remember. was our months that factors they’re has a from could that May. but headwind – noise that market anecdote things last I that slows out down mortgage have mentioned are the and the yet. that few our trends bit we of you’ve to have But and risk be right bit of of list and run, not a be harder to tightening people consumer that a be long couple about put things some jumbo some now. market the heard here. housing. was of We COVID we April, other if Like just this party question, back of yet. a macro noise we’re one than that the at knowing seeing in playing me, come getting There that jumbo got a bit on was don’t when the mortgages, the call, a not in not other We’ve of headwind may listed months. for point business But seen jumbo a in in And even the

a expected savings? of Ryan. flight how I’m Thanks, one about kind half the And – this is net expected what some the year? you reduction. guys of much to planning the items? cost reinvest back Charlotte, basically the me is remind cost think saves. Can you Got saves you can at we kind So And on expend getting it. is, of the are more gross, in of should

Yes.

So how you think evenly, is in million $XX about as million year. quarter buckets, the pretty about, should $XX it two phased talked throughout the to is the we by the that which first

had in And And permanent a million the are $XXX next already those to had QX. cost So cost $XX to reductions down announced. the we drops then from that delivered million in then in temporary million $XX we save, that we QX. and QX, nothing to

have But there’s so do there’s going litigation that but the We now, other business, slightly on. minor. spend back higher not direct it’s a hit correlation. costs back, relatively it’s some right business. reinvesting there’s always as the far in other As Like things

taking you Okay. Got it. Thanks guys. my I appreciate questions.

Barclays. Matthew question from you. Thank of with the And comes line next Bouley

Your line open. is

doing is Thanks questions. Hope the for afternoon. well. taking everyone Good

those perhaps there at markets level what other versus, did some were degree So of some trends all accelerating in we’re Maybe and be that trying in you I figure markets accelerated? if figure hit under business you same looks of one the what’s like the through geographies little, What’s the to to you July transactions, what open of up or talk know the recovery what’s How down a brokerage mentioned lockdowns, of those with XX% mentioned, XX% pushed Thank being of hardest pent-up. there, that New trying and cetera. out could York point. that it’d Ryan, markets those the sustainable out so and et versus out City helpful have as to you. kind did versus some

Yes, sure. question. That’s a great

me some kind give going volume, July. of was and detail. business XX% talk to the plus just you brokerage through open me let Let about which only I’m focus on

just given toughest, anymore, York it��s and the XX% July. XX% at challenges So not It’s far there. XX% negative still City the look, is look substantially you to but It’s negative. negative degree New when of lockdown still pretty still, by

us The tough, up which very and situations of in Florida even really XX%, that’s May, kind XX%. other XX%, is is month negative June through But above up one that like places in first July a was good Arizona were Whereas, the was from was for pretty after Texas the and XX%. with way breakeven. terms plus lot June COVID California there, of July of big decline. was open in volume good

New destination up suburbs more than Jersey is one of is XX%. those

up New XX%. England is more than

New side. we’re so that like of suburban local thing, The And really, the kind geographies, have and and that April, fire, like, be a would fire, of to the in New includes acceleration vacation on are were But right? still did overall, a the about. are New effect, so but good, tough, May the New improving. is York is maybe lot better England through time, like in talk and things Florida, and And on kind also are those average. attractive looking consumer Jersey obviously really Connecticut Texas, the you than of pretty New out closely average. home watching stronger call England but again, it, Jersey the it that below Florida the tax California, like levels. it’s on ones pretty the weather which I And is continued that then at

direction regional of a numbers the So same that’s and franchises of some lot and ballpark, a lead seeing but different, little the the challenges, of the but coming side regional on is to strengths, local are the the some things there’s bit the of same. often to we’re brokerage a color what little in together

time mix be And That’s term longer and a obviously not it. in drivers helpful, there’s was for. bit normalize I degree a kind the the of back point. on very to the the I gave question is as going And little step the just up had side, going not the second may actually of sounded exactly, some however may – or while, that. we’re some normalized in a Got the well, really, from looking to splits which starting there, go here. you. like more bit near we market around XX% here. color and in XX% then what is for now, if want define from And over question It or is retention so then term quarter a splits could that a a which seems to or year first consecutive structural to for Thank the of

the Thank question. for Yes. you

And I of here. think And that we part as we’re by rest day far by is for COVID. day will the throughout driven it year. the continue think this definitely as that of of part taking QX, drivers

as not it next far We year how splits. right year, for As evolves we’re now. wait to see giving commission guidance need to next on

like of As unwind all we that that’s think too. to I that, see something not but we’d crisis, sort from guide you at unwinding, the far point as as we this would

Understood. Okay. both. you Thank

you. comes our Evercore line ISI. from Kim question next Thank And the with Stephen of

open. line Your now is

commissions were a can impact in that could. lost we thought push might then I the Did ask couple business, that with brokerage Charlotte, down. or to Exciting actually number We which USAA guys. up make the mentioned brokerage year-over-year, that XQ? savings times. just commissions was lot a was XQ affinity start was actual not? range QX. you wanting the What encouraging. a to of those. And Wanted sure I questions if in for Thanks the clarifying temporary Yes.

Sure. Yes.

range at So were we definitely higher end you. that the gave we the of

a range So QX. the you in end perspective cost the savings temporary from higher use can of

As increase those commission because a splits. to of because a far year-over-year, at it’s an lower led… as USAA the high-quality transactions split commission negative actually goes, came It’s

I’m I commission rate. actual the sorry, Charlotte. meant

you… are what Sorry,

the actual commission. brokerage I meant

average rate? the commission mean broker You

Correct?

up actually a quarter few… the in was ABCR The

Right.

it. were actually asking but you’re No, that up, if that’s… drove yes, So we

that I’m asking was affinity business the asking actually… what in whether are just it had to not the – had the whether lingering I impact any guess, I’m this USAA quarter USAA its there – or impact related USAA affinity relationship some business lost – the or whether

splits. nonexistent have was were that not have – to see yes, an we in would an paid transactions commissions, going in we that in which That’s business, a because have the but the the that where impact this the weighted lower the you’re did higher it impact increase to quarter, It quarter. did USAA ones on an did quarter, impact commission was

That’s Okay. Got it. what I needed.

that some margins Okay. had there, lost was you the I relationship. listing And you franchise – business thinking a then fee the

like, XQ Did couldn’t I impact, into you referring actually of until be the QX. that to. Did I thinking an – it. to would you accelerated not the like I was know XXXX? actually impact going that got were we it impact That’s that think it really in going even have one because that think hit I’m XQ, it initially see thought was to

There exactly. so been impact quarter. it in was And realized – QX. the was in it it an Yes, did has get terminated,

Right.

is sort not up whether lastly, decided that. the when tied survey it’s demand sense when that that. home who’ve margins you’re curious like might whatever, actually out. your secular seeing the their figure looking key which I’m is include you’re I this a Great. to to of pent I hit forces, pent done has asking want right, the demand Yes. question, – this people aftermath. start you’re it’s to think when So purchase latter. then just or as or talking actually them But you I you’ve whether because or know we action just for And process, to they up been the Ryan, try The we’re in whether you or customers, give COVID created about some to

you Are So question? asked from you have getting sense any that that?

demand upward kind may is, it’s of the price who run new I and franchisee inventory on. getting The are it even it’s what and question benefit, possibly I to new volume already was it agent the much And And volume we’re right? go long the clearly like than consumer there. May up in stuff a for anecdotes, in get, The on to survey July the I there’s know you thing, of lot how lot pent do example, that you real decision, that is the because from and for all to strength. think kind out inventory ended changes look when of decisions of inventory anecdotes I open biggest all Hence there’s people of pretty knows. – June, but the kind July a not at big just demand, months pent going get out, demand And the that’s up is think more coming kind like with we out someday. I secular of market. have that it, run going more there’s and made kind sense run not The because one June the listings, and time long price a is for

that some purchases, And accelerating do ends isn’t there’s some property. are have – of purchase to view, natural If their in to of on of the still home scheme second a in – people only my them, which going right? one you’re second those big things,

big kind the people could kind is at of those kind So, to associated the things, run again, we’re the the the And shift small volume markets, some interesting just right, too of numbers a here, a into secular accidents long time. and that a we’re do the that’s acceleration. know ones that suburban weeks of the early, those unprecedented actually it within with for also of some is answer are secular rush the going both on living think trend or The that more go with looking but to to one that’s out. uncertainty really them, of to because very of to I group seven of, big suburban rotation a big – yet,

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here I low probably awhile the that’s with think favorable. for rates very parts us and

we’ve in probably we’re but also thoughts, why this thinking my future. are gone call detail do more about that’s and those how we than So usually the

If that business thing that there’s about to one managing versus – are you they if term, would real comes what you do these longer mind? trends your differently, not, think secular that as if if are

than just would much do investing differently than want and position, of probably would the in stronger many most in If the do manage on how a different with Well, larger easiest housing you’d market margin support look, the you’re here, to this for of bubble to dealing to of your cost to kind multiple you’ve kind what a What years, make volume for terms industry if you kind but answer, in of the volume been you your of right? a kind sure not used much years. important cost you’re right? on is we’re is,

So probably easiest the that’s one.

in we’re transaction the in the urban XX I in but geography biggest XXX I – like every ours doing is that some what metros position stuff then, like in company, be if business virtualizing real like ongoing like we’re think trend. our we’re mix. the of an on People the the estate we’re there’s And this U.S. in, think of will helpful increasingly

New Our if business we between up suburban a than of Coldwell this and add is but business Long bigger love City, York beneficiary Even Island, wow, urban Manhattan business, it’s Jersey. thing continues. business we and our Banker huge, Westchester, right? And and our in it a suburban be on like Corcoran Sotheby’s, like, Brooklyn, Connecticut will go our New

to too do the So, keeping that minds secular high important these trends people’s pretty continue. suburban really if is thing in

Great. Thanks Ryan. very much,

Thank you, Stephen.

from of Jack our question Micenko last Susquehanna. And you. comes with line Thank the

Your line is open. now

Hi, good afternoon.

you from thinking learned temporary I the said that? cost First is had $XX savings that some how – are million you of on had number? of think of we lease think one Am the million. right facilities you potential things Or reality? that for about said clarification, to and XXXX I you time seasoning, as a And Charlotte $XX do

Absolutely.

and to the start just been that we’ve execute stuff And early identify able on. right are the You to on that’s number.

next start in yes, I year. Some of of that bigger the start later piece but will year, the it could heading think hitting

I with bit and I themselves where what trying may is I’m minute. we from a if and for world both really could crisis that work Look, the good learned Jack, company started every excited that work. editorialize And we’ve that a on going. just COVID be to the reimagine think virtual doing

of it side really and work. I the excited public else And about that Charlotte just Most disclosure what was with thing. very company even side, stuff – but we glad As good. about really something decisions And to are But already put you some forward talked that to the of we of we’re today. savings we did finding did our of last yet, in that’s that’s $XX now. been last of was on example books have And temporary the $XX we’re aren’t looking a able on amazing both generation share we learning transaction year on experience. million the kind and million that. the of call, feels It’s an to we tangible cost made for in learnings one kind of ready the next doing to that boy, kind important

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with fun having we’re so, it. And

sellers always the I’ll market. price question, hear, let Ryan. picture wrap bring up on On big to we inventory? appreciation, What one tree you the a side with shakes

have I the to On I’d to my And my don’t nowhere days in where caught I hear bed hand, want to three a go. hey, where house, situation but home in other to go. and know get sell in you today, I don’t got a sell I’ve multiple like

curious So does of about more vicious Just this that? environment a cycle? actually were create you thinking how somewhat

six inventory that it how with see mean, that. last, inventory Look, things inventory just we’re can months And price there’s there, have huge I period the reasons the couple homes you a just a all it’s months kind stuff all half the that now. been society, late four inventory, has average, months XXXX’s for to that. here, If worry are there’s numbers pretty like relative And even type. out as not when of many for in been start a construction for the you’ve and like still we it’s higher is shaken historical the got. thing right? new to new have years where point. your whatever done Yes. a bit believe at I enough look and historically not on construction historically where low And Well, and two actually the and thing even a like, like of years the any less building they right little you are the of going

more same survey, talk comes society But agents, don’t inventory had little is the when about, rotation though to some for is in to to more thing, I have them inventory of going we tight positioned if I or that where customers a don’t have, price. are do I the if office a want I to that’s going to before. things. thousands So would seeing units as or rotation a or that thing we’re not more Some favor. need world suburban market want because as as better But suburban what love look a about And and think, of thing. well I unlocking others a of it. that thing out wish, unlock side, able to the more we our where even that may need presence thing do me, a want inventory in worry think that need is be But we’re think things, talked the And an was might isn’t The actually external thing massive on I there piece. that suburban for industry. but positive I a enough. as answers looking kind different much capture, is people is And on big different we think in But longer of on home temporary the those whether I space is side and too. it people right? the people we

Got it. Appreciate thoughts. the

Thank you.

Ryan our Zelman And with line Associates. the question from & last Thank you. comes McKeveny of

Your line is open. now

guys me much in. squeezing so you Thank for

and I rate one ticked I And So a in ones, two missed higher. But business. actually we’ve in if quick of commission tick first franchise the side while think earlier. the the this bit own a both commission the and that’s the seen actually I rate, apologize up time that

this the inventory agents. think when I commission in kind can actually compression some amongst competition is rate, industry, of the typically very given tight, you on just see

the of the going Obviously kind regarding just of So what versus that on just that’s pipeline Thank that curious you. Corcoran you seen question the things. pipeline curious how kind into throws on side bit what of say ultimately the and things curious And looking I’m in can are just second quarter? And maybe of some wrench things we’ve a expected things. announcements. going picture relative But if COVID how thus go. of comment far to how you franchise big this on drove what side you things, to like a you is anticipated. the of can then

Thanks, Ryan. both of questions. your take I’ll

it franchise kind look multiple because they we’ll mix. over And pretty around this years, back a lot a because last, of and the And broker happy was years, numbers something the it you look, trend So really a – there. mind that brokerage. see of was But think on numbers of were in yet are think average commission macro little of bit at up a actually I but little those don’t that a When We see belief couple because I to we think around. move I great. it think provided kind I you value. agent there, know to during just in stable. agents, quarter Look, that’s don’t want bounces of we rate. tick the power not times didn’t but fact agents. of of part they this it And there’s go bit the in commission The real the earn you there’s keep COVID trend a but take finished. quarter actually is talked agents competition, better, I value more just the reason, of down, provide may that my about don’t mix. even

of more help much uncertain way, the deals able higher to customers price, done by the safety were price, right to time. the health do benefit in the customer’s work terms and much often to In to a set a more of they and and kind get

should I And uses on That’s think guess. remember, the QX, have done, thousands the you and deals of versus all I down in but agents of the up got other eye So, don’t of agents. agents guess, shut is and data, bet my agents normal. and I powered of hundreds a that’s Realogy agents buyers actually

other somebody a And bit so, options market has dynamic kind a or see away. of price of there you other little can where, went

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And proved a I launch. a in quarter. So Corcoran big they’re the the franchise about on excited fan. actually think of Look it I’m we’re side, the lot

we’re bought We the that, expand. can’t great Northern firm a added soon, excited our got – a what’s more great. pipeline. good a publicly We’re what’s be announced already first a building to announce That’s Corcoran and hopefully. got to California good feel it. But going we franchisee been about couple we’ve a signed We in pipeline. just portfolio, – We’ve

was launched, than or we Better that XX on was, and Homes Sotheby’s years dozen it years years our ago. up XX coming ago it more or like business Gardens, whatever Just a

boy, franchise the You high looks. by franchise the where end plays. at don’t build we economics obviously especially far so pipeline And overnight, we’ve businesses really excited but the and estate, like we’re build what these real the had Corcoran of

both for thank those you, good Ryan, questions. So

you. helpful. Thank Very

conference your and you gentlemen, call. this question-and-answer does conclude this And ladies disconnect. now does conclude session. And you Thank today’s may today’s for and participation