Realogy Holdings Corp. (NYSE: RLGY), the largest full-service residential real estate services company in the United States, today reported financial results for the third quarter ended September 30, 2020.
"I am incredibly proud of Realogy's third quarter. We generated $309 million of Operating EBITDA, grew closed transaction volume 28%, gained market share, and materially reduced our debt," said Ryan Schneider, Realogy's chief executive officer and president. "Our strategic progress, agent and brand power, and technology initiatives, amplified by the very strong housing market, drove Realogy's results. And with very strong preliminary October volumes, we are excited as we look ahead."
"In the third quarter, Realogy continued to execute from a position of strength, delivering exceptional top-line and bottom-line growth," said Charlotte Simonelli, Realogy's executive vice president, chief financial officer and treasurer. "We improved operating margins, captured greater share of transaction economics with our mortgage joint venture and title operations, stayed laser focused on cost management and simplification, and strengthened our balance sheet. Overall, Realogy's financial profile is much stronger today, and I am optimistic for our future."
Third Quarter 2020 Highlights
- Generated revenue of $1.9 billion, an increase of 20% or $307 million year-over-year.
- Reported Net income of $145 million from continuing operations and Net income of $98 million including discontinued operations.
- Generated Operating EBITDA from continuing operations of $309 million, an increase of $103 million year-over-year, driven by higher transaction volume and strong performance at the GRA mortgage JV (See Table 5a).
- Title and mortgage continued to contribute meaningfully to our business results, generating approximately $95 million in third quarter Operating EBITDA.
- Combined closed transaction volume increased 28% year-over-year in the third quarter with improving transaction volume through the quarter. Unit growth contributed 12% to this volume improvement across both Brokerage and Franchise businesses.
- Generated Free Cash Flow from continuing operations of $344 million vs. $116 million for the corresponding quarter last year and $395 million including discontinued operations vs. $174 million for the corresponding quarter last year (See Table 7).
- Strengthened the balance sheet reducing net debt by $276 million vs. third quarter 2019 with the Net Debt Leverage Ratio declining to 4.2x (See Table 8b).
- Grew Brokerage agents 2% year-over-year with continued improving retention.
Third Quarter 2020 Financial Highlights
The following table sets forth Realogy's financial highlights for the periods presented (in millions, except per share data) (unaudited):
Balance Sheet and Capital Allocation
The Company ended the third quarter 2020 with cash and cash equivalents of $379 million*. Total corporate debt, including the short-term portion, net of cash and cash equivalents (net corporate debt), totaled $3.0 billion at September 30, 2020. The Company's Net Debt Leverage Ratio was 4.2x at September 30, 2020 (see Table 8b).
On October 27, 2020, the Company repaid the remaining $140 million balance on its revolving credit facility.
The Company expects to continue to prioritize investing in its business and reducing leverage over other potential uses of cash.
A consolidated balance sheet is included as Table 2 of this press release.
About Realogy Holdings Corp.
Realogy Holdings Corp. (NYSE: RLGY) is the leading and most integrated provider of U.S. residential real estate services, encompassing franchise, brokerage, relocation, and title and settlement businesses as well as a mortgage joint venture. Realogy's diverse brand portfolio includes some of the most recognized names in real estate: Better Homes and Gardens® Real Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®, Corcoran®, ERA®, and Sotheby's International Realty®. Using innovative technology, data and marketing products, best-in-class learning and support services, and high-quality lead generation programs, Realogy fuels the productivity of independent sales agents, helping them build stronger businesses and best serve today's consumers. Realogy's affiliated brokerages operate around the world with approximately 189,000 independent sales agents in the United States and more than 129,000 independent sales agents in 114 other countries and territories. Recognized for nine consecutive years as one of the World's Most Ethical Companies, Realogy has also been designated a Great Place to Work three years in a row and one of Forbes' Best Employers for Diversity. Realogy is headquartered in Madison, New Jersey.
