Realogy Holdings Corp. reported financial results for the quarter ended June 30, 2021.
“Realogy delivered an outstanding second quarter. We generated record operating EBITDA, gained market share for the fourth consecutive quarter and strengthened our balance sheet to its best position ever,” said Ryan Schneider, Realogy’s chief executive officer and president. “The unmatched power of Realogy’s strategic progress, innovation through technology, and leading presence in the luxury market, combined with our robust growth investments, position our business to lead into the future.”
“In the second quarter, Realogy delivered phenomenal results, significantly advanced our balance sheet, and generated impressive free cash flow that enable us to invest in our future,” said Charlotte Simonelli, Realogy’s executive vice president, chief financial officer and treasurer. “Over the past year Realogy has achieved tremendous quality and consistency in our financial performance.”
Highlights:
– Generated Revenue of $2.3 billion, an increase of 81% or $1,021 million year-over-year.
– Reported net income of $149 million and basic earnings per share of $1.28, an increase of $163 million vs. prior year or $1.40 per share.
– Generated operating EBITDA of $310 million, an increase of $135 million year-over-year.
– Lowest ever net debt leverage ratio of 2.5x and senior secured leverage ratio of 0.00x.
– Reported Free Cash Flow of $243 million, an improvement of $196 million versus second quarter of 2020.
– Combined closed transaction volume increased 85% year-over-year in the second quarter driving market share gains for the fourth consecutive quarter. Transaction volume growth was significantly above the 53% year-over-year market volume growth reported by the National Association of REALTORS® (NAR).
– Realogy Title Group contributed meaningfully to business results, generating approximately $55 million in second quarter operating EBITDA, a decline of $6 million year-over-year, including a $27 million decrease in equity in earnings from the company’s mortgage origination joint venture.
– Owned brokerage agent count grew 4% year-over-year..
– Strong cost management with $80 million in permanent cost savings expected in 2021 with actions taken for approximately 85% of the target savings and $50 million realized in the income statement through June 30, 2021.
Balance Sheet and Capital Allocation
The company ended the quarter with cash and cash equivalents of $859 million. Total corporate debt, including the short-term portion, net of cash and cash equivalents (net corporate debt), totaled $2.6 billion on June 30, 2021. The company’s net debt leverage ratio was 2.5x at June 30, 2021.
On April 28, 2021, the company used cash on hand to pay down $150 million of the Term Loan B Facility, reducing the principal amount of that facility to $240 million.
In June 2021, the company issued $403 million principal amount of 0.25% exchangeable senior notes due 2026. The company used a portion of the net proceeds from this offering to pay the cost of exchangeable note hedge transactions (with such cost partially offset by the proceeds to the company from the sale of warrants). Taken together, the purchase of such exchangeable note hedges and the sale of such warrants are intended to offset (in whole or in part) any potential dilution and/or cash payments upon the exchange of the exchangeable senior notes, and to effectively increase the overall exchange price from $24.49 to $30.6075 per share.
For more information, please visit www.realogy.com.
