Now in his third year as president and CEO of Realogy (NYSE: RLGY), the country’s largest real estate company, Schneider remains one of the most powerful people in the residential real estate industry leading one of the most powerful companies in it.
Things looked shaky for Realogy at the start of the year, and the company had a horrible first half of the year as Covid-19 ravaged plans, caused chaos, and created massive uncertainty. But Schneider responded decisively. As he said in the company’s first-quarter 2020 earnings call:
With the onset of the Covid-19 crisis, we moved quickly to ensure the health and safety of our affiliated agents, employees, franchisees and customers. We pivoted rapidly to virtually support housing transactions, frankly, more than you may be expecting, and we took quick actions to proactively position Realogy to navigate this crisis and emerge strong on the other side.
By the third quarter, those actions led Realogy to emerge stronger on the other side indeed. The following third-quarter metrics reveal this:
- The company generated revenue of $1.9 billion, an increase of 20 percent from the third quarter 2019.
- Realogy reported a net income of $145 million from continuing operations.
- Operating EBITDA from continuing operations measured $309 million, an increase of $103 million year-over-year, driven by higher transaction volume and strong performance from its mortgage joint venture Guaranteed Rate Affinity.
- The company reduced debt by $276 million versus the third quarter 2019.
- Realogy grew brokerage agents 2 percent year-over-year with continued improving retention.
- Title and mortgage generated approximately $95 million in third quarter operating EBITDA.
- Combined, closed transaction volume increased 28 percent in the period from the third quarter 2019, and unit growth contributed 12 percent to this volume improvement across both brokerage and franchise businesses.
The company’s share price plummeted from $9 in January to $2.36 by March 30th recovered to $13.12 by year end. That’s what you call coming through with flying colors.
That leadership continues to be tested as the new normal of Covid-19 descends on real estate. None of Realogy’s competitors have gone away, and most have gotten stronger as well. Its core problems of too much debt are not of their own making, and of continued pressure on margins remain. Major lawsuits have not been dismissed, and there is always the threat of disruption from all quarters. We are optimistic that Schneider can guide Realogy through whatever may come and will remain one of the most powerful leaders in real estate for years to come.