Q2 2023 earnings roundup: A shift away from growth at all costs

Publish Date: August 17, 2023

Written by Christy Murdock

- Originally published at Inman News - Christy Murdock

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The go-go pandemic-era real estate market was all about growth in both market share and agent count. Now, however, faced with low inventory, high interest rates and a tough Q1, many companies appear to have switched gears and adapted their business models to focus more on profitability.

Some companies cut losses while others, like Anywhere, actually finished Q2 in the black for the first time in a while. Find out who came out on top in Daniel Houston’s story for Intel: A stock analyst reveals the 2 big winners from Q2 earnings season.

Check out the earnings-related news to see how your brokerage or favorite real estate-related investment fared in the second quarter of 2023.

EXp Realty maintained profitability in the second quarter of 2023, but its gross profits and revenue both shrank considerably from a year ago as housing market activity remained dampened. EXp World Holdings‘ revenue decreased 13 percent from the second quarter to $1.2 billion, and its gross profit decreased 10 percent to $96.5 million.

Fathom Realty cut its losses during the second quarter, but the 100 percent commission brokerage remains well in the red — logging a net loss of $4.3 million during the quarter, an improvement over the $5.7 million loss logged during the first quarter.

Slowing transaction volume punched Compass in the pocket during the second quarter of the year as the New York City-based brokerage’s revenues slid 26 percent year over year to $1.5 billion. However, other financial measures improved with net losses shrinking 53 percent year over year from $101 million in Q2 2022 to $48 million in Q2 2023. The company also reached a free cash flow positivity of $51 million and an operating cash flow of $53 million.

RE/MAX posted another quarter of declines in total revenue and U.S. agent count in the second quarter as agents and consumers adjusted to rocky market conditions and high mortgage rates. Total revenue fell 10.6 percent year over year to $82.4 million while revenue excluding marketing funds collected from RE/MAX affiliates dropped 11.4 percent to $61.4 million, according to Q2 earnings data.

During the three months ending on June 30, Real’s revenues grew 65 percent annually to $185.3 million, while net losses declined 2.3 percent year over year to $4.1 million. Real also saw its Adjusted EBITDA improve year over year from a $583,000 loss in Q2, 2022 to a $2.6 million profit in Q2, 2023.

Anywhere Real Estate navigated a treacherous cycle of shrinking sales transactions to post $19 million in profit during the second quarter of 2023 despite plummeting revenues. The world’s largest franchisor of residential real estate brands, including Century 21, Coldwell Banker and Better Homes and Gardens, posted a profitable quarter for the first time since the third quarter of 2022 despite reporting sagging revenues of $1.7 billion in line with its own expectations.

The spring homebuying season was something of a bust for mortgage giants Fannie Mae and Freddie Mac, but both managed to boost their profits and net worth as most borrowers had no trouble making payments on nearly $7 trillion in single-family mortgages backed by the companies.

The nation’s biggest mortgage lender, United Wholesale Mortgage (UWM), was a well-oiled machine during the spring homebuying season, boosting second-quarter purchase loan originations by 25 percent from a year ago to a record $28 billion.

Following a rough coronavirus pandemic and bouts with an embattled CEO, coworking space giant WeWork may be coming to the end of its days, the company suggested in a financial filing that accompanied its Q2 earnings report.

Matterport posted second-quarter revenues of $39,600,000 — a 39 percent increase from the same period a year earlier that squeaked past analyst estimates of $39,200,000, according to their most recent earnings call.

The commercial-giant-turned-residential-upstart brought in $606 million in revenue during the second quarter, according to the company’s newly published earnings report. That’s up 13 percent compared to a year ago and represents a repeat of the previous quarter when revenue also rose 13 percent year over year.

Zillow pulled in $506 million in revenue between April and June, according to a newly published earnings report. That’s up from $504 million during the same time last year. However, the revenue improvement notwithstanding, Zillow also lost $35 million in the quarter, a reversal from the $8 million in profit it made during Q2 of 2022.

Thanks to a softer real estate market iBuying giant Opendoor saw revenue and the number of homes it sold plummet in the second quarter of this year — but in an unexpected twist, the company also managed to turn a profit. In total, Opendoor brought in $2 billion in revenue between April and June. That’s down 53 percent compared to the same period in 2022. The company also sold 5,383 homes, which represents a dip of 35 percent compared to the second quarter of last year.

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