Anywhere Real Estate Inc. (NYSE:HOUS) Q2 2025 Earnings Call Transcript

Anywhere Real Estate Inc. (NYSE:HOUS) Q2 2025 Earnings Call Transcript July 29, 2025

Anywhere Real Estate Inc. misses on earnings expectations. Reported EPS is $0.24 EPS, expectations were $0.34.

Operator: Good morning, and welcome to the Anywhere Real Estate Second Quarter 2025 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. Unless stated otherwise, growth figures should be assumed to be year-over-year. At this time, I would like to turn the conference over to Anywhere Vice President, Tom Hudson. Please go ahead, Tom.

Tom Hudson: Thank you, Bella. Good morning, and welcome to the Second Quarter 2025 Earnings Conference Call for Anywhere Real Estate. On the call with me today are Anywhere’s CEO and President, Ryan Schneider; and CFO, Charlotte Simonelli. As shown on Slide 3 of the presentation, the company will be making statements about its future results and other forward-looking statements during the call. These statements are based on current expectations and the current economic environment. Forward- looking statements, estimates and projections are inherently subject to significant economic, competitive, antitrust and other litigation, regulatory and other uncertainties and contingencies, many of which are beyond the control of management, including, among others, industry and macroeconomic developments.

Actual results may differ materially from these expressed or implied in the forward- looking statements. July month-to-date data is through July 21, 2025, with both open and closed volume comparisons based on the same number of business days in July 2025 versus last year. Three onetime free cash flow headwinds are excluded from our 2025 free cash flow guidance. First, $41 million was paid in Q2 for 1999 extended legacy tax matter that we intend to appeal. Next, $20 million that we expect to pay in Q3 for the TCPA litigation settlement. Last, the final $54 million payment towards our antitrust litigation settlement will be due when the appeals are resolved, the timing of which is uncertain, but is now estimated to be made in late 2025 or early 2026.

Growth in business recruited pursuant to other productive agent recruiting program at advisers is measuring using the estimated last 12 months closed gross commission income of the new agents prior to joining Anywhere. The top half of agents retained advisers is measured using the amount of production generated by agents remaining with the company a year following initial 12-month period based on gross commission income generated during the initial measuring period. Important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in our earnings release dated today as well as in our annual and quarterly SEC filings. For those who listen to the rebroadcast of this presentation, we remind you that remarks made herein as of today, July 29, have not been updated after the initial call.

Now I’d like to turn the call over to our CEO and President, Ryan Schneider.

Ryan M. Schneider: Thank you, Tom. It is incredibly exciting to speak with you here in late July. AI will change how real estate is done, and we plan to lead the way. We are using generative AI to revolutionize how this industry works, both how we go to market and how we run our company. This transformation is creating better experiences faster and at lower cost, all with the goal of driving growth for our great agents and franchisees, unlocking efficiencies and improving margins. The future of the real estate industry includes a truly end-to-end integrated transaction for the consumer. We are leveraging our scale across brokerage, title, mortgage and home services to deliver more seamless and connected home buying and selling experiences and to drive better economics.

And while we are in a historically challenging housing cycle, we are winning and creating octane for the future with powerful proof points in productive agent recruiting and retention, franchise sales and especially luxury success. Most excitingly, we are seeing strong growth momentum this month that has us more optimistic for the back half of the year. Turning to Q2. We exited the quarter with confidence, supported by meaningful operating EBITDA, a strengthened balance sheet and our unique collection of assets. This strong foundation enables us to invest in AI-driven initiatives and capture scale, operating efficiency across the company. We delivered $1.7 billion of revenue and $133 million of operating EBITDA, demonstrating the strength and resilience of our model.

Closed transaction volume was flat year-over-year in Q2. The quarter started off challenged due to macroeconomic volatility, but we saw volume trends improve with June closed volume solidly positive. And we love the business momentum we are delivering in July. July closed transaction volume is up mid-single digits year-over-year with growth in both units and price. Even more exciting, July open volume is up 9%, with this future growth indicator about equally driven by increases in both units and price. And looking even further into the future, our July Advisors listings are up significantly, over 10% compared to the prior year. Together, this paints a strong growth picture for the back half of the year that we hope continues. Q2 also saw a notable geographic variation across key markets where our Advisors business is concentrated.

New York City outperformed the broader portfolio, delivering double-digit growth in both units and price. And Florida by contrast, faced a more challenging quarter with volume down double digits. Now our industry-leading luxury businesses, anchored by Sotheby’s International Realty, Corcoran and Coldwell Banker Global Luxury continues to be a strategic growth engine, outperforming the broader market. Luxury delivered 3.5% year-over-year volume growth in the quarter and about 8% year-over-year growth in the first half as we obviously love this higher-margin, high-impact segment. We sold 369 homes priced $10 million or higher in Q2, a 20% increase from the prior year. And our luxury businesses are delivering incredibly strong growth momentum in July.

For example, Sotheby’s International Realty July open volume is up 13% and Corcoran is up about 20%. We are also raising the bar on what’s possible in luxury real estate, bringing new innovative ways to deliver value to agents, franchisees and the consumer. Our Sotheby’s Concierge Auctions JV is a great example. It provides an innovative way to match buyers and sellers of luxury properties while enabling us to capture much higher per transaction economics. The venture continues to scale with Q2 revenue up 10% and an average sales price of $5 million. Now beyond our success in luxury, we’re driving meaningful growth across our broader portfolio. Our high-margin franchise business welcomed 13 new U.S. franchisees and 3 international expansions, strategically expanding our footprint, including in key growth markets such as California, North Carolina and Georgia.

We are seeing strong momentum in our Advisors business, driven by robust agent recruiting and near-record levels of agent retention for productive agents. Our compelling value proposition centered on delivering best-in-class products and services, great marketing and industry-leading support is increasingly resonating with great agents across the country. Advisors recruited 625 productive agents in the quarter and saw a 31% year-over-year growth in business recruited with strong gains against many of our biggest competitors. And we are having even greater success retaining top talent in this highly competitive market, with Advisors agent retention reaching 95% — about 95% among the top half of producing agents. This is rarefied air, right around the highest rates we’ve ever achieved.

And in our great luxury brands, our retention is even higher. Now putting this all together, you can see why I’m excited about our growth potential going into the back half of the year. And in addition to growth, our other main priority is Reimagine ’25 as we leverage and harness emerging technologies like generative AI to reshape how real estate works for agents, franchisees, consumers and how we operate our company, all in the spirit of delivering better experiences faster and at lower cost and to drive growth for our great agents and franchisees, unlock efficiencies and improve margins. Anywhere is accelerating generative AI-driven innovation across every corner of its businesses. We are delivering AI-enabled tools to help agents and consumers better sell homes such as Listing Concierge.

We are using AI for productive agent and franchisee recruiting, for smarter lead targeting, to use AI to generate higher-quality content and to process documents faster and at lower cost. We have pilots and at scale examples across the whole company. And since we last spoke, we piloted Amazon Q in our contact centers and AI-generated comparative market analysis as we continue to build proof points of our broader strategy to scale AI. And our open architecture approach lets us also deploy best-in-class third-party AI-driven products to agents through enterprise agreements like our just announced Canva offering. Finally, the future of real estate includes a truly end-to-end integrated transaction for the consumer. This means a seamless and connected home buying and selling experience across not only real estate brokerage, but across mortgage, title, home insurance and other home services.

We have all of these transaction components in our unique collection of assets and continue to innovate and succeed on this holy grail that others are chasing. In that spirit, we’re increasingly delivering better experiences to consumers by introducing the right services at the right time. This better experience of an integrated transaction also adds to our economics. So let me give you two real examples that crystallized in Q2. First, as I told you last quarter, we see the opportunity to turn buyer agreements of perceived market risk into an opportunity and have begun using this consumer interaction to integrate the marketing of both our title and our mortgage services. While the title pilot results are still pending, our initial mortgage pilot showed approximately 2.5 percentage points increase in mortgage capture, the biggest increase that we’ve seen from any past initiative to drive this higher revenue per transaction.

Second, we redesigned the consumer workflow to embed our warranty offering more seamlessly into the home sale transaction. Based on pilots in multiple markets, we’ve seen attach rates increase by approximately 4 percentage points. And with these exciting results, we plan to roll out both pilots nationally later this year. By integrating more components of the real estate transaction, we enhance the customer journey, increase satisfaction and generate greater per transaction economics. This also elevates the agent central role in the transaction, helping them build deeper, more trusted relationships with consumers. So we’re excited to be here in July with powerful growth momentum, AI-led Reimagine ’25 transformation progress and more proof points on our ability to integrate the transaction and generate greater per transaction economics.

With that, let me turn the call over to Charlotte.

Charlotte C. Simonelli: Good morning, everyone. Anywhere delivered another strong quarter, driving solid operating EBITDA, accelerating cost efficiencies and increasing our financial flexibility. We are continuing to build on years of disciplined operational excellence, commitment to deleveraging the balance sheet and foresight to prime the business for its next chapter of AI-enabled growth. I will now highlight our Q2 ’25 financial results. Q2 revenue was $1.7 billion, up 1% versus prior year, and Q2 operating EBITDA was $133 million, a decrease of $10 million versus prior year, primarily due to higher employee benefit costs, increased investment in Reimagine initiative and an increase in agent commission costs in our own brokerage business.

We realized $25 million in cost savings in the quarter and $39 million of cost savings year-to-date, and we are on target to achieve $100 million in cost savings for 2025 with 95% of our savings already identified. Q2 free cash flow was $36 million before the $41 million onetime payment made for a 1999 Cendant legacy tax matter. Free cash flow was also negatively impacted by $25 million in seasonal volatility from our securitization facility. This facility historically can create working capital volatility quarter-by-quarter due to the seasonality of the business. Consistent with our capital allocation priorities, we opportunistically issued $500 million in new second lien debt and repurchased $345 million of our exchangeable notes at a discount.

In addition, we utilized the excess proceeds to further reduce our revolver balance. And as of July 28, our revolver balance was $460 million, down $230 million from our last earnings release date. We expect to repurchase the remaining $58 million in exchangeable notes outstanding over the next 6 months, and I remain confident in our financial position with no meaningful note maturities until 2029, ample revolver liquidity and enhanced flexibility following our recent refinancing. This continues to provide the balance sheet strength to invest organically or inorganically while fortifying the business now so we can return even stronger when the housing market normalizes. And our normalized market target leverage remains 3x EBITDA. Now let me provide more details about our business segment performance.

Our Anywhere Brands business, which includes lease and relocation, generated $163 million in operating EBITDA. Operating EBITDA increased $4 million, primarily due to strength in our Cartus Relocation business. Our franchise business expanded margins in the quarter, showing improved financial leverage despite flat volume. Our Anywhere Advisors operating EBITDA was 0, a $4 million decrease versus prior year, driven by higher employee benefit costs as well as commission costs, partially offset by higher revenue and cost savings initiatives. This business generated $93 million in operating EBITDA before the transfer of intercompany royalties and marketing fees paid to our franchise business. Advisors’ average broker commission rate increased 2 basis points year-over-year, increasing revenue capture per transaction.

Following last year’s industry changes, we have seen changes in how and when negotiation of commission occurs, but ABCR has been sequentially stable for the last 12 months, highlighting the value that agents bring to the transaction. Q2 agent commission splits were 80.9%, up 36 basis points year-over-year. The increase was primarily attributable to business mix with noncore items such as new development business and company-generated leads, which have lower splits on average, having a more material impact in the prior year. About 1/3 of the increase was because of agent mix as our top agents continue to take a greater share of transactions. Anywhere Integrated Services Q2 ’25 operating EBITDA of $10 million was up $1 million from Q2 ’24 due to higher revenue and mortgage JV earnings.

We continue to enhance our operations through Reimagine ’25, an ambitious multiyear transformation effort designed to set us up for greater growth and success in the future. This comprehensive program encompasses all aspects of our enterprise, and we expect it will significantly contribute to our savings targets for 2025 and beyond. By leveraging AI-enabled technology to reduce manual processes, we aim to enhance our value proposition and unlock growth opportunities. No area of our business is out of scope for this transformation, and all our core businesses and corporate teams are engaged, finding new and innovative ways to deliver better experiences faster and at lower costs. Some of our most recent examples include leveraging generative AI to improve our brokerage transaction processing.

Our brokerage operations team receives about 15,000 documents every day. 1/3 of our Coldwell Banker brokerage document submissions are now automated with a path to 90% by the end of this year. This substantial automation not only lets us accomplish these tasks faster, but lets us operate 24/7, delivering better quality with meaningfully lower costs. Our Cartus Relocation business continues to leverage transformation initiatives to enhance both revenue generation and operational performance. These efforts have proven effective in helping secure new clients and expand current relationships to drive top line growth. At the same time, automation and workflow improvements have significantly boosted operational efficiency, resulting in the highest quarterly margin since Q3 2022.

Now turning to our ’25 estimates. We reiterate our guidance and expect operating EBITDA for the full year to be about $350 million and free cash flow, excluding onetime charges to be about $70 million, with the biggest swing factor being the housing market itself, which is inherently volatile. Let me now turn the call back to Ryan for some closing remarks.

Ryan M. Schneider: Thank you, Charlotte. In closing, we are using generative AI to revolutionize how this industry works. We are moving to the future of a seamless end-to-end transaction experience for the consumer, and we are winning across multiple growth vectors that build octane for the future. And most excitingly, we are seeing strong July growth momentum, increasing our optimism for the back half of the year. It’s an incredibly exciting time. With that, we are happy to take your questions.

Q&A Session

Operator: [Operator Instructions] Your first question comes from the line of Matt Bouley with Barclays.

Matthew Adrien Bouley: Maybe just one around the overall housing market. I guess kind of thinking about this interplay between home prices and transaction sides. Ryan, you called out a lot of geographic variation. And so my question is, in those markets where you may be starting to see lower home prices, is it actually starting to, on the other hand, spur some transactions? And then if you kind of think about the markets where you still have inventory really tight, kind of how are you thinking about the actual unit volumes in those type of markets?

Ryan M. Schneider: A couple of things I’ll say, Matt, thank you for the good question. So first off, something is happening, at least in our portfolio in July because in July, we are seeing units up and price up. I kind of gave the numbers on our closed volume in July and our open volume in July and our open luxury volume in July. And it’s at least 50-50 units up and price up. And in luxury, it’s actually mostly units up. So in July, we’re seeing something happen where units seem to be having a little bit of a renaissance, which is awesome because most of the gains this year so far have been price driven. When you look at the markets out there, there’s really very few where price is actually dropping. And I think sometimes how the newspapers do comparisons is a problem, but we always look at year-over-year.

And so like when we look at our portfolio and you look at Q2, there were only two states where prices dropped at all. One was — at least among the meaningfully sized one, right? One was Florida and the other was Colorado. And like in Florida, the units dropped more than the price did. So it’s not like price is going down and it’s spurring more units. In fact, in Florida, it was mostly a unit decline with a little bit of price decline. So I think there is still this dynamic out there, Matt, that demand is actually greater than supply still even at these higher affordability levels. And so almost all states were looking at have prices still rising no matter what’s happening with their units. And then a few places where prices are going down, it’s pretty — it’s not spurring more units.

And then the other thing that’s unique to us is part of the reason our Florida prices are down is last year, we sold 9 homes in the second quarter over $50 million. And this year, I believe we sold 1. And a number of those were in Florida. So even a little bit of the Florida price drop in our book is driven by the mix, not actually same-store home prices going down. So I think the talk of prices falling is a little overstated out there, and it hasn’t spurred units, but we have seen units in July come back but still with some price growth. So it’s a weird market out there.

Matthew Adrien Bouley: Got it. Well said. And yes, understood and great color. So very helpful. So just other question is just obviously, given everything in the background around this sort of private and exclusive listings, I guess, dispute for lack of a better term. Are you seeing any, I guess, disruption out there related to that? And given your public stance on the issue, is it actually kind of, I don’t know, helping with the kind of recruiting and retention here? Or just any update to sort of how that’s playing out from your perspective?

Ryan M. Schneider: Yes. I’ll give you — I’ll touch on a number of different things because I think it’s an important industry topic. So one is it absolutely is helping us in recruiting. And we are winning this year more than we did in ’24 or ’23, not just with the overall numbers I gave you on recruiting, but against some of our — many of our direct competitors. And one of the things that I think is helping us win is this kind of stance on we want to do what’s best for the consumer, and that’s typically getting as many people looking at your listing as you can. And so while again, we sell 6% of our listings privately, we think the vast majority of people — you should have a broad distribution of listings. And that resonates with agents who want to do business that way, and it’s helping on recruiting.

There is a little bit of disruption starting to happen. I think different policies that portals have put into place have started to bite a little bit. And you can see people getting kind of worked up over that. But again, given our stance, it hasn’t really affected us, and we believe in our stance. And then we rolled out in the second quarter, we did it in June, we rolled out some technology we use in our own brokerages, Matt, to all of our franchisees that lets our brokerages do private listings that they want within their brokerage, just like we do and totally compliant with all the industry parameters and Zillow’s approach, et cetera. But we also have other features in that thing that let people do things like sneak peeks and wants and needs kind of at the brand level, so you can share things across Better Homes and Gardens Real Estate or Coldwell Banker.

And then in August, we’re going to be enhancing that with some more of that stuff that will let you share it across any part of the Anywhere network. And then finally, embedded in that is the ability to turn on private listings if we really ever want to if the market goes that way. I view that as more of a, again, kind of — if the market goes that way, we’re going to be ready and make sure our people are in an advantaged position. But we’ve made that strategic progress getting that to all of our franchisees since we talked to you last. And we like both the way it’s going to let us do more things on, like I said, sneak peeks and wants and needs to do more kind of things within and across brands. We think that will be additive, just a great thing to be doing out there in the world.

And then we like the kind of preparation for a defensive play if the world does go more toward private listings that we’ll have our whole ecosystem ready to succeed on it.

Operator: Your next question comes from the line of Nick McAndrew with Zelman.

Nick McAndrew: Ryan, maybe just to start, I think the pilot to introduce title and mortgage at the buyer agreement stage sounds pretty promising. And I’m just wondering, as mortgage capture improves, is that being driven primarily by better timing and introduction during the process? Or are there also tangible cost savings for the consumer such as, I don’t know, closing cost discounts, for example, when they choose to bundle ancillaries? I’m just trying to think about kind of the potential levers.

Ryan M. Schneider: That’s a great question. Look, we’re really excited about this, right? I mean, again, this whole buyer agreement thing was so much work last year. but let’s turn into a positive. So far, all the upside we’ve seen, and it’s early, and we think there can be more, and we’re going to test and optimize. But we still like the 2.5% increase in capture. We’ve never seen anything like that, that we’re going to go nationally just with what we have and want to keep making it better. So far, Nick, it is 100% driven by getting to the customer early with a good value proposition and communicating with them right at the start of their home buying journey as opposed to waiting until they purchased a house. We have done no discounts.

We have done no lower rates. And we know there’s a few people out there in the world that will say, “Hey, if you use our stuff and bundle it, we’ll give you 50 basis points off your mortgage.” Maybe that stuff will be in our future, but that will be upside to what we’re achieving now. So the real benefit is getting there to the consumer right away at the start of their home journey with mortgage, the title results will come in soon, and we’re still — we’re optimistic we can get benefits there, but I don’t have anything to share with you yet. And then even getting the insurance, we haven’t done this yet with, but we’re going to definitely be piloting that. And then I showed you that on like this warranty home service, we’ve been able to get some of that similar effect.

So, so far, it’s all get to the consumer, get there at the right time with a good product, get to them directly is where the benefit and get to them early. That’s where the benefit is coming from. We haven’t had to give economics away to drive these benefits yet, and that’s really exciting.

Nick McAndrew: Yes, that’s very helpful. And Charlotte, maybe just one for you. While I know there’s no formal guidance on cost savings for 2026, I’m just wondering, can you speak directionally about the potential for any additional cost action, has most of the low-hanging fruit already been addressed? Or are there further actions that could occur even in an improving housing environment?

Charlotte C. Simonelli: Yes, it’s a great question. And I kind of nodded to it a little bit in my prepared remarks around that Reimagined should deliver meaningful cost savings this year and beyond. So as per typical starting in Q3 or at the year-end release, I will give more specific guidance, but there is still meaningful cost opportunity from my perspective. I think if you look back 5 years ago, that was the low- hanging fruit. This is more about transforming our business and using AI and things that were not as widely used 5 years ago to make this place like super bulletproof when the market does come back that we won’t be adding back cost in the same way to support much higher volume and transactions. So I think there’s a lot left to be done.

I’m excited to be able to share a number with you later this year. It will be meaningful like it has been. I think on average, in the 6 years I’ve been sitting in this seat, give or take, it’s been about $100 million, and that’s meaningful. And I do believe there’s more meaningful cost to go get. So more to follow on specific numbers, but it really should be the transformative stuff. The low-hanging fruit has probably gone a long time ago, and this is just sort of rightsizing the business and automating what we can for better experiences as well as lower cost.

Ryan M. Schneider: Yes. Nick, if I can just build on that because you triggered me with the low-hanging fruit. I mean, as Charlotte said, the low-hanging fruit is gone, right? That’s been done, good stuff. The exciting thing, and I’m going to talk about this on stage at an industry conference in 48 hours, is just how every day some of the advances with like GenAI are creating new cost efficiency opportunities. But they’re also creating new speed opportunities and new better experience opportunities. And even like the brokerage document processing example, Charlotte gave, that wasn’t technically possible 3 years ago, and you just couldn’t do it. And now it’s doable. It’s not only more efficient, but it runs 24/7. And I mean it’s — and so I want — I’m trying to shift everybody’s mindset to — it’s not about like low- hanging fruit and how high you can get on the tree anymore, it’s literally just the new opportunities that are getting created that touch efficiency, that touch speed, that touch the experience.

And they’re coming out of all this pretty fast. And it’s true for every industry and being a leader in using that kind of thing like generative AI to do those things, has these awesome benefits, including letting us continue even if we label it a cost program to kind of drive changes to our margins and the bottom line, but also all those other speed and experience things. And so it’s really exciting that it’s opening up just areas that 3 years ago, you could have never have thought about for a cost program or the kind of economic changes.

Operator: Your next question comes from the line of Tommy McJoynt with KBW. And that would be a last question.

Thomas Patrick McJoynt-Griffith: Can you help us out with how we should think about modeling the brokerage commission split just as we contemplate a gradual reversion to a more normal, what we’ll call a 5 million existing home sale market. We understand there are inputs of mix by top- performing agents and agents moving up commission ladders and the impact of new business development. Is there any way to rank order or even provide some magnitudes to help us quantify these factors?

Charlotte C. Simonelli: Yes. I think the best thing I can point you to is like all the prepared remarks I’ve had over the past few years, agent mix started and was really pronounced during COVID, like as far back as 2020. And you would think at some point, you’re lapping it and that it kind of goes away, but it really hasn’t gone away. And so the theory is that it does improve as there are more transactions to be shared, but I think that remains to be seen. And I think the agent mix thing is probably the biggest contributor over time, but also has the possibility of more normalizing if it’s sort of 5 million, 5.5 million or 6 million units again. As far as new business development, on average, that’s sort of flattish on a full year basis.

It kind of gives us some noise quarter-by-quarter, but I don’t think you should expect that to be a big benefit or hurt on an annual basis going forward. So I think that’s just — it’s just seasonal and quarterly variations. And then as far as like the split tables, not all agents are on the table. In fact, it’s like half-ish. And so it kind of works in concert with agent mix because usually, the highest producing agents are not on a table. They’re on a fixed rate. So if they’re getting more of the transactions, you’re also not going to see the uptick from what’s implied in a table. So I think — I’d look at agent mix first. And then the table thing, yes, sure, it’s going to have a little bit of an impact, but it’s just not all the agents are on the table.

Thomas Patrick McJoynt-Griffith: Okay. Great. That’s helpful color. And then switching over, just a housekeeping one. The corporate operating EBITDA was down quite a bit year-over-year. What caused that in the second quarter? And then when we think about a good run rate to assume for that corporate segment going forward, what should use or if you have a full year expectation, that would be helpful.

Charlotte C. Simonelli: On a full year basis, the corporate costs really do tend to stay about the same. There’s only some variation, and that usually is driven by like bonus, bonus timing and like benefits where we haven’t like spread it out to the business units. There was an impact in the second quarter from some charges that remained at corporate that will probably be allocated out to the business units in the future. But it’s largely driven by bonus and by benefits. So as far as like on a full year basis, the corporate costs have actually kind of stayed flattish, like so cost savings are helping to offset inflation, but there was a little bit of a more pronounced impact in the second quarter of things that resided in corporate.

Thomas Patrick McJoynt-Griffith: Okay. So is there anything in 2025 that’s happening now that I guess we should think about backing out as we think about what the ’26 kind of run rate should be and beyond?

Charlotte C. Simonelli: The biggest challenge, and this is — and I called it out in the script, it’s kind of like unusual, but we’re not the only company facing it, materially higher employee benefit costs. Like what we’re seeing, and I think other companies are seeing is that there’s more usage. So it’s a bit of a price implication, but it’s also usage. More people are going to the doctor than they have in the past, and it’s actually material. It’s material in our first half results, which is why I called it out. That’s the only like — so what that I’m not sure about for next year. If this continues, like then you would see that flow through into 2026. Obviously, on an annual basis, you make decisions about your benefit plans. We’re about to go through that process before we launch sort of people renewing their benefit programs and things like that in the fall. But that’s kind of the single biggest factor that could potentially sort of move into 2026 with us.

Operator: That concludes our Q&A session. Ladies and gentlemen, thank you all for joining. You may now disconnect. Everyone, have a great day.