DENVER, May 4, 2023

First Quarter 2023 Highlights

(Compared to first quarter 2022 unless otherwise noted)

• Total Revenue decreased 6.2% to $85.4 million

• Revenue excluding the Marketing Funds1 decreased 6.0% to $64.1 million, driven by negative 5.0% organic growth2 and adverse foreign currency movements of 1.0%

• Net loss attributable to RE/MAX Holdings, Inc. of $0.7 million and loss per diluted share (GAAP EPS) of $0.04

• Adjusted EBITDA3 decreased 28.6% to $19.9 million, Adjusted EBITDA margin3 of 23.3% and Adjusted earnings per diluted share (Adjusted EPS3) of $0.26

•  Total agent count increased 0.8% to 143,523 agents

•  U.S. and Canada combined agent count decreased 3.1% to 82,521 agents

•  Total open Motto Mortgage franchises increased 21.5% to 232 offices4

Operating Statistics as of April 30, 2023

(Compared to April 30, 2022 unless otherwise noted)

•  Total agent count increased 0.3% to 143,759 agents

•  U.S. and Canada combined agent count decreased 3.6% to 82,393 agents

•  Total open Motto Mortgage franchises increased 23.2% to 234 offices4

RE/MAX Holdings, Inc. (the “Company” or “RE/MAX Holdings”) (NYSE: RMAX), parent company of RE/MAX, one of the world’s leading franchisors of real estate brokerage services, and Motto Mortgage (“Motto”), the first-and-only national mortgage brokerage franchise brand in the U.S., today announced operating results for the quarter ended March 31, 2023. 

“We performed largely as expected during the first quarter, as the U.S. housing market continued to adjust to higher interest rates,” said Steve Joyce, RE/MAX Holdings Chief Executive Officer. “Given the industry conditions, we anticipated pressure on our U.S. agent count to start the year but did see some encouraging trends toward the end of the first quarter. The quarter had several other operational highlights including agent count growth in Canada and the global regions, regained momentum in Motto franchise sales, and a continued ramp in wemlo’s business. We remain squarely focused on growth, and we believe we’re positioned for improved U.S. agent count performance in the near term.”

Joyce continued: “We’re executing on the strategic growth initiatives we put in place last year, and we remain confident in the upside they can deliver in the long run. We also continue to invest in critical growth-related activities such as our annual RE/MAX and Motto conventions, both of which had robust attendance, demonstrating the value our affiliates continue to derive from coming together to share ideas. We are directing our capital opportunistically so that we are best positioned to grow profitably when market conditions improve.”

First Quarter 2023 Operating Results

Agent Count

The following table compares agent count as of March 31, 2023 and 2022:

As of March 31, 2023: U.S. agent count: 57,450 Canada agent count: 25,071 Subtotal: 82,521 Outside the U.S. and Canada: 61,002 Total: 143,523

As of March 31, 2022: U.S. agent count: 60,717 Canada agent count: 24,443 Subtotal: 85,160 Outside the U.S. and Canada: 57,245 Total: 142,405

Revenue

RE/MAX Holdings generated revenue of $85.4 million in the first quarter of 2023, a decrease of $5.6 million, or 6.2%, compared to $91.0 million in the first quarter of 2022. Revenue excluding the Marketing Funds was $64.1 million in the first quarter of 2023, a decrease of $4.1 million, or 6.0%, versus the same period in 2022. The decrease in Revenue excluding the Marketing Funds was attributable to negative organic revenue growth of 5.0% and adverse foreign-currency movements of 1.0%. Organic growth decreased primarily due to lower broker fee revenue and a reduction in U.S. agent count, partially offset by higher revenue from the annual RE/MAX agent convention. Rising interest rates adversely impacted affordability and weakened housing demand resulting in fewer transactions and, by extension, lower broker fee revenue.

Recurring revenue streams, which consist of continuing franchise fees and annual dues, decreased $1.7 million, or 4.1%, compared to the first quarter of 2022 and accounted for 63.5% of Revenue excluding the Marketing Funds in the first quarter of 2023 compared to 62.2% of Revenue excluding the Marketing Funds in the prior-year period.

Operating Expenses

Total operating expenses were $78.5 million for the first quarter of 2023, a decrease of $4.9 million, or 5.9%, compared to $83.4 million in the first quarter of 2022. First quarter 2023 total operating expenses decreased primarily due to lower settlement and impairment charges.

Selling, operating and administrative expenses were $49.1 million in the first quarter of 2023, an increase of $1.3 million, or 2.7%, compared to the first quarter of 2022 and represented 76.7% of Revenue excluding the Marketing Funds, compared to 70.2% in the prior-year period. First quarter 2023 selling, operating and administrative expenses increased primarily due to an increase in expenses associated with the annual RE/MAX agent convention and bad debt expense, partially offset by lower personnel expenses and lower professional fees.  

Net Income (Loss) and GAAP EPS

Net loss attributable to RE/MAX Holdings was $0.7 million for the first quarter of 2023 compared to net income of $1.5 million for the first quarter of 2022. Reported basic and diluted GAAP loss per share were each $0.04 for the first quarter of 2023 compared to basic and diluted GAAP earnings per share of $0.08 each in the first quarter of 2022.

Adjusted EBITDA and Adjusted EPS

Adjusted EBITDA was $19.9 million for the first quarter of 2023, a decrease of $8.0 million, or 28.6%, compared to the first quarter of 2022. First quarter 2023 Adjusted EBITDA decreased primarily due to lower revenue excluding the Marketing Funds resulting from lower broker fee revenue and a decrease in U.S. agent count, increased bad debt expense and the net impact from the annual RE/MAX agent convention. Adjusted EBITDA margin was 23.3% in the first quarter of 2023, compared to 30.7% in the first quarter of 2022.

Adjusted basic and diluted EPS were each $0.26 for the first quarter of 2023 compared to Adjusted basic and diluted EPS of $0.51 each for the first quarter of 2022. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended March 31, 2023, assumes RE/MAX Holdings owned 100% of RMCO, LLC (“RMCO”). The weighted average ownership RE/MAX Holdings had in RMCO was 58.8% for the quarter ended March 31, 2023.

Balance Sheet

As of March 31, 2023, the Company had cash and cash equivalents of $96.8 million, a decrease of $11.9 million from December 31, 2022. As of March 31, 2023, the Company had $447.4 million of outstanding debt, net of an unamortized debt discount and issuance costs, compared to $448.3 million as of December 31, 2022.

Dividend

On May 3, 2023, the Company announced that its Board of Directors approved a quarterly cash dividend of $0.23 per share of Class A common stock.  The quarterly dividend is payable on May 31, 2023, to shareholders of record at the close of business on May 17, 2023.

Share Repurchases and Retirement

As previously disclosed, in January 2022 the Company’s Board of Directors authorized a common stock repurchase program of up to $100 million. During the three months ended March 31, 2023, 160,405 shares were repurchased and retired for $3.4 million excluding commissions, at a weighted average cost of $21.24 per share. As of March 31, 2023, $62.5 million remained available under the share repurchase program.

Outlook

The Company’s second quarter and full-year 2023 Outlook assumes no further currency movements, acquisitions, or divestitures.

For the second quarter of 2023, RE/MAX Holdings expects:

•  Agent count to change -0.5% to 0.5% over second quarter 2022;

•  Revenue in a range of $79.0 million to $84.0 million (including revenue from the Marketing Funds in a range of $20.0 million to $22.0 million); and

•  Adjusted EBITDA in a range of $24.5 million to $27.5 million.

For the full year 2023, the Company expects:

•  Agent count to change -1.0% to 1.0% over full year 2022;

•  Revenue in a range of $315.0 million to $335.0 million (including revenue from the Marketing Funds in a range of $83.5 million to $87.5 million); and

•  Adjusted EBITDA in a range of $95.0 million to $105.0 million.

Webcast and Conference Call

The Company will host a conference call for interested parties on Friday, May 5, 2023, beginning at 8:30 a.m. Eastern Time. Interested parties can register in advance for the conference call using the link below:

https://conferencingportals.com/event/tTSuEepd

Interested parties also can access a live webcast through the Investor Relations section of the Company’s website at http://investors.remaxholdings.com. Please dial-in or join the webcast 10 minutes before the start of the conference call. An archive of the webcast will be available on the Company’s website for a limited time as well.

Basis of Presentation

Unless otherwise noted, the results presented in this press release are consolidated and exclude adjustments attributable to the non-controlling interest.

Footnotes:

1Revenue excluding the Marketing Funds is a non-GAAP measure of financial performance that differs from U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and a reconciliation to the most directly comparable U.S. GAAP measure is as follows (in thousands):

Revenue excluding the Marketing Funds: Three Months Ended March 31, 2023: Total Revenue: $85,401 Less: Marketing Funds fees: 21,342 • Revenue excluding the Marketing Funds: $64,059

Three Months Ended March 31, 2022: Total Revenue: $91,004 Less: Marketing Funds fees: 22,851 • Revenue excluding the Marketing Funds: $68,153

2The Company defines organic revenue growth as revenue growth from continuing operations excluding (i) revenue from Marketing Funds, (ii) revenue from acquisitions, and (iii) the impact of foreign currency movements. The Company defines revenue from acquisitions as the revenue generated from the date of an acquisition to its first anniversary (excluding Marketing Funds revenue related to acquisitions where applicable). 

3Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS are non-GAAP measures. These terms are defined at the end of this release. Please see Tables 5 and 6 appearing later in this release for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures.

4Total open Motto Mortgage franchises includes only “bricks and mortar” offices with a unique physical address with rights granted by a full franchise agreement with Motto Franchising, LLC and excludes any “virtual” offices or BranchiseSM offices.

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About RE/MAX Holdings, Inc.

RE/MAX Holdings, Inc. (NYSE: RMAX) is one of the world’s leading franchisors in the real estate industry, franchising real estate brokerages globally under the RE/MAX® brand, and mortgage brokerages within the U.S. under the Motto® Mortgage brand. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Now with more than 140,000 agents in over 9,000 offices and a presence in more than 110 countries and territories, nobody in the world sells more real estate than RE/MAX, as measured by total residential transaction sides. Dedicated to innovation and change in the real estate industry, RE/MAX launched Motto Franchising, LLC, a ground-breaking mortgage brokerage franchisor, in 2016. Motto Mortgage, the first-and-only national mortgage brokerage franchise brand in the U.S., has grown to over 225 offices across more than 40 states.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the use of words such as “believe,” “intend,” “expect,” “estimate,” “plan,” “outlook,” “project,” “anticipate,” “may,” “will,” “would” and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. Forward-looking statements include statements related to agent count; Motto open offices; franchise sales; revenue; operating expenses; the Company’s outlook for the second quarter and full year 2023; non-GAAP financial measures; housing and mortgage market conditions; growth; encouraging trends seen toward the end of the first quarter; the Company’s focus on growth; the belief that the Company is positioned for improved U.S. agent count performance in the near term; the Company’s confidence that the strategic growth initiatives can deliver in the long run; and the Company’s directing of its capital opportunistically so that it is best positioned to grow profitably when market conditions improve. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily accurately indicate the times at which such performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include, without limitation, (1) the global COVID-19 pandemic, which continues to pose significant and widespread risks and ongoing uncertainty for the Company’s business, including the Company’s agents, loan originators, franchisees and employees, as well as home buyers and sellers, (2) changes in the real estate market or interest rates and availability of financing, (3) changes in business and economic activity in general, (4) the Company’s ability to attract and retain quality franchisees, (5) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (6) changes in laws and regulations, (7) the Company’s ability to enhance, market, and protect its brands, including the RE/MAX and Motto Mortgage brands, (8) the Company’s ability to implement its technology initiatives, (9) risks related to the Company’s CEO transition, (10) fluctuations in foreign currency exchange rates, and (11) those risks and uncertainties described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company’s website at www.remaxholdings.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no obligation, to update this information to reflect future events or circumstances.

Investor Contact: Andy Schulz (303) 796-3287  aschulz@remax.com

Media Contact: Keri Henke (303) 796-3424 khenke@remax.com 

To access appendix tables and Non-GAAP Financial Measures, download a PDF of the press release via the Media Tray.