Second Quarter 2021 Highlights (Compared to second quarter 2020 unless otherwise noted)

• Total agent count increased 6.3% to 140,201 agents • U.S. and Canada combined agent count increased 3.0% to 85,494 agents • Total open Motto Mortgage franchises increased 29.1% to 164 offices1 • Total Revenue of $77.2 million; Revenue excluding the Marketing Funds increased 46.4% to $59.2 million • Net income attributable to RE/MAX Holdings, Inc. of $5.2 million and earnings per diluted share (GAAP EPS) of $0.27 • Adjusted EBITDA2 of $30.5 million, Adjusted EBITDA margin2 of 39.5% and Adjusted earnings per diluted share (Adjusted EPS2) of $0.63

Operating Statistics as of July 31, 2021 (Compared to July 31, 2020 unless otherwise noted)

• Total agent count increased 6.0% to 140,594 agents • U.S. and Canada combined agent count increased 3.1% to 85,707 agents • Total open Motto Mortgage franchises increased 32.2% to 168 offices1

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 national mortgage brokerage franchise brand in the U.S., today announced operating results for the second quarter ended June 30, 2021. 

“Record financial results in the second quarter were driven by a historically strong housing market, improved performance from our core operations, and contributions from recent acquisitions,” stated Adam Contos, RE/MAX Holdings Chief Executive Officer. “Our second quarter revenue and Adjusted EBITDA totals were quarterly records. We added more than 8,000 new agents compared to last year’s second quarter, highlighted by solid agent growth in the U.S. and Canada. Open Motto offices increased nearly 30% year over year, and we continued to sell Motto franchises at a brisk pace.”

Contos continued, “Last month, we were pleased to close our acquisition of RE/MAX INTEGRA’s North American operations, the most significant acquisition in our history. We also amended and expanded our credit facility at attractive terms, further fortifying our already-strong balance sheet. The performance trends we see in our business remain positive and we believe our strategy and investments position us well to continue to capture the opportunities we see ahead of us to drive profitable growth.”

Second Quarter 2021 Operating Results Agent Count

The following compares agent count as of June 30, 2021 and 2020:

As of June 30, 2021: U.S. agent count: 62,428 Canada agent count: 23,066 Subtotal: 85,494 Outside the U.S. and Canada: 54,707 Total: 140,201

As of June 30, 2020: U.S. agent count: 61,677 Canada agent count: 21,295 Subtotal: 82,972 Outside the U.S. and Canada: 48,933 Total: 131,905

Revenue

RE/MAX Holdings generated total revenue of $77.2 million in the second quarter of 2021, an increase of $25.0 million, or 48.0%, compared to $52.2 million in the second quarter of 2020. Total revenue grew primarily due to increased broker fees stemming from higher total transactions per agent and rising home prices, fewer agent recruiting initiatives versus the prior year, incremental revenue from acquisitions and Motto growth. Revenue in the second quarter of 2020 was adversely affected by temporary COVID-19 financial support initiatives. Second quarter 2021 revenue growth was partially offset by continued attrition of booj’s legacy customer base. Recurring revenue streams, which consist of continuing franchise fees and annual dues, increased $10.3 million, or 40.6%, compared to the second quarter of 2020 and accounted for 60.5% of revenue (excluding the Marketing Funds) in the second quarter of 2021, compared to 63.0% in the comparable period in 2020.

Operating Expenses 

Total operating expenses were $63.8 million for the second quarter of 2021, an increase of $20.3 million, or 46.7%, compared to $43.5 million in the second quarter of 2020. Second quarter total operating expenses increased primarily due to higher selling, operating and administrative expenses. Second quarter 2020 selling, operating and administrative expenses were lower due to temporary COVID-19 costs savings measures. Excluding the Marketing Funds, second quarter 2021 operating expenses totaled $45.8 million, an increase of $14.0 million or 44.2% compared to $31.8 million in the second quarter of 2020.

Selling, operating and administrative expenses were $38.8 million in the second quarter of 2021, an increase of $13.5 million, or 53.1%, compared to the second quarter of 2020 and represented 50.2% of revenue, compared to 48.6% in the prior-year period. Selling, operating and administrative expenses increased primarily due to higher equity-based compensation expense related to acquisitions and the portion of the corporate bonus paid in stock; higher personnel costs from headcount increases largely from acquisitions, and the elimination of the corporate bonus and suspension of the 401(k) match in the prior year; an increase in acquisition-related expenses; an increase in legal fees; increased investments in technology; and higher travel and events expenses compared to the prior year; partially offset by lower bad debt expense driven by improved collections.

Depreciation and amortization expenses increased primarily due to incremental acquisition-related amortization expense and placing internally developed software into service.

Net Income and GAAP EPS

Net income attributable to RE/MAX Holdings was $5.2 million for the second quarter of 2021, an increase of $1.7 million compared to the second quarter of 2020. Reported basic and diluted GAAP EPS were $0.28 and $0.27, respectively, for the second quarter of 2021 compared to $0.19 each in the second quarter of 2020.  

Adjusted EBITDA and Adjusted EPS

Adjusted EBITDA was $30.5 million for the second quarter of 2021, an increase of $11.6 million or 61.3% from the second quarter of 2020. Adjusted EBITDA in the second quarter of 2020 was adversely affected by temporary COVID-19 financial support initiatives. Higher broker fees revenue in the second quarter of 2021 were partially offset by higher personnel costs from headcount increases largely from acquisitions and the reinstatement of the corporate bonus and the 401(k) match, both of which were suspended in the prior year. Adjusted EBITDA margin was 39.5% in the second quarter of 2021, up compared to 36.2% in the second quarter of 2020.

Adjusted basic and diluted EPS were $0.64 and $0.63, respectively, for the second quarter of 2021 compared to Adjusted basic and diluted EPS of $0.38 for the second quarter of 2020. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended June 30, 2021 assumes RE/MAX Holdings owned 100% of RMCO, LLC (“RMCO”). The weighted average ownership RE/MAX Holdings had in RMCO was 59.8% for the quarter ended June 30, 2021.

Balance Sheet

As of June 30, 2021, the Company had cash and cash equivalents of $107.3 million, an increase of $5.9 million from December 31, 2020. As of June 30, 2021, the Company had $222.6 million of outstanding debt, net of an unamortized debt discount and issuance costs, a decrease of $1.0 million compared to $223.6 million as of December 31, 2020.

On July 21, 2021, RE/MAX Holdings announced RE/MAX, LLC amended and restated its Credit Agreement to raise $460 million in term loans and increase the capacity of the revolving facility to $50 million. RE/MAX, LLC used the proceeds from the amended Credit Agreement to repay existing indebtedness of approximately $225 million and to fund the $235 million acquisition of the RE/MAX INTEGRA North American regions.

Dividend

On August 3, 2021, the Company’s Board of Directors approved a quarterly cash dividend of $0.23 per share of Class A common stock.  The quarterly dividend is payable on August 31, 2021, to shareholders of record at the close of business on August 17, 2021.

Outlook

The Company’s third quarter and full-year 2021 Outlook includes the financial results of the acquired RE/MAX INTEGRA’s North American regions and assumes no further currency movements, acquisitions or divestitures.

For the third quarter of 2021, the Company expects:

• Agent count to increase 5.0% to 6.0% over third quarter 2020; • Revenue in a range of $86.5 million to $91.5 million (including revenue from the Marketing Funds in a range of $21.5 million to $23.5 million); and • Adjusted EBITDA in a range of $29.5 million to $33.0 million.

For the full-year 2021, the Company is increasing its revenue guidance due to the RE/MAX INTEGRA North American acquisition. The Company is increasing its Adjusted EBITDA guidance due to stronger-than-expected second quarter results and the RE/MAX INTEGRA North American acquisition. The Company expects:

• Agent count to increase 5.0% to 6.0% over full-year 2020 • Revenue in a range of $321.0 million to $336.0 million (including revenue from the Marketing Funds in a range of $80.5 million to $83.5 million), up from $300.0 million to $310.0 million (including revenue from the Marketing Funds in a range of $71.0 million to $74.0 million); and • Adjusted EBITDA in a range of $113.0 million to $118.0 million, up from $103.0 million to $107.0 million.

Webcast and Conference Call

The Company will host a conference call for interested parties on Thursday, August 5, 2021, beginning at 8:30 a.m. Eastern Time. Interested parties can access the conference call using the link below:

http://www.directeventreg.com/registration/event/3535213

Interested parties 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:

1Total 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 “Branchises”. 

2Adjusted 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.

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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 nearly 140,000 agents across over 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 has grown to over 150 offices across almost 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; franchise sales; revenue; operating expenses; the Company’s outlook for the third quarter and full year 2021; non-GAAP financial measures; estimated effective tax rates for 2021; housing and mortgage market conditions; the benefits of recent acquisitions; the positive performance trends the Company is seeing in its business; the Company’s belief that its strategy and investments position it well to continue to capture the opportunities the Company sees ahead to drive profitable growth; and the Company’s strategic and operating plans and business models. 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 to 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, and (9) fluctuations in foreign currency exchange rates, and 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.remax.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:

Kerry McGovern (303) 796-3283 kmcgovern@remax.com

To access appendix tables, download a PDF of the press release via the Media Tray.