DENVER, August 8, 2024

Second Quarter 2024 Highlights

(Compared to second quarter 2023 unless otherwise noted)

  • Total Revenue decreased 4.8% to $78.5 million
  • Revenue excluding the Marketing Funds1 decreased 4.8% to $58.4 million, driven by negative 4.5% organic growth2 and 0.3% adverse foreign currency movements
  • Net income attributable to RE/MAX Holdings, Inc. of $3.7 million and earnings per diluted share (GAAP EPS) of $0.19
  • Adjusted EBITDA3 increased 5.4% to $28.1 million, Adjusted EBITDA margin3 of 35.8% and Adjusted earnings per diluted share (Adjusted EPS3) of $0.41
  • Total agent count decreased 968 agents, or 0.7%, to 143,542 agents
  • U.S. and Canada combined agent count decreased 4.4% to 78,599 agents
  • Total open Motto Mortgage franchises increased 2.6% to 241 offices4

Operating Statistics as of July 31, 2024

(Compared to July 31, 2023, unless otherwise noted)

  • Total agent count decreased 302 agents, or 0.2%, to 144,281 agents
  • U.S. and Canada combined agent count decreased 4.3% to 78,440 agents
  • Total open Motto Mortgage franchises increased 0.8% to 239 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 June 30, 2024.

“We continue to operate our business as efficiently and effectively as possible, which contributed to better-than-expected second-quarter financial results,” said Erik Carlson, RE/MAX Holdings Chief Executive Officer. “Both during and after the quarter, we were pleased to announce notable brokerage and team conversions to RE/MAX, testament to our brand’s strong reputation and value proposition in the market. Our mortgage business also continues to be resilient as we saw a year-over-year increase in open Motto Mortgage franchises.

Carlson continued: “As sector dynamics continue to change, skill is no longer optional. Agents who are experienced, productive, and trustworthy – attributes widely associated with RE/MAX affiliates – have a distinct competitive advantage. Those professionals, supplemented by our extensive support and resources, including outstanding education and marketing, our industry-leading brands, and our abundant presence in local markets, position RE/MAX Holdings to succeed in the months and years ahead.”

Second Quarter 2024 Operating Results

Agent Count

The following table compares agent count as of June 30, 2024 and 2023:

Revenue

RE/MAX Holdings generated revenue of $78.5 million in the second quarter of 2024, a decrease of $4.0 million, or 4.8%, compared to $82.4 million in the second quarter of 2023. Revenue excluding the Marketing Funds was $58.4 million in the second quarter of 2024, a decrease of $2.9 million, or 4.8%, versus the same period in 2023. The decrease in Revenue excluding the Marketing Funds was attributable to negative organic revenue growth of 4.5% and adverse foreign currency movements of 0.3%. Negative organic revenue growth was principally driven by a decrease in U.S. agent count and a reduction in revenue from previous acquisitions, partially offset by an increase in Broker fee revenue.

Recurring revenue streams, which consist of continuing franchise fees and annual dues, decreased $2.2 million, or 5.4%, compared to the second quarter of 2023 and accounted for 65.9% of Revenue excluding the Marketing Funds in the second quarter of 2024 compared to 66.3% of Revenue excluding the Marketing Funds in the prior-year period.

Operating Expenses

Total operating expenses were $62.3 million for the second quarter of 2024, a decrease of $7.0 million, or 10.1%, compared to $69.3 million in the second quarter of 2023. Second quarter 2024 total operating expenses decreased primarily due to lower selling, operating and administrative expenses. Depreciation and amortization and Marketing Funds expenses were also lower compared to the second quarter of 2023.

Selling, operating and administrative expenses were $34.9 million in the second quarter of 2024, a decrease of $5.4 million, or 13.3%, compared to the second quarter of 2023 and represented 59.6% of Revenue excluding the Marketing Funds, compared to 65.5% in the prior-year period. Second quarter 2024 selling, operating and administrative expenses decreased primarily due to lower personnel costs and a decrease in bad debt, legal, property taxes, and technology expenses.

Net Income and GAAP EPS

Net income attributable to RE/MAX Holdings was $3.7 million for the second quarter of 2024 compared to $2.0 million for the second quarter of 2023. Reported basic and diluted GAAP earnings per share were $0.20 and $0.19, respectively, for the second quarter of 2024 compared to basic and diluted GAAP earnings per share of $0.11 each in the second quarter of 2023.

Adjusted EBITDA and Adjusted EPS

Adjusted EBITDA was $28.1 million for the second quarter of 2024, an increase of $1.4 million, or 5.4%, compared to the second quarter of 2023. Second quarter 2024 Adjusted EBITDA increased primarily due to a decrease in bad debt expense, lower personnel costs, decreased property taxes, a reduction in technology expenses, and lower legal expenses, partially offset by a decrease in U.S. agent count. Adjusted EBITDA margin was 35.8% in the second quarter of 2024, compared to 32.3% in the second quarter of 2023.

Adjusted basic and diluted EPS were $0.41 each for the second quarter of 2024 compared to Adjusted basic and diluted EPS of $0.41 and $0.40, respectively, for the second quarter of 2023. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended June 30, 2024, assumes RE/MAX Holdings owned 100% of RMCO, LLC (“RMCO”). The weighted average ownership RE/MAX Holdings had in RMCO was 60.0% for the quarter ended June 30, 2024.

Balance Sheet

As of June 30, 2024, the Company had cash and cash equivalents of $66.1 million, a decrease of $16.6 million from December 31, 2023. As of June 30, 2024, the Company had $442.7 million of outstanding debt, net of an unamortized debt discount and issuance costs, compared to $444.6 million as of December 31, 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 June 30, 2024, the Company did not repurchase any shares. As of June 30, 2024, $62.5 million remained available under the share repurchase program.

Outlook

The Company’s third quarter and full year 2024 Outlook assumes no further currency movements, acquisitions, or divestitures.

For the third quarter of 2024, RE/MAX Holdings expects:

  • Agent count to change negative 1.5% to 0.0% over third quarter 2023;
  • Revenue in a range of $75.0 million to $80.0 million (including revenue from the Marketing Funds in a range of $19.0 million to $21.0 million); and
  • Adjusted EBITDA in a range of $24.5 million to $27.5 million.

For the full year 2024, the Company is slightly reducing its agent count guidance and narrowing its Revenue and Adjusted EBITDA guidance ranges. The Company now expects:

  • Agent count to change negative 1.0% to positive 1.0% over full year 2023, changed from negative 0.5% to positive 1.5%;
  • Revenue in a range of $305.0 million to $315.0 million (including revenue from the Marketing Funds in a range of $78.0 million to $82.0 million), changed from $300.0 million to $320.0 million (including revenue from the Marketing Funds in a range of $78.0 million to $82.0 million); and
  • Adjusted EBITDA in a range of $93.0 million to $98.0 million, changed from $90.0 million to $100.0 million.

Webcast and Conference Call

The Company will host a conference call for interested parties on Friday, August 9, 2024, beginning at 8:30 a.m. Eastern Time. Interested parties can register in advance for the conference call using the link below:

https://registrations.events/direct/Q4I9411581

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):

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 nearly 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 and cost management; the Company’s outlook for the third quarter and full year 2024; non-GAAP financial measures; housing and mortgage market conditions; the resilience of our mortgage business and competitive advantages of RE/MAX; the operation of the Company’s business as efficiently and effectively as possible; brokerage and team conversions to RE/MAX and the Company’s strong reputation and value proposition in the market; the distinct competitive advantage of agents who are experienced, productive and trustworthy, which are attributes widely associated with RE/MAX affiliates; and our professionals positioning the Company to succeed in the months and years ahead. 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) changes in the real estate market or interest rates and availability of financing, (2) changes in business and economic activity in general, (3) the Company’s ability to attract and retain quality franchisees, (4) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (5) changes in laws and regulations, (6) the Company’s ability to enhance, market, and protect its brands, (7) the Company’s ability to implement its technology initiatives, (8) risks related to the Company’s leadership transition, (9) fluctuations in foreign currency exchange rates, (10) the nature and amount of the exclusion of charges in future periods when determining Adjusted EBITDA is subject to uncertainty and may not be similar to such charges in prior periods, 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: Kimberly Golladay (303) 224-4258 kgolladay@remax.com

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