DENVER, February 28, 2023

RE/MAX Holdings, Inc. released the following corrected press release and posted the updated release to its investor relations website:

Updated

Fourth Quarter 2022 Highlights (Compared to fourth quarter 2021 unless otherwise noted)

• Total Revenue decreased 8.9% to $81.3 million • Revenue excluding the Marketing Funds1 decreased 10.2% to $59.4 million, driven by negative 9.1% organic growth2 and adverse foreign currency movements of 1.1% • Net loss attributable to RE/MAX Holdings, Inc. of $1.3 million and loss per diluted share (GAAP EPS) of $0.07 • Adjusted EBITDA3 decreased 14.6% to $26.5 million, Adjusted EBITDA margin3 of 32.7% and Adjusted earnings per diluted share (Adjusted EPS3) of $0.41 • Total agent count increased 1.4% to 144,014 agents • U.S. and Canada combined agent count decreased 1.9% agents to 83,839 agents • Total open Motto Mortgage franchises increased 23.5% to 231 offices4

Full-Year 2022 Highlights (Compared to full-year 2021 unless otherwise noted)

• Total Revenue increased 7.2% to $353.4 million • Revenue excluding the Marketing Funds1 increased 6.4% to $263.1 million, driven by 7.8% growth attributable to acquisitions, partially offset by negative 0.8% organic growth2 and adverse foreign currency movements of 0.6% • Net income attributable to RE/MAX Holdings, Inc. of $6.1 million and income per diluted share (GAAP EPS) of $0.32 • Adjusted EBITDA3 increased 1.7% to $121.6 million, Adjusted EBITDA margin3 of 34.4% and Adjusted earnings per diluted share (Adjusted EPS3) of $2.17

Operating Statistics as of January 31, 2023 (Compared to January 31, 2022 unless otherwise noted)

• Total agent count increased 1.1% to 143,293 agents • U.S. and Canada combined agent count decreased 2.3% to 82,917 agents • Total open Motto Mortgage franchises increased 20.3% to 231 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 and full-year ended December 31, 2022. 

“Our business showed resilience during the fourth quarter while facing the strongest industry headwinds we’ve seen in more than a decade,” said Steve Joyce, RE/MAX Holdings Chief Executive Officer. “Our growth in Canadian and global RE/MAX agent counts continued, as did our Motto open office count, and we accelerated our stock buyback program.”

Joyce continued: “Our revenue decreased by less than 10% despite the nearly 35% year-over-year decline in U.S. existing home sales, highlighting the advantages and strength of our diversified franchise model. However, continuing challenging macroeconomic conditions including higher mortgage rates and lower U.S. existing home sales reduced our broker fee revenue, pressured our U.S. agent count, slowed Motto franchise sales, and muted our top- and bottom-line performance.”

“On January 30th, our RE/MAX brand celebrated its first 50 years, marking five consecutive decades of growth – a remarkable achievement. We remain steadfast in our belief that our global scale, industry-leading brands, financial strength, principally recurring-revenue model, and 100%-franchised businesses set us up well as we navigate the current environment. By continuing to reinvest in our brands and execute on our growth initiatives, we believe we will be well positioned to deliver profitable growth when the industry rebounds.”

Fourth Quarter 2022 Operating Results

Agent Count The following compares Agent Count as of December 31, 2022 and 2021:

As of December 31, 2022: U.S. agent count: 58,719 Canada agent count: 25,120 Subtotal: 83,839 Outside the U.S. and Canada: 60,175 Total: 144,014

As of December 31, 2021: U.S. agent count: 61,327 Canada agent count: 24,144 Subtotal: 85,471 Outside the U.S. and Canada: 56,527 Total: 141,998

Revenue

RE/MAX Holdings generated revenue of $81.3 million in the fourth quarter of 2022, a decrease of $7.9 million, or 8.9%, compared to $89.2 million in the fourth quarter of 2021. Revenue excluding the Marketing Funds was $59.4 million in the fourth quarter of 2022, a decrease of $6.8 million, or 10.2%, versus the same period in 2021. This decrease was attributable to negative organic revenue growth of 9.1% and adverse foreign-currency movements of 1.1%. Organic growth decreased primarily due to lower broker fee revenue, a reduction in U.S. agent count, and an increase in recruiting incentives, partially offset by Motto growth and Canadian RE/MAX agent count growth. 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 $1.5 million, or 3.4%, compared to the fourth quarter of 2021 and accounted for 69.4% of Revenue excluding the Marketing Funds in the fourth quarter of 2022 compared to 64.6% of Revenue excluding the Marketing Funds in the prior-year period.

Operating Expenses

Total operating expenses were $72.8 million for the fourth quarter of 2022, a decrease of $5.9 million, or 7.5%, compared to $78.7 million in the fourth quarter of 2021. Fourth quarter 2022 total operating expenses decreased primarily due to lower selling, operating and administrative expenses, partially offset by a $7.1 million goodwill impairment associated with the planned wind down of the Gadberry Group.

Selling, operating and administrative expenses were $35.0 million in the fourth quarter of 2022, a decrease of $11.3 million, or 24.5%, compared to the fourth quarter of 2021 and represented 58.8% of Revenue excluding the Marketing Funds, compared to 69.9% in the prior-year period. Fourth quarter 2022 selling, operating and administrative expenses decreased primarily due to lower personnel expenses – mainly decreased equity-based compensation, lower bonus expense and reduced headcount – and lower acquisition-related expenses. The Company substantially completed a restructuring, principally focused on its RE/MAX technology efforts, during the third quarter of 2022.  

Net Income (Loss) and GAAP EPS

Net loss attributable to RE/MAX Holdings was $1.3 million for the fourth quarter of 2022 compared to net income of $3.1 million for the fourth quarter of 2021. Reported basic and diluted GAAP loss per share were each $0.07 for the fourth quarter of 2022 compared to basic and diluted GAAP earnings per share of $0.17 and $0.16, respectively, in the fourth quarter of 2021.

Adjusted EBITDA and Adjusted EPS

Adjusted EBITDA was $26.5 million for the fourth quarter of 2022, a decrease of $4.5 million, or 14.6%, compared to the fourth quarter of 2021. Fourth quarter 2022 Adjusted EBITDA decreased primarily due to lower revenue excluding the Marketing Funds resulting from lower broker fee revenue and increased bad debt expense, partially offset by lower personnel expenses. Adjusted EBITDA margin was 32.7% in the fourth quarter of 2022, compared to 34.8% in the fourth quarter of 2021.

Adjusted basic and diluted EPS were each $0.41 for the fourth quarter of 2022 compared to Adjusted basic and diluted EPS of $0.61 and $0.60, respectively, for the fourth quarter of 2021. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended December 31, 2022 assumes RE/MAX Holdings owned 100% of RMCO, LLC (“RMCO”). The weighted average ownership RE/MAX Holdings had in RMCO was 59.1% for the quarter ended December 31, 2022.

Balance Sheet

As of December 31, 2022, the Company had cash and cash equivalents of $108.7 million, a decrease of $17.6 million from December 31, 2021. As of December 31, 2022, the Company had $448.3 million of outstanding debt, net of an unamortized debt discount and issuance costs, compared to $452.1 million as of December 31, 2021.

Dividend

On February 15, 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 March 22, 2023, to shareholders of record at the close of business on March 8, 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 December 31, 2022, 538,552 shares were repurchased and retired for $10.3 million excluding commissions, at a weighted average cost of $19.14 per share.

During the year ended December 31, 2022, 1,533,728 shares of the Company’s Class A common stock were repurchased and retired for $34.1 million excluding commissions, at a weighted average cost of $22.23. As of December 31, 2022, $65.9 million remained available under the share repurchase program.

Outlook

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

For the first quarter of 2023, RE/MAX Holdings expects: • Agent count to increase 0.0% to 1.0% over first quarter 2022; • Revenue in a range of $82.0 million to $87.0 million (including revenue from the Marketing Funds in a range of $20.5 million to $22.5 million); and • Adjusted EBITDA in a range of $18.5 million to $21.5 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, February 17, 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 December 31, 2022: Total Revenue: $81,267 Less: Marketing Funds fees: 21,823 • Revenue excluding the Marketing Funds: $59,444

Three Months Ended December 31, 2021: Total Revenue: $89,163 Less: Marketing Funds fees: 22,935 • Revenue excluding the Marketing Funds: $66,228

Year Ended December 31, 2022: Total Revenue: $353,386 Less: Marketing Funds fees: 90,319 • Revenue excluding the Marketing Funds: $263,067

Year Ended December 31, 2021: Total Revenue: $329,701 Less: Marketing Funds fees: 82,391 • Revenue excluding the Marketing Funds: $247,310

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; franchise sales; revenue; operating expenses; the Company’s outlook for the first quarter and full year 2023; non-GAAP financial measures; housing and mortgage market conditions; growth; the strength of the Company’s diversified franchise model despite continuing challenging macroeconomic conditions; the Company’s ability to navigate the current environment; and the Company’s belief that it will be well positioned to deliver profitable growth. 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: Samantha Rotbart (303) 796-3303 srotbart@remax.com

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