Third Quarter 2023 Highlights 

(Compared to third quarter 2022 unless otherwise noted) 

▪ Total Revenue decreased 8.7% to $81.2 million 

▪ Revenue excluding the Marketing Funds1 decreased 8.8% to $60.4 million, driven by negative 8.2% organic growth2 and adverse foreign currency movements of 0.6% 

▪ Net loss attributable to RE/MAX Holdings, Inc. of $59.5 million and loss per diluted share (GAAP EPS) of $3.28 

▪ Adjusted EBITDA3 decreased 15.0% to $26.7 million, Adjusted EBITDA margin3 of 32.9% and Adjusted earnings per diluted share (Adjusted EPS3) of $0.40 

▪ Total agent count increased 0.7% to 145,309 agents 

▪ U.S. and Canada combined agent count decreased 3.9% to 81,782 agents 

▪ Total open Motto Mortgage franchises increased 14.7% to 242 offices4 

Operating Statistics as of October 31, 2023 

(Compared to October 31, 2022 unless otherwise noted) 

▪ Total agent count increased 0.9% to 145,348 agents 

▪ U.S. and Canada combined agent count decreased 4.1% to 81,432 agents 

▪ Total open Motto Mortgage franchises increased 10.1% 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 September 30, 2023. 

“We continue to make progress driving forward our core strategic initiatives amid the toughest real estate market in a decade,” said Steve Joyce, RE/MAX Holdings Chief Executive Officer. “We remain focused on aggressively pursuing agent growth opportunities – teams and conversions, mergers and acquisitions – in the U.S., increasing our Canadian and global agent counts, and growing our mortgage business.” 

Joyce continued: “In the third quarter, we also made two difficult but necessary moves in the current environment. First, we streamlined our operations and our cost structure. Second, we entered into a settlement to end costly litigation and protect the Company and RE/MAX network from multiple industry class-action lawsuits. Ultimately, we believe we will successfully navigate these challenging times and grow significantly when industry conditions improve – a pattern we’ve seen repeatedly for 50 years. The strength of our brands and networks are unmatched in many ways, and we believe our future is very bright.” 

Revenue 

RE/MAX Holdings generated revenue of $81.2 million in the third quarter of 2023, a decrease of $7.7 million, or 8.7%, compared to $88.9 million in the third quarter of 2022. Revenue excluding the Marketing Funds was $60.4 million in the third quarter of 2023, a decrease of $5.8 million, or 8.8%, versus the same period in 2022. The decrease in Revenue excluding the Marketing Funds was attributable to negative organic revenue growth of 8.2% and adverse foreign-currency movements of 0.6%. Organic growth decreased primarily due to lower broker fee revenue and a reduction in U.S. agent count, partially offset by Mortgage segment growth. 

Recurring revenue streams, which consist of continuing franchise fees and annual dues, decreased $1.9 million, or 4.6%, compared to the third quarter of 2022 and accounted for 66.7% of Revenue excluding the Marketing Funds in the third quarter of 2023 compared to 63.8% of Revenue excluding the Marketing Funds in the prior-year period. 

Operating Expenses 

Total operating expenses were $102.2 million for the third quarter of 2023, an increase of $18.5 million, or 22.1%, compared to $83.7 million in the third quarter of 2022. Third quarter 2023 total operating expenses increased primarily due to higher settlement and impairment charges, partially offset by the $24.9 million gain on reduction in tax receivable agreement liability; lower selling, operating and administrative expenses; and reduced Marketing Funds expenses. During the third quarter of 2023, the Company agreed to pay $55.0 million to settle various industry class-action lawsuits. As a result, the total settlement amount of $55.0 million was recorded in the third quarter. 

Selling, operating and administrative expenses were $43.1 million in the third quarter of 2023, a decrease of $6.6 million, or 13.3%, compared to the third quarter of 2022 and represented 71.4% of Revenue excluding the Marketing Funds, compared to 75.1% in the prior-year period. Third quarter 2023 selling, operating and administrative expenses decreased primarily due to lower severance and reorganization charges, equity-compensation expense, and legal fees. 

Net Income (Loss) and GAAP EPS 

Net loss attributable to RE/MAX Holdings was $59.5 million for the third quarter of 2023 compared to net income of $0.1 million for the third quarter of 2022. Reported basic and diluted GAAP loss per share were each $3.28 for the third quarter of 2023 compared to basic and diluted GAAP earnings per share of $0.01 each in the third quarter of 2022. 

Adjusted EBITDA and Adjusted EPS 

Adjusted EBITDA was $26.7 million for the third quarter of 2023, a decrease of $4.7 million, or 15.0%, compared to the third quarter of 2022. Third 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, partially offset by lower legal fees. Adjusted EBITDA margin was 32.9% in the third quarter of 2023, compared to 35.4% in the third quarter of 2022. 

Adjusted basic and diluted EPS were each $0.40 for the third quarter of 2023 compared to Adjusted basic and diluted EPS of $0.56 each for the third quarter of 2022. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended September 30, 2023, 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 September 30, 2023. 

Balance Sheet 

As of September 30, 2023, the Company had cash and cash equivalents of $89.8 million, a decrease of $18.8 million from December 31, 2022. As of September 30, 2023, the Company had $445.5 million of outstanding debt, net of an unamortized debt discount and issuance costs, compared to $448.3 million as of December 31, 2022. 

Capital Allocation 

The Board of Directors decided to suspend the Company’s quarterly dividend. In light of the recent litigation settlement and ongoing challenging housing and mortgage market conditions, the Board believes this action to preserve the Company’s capital is prudent. 

Steve Joyce commented, “Today’s announced change in capital allocation was not entered into lightly. We strongly support returning capital to shareholders. However, given current circumstances and out of an abundance of caution, we believe this decision is optimal for shareholders as we determine how to best position the Company to take advantage of those opportunities that we believe will yield the best long-term returns.” 

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 September 30, 2023, the Company did not repurchase any shares. As of September 30, 2023, $62.5 million remained available under the share repurchase program. 

Outlook 

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

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

▪ Agent count to increase 0.25% to 1.25% over fourth quarter 2022; 

▪ Revenue in a range of $74.0 million to $79.0 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 $20.5 million to $23.5 million. 

For the full year 2023, the Company is slightly increasing its agent count guidance and narrowing its Revenue and Adjusted EBITDA guidance ranges and expects: 

▪ Agent count to increase 0.25% to 1.25% over full year 2022, changed from 0.0% to 1.0%; 

▪ Revenue in a range of $323.0 million to $328.0 million (including revenue from the Marketing Funds in a range of $83.0 million to $85.0 million), changed from $320.0 million to $332.0 million (including revenue from the Marketing Funds in a range of $82.5 million to $86.5 million); and 

▪ Adjusted EBITDA in a range of $94.0 million to $97.0 million, changed from $92.0 million to $98.0 million. 

RE/MAX Holdings, Inc. – Third Quarter 2023 Page 4 of 16 

Webcast and Conference Call 

The Company will host a conference call for interested parties on Friday, November 3, 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/SxfZxNDm 

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. 

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 September 30, 2023

Total Revenue: $ 81,223 

Less: Marketing Funds Fees $ 20,853 

* Revenue excluding the Marketing Funds $ 60,370 

Three Months Ended September 30, 2022

Total Revenue: $88,943

Less: Marketing Funds fees: $22,736

* Revenue excluding the Marketing Funds: $66,207

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. 

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 RE/MAX Holdings, Inc. the 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 fourth quarter and full year 2023; non-GAAP financial measures; housing and mortgage market conditions; growth; the Company’s focus on its strategic initiatives; our focus on pursuing growth opportunities and growing our mortgage business; and our belief that we will successfully navigate challenging times and grow significantly when industry 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) 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, including the RE/MAX and Motto Mortgage brands, (7) the Company’s ability to implement its technology initiatives, (8) risks related to the Company’s CEO 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 

aschulz@remax.com 

(303) 796-3287 

Media Contact:

Kimberly Golladay 

kgolladay@remax.com 

(303) 224-4258