DENVER, February 22, 2024

Fourth Quarter 2023 Highlights

(Compared to fourth quarter 2022 unless otherwise noted)

• Total Revenue decreased 5.7% to $76.6 million • Revenue excluding the Marketing Funds1 decreased 5.8% to $56.0 million, driven by negative 5.6% organic growth2 and adverse foreign currency movements of 0.2% • Net loss attributable to RE/MAX Holdings, Inc. of $10.9 million and loss per diluted share (GAAP EPS) of $0.60 • Adjusted EBITDA3 decreased 13.4% to $23.0 million, Adjusted EBITDA margin3 of 30.0% and Adjusted earnings per diluted share (Adjusted EPS3) of $0.30 • Total agent count increased 0.6% to 144,835 agents • U.S. and Canada combined agent count decreased 4.2% to 80,299 agents • Total open Motto Mortgage franchises increased 6.5% to 246 offices4

Full-Year 2023 Highlights

(Compared to full year 2022 unless otherwise noted)

• Total Revenue decreased 7.8% to $325.7 million • Revenue excluding the Marketing Funds1 decreased 8.1% to $241.8 million, driven by negative 7.4% organic growth2 and adverse foreign currency movements of 0.7% • Net loss attributable to RE/MAX Holdings, Inc. of $69.0 million and loss per diluted share (GAAP EPS) of $3.81 • Adjusted EBITDA3 decreased 20.8% to $96.3 million, Adjusted EBITDA margin3 of 29.6% and Adjusted earnings per diluted share (Adjusted EPS3) of $1.36

Operating Statistics as of January 31, 2024

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

• Total agent count increased 204 agents to 143,497 agents • U.S. and Canada combined agent count decreased 4.2% to 79,416 agents • Total open Motto Mortgage franchises increased 5.6% to 244 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 national mortgage brokerage franchise brand in the U.S., today announced operating results for the quarter and year ended December 31, 2023. 

“We generated better-than-expected margins in the fourth quarter, driven by our ongoing focus on effective cost management amidst what continues to be a very difficult housing market. Despite macro conditions beyond our control, our expense discipline has allowed us to remain nimble, able to pursue and seize those growth opportunities that we identify as having the greatest potential,” said Erik Carlson, RE/MAX Holdings Chief Executive Officer. “Looking ahead to 2024, we believe there are many reasons to be optimistic – encouraging interest rate trends, improving customer sentiment, and ongoing pent-up demand bode well for progressively better housing market performance moving forward.

Carlson continued: “RE/MAX Holdings is uniquely positioned to benefit when the industry environment improves given our industry-leading brands, highly productive networks, and scaled business model. We believe these strengths, coupled with our strategic growth initiatives, should serve us well in an ascending market.”

Fourth Quarter 2023 Operating Results

Agent Count The following table compares Agent Count as of December 31, 2023 and 2022:

As of December 31, 2023: U.S. agent count: 55,131 Canada agent count: 25,168 Subtotal: 80,299 Outside the U.S. and Canada: 64,536 Total: 144,835

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

Revenue

RE/MAX Holdings generated revenue of $76.6 million in the fourth quarter of 2023, a decrease of $4.7 million, or 5.7%, compared to $81.3 million in the fourth quarter of 2022. Revenue excluding the Marketing Funds was $56.0 million in the fourth quarter of 2023, a decrease of $3.4 million, or 5.8%, versus the same period in 2022. The decrease in Revenue excluding the Marketing Funds was attributable to negative organic revenue growth of 5.6% and adverse foreign-currency movements of 0.2%. Organic growth decreased primarily due to a reduction in U.S. agent count and lower broker fee revenue, partially offset by Mortgage segment growth.

Recurring revenue streams, which consist of continuing franchise fees and annual dues, decreased $1.7 million, or 4.0%, compared to the fourth quarter of 2022 and accounted for 70.7% of Revenue excluding the Marketing Funds in the fourth quarter of 2023 compared to 69.4% of Revenue excluding the Marketing Funds in the prior-year period.

Operating Expenses

Total operating expenses were $86.3 million for the fourth quarter of 2023, an increase of $13.5 million, or 18.5%, compared to $72.8 million in the fourth quarter of 2022. Fourth quarter 2023 total operating expenses increased primarily due to higher impairment charges and selling, operating and administrative expenses, partially offset by reduced Marketing Funds and depreciation and amortization expenses.

Selling, operating and administrative expenses were $39.1 million in the fourth quarter of 2023, an increase of $3.4 million, or 9.6%, compared to the fourth quarter of 2022 and represented 69.9% of Revenue excluding the Marketing Funds, compared to 60.0% in the prior-year period. Fourth quarter 2023 selling, operating and administrative expenses increased primarily due to changes in the fair value of the contingent consideration liabilities.  

Net Income (Loss) and GAAP EPS

Net loss attributable to RE/MAX Holdings was $10.9 million for the fourth quarter of 2023 compared to net loss of $1.3 million for the fourth quarter of 2022. Reported basic and diluted GAAP loss per share were each $0.60 for the fourth quarter of 2023 compared to basic and diluted GAAP loss per share of $0.07 each in the fourth quarter of 2022.

Adjusted EBITDA and Adjusted EPS

Adjusted EBITDA was $23.0 million for the fourth quarter of 2023, a decrease of $3.6 million, or 13.4%, compared to the fourth quarter of 2022. Fourth quarter 2023 Adjusted EBITDA decreased primarily due to lower Revenue excluding the Marketing Funds resulting primarily from a decrease in U.S. agent count and lower broker fee revenue, partially offset by lower personnel expenses and legal fees. Adjusted EBITDA margin was 30.0% in the fourth quarter of 2023, compared to 32.7% in the fourth quarter of 2022.

Adjusted basic and diluted EPS were each $0.30 for the fourth quarter of 2023 compared to Adjusted basic and diluted EPS of $0.41 each for the fourth quarter of 2022. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended December 31, 2023, assumes RE/MAX Holdings owned 100% of RMCO, LLC (“RMCO”). The weighted average ownership RE/MAX Holdings had in RMCO was 59.2% for the quarter ended December 31, 2023.

Balance Sheet

As of December 31, 2023, the Company had cash and cash equivalents of $82.6 million, a decrease of $26.0 million from December 31, 2022. As of December 31, 2023, the Company had $444.6 million of outstanding debt, net of an unamortized debt discount and issuance costs, compared to $448.3 million as of December 31, 2022.

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, 2023, the Company did not repurchase any shares. As of December 31, 2023, $62.5 million remained available under the share repurchase program.

Leadership Changes

Today the Company announced the promotions of three of its senior leaders – Amy Lessinger, Abby Lee, and Susie Winders – in recognition of their contributions to the Company over their long tenures.

Ms. Lessinger is being promoted from Senior Vice President of Region Development for RE/MAX, LLC to President of RE/MAX, LLC, responsible for overseeing the RE/MAX brand and network globally. She succeeds Nick Bailey, President and CEO of RE/MAX, LLC, who is leaving the Company. Ms. Lee, previously Senior Vice President of Marketing and Communications, is being promoted to Executive Vice President of Marketing, Communications, and Events. She will continue to lead advertising, marketing, communications, and public relations for the Company, in addition to managing the Company’s events team. Susie Winders is being promoted from Senior Vice President, General Counsel, Chief Compliance Officer and Secretary to Executive Vice President, General Counsel, Chief Compliance Officer, and Secretary. Ms. Lessinger, Ms. Lee, and Ms. Winders will report directly to RE/MAX Holdings CEO Erik Carlson.

Outlook 

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

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

• Agent count to change negative 0.5% to positive 0.5% over first 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 $16.5 million to $19.5 million.

For the full year 2024, the Company expects:

• Agent count to change negative 0.5% to positive 1.5% over full year 2023; • Revenue in a range of $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 $90.0 million to $100.0 million.

Webcast and Conference Call

The Company will host a conference call for interested parties on Friday, February 23, 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/Q4I94851

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, 2023: Total revenue: $76,600 Less: Marketing Funds fees: $20,589 • Revenue excluding the Marketing Funds: $56,011

Three Months Ended December 31, 2022: Total revenue: $81,267 Less: Marketing Funds fees: $21,823 • Revenue excluding the Marketing Funds: $59,444

Year Ended December 31, 2023: Total revenue: $325,671 Less: Marketing Funds fees: $83,861 • Revenue excluding the Marketing Funds: $241,810

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

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 first quarter and full year 2024; non-GAAP financial measures; housing and mortgage market conditions (including interest rate trends, customer sentiment, and pent-up demand); our belief that there are many reasons to be optimistic in 2024 with respect to housing market performance moving forward; and our belief that RE/MAX Holdings is uniquely positioned to benefit when the industry environment improves which should serve the Company well in an ascending market. 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.