Financial Performance - Total revenue for Q1 2025 was $74.5 million, a decrease of 4.9% compared to $78.3 million in Q1 2024[3] - Revenue excluding Marketing Funds decreased by 4.3% to $55.6 million, driven by negative 3.2% organic growth and 1.1% adverse foreign currency movements[5] - Net loss attributable to RE/MAX Holdings was $(2.0) million, with a loss per diluted share of $(0.10)[9] - Net income for Q1 2025 was a loss of $3.236 million, an improvement from a loss of $5.607 million in Q1 2024[40] - Adjusted net income increased to $7.549 million in Q1 2025, compared to $6.267 million in Q1 2024, reflecting a growth of 20.4%[40] EBITDA and Margins - Adjusted EBITDA increased by 1.5% to $19.3 million, with an adjusted EBITDA margin of 25.9%[10] - Adjusted EBITDA for Q1 2025 was $19.287 million, up from $18.993 million in Q1 2024, with an adjusted EBITDA margin of 25.9% compared to 24.3% in the prior year[36] - Adjusted free cash flow was negative at $(1.161) million in Q1 2025, compared to positive $4.543 million in Q1 2024[47] - Adjusted free cash flow as a percentage of Adjusted EBITDA was (6.0)% in Q1 2025, down from 23.9% in Q1 2024[47] Agent Count and Franchise Performance - Total agent count increased by 2.0% to 146,126 agents, while U.S. and Canada combined agent count decreased by 5.0% to 75,010 agents[4] - The agent count in the U.S. decreased to 49,854 as of March 31, 2025, down from 51,286 as of December 31, 2024, reflecting a decline of 2.8%[34] - Total open Motto Mortgage franchises decreased by 7.8% to 224 offices[3] Expenses and Liabilities - Total operating expenses decreased by 6.3% to $69.1 million, primarily due to lower selling, operating, and administrative expenses[7] - Total liabilities decreased to $626.914 million as of March 31, 2025, from $639.988 million at the end of 2024, a reduction of 2.0%[30] Cash Flow and Cash Position - Cash and cash equivalents as of March 31, 2025, were $89.1 million, a decrease of $7.5 million from December 31, 2024[13] - Cash flow from operations decreased to $5.661 million in Q1 2025, down from $9.381 million in Q1 2024[47] - The company reported a net cash provided by operating activities of $5.661 million for Q1 2025, down from $9.381 million in Q1 2024, a decline of 39.0%[32] - Cash and cash equivalents as of March 31, 2025, were $89.107 million, down from $96.619 million at the end of 2024, a decrease of 7.8%[30] Future Outlook - The company expects Q2 2025 revenue in the range of $70.0 million to $75.0 million and adjusted EBITDA in the range of $22.5 million to $25.5 million[17] - For the full year 2025, the company anticipates revenue between $290.0 million and $310.0 million, with adjusted EBITDA between $90.0 million and $100.0 million[17] Shareholder Information - The weighted average shares of Class A common stock outstanding increased to 19,292,210 in Q1 2025 from 18,481,848 in Q1 2024[28] - Total basic pro forma shares outstanding increased to 31,851,810 in Q1 2025 from 31,041,448 in Q1 2024[45] Other Financial Metrics - Operating income for Q1 2025 was $5.367 million, an increase of 18.7% from $4.524 million in Q1 2024[28] - The company incurred interest expense of $7.924 million in Q1 2025, down from $9.256 million in Q1 2024, a decrease of 14.4%[36] - The company incurred $619,000 in settlement and impairment charges during Q1 2025[40]

Core Insights - Don Kottick has been appointed as the President of RE/MAX Canada, bringing over 30 years of experience in the Canadian real estate industry [1][2][3] - Kottick's leadership is expected to strengthen RE/MAX's position as a market leader in Canada, where the brand has over 25,000 agents in more than 970 offices across all provinces and territories [2][3] - RE/MAX is focusing on innovation and technology to enhance services for its affiliates and maintain its market dominance [3][5] Company Overview - RE/MAX is recognized as the 1 name in real estate, with a global presence in over 110 countries and territories [5][6] - The company has more than 145,000 agents operating in nearly 9,000 offices worldwide, making it the largest real estate brand by residential transaction sides [6][7] - The brand was founded in 1973 and has cultivated an entrepreneurial culture that allows agents and franchisees significant operational independence [7][8] Leadership and Strategy - Kottick's previous roles include Executive Vice President of Corporate Development at Peerage Realty Partners and President of Right At Home Realty, showcasing a strong background in corporate development and brokerage management [4] - His appointment is seen as a strategic move to build on RE/MAX's existing momentum and success in the Canadian market [3][4] - The company aims to continue expanding its presence and enhancing agent productivity through innovative practices [4][5]

Core Insights - March home sales experienced a significant increase of 23.0% compared to February, marking the largest month-over-month increase since March 2023, although sales were down 1.4% compared to March 2024 [1][8] - Active inventory rose by 35.5% year-over-year across 50 metro areas surveyed, indicating a growing supply of homes available for sale [2][18] - The median sales price in March reached $435,000, which is an increase of $8,000 (1.8%) from February and $15,000 (3.5%) from March 2024 [4][12] Sales and Inventory - The number of homes for sale in March increased by 8.0% from February and was 35.5% higher than in March 2024, driven by a 29.8% increase in new listings compared to February [3][18] - Washington D.C. saw the largest month-over-month increase in active listings, rising 25.3% from February [5] - The overall number of home sales in March was down 1.4% compared to March 2024, despite the significant month-over-month increase [8] Pricing Trends - The median sales price of $435,000 in March 2025 reflects a year-over-year increase, with notable increases in markets such as Burlington, VT (+22.4%) and Trenton, NJ (+9.7%) [12][13] - Buyers paid an average of 99% of the asking price in March, consistent with previous months [9][14] Market Dynamics - The average days on market for homes sold in March was 44 days, a decrease from February but an increase from March 2024 [16] - The months' supply of inventory was 2.3, indicating a slight increase from the previous year but a decrease from February [18][19] - The close-to-list price ratio remained stable at 99%, with San Francisco having the highest ratio at 104.8% [14][15]

Core Insights - RE/MAX Holdings, Inc. announces the retirement of Motto Mortgage and wemlo President and CEO Ward Morrison, effective June 15, 2025, with Morrison remaining in a consultative role until the end of 2025 [1][4] Company Overview - RE/MAX Holdings, Inc. is a leading franchisor in the real estate industry, operating under the RE/MAX® brand globally and the Motto® Mortgage brand in the U.S. [6] - The company was founded in 1973 and has grown to over 145,000 agents in nearly 9,000 offices across more than 110 countries, making it the largest real estate sales organization in terms of total residential transaction sides [6] Leadership Transition - Morrison played a crucial role in the development and launch of Motto Mortgage in 2016, establishing a unique business model that supports entrepreneurs in building mortgage businesses [2][5] - Adam Sartin, Vice President of Franchise Growth & Development, will lead the Motto Mortgage and wemlo brands during the search for Morrison's successor [4] Morrison's Contributions - Morrison's leadership has significantly impacted the real estate and mortgage industries, and he expressed pride in the accomplishments of Motto Mortgage since its inception [5][6] - His decision to retire is influenced by personal reasons, including a focus on family and personal fulfillment [3][4]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $72.5 million, with adjusted EBITDA of $23.3 million, reflecting an increase of almost 2% compared to Q4 of the previous year [28] - Adjusted EBITDA margin improved to 32.2%, an increase of 220 basis points over Q4 2023 [28] - Adjusted diluted EPS was reported at $0.30 [28] - Revenue excluding marketing funds decreased by 3.9% year-over-year, driven by negative organic growth of 3.5% and adverse foreign currency movements of 0.4% [28] Business Line Data and Key Metrics Changes - International agent count increased by almost 9% year-over-year, surpassing 70,000 agents outside the US and Canada for the first time [10] - In Canada, the agent count remained strong with over 25,000 agents, maintaining the brand's industry leadership [11] - The US experienced a decline in agent count typical at year-end, with efforts focused on enhancing the value proposition to stabilize and grow agent count [12] Market Data and Key Metrics Changes - The housing macro environment is described as being in a state of transition, influenced by inventory levels, interest rates, and government actions [8] - The Canadian market remains strong with a market share of approximately 28% [74] Company Strategy and Development Direction - The company aims to strengthen its existing business, develop new products and services, and explore growth opportunities [18] - A focus on operational efficiency and enhancing customer experience is emphasized as critical for future success [13][14] - New initiatives like Lead Concierge and RE/MAX Media Network are expected to contribute to revenue growth and improve customer experience [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the current housing market but sees opportunities for growth and resilience [9] - The company is optimistic about stabilizing US agent count and generating revenue from new initiatives [48] - The outlook for Q1 2025 anticipates a slight increase in agent count and revenue in the range of $71 million to $76 million [35] Other Important Information - The company has reached an agreement to settle two class action lawsuits in Canada for approximately $5.5 million [31] - The total leverage ratio increased slightly to 3.57:1 due to the settlement, but cash reserves are expected to grow, allowing for deleveraging in 2025 [34] Q&A Session Summary Question: Additional revenue opportunities from new initiatives - Management expressed optimism about new initiatives like Lead Concierge and RE/MAX Media Network, which are expected to drive revenue growth, although they may not match the scale of Motto [38][42] Question: Trends in broker commissions - Broker commissions have remained consistent throughout 2024, with the RE/MAX network adapting well to market conditions [50][52] Question: Cost management and savings opportunities - The company has focused on operational efficiency and cost management, with a goal to maintain a stable cost structure moving into 2025 [58][60] Question: US and international agent count trends - The US agent count has seen some attrition, while international agent count has grown significantly, driven by strong brand presence [72][75] Question: Update on Canadian litigation - The settlement of Canadian lawsuits is expected to remove uncertainty and is viewed positively for stakeholders [80] Question: R4 conference and upcoming changes - Management is preparing to announce new initiatives at the upcoming R4 conference, focusing on enhancing the value proposition for agents [84][88] Question: Buyback capacity and strategy - The company is considering stock buybacks as part of its capital allocation strategy, contingent on reducing leverage [100][102]

RE/MAX Holdings, Inc. Fourth Quarter and Full-Year 2024 Earnings February 21, 2025 Forward-Looking Statements This presentation 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 expression ...

Core Insights - RE/MAX reported revenue of $72.47 million for the quarter ended December 2024, reflecting a year-over-year decline of 5.4% and an EPS of $0.30, unchanged from the previous year [1] - The revenue fell short of the Zacks Consensus Estimate of $75.6 million, resulting in a surprise of -4.14%, while the EPS exceeded the consensus estimate of $0.29 by 3.45% [1] Financial Performance Metrics - RE/MAX's agent count outside the U.S. and Canada totaled 70,170, surpassing the average estimate of 69,085 [4] - The total agent count was 146,627, slightly above the average estimate of 146,114 [4] - The U.S. total agent count was 51,286, below the average estimate of 51,643 [4] - In Canada, the independent regions had an agent count of 4,860, compared to the average estimate of 5,010 [4] - Company-owned regions in the U.S. had an agent count of 44,911, below the average estimate of 45,373 [4] - Independent regions in the U.S. had an agent count of 6,375, slightly above the average estimate of 6,270 [4] - Company-owned regions in Canada had an agent count of 20,311, close to the average estimate of 20,376 [4] Revenue Breakdown - Revenue from marketing funds fees was $18.65 million, below the average estimate of $19.53 million, representing a year-over-year decline of 9.4% [4] - Continuing franchise fees generated $29.79 million, compared to the average estimate of $30.66 million, reflecting a decline of 5.1% year over year [4] - Franchise sales and other revenue amounted to $4.53 million, below the average estimate of $5.03 million, indicating a year-over-year change of -6.7% [4] - Broker fees were reported at $11.66 million, slightly below the average estimate of $11.78 million, with a year-over-year increase of 1% [4] - Annual dues revenue was $7.84 million, below the average estimate of $8.30 million, representing a year-over-year decline of 4.9% [4] Stock Performance - Over the past month, RE/MAX shares returned +2%, compared to the Zacks S&P 500 composite's +2.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - RE/MAX reported quarterly earnings of $0.30 per share, exceeding the Zacks Consensus Estimate of $0.29 per share, with a year-over-year comparison showing no change in earnings per share [1][2] Financial Performance - The company posted revenues of $72.47 million for the quarter ended December 2024, which was 4.14% below the Zacks Consensus Estimate and down from $76.6 million in the same quarter last year [2] - Over the last four quarters, RE/MAX has surpassed consensus EPS estimates four times and topped consensus revenue estimates twice [2] Stock Performance - RE/MAX shares have declined approximately 1.9% since the beginning of the year, while the S&P 500 has gained 4.5% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $78.12 million, and for the current fiscal year, it is $1.31 on revenues of $311.44 million [7] - The trend of estimate revisions for RE/MAX has been unfavorable leading up to the earnings release [6] Industry Context - The Real Estate - Operations industry, to which RE/MAX belongs, is currently ranked in the bottom 13% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact RE/MAX's stock performance [5]

Financial Performance - Total revenue for 2024 was $307.685 million, a decrease of 5.5% from $325.671 million in 2023 [323]. - Net income attributable to RE/MAX Holdings, Inc. for 2024 was $7.123 million, compared to a net loss of $69.022 million in 2023 [324]. - Operating income for 2024 was $40.181 million, a significant recovery from an operating loss of $10.637 million in 2023 [324]. - Comprehensive income attributable to RE/MAX Holdings, Inc. for 2024 was $4.621 million, compared to a comprehensive loss of $67.989 million in 2023 [326]. - Net income for the year ended December 31, 2024, was $8,077 thousand, a significant recovery from a net loss of $98,486 thousand in 2023 [332]. - Basic earnings per share (EPS) for 2024 was $0.38, compared to a loss of $3.81 in 2023, indicating a strong turnaround in performance [423]. Cash and Liquidity - Cash and cash equivalents increased to $96.619 million in 2024, up from $82.623 million in 2023, reflecting a growth of 16.1% [321]. - The total cash, cash equivalents, and restricted cash at the end of 2024 was $169,287 thousand, up from $125,763 thousand at the end of 2023 [332]. - Cash provided by operating activities increased to $59,652 thousand in 2024, compared to $28,264 thousand in 2023 [332]. - Total cash, cash equivalents, and restricted cash increased to $169.287 million in 2024 from $125.763 million in 2023, a rise of 34.5% [368]. Debt and Liabilities - As of December 31, 2024, $443.9 million in term loans were outstanding under the Senior Secured Credit Facility, with an interest rate of 7.0% [283]. - The Company is required to repay term loans at approximately $1.2 million per quarter under the Senior Secured Credit Facility [437]. - As of December 31, 2024, the Company had $436.2 million in net debt, slightly down from $440.0 million in 2023 [435]. - Total liabilities decreased to $639.988 million in 2024 from $653.211 million in 2023, a reduction of approximately 2% [321]. Revenue Sources - The company reported a decrease in franchise sales and other revenue to $22.687 million in 2024, down from $29.510 million in 2023, a decline of 23.1% [323]. - Revenue from U.S. Company-Owned Regions was $131.375 million, down from $138.499 million in 2023, reflecting a decline of 4.1% [365]. - Franchise sales and other revenue decreased to $18.829 million in 2024 from $25.794 million in 2023, a decline of 27.1% [365]. - The company recognized $7.9 million in revenue from franchise sales and $12.5 million from annual dues for the year ended December 31, 2024 [361]. Expenses and Cost Management - Selling, operating, and administrative expenses were reduced to $152.258 million in 2024, down from $171.548 million in 2023, a decrease of 11.3% [324]. - The Company incurred $1.3 million in severance and related expenses during the restructuring in 2024, along with $0.3 million in accelerated equity compensation expenses [394]. - The total lease cost for the Company was $14.267 million in 2024, down from $17.160 million in 2023 and $19.241 million in 2022, reflecting a decrease of approximately 16.5% year-over-year [408]. Strategic Initiatives - The company is focused on increasing the number of RE/MAX agents and closed transaction sides, as well as expanding Motto Mortgage offices [16]. - The company is pursuing future acquisitions and expects benefits from past acquisitions, impacting future performance positively [16]. - The company aims to enhance its franchise model to attract and retain top-performing agents, which is central to its growth strategy [336]. Currency and Interest Rate Management - A hypothetical 5% strengthening of the U.S. dollar against the Canadian dollar would have resulted in a decrease of approximately $1.3 million in operating income for the year ended December 31, 2024 [287]. - The company is actively managing currency risk through short-term foreign currency forwards and converting cash balances into U.S. dollars [286]. - A hypothetical 0.25% increase in interest rates would result in an additional annual interest expense of $1.1 million [284]. Management and Governance - The company emphasizes the importance of retaining senior management and key employees for future growth and operational success [16]. - The ownership percentage of non-controlling interest in RMCO decreased from 40.7% in 2023 to 39.8% in 2024 [414]. Tax and Regulatory Matters - The provision for income taxes for the year ended December 31, 2024, was $(1.877) million, reflecting a negative effective tax rate of (30.3)% [450]. - The uncertain tax position liabilities decreased from $258,000 in 2023 to $30,000 in 2024, reflecting a reduction in tax positions related to prior years [461]. Legal Matters - The Company is involved in ongoing antitrust litigations related to the National Association of Realtors, which may impact future financial performance [474]. - Plaintiffs in the Moehrl Action sought class certification for home sellers who paid commissions between March 6, 2015, and December 31, 2020 [475].

Financial Performance - Total revenue for Q4 2024 was $72.5 million, a decrease of 5.4% compared to Q4 2023[3] - Revenue excluding Marketing Funds decreased 3.9% to $53.8 million, driven by negative organic growth of 3.5% and adverse foreign currency movements of 0.4%[5] - Adjusted EBITDA increased 1.6% to $23.3 million, with an Adjusted EBITDA margin of 32.2%[11] - Net income attributable to RE/MAX Holdings was $5.8 million, with GAAP EPS of $0.29, compared to a net loss of $10.9 million in Q4 2023[9] - Total operating expenses for Q4 2024 were $68.2 million, a decrease of 21.0% compared to Q4 2023[7] - For Q4 2024, RE/MAX Holdings reported a net income of $4,080,000, a significant improvement from a net loss of $18,379,000 in Q4 2023[36] - Adjusted EBITDA for Q4 2024 was $23,341,000, compared to $22,976,000 in Q4 2023, reflecting an adjusted EBITDA margin of 32.2%[36] - Adjusted net income for the year ended December 31, 2024, was $41,494,000, slightly down from $41,695,000 in 2023[40] - Adjusted EBITDA for 2024 was $97,700 million, slightly up from $96,288 million in 2023, indicating a growth of 1.5%[46] Agent Count and Franchise Operations - Total agent count increased 1.2% to 146,627 agents, while U.S. and Canada combined agent count decreased 4.8% to 76,457 agents[4] - Total open Motto Mortgage franchises decreased 8.5% to 225 offices[3] - The total agent count in the U.S. decreased to 51,286 in Q4 2024 from 55,131 in Q4 2023, indicating a decline of approximately 7% year-over-year[34] - The total number of independent regions outside the U.S. and Canada increased to 70,170 in Q4 2024, up from 64,536 in Q4 2023, representing an increase of about 8%[34] Cash and Liquidity - Cash and cash equivalents as of December 31, 2024, were $96.6 million, an increase of $14.0 million from the previous year[13] - Cash and cash equivalents increased to $96,619,000 as of December 31, 2024, up from $82,623,000 in 2023[30] - Total current assets rose to $218,511,000 in 2024, compared to $176,565,000 in 2023, reflecting a growth of 23.7%[30] - The company reported a net cash provided by operating activities of $59,652,000 for the year ended December 31, 2024, compared to $28,264,000 in 2023[32] - Cash flow from operations for the year ended December 31, 2024, was $59,652 million, a significant increase from $28,264 million in 2023, representing a growth of 111%[46] - Adjusted free cash flow reached $51,002 million in 2024, up from $35,670 million in 2023, marking an increase of 43%[46] - Unencumbered cash generated amounted to $46,402 million in 2024, an increase from $31,058 million in 2023, which is a rise of 49%[46] Debt and Expenses - Total liabilities decreased to $639,988,000 in 2024 from $653,211,000 in 2023, a reduction of 2%[30] - Interest expense for the year ended December 31, 2024, was $36,258,000, compared to $35,741,000 in 2023, indicating a slight increase[36] - Debt principal payments remained consistent at $4,600 million for both years, indicating stable debt management[46] Strategic Initiatives - The company restructured its support services in Q4 2024 to enhance customer experience, alongside a reduction in force announced in Q3 2023 aimed at long-term cost savings[42] - The company emphasizes that adjusted free cash flow is a key measure for assessing cash available for strategic opportunities, including acquisitions and reinvestments[58] Dividends and Shareholder Returns - RE/MAX Holdings, Inc. declared no cash dividends for the year ended December 31, 2024, compared to $0.69 per share in 2023[28] - The weighted average shares of Class A common stock outstanding increased to 18,921,229 in Q4 2024 from 18,253,608 in Q4 2023[28] - Total basic pro forma shares outstanding increased to 31,480,829 in Q4 2024 from 30,813,208 in Q4 2023, reflecting a growth of approximately 2.2%[44]