RE/MAX(US:RMAX)2025-05-01 20:21Revenue Performance - Total revenue for Q1 2025 was $74.5 million, a decrease of 4.9% compared to Q1 2024[114] - Revenue excluding Marketing Funds decreased 4.3% to $55.6 million, driven by negative organic revenue growth of 3.2% and adverse foreign currency movements of 1.1%[114] - Continuing franchise fees decreased by 5.6% to $29.4 million, primarily due to a reduction in U.S. agent count[123] - Franchise sales in the U.S. and Canada decreased by 18.2% to 27[119] - Economic uncertainties and high interest rates have led to declines in the number of U.S. REMAX agents and total revenue[115] Income and Expenses - Net income attributable to RE/MAX Holdings, Inc. was a loss of $2.0 million, an improvement from a loss of $3.4 million in the prior year[114] - Total operating expenses for the three months ended March 31, 2025, were $69,100,000, a decrease of 6.3% from $73,763,000 in the same period of 2024[129] - Selling, operating, and administrative expenses decreased by $2,677,000, or 5.9%, from $45,705,000 in Q1 2024 to $43,028,000 in Q1 2025[130] - Adjusted EBITDA increased 1.5% to $19.3 million, with an Adjusted EBITDA margin of 25.9%, up 164 basis points from the prior year[117] - Adjusted EBITDA for the three months ended March 31, 2025, was $19,287,000, an increase of $294,000 from $18,993,000 in the comparable prior year period[138] - Interest expense decreased by $1,332,000, or 14.4%, from $9,256,000 in Q1 2024 to $7,924,000 in Q1 2025[134] - Total other expenses, net, decreased by $1,894,000, or 22.0%, from $8,627,000 in Q1 2024 to $6,733,000 in Q1 2025[134] - Personnel expenses decreased by $754,000, or 2.9%, from $25,832,000 in Q1 2024 to $25,078,000 in Q1 2025[130] - Depreciation and amortization expense decreased from $7,852,000 in Q1 2024 to $6,589,000 in Q1 2025, primarily due to lower franchise agreements amortization[131] Agent and Office Metrics - 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[117] - The number of open Motto Mortgage offices decreased by 7.8% to 224 offices[117] Cash Flow and Capital Expenditures - Cash provided by operating activities decreased to $5.661 million for the three months ended March 31, 2025, compared to $9.381 million for the same period in 2024[160] - Total capital expenditures for the three months ended March 31, 2025, were $1.7 million, with expectations for 2025 to be between $6.0 million and $7.5 million[166] Debt and Financial Obligations - The Senior Secured Credit Facility includes a $460 million term loan and a $50 million revolving loan, with a repayment requirement of approximately $1.2 million per quarter[150] - As of December 31, 2024, no Excess Cash Flow payment was required because the Total Leverage Ratio was below 3.75:1[152] - As of March 31, 2025, RE/MAX, LLC's consolidated EBITDA was $97.8 million, with a Total Leverage Ratio (TLR) of 3.61:1[154] - The company had $442.8 million in term loans outstanding and no revolving loans under the Senior Secured Credit Facility as of March 31, 2025[158] - The interest rate on the term loan facility was 6.9% as of March 31, 2025, with a hypothetical 0.25% increase resulting in an additional annual interest expense of $1.1 million[180] Strategic Initiatives - The AspireSM program was launched to help brokerages attract new agents, with a performance-based financial model[116] - The company plans to pursue acquisitions of RE/MAX Independent Regions in the U.S. and Canada to access new markets and revenue streams[165] Shareholder Returns - The company suspended its quarterly dividend in Q4 2023 and did not approve any dividends for the first quarters of 2025 and 2024[168] - A common stock repurchase program of up to $100 million was authorized, with $62.5 million remaining available as of March 31, 2025[169] Bad Debt and Currency Impact - Bad debt expense for the three months ended March 31, 2025, was 2.1% of revenue, compared to 1.7% for the same period in 2024[177] - A hypothetical 5% strengthening/weakening of the U.S. dollar against the Canadian dollar would have impacted operating income by approximately $0.4 million[182]