RE/MAX(RMAX) - 2025 Q3 - Quarterly Results

Financial Performance - Total revenue for Q3 2025 was $73.3 million, a decrease of 6.7% from $78.5 million in Q3 2024[4] - Revenue excluding Marketing Funds decreased by 5.6% to $55.1 million, driven by a negative 5.4% organic revenue growth and 0.2% adverse foreign currency movements[4][6] - Adjusted EBITDA for Q3 2025 was $25.8 million, down 5.6% from the previous year, with an Adjusted EBITDA margin of 35.2%[4][12] - Net income attributable to RE/MAX Holdings was $4.0 million, compared to $1.0 million in Q3 2024, resulting in GAAP EPS of $0.19[4][10] - Total revenue for Q3 2025 was $73,247,000, a decrease of 6.4% compared to $78,478,000 in Q3 2024[28] - Net income attributable to RE/MAX Holdings, Inc. for Q3 2025 was $3,986,000, compared to $966,000 in Q3 2024, representing a significant increase of 312.4%[28] - The company reported operating income of $18,313,000 for Q3 2025, up from $15,211,000 in Q3 2024, reflecting a growth of 13.8%[28] - The net income for the three months ended September 30, 2025, was $7,462,000, compared to $3,414,000 for the same period in 2024, reflecting a year-over-year increase of 118%[36] Revenue Guidance - For Q4 2025, the company expects revenue in the range of $69.5 million to $73.5 million and Adjusted EBITDA between $19.0 million and $23.0 million[17] - The full year 2025 revenue guidance is now between $290.0 million and $294.0 million, with Adjusted EBITDA expected in the range of $90.0 million to $94.0 million[17] Agent Count and Franchise Operations - Total agent count increased by 1.4% to 147,547 agents, while U.S. and Canada combined agent count decreased by 5.1% to 74,198 agents[4][5] - The total number of open Motto Mortgage franchises decreased by 10.3% to 210 offices[4] - As of September 30, 2025, the total agent count in the U.S. and Canada decreased to 74,198, down from 76,457 in the previous quarter, representing a decline of 3.3%[34] - The agent count remained stable, reflecting the company's commitment to maintaining its franchise network[33] Cash Flow and Assets - Cash and cash equivalents increased to $107,476,000 as of September 30, 2025, compared to $96,619,000 at the end of 2024, marking an increase of 11.9%[30] - The total assets of the company were $582,203,000 as of September 30, 2025, slightly up from $581,594,000 at the end of 2024[30] - The company’s total liabilities decreased to $617,051,000 as of September 30, 2025, down from $639,988,000 at the end of 2024, a reduction of 3.6%[30] - The company’s cash flows from operating activities for the nine months ended September 30, 2025, were $27,955,000, down from $42,867,000 for the same period in 2024, a decrease of 34.8%[32] Adjusted Financial Metrics - Adjusted EBITDA for the three months ended September 30, 2025, was $25,768,000, with an adjusted EBITDA margin of 35.2%, compared to $27,290,000 and 34.8% in the same period of 2024[36] - Adjusted net income for the nine months ended September 30, 2025, was $32,698,000, compared to $31,570,000 for the same period in 2024, indicating a growth of 3.6%[41] - The adjusted free cash flow for the nine months ended September 30, 2025, was $25,354,000, down from $35,087,000 in the same period of 2024, a decrease of 27.8%[48] - Unencumbered cash generated for the nine months ended September 30, 2025, was $21,904,000, compared to $31,637,000 in the same period of 2024, reflecting a decline of 30.9%[48] - The total basic pro forma shares outstanding as of September 30, 2025, increased to 32,602,939 from 31,423,393 in the same period of 2024, an increase of 3.8%[45] Strategic Initiatives - The company plans to enhance its technology initiatives and expand its market presence, focusing on innovation and improved customer experience[25] - The company recorded a cost recovery related to a previous settlement during the three months ended September 30, 2025, which positively impacted net income[41] - The company restructured its support services during the nine months ended September 30, 2025, aimed at enhancing overall customer experience[37] Non-GAAP Measures - The Company defines Adjusted EBITDA as EBITDA adjusted for non-cash items and non-recurring charges, providing greater transparency into operating performance[53] - Adjusted EBITDA guidance for future periods is expected to exclude similar charges as in prior quarters, significantly impacting the Company's Adjusted EBITDA[56] - Adjusted net income is calculated by adding non-cash items and other items not useful for assessing operating performance to net income attributable to RE/MAX Holdings[57] - Adjusted basic and diluted earnings per share (Adjusted EPS) are derived from Adjusted net income divided by pro forma weighted average shares[58] - Adjusted free cash flow is calculated as cash flows from operations minus capital expenditures, quantifying cash available for shareholder value enhancement[60] - Adjusted free cash flow after tax and non-dividend distributions provides a meaningful view of cash flow available for opportunities after tax obligations[61] - Unencumbered cash generated is calculated as adjusted free cash flow after tax minus debt principal payments, indicating cash available for strategic opportunities[62] - The Company believes that Adjusted EBITDA and Adjusted EPS are useful measures for evaluating performance relative to competitors and over time[60] - Limitations of Adjusted EBITDA include not reflecting cash requirements for working capital, interest expense, or income tax obligations[55] - The Company emphasizes that these non-GAAP measures should not be considered in isolation from GAAP financial measures[55]