RE/MAX(US:RMAX)2025-10-30 20:42Financial Performance - Total revenue for the three months ended September 30, 2025, was $73.3 million, a decrease of 6.7% from the prior year[117]. - Revenue excluding Marketing Funds decreased 5.6% to $55.1 million, driven by negative organic revenue growth of 5.4% and adverse foreign currency movements of 0.2%[117]. - Net income attributable to RE/MAX Holdings, Inc. was $4.0 million, compared to $1.0 million in the prior year[117]. - Total revenue for the three months ended September 30, 2025, was $73,247,000, a decrease of $5,231,000 or 6.7% compared to $78,478,000 in 2024[139]. - Revenue from Continuing franchise fees decreased by $3,353,000 or 10.9% to $27,445,000, primarily due to a reduction in U.S. agent count[133]. - Revenue excluding Marketing Funds fees was $55,105,000, down $3,275,000 or 5.6% from $58,380,000, driven by a decline in organic revenue of 5.4%[139]. - Total revenue for the nine months ended September 30, 2025, was $220,464,000, a decrease of $14,754,000 or 6.3% compared to $235,218,000 in 2024[149]. - Revenue from Franchise sales and other revenue decreased by $1,648,000 or 9.1% to $16,512,000, primarily due to a reduction in Franchise sales revenue[153]. - Revenue excluding Marketing Funds for the nine months ended September 30, 2025, was $165,185,000, down $9,702,000 or 5.5% from $174,887,000[154]. Operating Expenses - Total operating expenses increased by $8,333,000 or 13.2% to $54,934,000, representing 75.0% of total revenue[140]. - Personnel expenses within selling, operating, and administrative expenses decreased by $4,905,000 or 21.0% to $18,491,000[141]. - Total operating expenses for the nine months ended September 30, 2025, were $182,739,000, a decrease of $16,569,000 or 8.3% compared to $199,308,000 in 2024[157]. - Selling, operating, and administrative expenses decreased to $109,369,000, down $7,119,000 or 6.1% from $116,488,000 in the prior year[158]. - Personnel expenses decreased by $6,394,000 or 9.0% to $65,031,000, primarily due to increased costs charged to Marketing Funds and lower employee compensation[158]. - Total other expenses, net, decreased to $20,979,000, down $4,450,000 or 17.5% from $25,429,000 in 2024[162]. EBITDA and Income - Adjusted EBITDA decreased 5.6% to $25.8 million, with an Adjusted EBITDA margin of 35.2%, an increase of 40 basis points from the prior year[123]. - Adjusted EBITDA for the three months ended September 30, 2025, was $25.8 million, a decrease of $1.5 million from the prior year period[148]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $71,321,000, a decrease of $3,038,000 or 4.1% from $74,359,000 in 2024[167]. Cash Flow and Liquidity - Cash provided by operating activities decreased to $27.96 million for the nine months ended September 30, 2025, compared to $42.87 million for the same period in 2024[190]. - The company’s liquidity position is affected by changes in its agent and franchise base and conditions in the real estate and mortgage markets[177]. - The company’s cash flows are primarily related to the timing of cash receipts of revenues and payments of selling, operating, and administrative expenses[179]. - As of September 30, 2025, the company had $440.5 million in term loans outstanding and no revolving loans under its Senior Secured Credit Facility[189]. - The Senior Secured Credit Facility includes a $460 million term loan maturing on July 21, 2028, and a $50 million revolving loan facility[181]. - The interest rate on the Senior Secured Credit Facility was 6.8% as of September 30, 2025, with a potential additional annual interest expense of $1.1 million for each hypothetical 0.25% increase[210]. Programs and Initiatives - The Aspire program was launched to help brokerages attract new agents, with a fee structure that caps payments at $5,000 annually[119]. - The Ascend program introduced a 45% reduction in monthly fixed fees, allowing for greater cash flow flexibility for franchisees[121]. - The Appreciate program replaces the existing retirement plan for eligible agents, featuring a $100 transaction fee and reduced annual dues[124]. - The company announced the launch of Marketing as a Service (MaaS), a data-driven platform to enhance marketing efforts for affiliates[126]. Shareholder Returns and Dividends - The company suspended its quarterly dividend in Q4 2023 and did not approve any dividends in the first three quarters of 2025 and 2024[198]. - The company has a share repurchase program authorized for up to $100 million, with $62.5 million remaining available as of September 30, 2025[199]. Other Financial Metrics - Bad debt expense for the nine months ended September 30, 2025, was 1.0% of revenue, compared to 0.4% for the same period in 2024[208]. - 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 nine months ended September 30, 2025[212]. - The effective income tax rate for the nine months ended September 30, 2025, was impacted by foreign taxes on overseas income and valuation allowances related to U.S. foreign tax credits[164]. - The company recorded a cost recovery of $2.1 million related to a previous settlement during the three months ended September 30, 2025[161]. - For the twelve-month period ending September 30, 2025, the company's consolidated EBITDA was $97.6 million, resulting in a Total Leverage Ratio (TLR) of 3.41:1[185].