Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $73.3 million, with adjusted EBITDA of $25.8 million and an adjusted EBITDA margin of 35.2%, an increase of 40 basis points compared to Q3 2024 [17][19] - Revenue excluding marketing funds was $55.1 million, a decrease of 5.6% year-over-year, primarily due to a decline in organic revenue of 5.4% and adverse foreign currency movements of 0.2% [17][18] - Adjusted diluted EPS was $0.37, reflecting the company's profitability despite a challenging housing market [17] Business Line Data and Key Metrics Changes - The agent count reached over 147,500, marking a record high, with the U.S. agent count showing the best performance in three years [6][4] - The Aspire program has seen approximately 1,500 agents benefiting, contributing to higher retention rates and recruitment of newer agents [9][38] - The RE/MAX Marketing as a Service platform is expected to generate a seven-digit revenue contribution, indicating strong engagement and effectiveness [11][27] Market Data and Key Metrics Changes - Inventory in the housing market increased by 20% year-over-year, marking the 21st consecutive month of growth [5] - New listings rebounded in September, growing 4.5% over August, which is seen as a positive sign for transaction activity [5] - Canadian agent count saw a slight year-over-year decline but modest sequential growth, indicating resilience in a challenging market [8] Company Strategy and Development Direction - The company is focused on enhancing its value proposition through innovation and operational excellence, aiming to drive profitability and margin performance [4][6] - RE/MAX is strategically reinvesting in the business while evaluating opportunities for share repurchases, indicating a shift towards returning capital to shareholders [19][57] - The introduction of new economic models like Aspire, Ascend, and Appreciate aims to attract a diverse range of agents and improve retention [39][40] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the long-term potential of their initiatives despite the current housing market challenges [12][20] - The company is tightening its revenue and adjusted EBITDA guidance for the full year 2025, reflecting a pragmatic approach to the market conditions [20] - Management highlighted the importance of operational efficiencies and the cash-generative nature of the business, with a total leverage ratio now below 3.5 times [19][57] Other Important Information - The company is expanding its marketing services and leveraging AI to enhance customer experience and operational efficiency [10][14] - New leadership appointments, including a President of Mortgage Services, are expected to drive growth in the mortgage business [12][13] Q&A Session Summary Question: Can you provide more detail on the expected incremental revenue from the marketing and Aspire programs in 2026? - Management indicated that the RE/MAX Marketing as a Service platform is showing strong engagement and is expected to contribute significantly to revenue in 2026, with a margin profile differing from the core business [25][28] Question: What are the implications of M&A activity in the sector on recruitment rates? - Management noted that ongoing consolidation in the market presents opportunities for RE/MAX, with increased inbound interest from potential franchisees [31][33] Question: How are the Aspire, Ascend, and Appreciate models being received by franchisees? - The models are resonating well with the network, with Aspire showing higher retention rates and incremental recruitment of newer agents [38][39] Question: What is the outlook for Motto and its profitability? - Management is optimistic about the mortgage opportunity and is exploring changes to the business model to enhance profitability, though specifics will be shared later [46][48] Question: Will there be share buybacks by year-end? - With the total leverage ratio now below 3.5 times, management is considering share repurchases as an attractive use of capital [19][57]