RE/MAX(US:RMAX)2023-08-05 06:19Financial Data and Key Metrics Changes - In Q2 2023, total revenue declined by 10.6% to $82.4 million, with adjusted EBITDA of $26.6 million and an adjusted EBITDA margin of 32.3% [21][68] - Excluding marketing funds, revenue was $61.4 million, a decrease of approximately 11% compared to the same period last year, driven by negative 10.5% organic growth and adverse foreign currency movements of 29% [21][24] - Selling, operating, and administrative expenses decreased by 1.4% to $40.2 million, primarily due to changes in the fair value of contingent consideration liabilities and lower legal fees [23] Business Line Data and Key Metrics Changes - The mortgage segment is expected to generate approximately $1 million less in revenue than originally forecasted due to challenging market conditions [71] - The mortgage business continues to grow, with the company optimistic about increasing the pace of Motto franchise sales in the second half of 2023 [47][55] Market Data and Key Metrics Changes - The U.S. agent count losses narrowed during Q2 compared to Q1, indicating some positive momentum despite overall market contraction [37][53] - International agent count growth accelerated to 7% during Q2, particularly in countries like Turkey, Peru, Brazil, and South Africa [34] Company Strategy and Development Direction - The company is focused on strategic growth initiatives, including enhancing the recruiting value proposition through technology and training programs [18][42] - The MAX Recruit program has gained traction, with participation exceeding expectations, indicating a commitment to improving recruiting efforts [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment, which has pressured top-line growth and margins, but remains optimistic about long-term growth potential as the housing market normalizes [42][55] - The company expects agent count to change by 0% to 1% over the full year 2022, with revenue guidance slightly adjusted downward [25][24] Other Important Information - The company is actively managing legal expenses related to ongoing industry lawsuits, with a focus on maintaining operational efficiency [13][15] - The CEO search is ongoing, with robust interest from multiple candidates expected to conclude by the end of summer [54] Q&A Session Summary Question: Can you provide more color on the EBITDA guidance changes? - Management indicated that the changes are influenced by revenue and expense dynamics, with specific details expected to be discussed further [3] Question: What are the trends in U.S. agent count compared to competitors? - Management noted that while there is overall contraction in agent licenses, the company is seeing a narrowing of agent count losses, which is a positive sign [63][79] Question: How is the mortgage segment performing relative to expectations? - The mortgage segment is expected to generate less revenue than initially forecasted, but management remains optimistic about its growth potential [71][86]