RE/MAX(US:RMAX)2021-11-23 17:32Financial Data and Key Metrics Changes - RE/MAX Holdings reported record revenue of $91 million for Q3 2021, a 28% increase year-over-year, with organic revenue growth of almost 7% [6][21] - Adjusted EBITDA reached a record $35 million, and adjusted diluted EPS was $0.71 [7] - The company increased its profit guidance for 2021 based on strong Q3 results [8] Business Line Data and Key Metrics Changes - Motto franchise sales remained strong, with open office count up more than 30% year-over-year [5][6] - Gadberry Group (now G73) posted a quarterly profit, contributing positively to overall revenue [7] - The core business generated nearly 7% organic revenue growth, with expectations for continued mid-single-digit organic growth [7][21] Market Data and Key Metrics Changes - October home sales in surveyed metros dropped 6.4% from September, indicating a cooling housing market [9] - Inventory levels decreased to 1.3 months supply in October, down from 1.5 months in September, highlighting ongoing supply chain challenges [10] Company Strategy and Development Direction - The company is focused on diversifying and expanding revenue opportunities, with significant investments in technology and acquisitions [5][8] - The integration of RE/MAX Integra's North American regions is a priority, with a focus on enhancing support for franchisees and agents [8] - RE/MAX is positioning itself for growth in Canada, leveraging its strong market presence and recent acquisitions [13][40] Management's Comments on Operating Environment and Future Outlook - Management noted a robust housing market despite recent sales declines, with expectations for a more balanced market moving forward [9][10] - The company anticipates continued growth in agent count and revenue, with a focus on maintaining productivity among agents [12][38] - Management expressed confidence in the company's strategic direction and the potential for future growth [25] Other Important Information - The company has launched a reinvention of its RE/MAX University platform to enhance agent training and productivity [15] - The introduction of the wemlo loan brokering system is expected to provide additional revenue opportunities [19][36] Q&A Session Summary Question: Revenue per agent trends - Management indicated that revenue per agent has remained consistent at around $2,600 to $2,700, benefiting from a recurring revenue model [27] Question: Measurement of productive brokers - Management conducts regular analyses of franchisee performance, leading to terminations of underperforming agents [28][29] Question: G73 revenue model - G73 operates on a subscription-based revenue model, contributing to overall franchise sales and revenue growth [31][32] Question: Reduced agent count growth - Management attributed reduced growth to unexpected terminations of underperforming franchisees in specific states [38] Question: Market share in Canada - RE/MAX holds approximately 30% market share across Canada, with potential for further growth [40] Question: Normalizing SOA and non-cash compensation - Management expects SOA to normalize around $7 million per quarter, with incremental amortization expenses from acquisitions [41][42]