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RE/MAX HOLDINGS, INC. REPORTS THIRD QUARTER 2024 RESULTS

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RE/MAX Holdings reported Q3 2024 results with total revenue decreasing 3.4% to $78.5 million. The company's Adjusted EBITDA increased 2.0% to $27.3 million, with a margin of 34.8%. Total agent count showed a modest increase of 174 agents (0.1%) to 145,483, though U.S. and Canada combined agent count decreased 4.4%. The company's performance was marked by operational efficiency improvements, despite challenges in the U.S. market where agent count declined 6.5%. Recent hurricanes Helene and Milton are expected to impact Q4 revenue by $1.0-1.5 million due to fee waivers for affected affiliates.

RE/MAX Holdings ha riportato i risultati del terzo trimestre del 2024 con un fatturato totale che è diminuito del 3,4% a 78,5 milioni di dollari. L'Adjusted EBITDA dell'azienda è aumentato del 2,0% a 27,3 milioni di dollari, con un margine del 34,8%. Il numero totale di agenti ha mostrato un modesto aumento di 174 agenti (0,1%) arrivando a 145.483, sebbene il numero combinato di agenti negli Stati Uniti e in Canada sia diminuito del 4,4%. Le performance dell'azienda sono state contrassegnate da miglioramenti dell'efficienza operativa, nonostante le sfide nel mercato statunitense, dove il numero di agenti è calato del 6,5%. Gli uragani recenti Helene e Milton sono previsti avere un impatto sul fatturato del quarto trimestre di 1,0-1,5 milioni di dollari a causa delle esenzioni delle tasse per gli affiliati colpiti.

RE/MAX Holdings reportó los resultados del tercer trimestre de 2024, mostrando una disminución del 3.4% en los ingresos totales, alcanzando 78.5 millones de dólares. El EBITDA ajustado de la compañía aumentó un 2.0% hasta 27.3 millones de dólares, con un margen del 34.8%. El número total de agentes mostró un modesto aumento de 174 agentes (0.1%) alcanzando 145,483, aunque el número combinado de agentes en EE. UU. y Canadá disminuyó un 4.4%. El desempeño de la compañía estuvo marcado por mejoras en la eficiencia operativa, a pesar de los desafíos en el mercado estadounidense, donde la cantidad de agentes disminuyó un 6.5%. Se espera que los recientes huracanes Helene y Milton impacten los ingresos del cuarto trimestre en 1.0-1.5 millones de dólares debido a las exenciones de tarifas para los afiliados afectados.

RE/MAX Holdings는 2024년 3분기 결과를 발표했으며, 총 수익이 7850만 달러로 3.4% 감소했습니다. 회사의 조정 EBITDA는 2730만 달러로 2.0% 증가했으며, 마진은 34.8%입니다. 총 에이전트 수는 174명의 에이전트가 증가하여 (0.1%) 145,483명이 되었으나, 미국과 캐나다의 에이전트 수는 4.4% 감소했습니다. 회사의 성과는 운영 효율성 개선이 두드러졌으나, 에이전트 수가 6.5% 감소한 미국 시장에서의 어려움이 있었습니다. 최근의 허리케인 헬렌과 밀턴은 영향을 받은 제휴사를 위한 요금 면제로 인해 4분기 매출에 100만-150만 달러의 영향을 미칠 것으로 예상됩니다.

RE/MAX Holdings a annoncé les résultats du troisième trimestre 2024, avec un chiffre d'affaires total en baisse de 3,4% à 78,5 millions de dollars. L'EBITDA ajusté de la société a augmenté de 2,0% pour atteindre 27,3 millions de dollars, avec une marge de 34,8%. Le nombre total d'agents a montré une légère augmentation de 174 agents (0,1%) pour atteindre 145 483, bien que le nombre combiné d'agents aux États-Unis et au Canada ait diminué de 4,4%. La performance de l'entreprise a été marquée par des améliorations de l'efficacité opérationnelle, malgré les défis sur le marché américain où le nombre d'agents a chuté de 6,5%. Les récents ouragans Helene et Milton devraient avoir un impact de 1,0-1,5 million de dollars sur le revenu du quatrième trimestre en raison des exonérations de frais pour les affiliés concernés.

RE/MAX Holdings hat die Ergebnisse des dritten Quartals 2024 bekanntgegeben, wobei die Gesamteinnahmen um 3,4% auf 78,5 Millionen Dollar gesunken sind. Das bereinigte EBITDA des Unternehmens stieg um 2,0% auf 27,3 Millionen Dollar mit einer Marge von 34,8%. Die Gesamtzahl der Agenten zeigte einen moderaten Anstieg von 174 Agenten (0,1%) auf 145.483, obwohl die kombinierte Agentenzahl in den USA und Kanada um 4,4% zurückging. Die Leistung des Unternehmens war durch Verbesserungen der betrieblichen Effizienz geprägt, trotz der Herausforderungen auf dem US-Markt, wo die Zahl der Agenten um 6,5% zurückging. Es wird erwartet, dass die jüngsten Hurrikane Helene und Milton die Einnahmen im vierten Quartal um 1,0-1,5 Millionen Dollar beeinträchtigen werden, aufgrund von Gebührenerlassen für betroffene Partner.

Positive
  • Adjusted EBITDA increased 2.0% to $27.3 million
  • Adjusted EBITDA margin improved to 34.8% from 32.9% YoY
  • Global agent count increased by 174 agents (0.1%)
  • Operating expenses decreased 38.1% to $63.3 million
  • Strong cash position with $83.8 million in cash and cash equivalents
Negative
  • Total revenue declined 3.4% to $78.5 million
  • U.S. and Canada combined agent count decreased 4.4%
  • U.S. agent count decreased 6.5%
  • Recurring revenue streams decreased 3.8%
  • Hurricane impact expected to reduce Q4 revenue by $1.0-1.5 million

Insights

RE/MAX's Q3 2024 results reveal mixed performance with concerning trends in the core U.S. market. Total revenue declined 3.4% to $78.5 million, while U.S. agent count dropped 6.5% to 52,808 agents. However, operational efficiency improvements led to Adjusted EBITDA growth of 2.0% to $27.3 million with an improved margin of 34.8%.

Notable highlights include reduced operating expenses, down 38.1% year-over-year, primarily due to the absence of last year's $55 million legal settlement. The company's international expansion continues with 5.9% agent growth outside U.S. & Canada, partially offsetting domestic declines. The recent hurricanes are expected to impact Q4 revenue by $1.0-1.5 million.

The balance sheet remains stable with $83.8 million in cash and reduced debt, though no share repurchases were made despite $62.5 million remaining authorization.

Total Revenue of $78.5 Million, Adjusted EBITDA of $27.3 Million

DENVER, Oct. 31, 2024 /PRNewswire/ --  

Third Quarter 2024 Highlights
(Compared to third quarter 2023 unless otherwise noted)

  • Total Revenue decreased 3.4% to $78.5 million
  • Revenue excluding the Marketing Funds1 decreased 3.3% to $58.4 million, driven by negative 3.0% organic growth2 and 0.3% adverse foreign currency movements
  • Net income attributable to RE/MAX Holdings, Inc. of $1.0 million and earnings per diluted share (GAAP EPS) of $0.05
  • Adjusted EBITDA3 increased 2.0% to $27.3 million, Adjusted EBITDA margin3 of 34.8% and Adjusted earnings per diluted share (Adjusted EPS3) of $0.38
  • Total agent count increased 174 agents, or 0.1%, to 145,483 agents
  • U.S. and Canada combined agent count decreased 4.4% to 78,201 agents
  • Total open Motto Mortgage franchises decreased 3.3% to 234 offices4

RE/MAX Holdings, Inc. (the "Company" or "RE/MAX Holdings") (NYSE: RMAX), parent company of RE/MAX, one of the world's leading franchisors of real estate brokerage services, and Motto Mortgage ("Motto"), the first and only national mortgage brokerage franchise brand in the U.S., today announced operating results for the quarter ended September 30, 2024. 

"We continue to drive operational efficiency across the enterprise, which helped generate better-than-forecasted third-quarter financial results," said Erik Carlson, RE/MAX Holdings Chief Executive Officer. "Our team is developing new revenue opportunities while working to run our core business better each day. That effort has contributed to our strong margin performance the past two quarters, which is an encouraging trend."

Carlson continued: "Business optimization, having a growth mindset, and delivering the absolute best customer experience possible are the cornerstones of our playbook. We are making measurable progress on each of these. With increasing optimism about the trajectory of future interest rates, our growing global agent count, and our bold new initiatives – including providing innovative and enhanced technology products to our RE/MAX affiliates, improving the agent-customer experience by cultivating leads, and starting to monetize our digital assets – we are well-positioned to finish the year with positive momentum."

Third Quarter 2024 Operating Results

Agent Count

The following table compares agent count as of September 30, 2024 and 2023:














As of September 30, 


Change




2024


2023


#


%

U.S.



52,808


56,494


(3,686)


(6.5)

Canada



25,393


25,288


105


0.4

Subtotal



78,201


81,782


(3,581)


(4.4)

Outside the U.S. & Canada



67,282


63,527


3,755


5.9

Total



145,483


145,309


174


0.1

Revenue

RE/MAX Holdings generated revenue of $78.5 million in the third quarter of 2024, a decrease of $2.7 million, or 3.4%, compared to $81.2 million in the third quarter of 2023. Revenue excluding the Marketing Funds was $58.4 million in the third quarter of 2024, a decrease of $2.0 million, or 3.3%, versus the same period in 2023. The decrease in Revenue excluding the Marketing Funds was attributable to negative organic revenue growth of 3.0% and adverse foreign currency movements of 0.3%. Negative organic revenue growth was principally driven by a decrease in U.S. agent count and a reduction in revenue from previous acquisitions, partially offset by an increase in Broker fee revenue.

Recurring revenue streams, which consist of continuing franchise fees and annual dues, decreased $1.5 million, or 3.8%, compared to the third quarter of 2023 and accounted for 66.4% of Revenue excluding the Marketing Funds in the third quarter of 2024 compared to 66.7% of Revenue excluding the Marketing Funds in the prior-year period.

Operating Expenses

Total operating expenses were $63.3 million for the third quarter of 2024, a decrease of $39.0 million, or 38.1%, compared to $102.2 million in the third quarter of 2023. During the third quarter of 2023, the Company agreed to pay $55.0 million to settle various industry class-action lawsuits, which was recorded in the third quarter of 2023. A $24.9 million gain on reduction in tax receivable agreement liability was also recorded in the third quarter of 2023.

Selling, operating and administrative expenses were $35.9 million in the third quarter of 2024, a decrease of $7.2 million, or 16.6%, compared to the third quarter of 2023 and represented 61.5% of Revenue excluding the Marketing Funds, compared to 71.4% in the prior-year period. Third quarter 2024 selling, operating and administrative expenses decreased primarily due to lower personnel costs and a decrease in bad debt, legal, and other technology expenses.

Net Income (Loss) and GAAP EPS

Net income attributable to RE/MAX Holdings was $1.0 million for the third quarter of 2024 compared to net loss of ($59.5) million for the third quarter of 2023. Reported basic and diluted GAAP earnings per share were $0.05 each for the third quarter of 2024 compared to basic and diluted GAAP loss per share of ($3.28) each in the third quarter of 2023.

Adjusted EBITDA and Adjusted EPS

Adjusted EBITDA was $27.3 million for the third quarter of 2024, an increase of $0.5 million, or 2.0%, compared to the third quarter of 2023. Third quarter 2024 Adjusted EBITDA increased primarily due to a decrease in bad debt, legal, personnel, and other technology expenses, partially offset by a decrease in U.S. agent count. Adjusted EBITDA margin was 34.8% in the third quarter of 2024, compared to 32.9% in the third quarter of 2023.

Adjusted basic and diluted EPS were $0.39 and $0.38, respectively, for the third quarter of 2024 compared to Adjusted basic and diluted EPS of $0.40 each for the third quarter of 2023. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended September 30, 2024, assumes RE/MAX Holdings owned 100% of RMCO, LLC ("RMCO"). The weighted average ownership RE/MAX Holdings had in RMCO was 60.0% for the quarter ended September 30, 2024.

Balance Sheet

As of September 30, 2024, the Company had cash and cash equivalents of $83.8 million, an increase of $1.2 million from December 31, 2023. As of September 30, 2024, the Company had $441.8 million of outstanding debt, net of an unamortized debt discount and issuance costs, compared to $444.6 million as of December 31, 2023.

Share Repurchases and Retirement

As previously disclosed, in January 2022 the Company's Board of Directors authorized a common stock repurchase program of up to $100 million. During the three months ended September 30, 2024, the Company did not repurchase any shares. As of September 30, 2024, $62.5 million remained available under the share repurchase program.

Impact of Hurricanes Helene and Milton

Several of the Company's affiliates were impacted by the recent hurricanes. While the extent of the hurricanes' full impact on the Company's networks is not entirely known at this time, the Company currently estimates that its fourth quarter revenue will be lower than previously expected as financial support is provided to affected affiliates for a limited time. As a result, the Company's fourth quarter and full year revenue (below) was reduced by approximately $1.0 million to $1.5 million, of which approximately 40% relates to the Marketing Funds, to reflect expected foregone revenue in the form of fee waivers provided to affiliates impacted by these storms.

Outlook

The Company's fourth quarter and full year 2024 Outlook includes the impact of the fee waivers to hurricane-impacted affiliates and assumes no further currency movements, acquisitions, or divestitures.

For the fourth quarter of 2024, RE/MAX Holdings expects:

  • Agent count to change 0.0% to 1.0% over fourth quarter 2023;
  • Revenue in a range of $71.0 million to $76.0 million (including revenue from the Marketing Funds in a range of $18.5 million to $20.5 million); and
  • Adjusted EBITDA in a range of $20.5 million to $23.5 million.

For the full year 2024, the Company now expects:

  • Agent count to change 0.0% to 1.0% over full year 2023, changed from negative 1.0% to positive 1.0%;
  • Revenue in a range of $306.0 million to $311.0 million (including revenue from the Marketing Funds in a range of $78.5 million to $80.5 million), changed from $305.0 million to $315.0 million (including revenue from the Marketing Funds in a range of $78.0 million to $82.0 million); and
  • Adjusted EBITDA in a range of $95.0 million to $98.0 million, changed from $93.0 million to $98.0 million.

Webcast and Conference Call

The Company will host a conference call for interested parties on Friday, November 1, 2024, beginning at 8:30 a.m. Eastern Time. Interested parties can register in advance for the conference call using the link below:

https://registrations.events/direct/Q4I941153

Interested parties also can access a live webcast through the Investor Relations section of the Company's website at http://investors.remaxholdings.com. Please dial-in or join the webcast 10 minutes before the start of the conference call. An archive of the webcast will be available on the Company's website for a limited time as well.

Basis of Presentation

Unless otherwise noted, the results presented in this press release are consolidated and exclude adjustments attributable to the non-controlling interest.

Footnotes:

1Revenue excluding the Marketing Funds is a non-GAAP measure of financial performance that differs from U.S. Generally Accepted Accounting Principles ("U.S. GAAP") and a reconciliation to the most directly comparable U.S. GAAP measure is as follows (in thousands):



Three Months Ended


Nine Months Ended



September 30, 


September 30, 



2024


2023


2024


2023

Revenue excluding the Marketing Funds:













Total revenue


$

78,478


$

81,223


$

235,218


$

249,071

Less: Marketing Funds fees



20,098



20,853



60,331



63,272

Revenue excluding the Marketing Funds


$

58,380


$

60,370


$

174,887


$

185,799

2The Company defines organic revenue growth as revenue growth from continuing operations excluding (i) revenue from Marketing Funds, (ii) revenue from acquisitions, and (iii) the impact of foreign currency movements. The Company defines revenue from acquisitions as the revenue generated from the date of an acquisition to its first anniversary (excluding Marketing Funds revenue related to acquisitions where applicable).

3Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS are non-GAAP measures. These terms are defined at the end of this release. Please see Tables 5 and 6 appearing later in this release for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures.

4Total open Motto Mortgage franchises includes only "bricks and mortar" offices with a unique physical address with rights granted by a full franchise agreement with Motto Franchising, LLC and excludes any "virtual" offices or BranchiseSM offices.

# # #

About RE/MAX Holdings, Inc.

RE/MAX Holdings, Inc. (NYSE: RMAX) is one of the world's leading franchisors in the real estate industry, franchising real estate brokerages globally under the RE/MAX® brand, and mortgage brokerages within the U.S. under the Motto® Mortgage brand. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Now with more than 140,000 agents in nearly 9,000 offices and a presence in more than 110 countries and territories, nobody in the world sells more real estate than RE/MAX, as measured by total residential transaction sides. Dedicated to innovation and change in the real estate industry, RE/MAX launched Motto Franchising, LLC, a ground-breaking mortgage brokerage franchisor, in 2016. Motto Mortgage, the first and only national mortgage brokerage franchise brand in the U.S., has grown to over 225 offices across more than 40 states.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project," "anticipate," "may," "will," "would" and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. Forward-looking statements include statements related to agent count; Motto open offices; franchise sales; revenue; operating expenses and cost management; the Company's outlook for the fourth quarter and full year 2024; non-GAAP financial measures; housing and mortgage market conditions; interest rates; the amount of fee waivers to affiliates affected by recent hurricanes and the impact of such fee waivers on our fourth quarter and full year 2024 outlook; operational efficiencies; business optimization and delivering the absolute best customer experience; development of new revenue opportunities; our strong margin performance being an encouraging trend; increasing optimism about future interest rates; our growing global agent count and our bold new  initiatives, including enhanced technology, improved customer experience with leads, and monetizing our digital assets; and being well positioned to finish the year with positive momentum. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily accurately indicate the times at which such performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include, without limitation, (1) changes in the real estate market or interest rates and availability of financing, (2) changes in business and economic activity in general, (3) the Company's ability to attract and retain quality franchisees, (4) the Company's franchisees' ability to recruit and retain real estate agents and mortgage loan originators, (5) changes in laws and regulations, (6) the Company's ability to enhance, market, and protect its brands, (7) the Company's ability to implement its technology initiatives, (8) risks related to the Company's leadership transition, (9) fluctuations in foreign currency exchange rates, (10) the nature and amount of the exclusion of charges in future periods when determining Adjusted EBITDA is subject to uncertainty and may not be similar to such charges in prior periods, and (11) those risks and uncertainties described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company's website at www.remaxholdings.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no obligation, to update this information to reflect future events or circumstances.

 

TABLE 1

RE/MAX Holdings, Inc.

Consolidated Statements of Income (Loss)

(In thousands, except share and per share amounts)

(Unaudited)




Three Months Ended


Nine Months Ended



September 30, 


September 30, 



2024


2023


2024


2023

Revenue:













Continuing franchise fees


$

30,798


$

31,834


$

92,223


$

96,011

Annual dues



7,969



8,456



24,345



25,661

Broker fees



14,915



14,255



40,159



39,468

Marketing Funds fees



20,098



20,853



60,331



63,272

Franchise sales and other revenue



4,698



5,825



18,160



24,659

Total revenue



78,478



81,223



235,218



249,071

Operating expenses:













Selling, operating and administrative expenses



35,932



43,090



116,488



132,417

Marketing Funds expenses



20,098



20,853



60,331



63,272

Depreciation and amortization



7,237



8,195



22,489



24,236

Settlement and impairment charges





55,000





55,000

Gain on reduction in tax receivable agreement liability





(24,917)





(24,917)

Total operating expenses



63,267



102,221



199,308



250,008

Operating income (loss)



15,211



(20,998)



35,910



(937)

Other expenses, net:













Interest expense



(9,249)



(9,292)



(27,696)



(26,377)

Interest income



885



1,173



2,835



3,318

Foreign currency transaction gains (losses)



74



125



(568)



383

Total other expenses, net



(8,290)



(7,994)



(25,429)



(22,676)

Income (loss) before provision for income taxes



6,921



(28,992)



10,481



(23,613)

Provision for income taxes



(3,507)



(53,680)



(6,484)



(56,494)

Net income (loss)


$

3,414


$

(82,672)


$

3,997


$

(80,107)

Less: net income (loss) attributable to non-controlling interest



2,448



(23,218)



2,679



(21,992)

Net income (loss) attributable to RE/MAX Holdings, Inc.


$

966


$

(59,454)


$

1,318


$

(58,115)














Net income (loss) attributable to RE/MAX Holdings, Inc. per share
of Class A common stock













Basic


$

0.05


$

(3.28)


$

0.07


$

(3.22)

Diluted


$

0.05


$

(3.28)


$

0.07


$

(3.22)

Weighted average shares of Class A common stock outstanding













Basic



18,863,793



18,150,557



18,733,190



18,064,009

Diluted



19,483,798



18,150,557



19,063,279



18,064,009

Cash dividends declared per share of Class A common stock


$


$

0.23


$


$

0.69

 

TABLE 2 

RE/MAX Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)










As of



September 30, 


December 31, 



2024


2023

Assets







Current assets:







Cash and cash equivalents


$

83,779


$

82,623

Restricted cash



72,599



43,140

Accounts and notes receivable, current portion, net of allowances



30,598



33,427

Income taxes receivable



1,693



1,706

Other current assets



13,224



15,669

Total current assets



201,893



176,565

Property and equipment, net of accumulated depreciation



8,295



8,633

Operating lease right of use assets



19,209



23,013

Franchise agreements, net



87,346



101,516

Other intangible assets, net



15,297



19,176

Goodwill



240,102



241,164

Other assets, net of current portion



6,507



7,083

Total assets


$

578,649


$

577,150

Liabilities and stockholders' equity (deficit)







Current liabilities:







Accounts payable


$

5,347


$

4,700

Accrued liabilities



105,132



107,434

Income taxes payable



1,274



766

Deferred revenue



22,625



23,077

Current portion of debt



4,600



4,600

Current portion of payable pursuant to tax receivable agreements



285



822

Operating lease liabilities



8,437



7,920

Total current liabilities



147,700



149,319

Debt, net of current portion



437,176



439,980

Deferred tax liabilities



11,281



10,797

Deferred revenue, net of current portion



15,482



17,607

Operating lease liabilities, net of current portion



25,044



31,479

Other liabilities, net of current portion



3,729



4,029

Total liabilities



640,412



653,211

Commitments and contingencies







Stockholders' equity (deficit):







Class A common stock, par value $.0001 per share, 180,000,000 shares authorized; 18,872,052
and 18,269,284 shares issued and outstanding as of September 30, 2024 and
December 31, 2023, respectively



2



2

Class B common stock, par value $.0001 per share, 1,000 shares authorized; 1 share issued
and outstanding as of September 30, 2024 and December 31, 2023, respectively





Additional paid-in capital



562,594



550,637

Accumulated deficit



(139,524)



(140,217)

Accumulated other comprehensive income (deficit), net of tax



35



638

Total stockholders' equity attributable to RE/MAX Holdings, Inc.



423,107



411,060

Non-controlling interest



(484,870)



(487,121)

Total stockholders' equity (deficit)



(61,763)



(76,061)

Total liabilities and stockholders' equity (deficit)


$

578,649


$

577,150








 

TABLE 3

RE/MAX Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)




Nine Months Ended



September 30, 



2024


2023

Cash flows from operating activities:







Net income (loss)


$

3,997


$

(80,107)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:







Depreciation and amortization



22,489



24,236

Equity-based compensation expense



14,443



14,050

Bad debt expense



1,039



4,903

Deferred income tax expense (benefit)



434



51,799

Fair value adjustments to contingent consideration



(300)



(379)

Settlement payment, net





55,000

Loss (gain) on sale or disposition of assets, net



160



386

Non-cash lease benefit



(2,110)



(2,242)

Non-cash debt charges



646



644

Payment of contingent consideration in excess of acquisition date fair value



(360)



Gain on reduction in tax receivable agreement liability





(24,917)

Other, net



53



(73)

Changes in operating assets and liabilities



2,376



(23,675)

Net cash provided by operating activities



42,867



19,625

Cash flows from investing activities:







Purchases of property, equipment and capitalization of software



(5,821)



(4,249)

Other



698



679

Net cash used in investing activities



(5,123)



(3,570)

Cash flows from financing activities:







Payments on debt



(3,450)



(3,450)

Distributions paid to non-controlling unitholders





(8,667)

Dividends and dividend equivalents paid to Class A common stockholders



(591)



(13,492)

Payments related to tax withholding for share-based compensation



(2,548)



(4,014)

Common shares repurchased





(3,408)

Payment of contingent consideration





(360)

Other financing



(21)



Net cash used in financing activities



(6,610)



(33,391)

Effect of exchange rate changes on cash



(519)



21

Net increase (decrease) in cash, cash equivalents and restricted cash



30,615



(17,315)

Cash, cash equivalents and restricted cash, beginning of period



125,763



138,128

Cash, cash equivalents and restricted cash, end of period


$

156,378


$

120,813

 

TABLE 4

RE/MAX Holdings, Inc.

Agent Count

(Unaudited)




As of



September 30,


June 30,


March 31,


December 31,


September 30,


June 30,


March 31,


December 31,


September 30,



2024


2024


2024


2023


2023


2023


2023


2022


2022

Agent Count:



















U.S.



















Company-Owned Regions


46,283


46,780


47,302


48,401


49,576


50,011


50,340


51,491


52,804

Independent Regions


6,525


6,626


6,617


6,730


6,918


6,976


7,110


7,228


7,311

U.S. Total


52,808


53,406


53,919


55,131


56,494


56,987


57,450


58,719


60,115

Canada



















Company-Owned Regions


20,515


20,347


20,151


20,270


20,389


20,354


20,172


20,228


20,174

Independent Regions


4,878


4,846


4,885


4,898


4,899


4,864


4,899


4,892


4,844

Canada Total


25,393


25,193


25,036


25,168


25,288


25,218


25,071


25,120


25,018

U.S. and Canada Total


78,201


78,599


78,955


80,299


81,782


82,205


82,521


83,839


85,133

Outside U.S. and Canada



















Independent Regions


67,282


64,943


64,332


64,536


63,527


62,305


61,002


60,175


59,167

Outside U.S. and Canada Total


67,282


64,943


64,332


64,536


63,527


62,305


61,002


60,175


59,167

Total


145,483


143,542


143,287


144,835


145,309


144,510


143,523


144,014


144,300

 

TABLE 5

RE/MAX Holdings, Inc.

Adjusted EBITDA Reconciliation to Net Income (Loss)

(In thousands, except percentages)

(Unaudited)




Three Months Ended


Nine Months Ended




September 30, 


September 30, 




2024


2023


2024


2023


Net income (loss)


$

3,414


$

(82,672)


$

3,997


$

(80,107)


Depreciation and amortization



7,237



8,195



22,489



24,236


Interest expense



9,249



9,292



27,696



26,377


Interest income



(885)



(1,173)



(2,835)



(3,318)


Provision for income taxes



3,507



53,680



6,484



56,494


EBITDA



22,522



(12,678)



57,831



23,682


Settlement charge (1)





55,000





55,000


Equity-based compensation expense



4,618



4,891



14,443



14,050


Acquisition-related expense (2)





59





160


Fair value adjustments to contingent consideration (3)



(437)



(280)



(300)



(379)


Restructuring charges (4)



(18)



4,278



(59)



4,245


Gain on reduction in tax receivable agreement liability (5)





(24,917)





(24,917)


Other (6)



605



395



2,444



1,471


Adjusted EBITDA (7)


$

27,290


$

26,748


$

74,359


$

73,312


Adjusted EBITDA Margin (7)



34.8

%


32.9

%


31.6

%


29.4

%



(1)

Represents the settlement of industry class-action lawsuits.

(2)

Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with acquisition activities and integration of acquired companies.

(3)

Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities.

(4)

During the third quarter of 2023, the Company announced a reduction in force and reorganization intended to streamline the Company's operations and yield cost savings over the long term.

(5)

Gain on reduction in tax receivable agreement liability is a result of a valuation allowance on deferred tax assets recorded during the third quarter of 2023.

(6)

Other is primarily made up of employee retention related expenses from the Company's CEO transition.

(7)

Non-GAAP measure. See the end of this press release for definitions of non-GAAP measures.

 

TABLE 6

RE/MAX Holdings, Inc.

Adjusted Net Income (Loss) and Adjusted Earnings per Share

(In thousands, except share and per share amounts)

(Unaudited)




Three Months Ended


Nine Months Ended



September 30, 


September 30, 



2024


2023


2024


2023

Net income (loss)


$

3,414


$

(82,672)


$

3,997


$

(80,107)

Amortization of acquired intangible assets



4,672



5,768



15,085



17,299

Provision for income taxes



3,507



53,680



6,484



56,494

Add-backs:













Settlement charge (1)





55,000





55,000

Equity-based compensation expense



4,618



4,891



14,443



14,050

Acquisition-related expense (2)





59





160

Fair value adjustments to contingent consideration (3)



(437)



(280)



(300)



(379)

Restructuring charges (4)



(18)



4,278



(59)



4,245

Gain on reduction in tax receivable agreement liability (5)





(24,917)





(24,917)

Other (6)



605



395



2,444



1,471

Adjusted pre-tax net income



16,361



16,202



42,094



43,316

Less: Provision for income taxes at 25% (7)



(4,091)



(4,051)



(10,524)



(10,829)

Adjusted net income (8)


$

12,270


$

12,151


$

31,570


$

32,487














Total basic pro forma shares outstanding



31,423,393



30,710,157



31,292,790



30,623,609

Total diluted pro forma shares outstanding



32,043,398



30,710,157



31,622,879



30,623,609














Adjusted net income basic earnings per share (8)


$

0.39


$

0.40


$

1.01


$

1.06

Adjusted net income diluted earnings per share (8)


$

0.38


$

0.40


$

1.00


$

1.06



(1)

Represents the settlement of industry class-action lawsuits.

(2)

Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with acquisition activities and integration of acquired companies.

(3)

Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities.

(4)

During the third quarter of 2023, the Company announced a reduction in force and reorganization intended to streamline the Company's operations and yield cost savings over the long term.

(5)

Gain on reduction in tax receivable agreement liability is a result of a valuation allowance on deferred tax assets recorded during the third quarter of 2023.

(6)

Other is primarily made up of employee retention related expenses from the Company's CEO transition.

(7)

The long-term tax rate assumes the exchange of all outstanding non-controlling interest partnership units for Class A Common Stock that (a) removes the impact of unusual, non-recurring tax matters and (b) does not estimate the residual impacts to foreign taxes of additional step-ups in tax basis from an exchange because that is dependent on stock prices at the time of such exchange and the calculation is impracticable.

(8)

Non-GAAP measure. See the end of this press release for definitions of non-GAAP measures.

 

TABLE 7

RE/MAX Holdings, Inc.

Pro Forma Shares Outstanding

(Unaudited)




Three Months Ended


Nine Months Ended



September 30, 


September 30, 



2024


2023


2024


2023

Total basic weighted average shares outstanding:









Weighted average shares of Class A common stock outstanding


18,863,793


18,150,557


18,733,190


18,064,009

Remaining equivalent weighted average shares of stock
outstanding on a pro forma basis assuming RE/MAX Holdings
owned 100% of RMCO


12,559,600


12,559,600


12,559,600


12,559,600

Total basic pro forma weighted average shares outstanding


31,423,393


30,710,157


31,292,790


30,623,609










Total diluted weighted average shares outstanding:









Weighted average shares of Class A common stock outstanding


18,863,793


18,150,557


18,733,190


18,064,009

Remaining equivalent weighted average shares of stock
outstanding on a pro forma basis assuming RE/MAX Holdings
owned 100% of RMCO


12,559,600


12,559,600


12,559,600


12,559,600

Dilutive effect of unvested restricted stock units (1)


620,005



330,089


Total diluted pro forma weighted average shares outstanding


32,043,398


30,710,157


31,622,879


30,623,609



(1)

In accordance with the treasury stock method.

 

TABLE 8

RE/MAX Holdings, Inc.

Adjusted Free Cash Flow & Unencumbered Cash

(Unaudited)




Nine Months Ended



September 30, 



2024


2023

Cash flow from operations


$

42,867


$

19,625

Less: Purchases of property, equipment and capitalization of software



(5,821)



(4,249)

(Increases) decreases in restricted cash of the Marketing Funds (1)



(1,959)



12,222

Adjusted free cash flow (2)



35,087



27,598








Adjusted free cash flow (2)



35,087



27,598

Less: Tax/Other non-dividend distributions to RIHI





Adjusted free cash flow after tax/non-dividend distributions to RIHI (2)



35,087



27,598








Adjusted free cash flow after tax/non-dividend distributions to RIHI (2)



35,087



27,598

Less: Debt principal payments



(3,450)



(3,450)

Unencumbered cash generated (2)


$

31,637


$

24,148








Summary







Cash flow from operations


$

42,867


$

19,625

Adjusted free cash flow (2)


$

35,087


$

27,598

Adjusted free cash flow after tax/non-dividend distributions to RIHI (2)


$

35,087


$

27,598

Unencumbered cash generated (2)


$

31,637


$

24,148








Adjusted EBITDA (2)


$

74,359


$

73,312

Adjusted free cash flow as % of Adjusted EBITDA (2)



47.2 %



37.6 %

Adjusted free cash flow less distributions to RIHI as % of Adjusted EBITDA (2)



47.2 %



37.6 %

Unencumbered cash generated as % of Adjusted EBITDA (2)



42.5 %



32.9 %



(1)

This line reflects any subsequent changes in the restricted cash balance (which under GAAP reflects as either (a) an increase or decrease in cash flow from operations or (b) an incremental amount of purchases of property and equipment and capitalization of developed software) to remove the impact of changes in restricted cash in determining adjusted free cash flow.

(2)

Non-GAAP measure. See the end of this press release for definitions of non-GAAP measures.

Non-GAAP Financial Measures

The SEC has adopted rules to regulate the use in filings with the SEC and in public disclosures of financial measures that are not in accordance with U.S. GAAP, such as revenue excluding the Marketing Funds, Adjusted EBITDA and the ratios related thereto, Adjusted net income, Adjusted basic and diluted earnings per share (Adjusted EPS) and adjusted free cash flow. These measures are derived based on methodologies other than in accordance with U.S. GAAP.

Revenue excluding the Marketing Funds is calculated directly from our consolidated financial statements as Total revenue less Marketing Funds fees.

The Company defines Adjusted EBITDA as EBITDA (consolidated net income before depreciation and amortization, interest expense, interest income and the provision for income taxes, each of which is presented in the unaudited consolidated financial statements included earlier in this press release), adjusted for the impact of the following items that are either non-cash or that the Company does not consider representative of its ongoing operating performance: loss or gain on sale or disposition of assets and sublease, settlement and impairment charges, equity-based compensation expense, acquisition-related expense, gain on reduction in tax receivable agreement liability, expense or income related to changes in the estimated fair value measurement of contingent consideration, restructuring charges and other non-recurring items. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenue.

Because Adjusted EBITDA and Adjusted EBITDA margin omit certain non-cash items and other non-recurring cash charges or other items, the Company believes that each measure is less susceptible to variances that affect its operating performance resulting from depreciation, amortization and other non-cash and non-recurring cash charges or other items. The Company presents Adjusted EBITDA and the related Adjusted EBITDA margin because the Company believes they are useful as supplemental measures in evaluating the performance of its operating businesses and provides greater transparency into the Company's results of operations. The Company's management uses Adjusted EBITDA and Adjusted EBITDA margin as factors in evaluating the performance of the business.

Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analyzing the Company's results as reported under U.S. GAAP. Some of these limitations are:

  • these measures do not reflect changes in, or cash requirements for, the Company's working capital needs;
  • these measures do not reflect the Company's interest expense, or the cash requirements necessary to service interest or principal payments on its debt;
  • these measures do not reflect the Company's income tax expense or the cash requirements to pay its taxes;
  • these measures do not reflect the cash requirements to pay dividends to stockholders of the Company's Class A common stock and tax and other cash distributions to its non-controlling unitholders;
  • these measures do not reflect the cash requirements pursuant to the tax receivable agreements;
  • these measures do not reflect the cash requirements for share repurchases;
  • these measures do not reflect the cash requirements for the settlement of industry class-action lawsuits and other legal settlements;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and these measures do not reflect any cash requirements for such replacements;
  • although equity-based compensation is a non-cash charge, the issuance of equity-based awards may have a dilutive impact on earnings per share; and
  • other companies may calculate these measures differently so similarly named measures may not be comparable.

The Company's Adjusted EBITDA guidance does not include certain charges and costs. The adjustments to EBITDA in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior quarters, such as gain or loss on sale or disposition of assets and sublease, settlement and impairment charges, equity-based compensation expense, acquisition-related expense, gains or losses from changes in the tax receivable agreement liability, expense or income related to changes in the fair value measurement of contingent consideration, restructuring charges and other non-recurring items. The exclusion of these charges and costs in future periods will have a significant impact on the Company's Adjusted EBITDA. The Company is not able to provide a reconciliation of the Company's non-GAAP financial guidance to the corresponding U.S. GAAP measures without unreasonable effort because of the uncertainty and variability of the nature and amount of these future charges and costs.

Adjusted net income is calculated as Net income attributable to RE/MAX Holdings, assuming the full exchange of all outstanding non-controlling interests for shares of Class A common stock as of the beginning of the period (and the related increase to the provision for income taxes after such exchange), plus primarily non-cash items and other items that management does not consider to be useful in assessing the Company's operating performance (e.g., amortization of acquired intangible assets, gain on sale or disposition of assets and sub-lease, non-cash impairment charges, acquisition-related expense, restructuring charges and equity-based compensation expense). 

Adjusted basic and diluted earnings per share (Adjusted EPS) are calculated as Adjusted net income (as defined above) divided by pro forma (assuming the full exchange of all outstanding non-controlling interests) basic and diluted weighted average shares, as applicable.

When used in conjunction with GAAP financial measures, Adjusted net income and Adjusted EPS are supplemental measures of operating performance that management believes are useful measures to evaluate the Company's performance relative to the performance of its competitors as well as performance period over period. By assuming the full exchange of all outstanding non-controlling interests, management believes these measures:

  • facilitate comparisons with other companies that do not have a low effective tax rate driven by a non-controlling interest on a pass-through entity;
  • facilitate period over period comparisons because they eliminate the effect of changes in Net income attributable to RE/MAX Holdings, Inc. driven by increases in its ownership of RMCO, LLC, which are unrelated to the Company's operating performance; and
  • eliminate primarily non-cash and other items that management does not consider to be useful in assessing the Company's operating performance.

Adjusted free cash flow is calculated as cash flows from operations less capital expenditures and any changes in restricted cash of the Marketing Funds, all as reported under GAAP, and quantifies how much cash a company has to pursue opportunities that enhance shareholder value. The restricted cash of the Marketing Funds is limited in use for the benefit of franchisees and any impact to adjusted free cash flow is removed. The Company believes adjusted free cash flow is useful to investors as a supplemental measure as it calculates the cash flow available for working capital needs, re-investment opportunities, potential Independent Region and strategic acquisitions, dividend payments or other strategic uses of cash.

Adjusted free cash flow after tax and non-dividend distributions to RIHI is calculated as adjusted free cash flow less tax and other non-dividend distributions paid to RIHI (the non-controlling interest holder) to enable RIHI to satisfy its income tax obligations. Similar payments would be made by the Company directly to federal and state taxing authorities as a component of the Company's consolidated provision for income taxes if a full exchange of non-controlling interests occurred in the future. As a result and given the significance of the Company's ongoing tax and non-dividend distribution obligations to its non-controlling interest, adjusted free cash flow after tax and non-dividend distributions, when used in conjunction with GAAP financial measures, provides a meaningful view of cash flow available to the Company to pursue opportunities that enhance shareholder value.

Unencumbered cash generated is calculated as adjusted free cash flow after tax and non-dividend distributions to RIHI less quarterly debt principal payments less annual excess cash flow payment on debt, as applicable. Given the significance of the Company's excess cash flow payment on debt, when applicable, unencumbered cash generated, when used in conjunction with GAAP financial measures, provides a meaningful view of the cash flow available to the Company to pursue opportunities that enhance shareholder value after considering its debt service obligations.

 

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SOURCE RE/MAX Holdings, Inc.

FAQ

What was RE/MAX Holdings (RMAX) revenue in Q3 2024?

RE/MAX Holdings reported total revenue of $78.5 million in Q3 2024, representing a 3.4% decrease from the same period in 2023.

How did RE/MAX (RMAX) agent count change in Q3 2024?

Total agent count increased by 174 agents (0.1%) to 145,483, though U.S. and Canada combined agent count decreased 4.4% to 78,201 agents.

What was RE/MAX Holdings (RMAX) Adjusted EBITDA in Q3 2024?

Adjusted EBITDA was $27.3 million in Q3 2024, showing a 2.0% increase compared to Q3 2023, with an improved margin of 34.8%.

How will hurricanes Helene and Milton impact RE/MAX (RMAX) Q4 2024 revenue?

The hurricanes are expected to reduce Q4 2024 revenue by approximately $1.0-1.5 million due to fee waivers provided to affected affiliates.

RE/MAX HOLDINGS, INC.

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