• Total Revenue: $74.5 million.
• Adjusted EBITDA: $19.3 million, up 1.5% over Q1 of last year.
• Adjusted EBITDA Margin: 25.9%, an increase of 164 basis points over Q1 2024.
• Adjusted Diluted EPS: $0.24.
• Revenue Excluding Marketing Funds: $55.6 million, a decrease of 4.3% compared to the same period last year.
• Operating Expenses: Decreased by $2.7 million, or 5.9%, to $43 million.
• Total Leverage Ratio: 3.61 to 1 as of March 30.
• Agent Count Growth Guidance for Q2 2025: Expected to increase 1.5% to 2.5% over Q2 2024.
• Revenue Guidance for Q2 2025: Expected in the range of $70 to $75 million.
• Adjusted EBITDA Guidance for Q2 2025: Expected in the range of $22.5 to $25.5 million.
• Full Year 2025 Revenue Guidance: Expected in the range of $290 to $310 million.
• Full Year 2025 Adjusted EBITDA Guidance: Expected in the range of $90 to $100 million.

• Warning! GuruFocus has detected 4 Warning Signs with RMAX.

Release Date: May 02, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• RE/MAX Holdings Inc (NYSE:RMAX) reported higher than expected revenue, margins, and profits for the first quarter of 2025.
• The company introduced several new initiatives, including a refreshed branding, advanced marketing resources, and a comprehensive global referral system.
• The Aspire program aims to attract and develop the next generation of top-producing RE/MAX agents, enhancing recruitment and retention.
• International agent growth was strong, with a 10% increase in global agent count in Q1.
• Operational efficiencies led to improved margin performance for the fourth consecutive quarter.

Negative Points

• Revenue excluding marketing funds decreased by 4.3% compared to the same period last year, driven by lower US agent counts and adverse foreign currency movements.
• The challenging mortgage market continues to impact the mortgage segment, with expectations of a few more quarters before consistent revenue growth returns.
• Franchise sales revenue was down year over year, partly due to the wind down of prior technology acquisitions.
• The macroeconomic environment and real estate market remain uncertain, affecting forecasting and strategic planning.
• US agent count has been declining, although there are signs of stabilization and potential growth.

Q & A Highlights

Q: Can you explain the decline in franchise sales revenue and whether it's due to conference attendance or other strategic initiatives? A: Karri Callahan, CFO: The decline is partly due to lower conference attendance, which impacted revenue by a few hundred thousand dollars. Additionally, the wind-down of prior technology acquisitions, like Gadbury, is pressuring the line by over $50 million. However, newer initiatives like our lead concierge program and RE/MAX Media Network are offsetting some of this decline. We see potential for significant revenue growth from these initiatives in the long term.

Q: How are you managing operating expenses (opex) given the inflationary environment, and is there room for further cost reductions? A: Karri Callahan, CFO: We've instilled strong discipline around cost management, focusing on strategic allocation of resources. We've seen relief from litigation costs and are optimizing personnel expenses. Our focus is on maintaining cost efficiency while driving top-line growth, which should enhance profitability and margins.

Q: How does the new Aspire program position RE/MAX competitively, and does it attract agents who might not have considered RE/MAX before? A: W. Erik Carlson, CEO: Aspire is designed to enhance our value proposition and open up the top of the recruitment funnel. It provides financial risk-sharing with brokers and focuses on onboarding agents to ensure productivity and professionalism. This program, along with other digital and social initiatives, is attracting interest from agents outside the RE/MAX network.

Q: Can you provide more detail on the early feedback and adoption of the Aspire program and its potential impact on US agent count? A: W. Erik Carlson, CEO: Feedback has been positive, with higher-than-expected adoption rates. The program is designed to stabilize and grow agent count by enhancing our value proposition and attracting agents from other brokerages. We are seeing increased interest and engagement, which is promising for future growth.

Q: What is RE/MAX's stance on the National Association of Realtors' updated clear cooperation policy, and how does it affect franchisees? A: W. Erik Carlson, CEO: We support transparency and broad distribution of listings, which we believe benefits consumers. While private listings have their place, we advocate for the majority of listings to be widely distributed. We provide guidance to our brokers to ensure compliance with local rules while prioritizing consumer interests.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.