PR Newswire
DENVER, Nov. 2, 2023
Total Revenue of $81.2 Million, Adjusted EBITDA of $26.7 Million
DENVER, Nov. 2, 2023 /PRNewswire/ --
Operating Statistics as of October 31, 2023
(Compared to October 31, 2022 unless otherwise noted)
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, 2023.
"We continue to make progress driving forward our core strategic initiatives amid the toughest real estate market in a decade," said Steve Joyce, RE/MAX Holdings Chief Executive Officer. "We remain focused on aggressively pursuing agent growth opportunities – teams and conversions, mergers and acquisitions – in the U.S., increasing our Canadian and global agent counts, and growing our mortgage business."
Joyce continued: "In the third quarter, we also made two difficult but necessary moves in the current environment. First, we streamlined our operations and our cost structure. Second, we entered into a settlement to end costly litigation and protect the Company and RE/MAX network from multiple industry class-action lawsuits. Ultimately, we believe we will successfully navigate these challenging times and grow significantly when industry conditions improve – a pattern we've seen repeatedly for 50 years. The strength of our brands and networks are unmatched in many ways, and we believe our future is very bright."
Third Quarter 2023 Operating Results
Agent Count
The following table compares agent count as of September 30, 2023 and 2022:
| | | | | | | | | |
| | | As of September 30, | | Change | ||||
| | | 2023 | | 2022 | | # | | % |
U.S. | | | 56,494 | | 60,115 | | (3,621) | | (6.0) |
Canada | | | 25,288 | | 25,018 | | 270 | | 1.1 |
Subtotal | | | 81,782 | | 85,133 | | (3,351) | | (3.9) |
Outside the U.S. & Canada | | | 63,527 | | 59,167 | | 4,360 | | 7.4 |
Total | | | 145,309 | | 144,300 | | 1,009 | | 0.7 |
Revenue
RE/MAX Holdings generated revenue of $81.2 million in the third quarter of 2023, a decrease of $7.7 million, or 8.7%, compared to $88.9 million in the third quarter of 2022. Revenue excluding the Marketing Funds was $60.4 million in the third quarter of 2023, a decrease of $5.8 million, or 8.8%, versus the same period in 2022. The decrease in Revenue excluding the Marketing Funds was attributable to negative organic revenue growth of 8.2% and adverse foreign-currency movements of 0.6%. Organic growth decreased primarily due to lower broker fee revenue and a reduction in U.S. agent count, partially offset by Mortgage segment growth.
Recurring revenue streams, which consist of continuing franchise fees and annual dues, decreased $1.9 million, or 4.6%, compared to the third quarter of 2022 and accounted for 66.7% of Revenue excluding the Marketing Funds in the third quarter of 2023 compared to 63.8% of Revenue excluding the Marketing Funds in the prior-year period.
Operating Expenses
Total operating expenses were $102.2 million for the third quarter of 2023, an increase of $18.5 million, or 22.1%, compared to $83.7 million in the third quarter of 2022. Third quarter 2023 total operating expenses increased primarily due to higher settlement and impairment charges, partially offset by the $24.9 million gain on reduction in tax receivable agreement liability; lower selling, operating and administrative expenses; and reduced Marketing Funds expenses. During the third quarter of 2023, the Company agreed to pay $55.0 million to settle various industry class-action lawsuits. As a result, the total settlement amount of $55.0 million was recorded in the third quarter.
Selling, operating and administrative expenses were $43.1 million in the third quarter of 2023, a decrease of $6.6 million, or 13.3%, compared to the third quarter of 2022 and represented 71.4% of Revenue excluding the Marketing Funds, compared to 75.1% in the prior-year period. Third quarter 2023 selling, operating and administrative expenses decreased primarily due to lower severance and reorganization charges, equity-compensation expense, and legal fees.
Net Income (Loss) and GAAP EPS
Net loss attributable to RE/MAX Holdings was $59.5 million for the third quarter of 2023 compared to net income of $0.1 million for the third quarter of 2022. Reported basic and diluted GAAP loss per share were each $3.28 for the third quarter of 2023 compared to basic and diluted GAAP earnings per share of $0.01 each in the third quarter of 2022.
Adjusted EBITDA and Adjusted EPS
Adjusted EBITDA was $26.7 million for the third quarter of 2023, a decrease of $4.7 million, or 15.0%, compared to the third quarter of 2022. Third quarter 2023 Adjusted EBITDA decreased primarily due to lower Revenue excluding the Marketing Funds resulting from lower broker fee revenue and a decrease in U.S. agent count, partially offset by lower legal fees. Adjusted EBITDA margin was 32.9% in the third quarter of 2023, compared to 35.4% in the third quarter of 2022.
Adjusted basic and diluted EPS were each $0.40 for the third quarter of 2023 compared to Adjusted basic and diluted EPS of $0.56 each for the third quarter of 2022. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended September 30, 2023, assumes RE/MAX Holdings owned 100% of RMCO, LLC ("RMCO"). The weighted average ownership RE/MAX Holdings had in RMCO was 59.1% for the quarter ended September 30, 2023.
Balance Sheet
As of September 30, 2023, the Company had cash and cash equivalents of $89.8 million, a decrease of $18.8 million from December 31, 2022. As of September 30, 2023, the Company had $445.5 million of outstanding debt, net of an unamortized debt discount and issuance costs, compared to $448.3 million as of December 31, 2022.
Capital Allocation
The Board of Directors decided to suspend the Company's quarterly dividend. In light of the recent litigation settlement and ongoing challenging housing and mortgage market conditions, the Board believes this action to preserve the Company's capital is prudent.
Steve Joyce commented, "Today's announced change in capital allocation was not entered into lightly. We strongly support returning capital to shareholders. However, given current circumstances and out of an abundance of caution, we believe this decision is optimal for shareholders as we determine how to best position the Company to take advantage of those opportunities that we believe will yield the best long-term returns."
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, 2023, the Company did not repurchase any shares. As of September 30, 2023, $62.5 million remained available under the share repurchase program.
Outlook
The Company's fourth quarter and full-year 2023 Outlook assumes no further currency movements, acquisitions, or divestitures.
For the fourth quarter of 2023, RE/MAX Holdings expects:
For the full year 2023, the Company is slightly increasing its agent count guidance and narrowing its Revenue and Adjusted EBITDA guidance ranges and expects:
Webcast and Conference Call
The Company will host a conference call for interested parties on Friday, November 3, 2023, beginning at 8:30 a.m. Eastern Time. Interested parties can register in advance for the conference call using the link below:
https://conferencingportals.com/event/SxfZxNDm
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, | ||||||||
| | 2023 | | 2022 | | 2023 | | 2022 | ||||
Revenue excluding the Marketing Funds: | | | | | | | | | | | | |
Total revenue | | $ | 81,223 | | $ | 88,943 | | $ | 249,071 | | $ | 272,119 |
Less: Marketing Funds fees | | | 20,853 | | | 22,736 | | | 63,272 | | | 68,496 |
Revenue excluding the Marketing Funds | | $ | 60,370 | | $ Werbung Mehr Nachrichten zur Re/max Holdings A Aktie kostenlos abonnieren
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