A brand new quarter noticed persevering with tendencies for RE/MAX Holdings in lowering income and U.S. agent depend, however the franchisor additionally vastly improved its internet revenue yr over yr.
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Because the market continued to current challenges to brokers through the third quarter of 2024, RE/MAX Holdings‘ income declined for the ninth consecutive quarter, in keeping with monetary outcomes posted after the market closed on Thursday.
Whole income declined 3.4 % on an annual foundation to $78.5 million, down from $81.2 million the yr earlier than.
The information was a troublesome hit, as RE/MAX Holdings had famous through the earlier quarter’s earnings that the corporate’s income had fallen throughout every quarter of the final two years. This quarter was no completely different.
The agency noticed unfavourable natural income progress of -3.0 % through the quarter, which it stated was largely as a result of a drop in U.S. agent depend and a discount in income from earlier acquisitions.
Money and money equivalents had been $83.8 million as of Sept. 30, 2024, up by $1.2 million from Dec. 31, 2023. As of Sept. 30, 2024, RE/MAX Holdings had $441.8 million of excellent debt in comparison with $444.6 million as of Dec. 31, 2023.
Nonetheless, there was excellent news, as the actual property franchisor vastly improved its revenue from the earlier yr to a internet revenue of $1 million and earnings per diluted share of $0.05. In contrast, through the third quarter of 2023, RE/MAX Holdings noticed a internet lack of $59.5 million.
“We proceed to drive operational effectivity throughout the enterprise, which helped generate better-than-forecasted third-quarter monetary outcomes,” RE/MAX Holdings CEO Erik Carlson stated in a press release. “Our staff is growing new income alternatives whereas working to run our core enterprise higher every day. That effort has contributed to our sturdy margin efficiency the previous two quarters, which is an encouraging pattern.”
RE/MAX Holdings minimize its working bills by $39 million or 38.1 % yr over yr, winnowing it right down to $63.3 million through the third quarter of 2024. Throughout Q3 2023, RE/MAX Holdings’ bills had been partly elevated by its settlement fee of $55 million in business antitrust lawsuits.
Regardless of ongoing U.S. agent attrition — 3,686 brokers, or 6.5 %, departing between Q3 2023 and Q3 2024, the general agent depend grew barely, including 174 brokers globally.
On an investor name Friday, Andy Schultz, Senior Vice President of Investor Relations, highlighted worldwide progress, with agent numbers growing practically 6 % in Q3 to a document of over 67,000 brokers exterior the U.S. and Canada. Markets like Brazil and Argentina had been key contributors to this progress, supported by efficient recruitment and retention methods.
RE/MAX additionally reached a document 25,400 brokers in Canada, even amid fierce competitors and market share challenges. Chief Monetary Officer Karri Callahan famous that Canada’s progress momentum included large-scale conversions of firms becoming a member of RE/MAX.
Earlier in Q2 2024, RE/MAX Holdings reported that 4.4 % of its brokers within the U.S. and Canada had parted methods with the franchisor. Moreover, the variety of Motto Mortgage franchises declined 3.3 % yr over yr to 234 workplaces.
“Enterprise optimization, having a progress mindset, and delivering the very best buyer expertise doable are the cornerstones of our playbook,” Carlson continued. “We’re making measurable progress on every of those. With growing optimism in regards to the trajectory of future rates of interest, our rising international agent depend, and our daring new initiatives — together with offering modern and enhanced expertise merchandise to our RE/MAX associates, bettering the agent-customer expertise by cultivating leads, and beginning to monetize our digital belongings — we’re well-positioned to complete the yr with constructive momentum.”
The franchisor’s third-quarter monetary outcomes additionally famous that many RE/MAX associates had been impacted by the current hurricanes Helene and Milton, with Schultz sharing the tragic lack of a dealer and their partner.
Because of storm destruction, RE/MAX Holdings anticipates its fourth-quarter income to be lower than beforehand anticipated, for the reason that firm is waiving charges to associates which have been impacted by the storms. The corporate downgraded its fourth-quarter and full-year income estimates by about $1 million to $1.5 million.
The franchisor’s inventory worth had dropped by about 4.98 % or $0.61 on Thursday throughout after-hours buying and selling to about $11.63.
E mail Lillian Dickerson
