A brand new quarter noticed persevering with traits 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, based on monetary outcomes posted after the market closed on Thursday.
Complete income declined 3.4 p.c 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 development of -3.0 p.c through the quarter, which it mentioned 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. Against this, through the third quarter of 2023, RE/MAX Holdings noticed a internet lack of $59.5 million.
“We continue to drive operational efficiency across the enterprise, which helped generate better-than-forecasted third-quarter financial results,” RE/MAX Holdings CEO Erik Carlson mentioned in an announcement. “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.”
RE/MAX Holdings reduce its working bills by $39 million or 38.1 p.c 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 partially elevated by its settlement cost of $55 million in business antitrust lawsuits.
The corporate was additionally in a position to enhance its total agent depend barely, bettering by 174 brokers or 0.1 p.c. Nonetheless, agent depend within the U.S. suffered, as 3,686 or 6.5 p.c of U.S.-based brokers left the franchisor between the third quarter of 2023 and the third quarter of 2024. In the course of the second quarter of 2024, RE/MAX Holdings reported that 4.4 p.c of its brokers within the U.S. and Canada had parted methods with the franchisor.
The variety of Motto Mortgage franchises additionally declined 3.3 p.c yr over yr to 234 places of work.
“Business optimization, having a growth mindset, and delivering the absolute best customer experience possible are the cornerstones of our playbook,” Carlson continued. “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.”
The franchisor’s third-quarter monetary outcomes additionally famous that many RE/MAX associates had been impacted by the latest hurricanes Helene and Milton, which devastated some elements of the southeastern U.S.
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 value had dropped by about 4.98 p.c or $0.61 on Thursday throughout after-hours buying and selling to about $11.63.
RE/MAX Holdings will maintain a name with traders on Friday morning at 8:30 a.m. ET to debate the third-quarter monetary outcomes.
