RE/MAX Holdings, Inc. Q3 FY2025 earnings call

• Agent count reached an all-time high, with total worldwide agents over 147,500 and U.S. agent count having best Q3 in 3 years.
• Initiatives like Aspire program successful, with Ascend and Appreciate programs introduced in September offering flexibility in economic models.
• Marketing as a Service platform launched, showing strong engagement with elevated experience for affiliates and consumers, with plans to expand internationally.
• Lead Concierge program outperforming expectations, and RE/MAX Media Network on track for 7-figure revenue by end of 2025.
• New leadership in mortgage services (Vic Lombardo) and CIO (Tom Flanagan) bringing fresh perspectives and innovation.

Total revenue for the third quarter was $73.3 million. Adjusted EBITDA was $25.8 million with an adjusted EBITDA margin of 35.2%, an increase of 40 basis points over Q3 2024. Adjusted diluted EPS was $0.37. Excluding marketing funds, revenue was $55.1 million, a decrease of 5.6% year-over-year, driven by lower U.S. agent count and fee model modifications, partially offset by contributions from marketing services like Lead Concierge and RE/MAX Media Network.

• Fourth quarter 2025: Expected agent count increase 0% to 1.5% y-o-y, revenue $69.5M-$73.5M (including marketing funds $17M-$19M), adjusted EBITDA $19M-$23M.
• Full-year 2025: Revised revenue range to $290M-$294M (including marketing funds $72M-$74M) and adjusted EBITDA range to $90M-$94M, tightening from prior ranges.

Q: Can we expect 2026 incremental revenue from marketing programs and margin trajectory?

A: Marketing as a Service platform is a 7-digit revenue opportunity continuing to grow, with margin profile for Marketing as a Service high single-digit to low double-digit, and RMN margin higher than normal.

Q: Thoughts on M&A in the sector and recruitment rate impact?

A: Continued consolidation in market brings opportunity, seeing inbound activity as network resonates with RE/MAX's strategy and value proposition, boosting recruitment rates through programs like Aspire.

Q: Details on Aspire, Ascend, Appreciate models and agent productivity?

A: Aspire drives recruitment of newer agents with higher retention, Ascend offers lower fixed fee and higher variable rate, Appreciate for retirement; engagement on listings shows green shoots but long sales cycle for full productivity impact.

Q: Motto profitability and leveraging agent network?

A: New outlook on mortgage with Vic Lombardo, leaning into agent network through services like Marketing as a Service, RE/MAX Media Network, and focusing on post-close value-added experiences.

Q: Organic revenue impact magnitude and capital allocation?

A: Organic revenue impact from fee model modifications is short-term, with Aspire program an upfront investment for long-term benefits; total leverage ratio below 3.5x allows consideration of returning capital to shareholders.