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RE/MAX Holdings’ total revenue declined by 8.3 percent year over year to $78.3 million during the first quarter of 2024, marking the company’s seventh consecutive quarter of falling revenue, the company announced on Thursday.
The decline in revenue bested analysts’ expectations, however, which anticipated RE/MAX’s revenue to fall by 9.5 percent on an annual basis to $77.26 million.
The news came one quarter after it was announced that previous President and CEO Nick Bailey would be stepping down and that Amy Lessinger, a long-time affiliate and headquarters exec, would succeed him as president, and report to RE/MAX Holdings CEO Erik Carlson.
Erik Carlson | RE/MAX Holdings
RE/MAX Holdings CEO Erik Carlson called the company’s performance “solid,” given the uncertain market.
“Effective cost management led to solid first-quarter margin performance, as we continue to operate our business as efficiently as possible amidst an environment of uncertainty,” Carlson said in a press statement.
“This, coupled with our growth mindset and a focus on delivering the absolute best customer experience, are the cornerstones of our playbook, supported by RE/MAX agents who are among the highest quality and most trusted in the profession.”
Revenue excluding Marketing Funds (the branch of RE/MAX that holds advertising funds collected from RE/MAX affiliates) decreased 9.3 percent on an annual basis to $58.1 million, largely driven by negative 9.3 percent organic growth, which was a result of a reduction in revenue from RE/MAX’s annual agent convention because of the company’s 50th anniversary the year before and a lower U.S. agent count.
The franchisor also saw a net loss attributable to RE/MAX Holdings of $3.4 million and loss per diluted share of $0.18.
RE/MAX’s adjusted operating earnings before interest, taxes, depreciation and amortization (EBITDA) declined by 4.7 percent to $19.0 million.
Total operating expenses dropped by 6.0 percent year over year to $73.8 million.
The franchiser’s total agent count also took a slight hit of 0.2 percent, or a loss of 236 agents, to a total of 143,287 agents. U.S. and Canada combined agent count dropped by 4.3 percent to 78,955 agents, largely driven by a roughly 3,500 drop in U.S. agent count.
Meanwhile, Motto Mortgage franchises rose by 4.7 percent year over year to 243 offices.
Despite many figures looking down for RE/MAX, Carlson said the quality of the franchiser’s agents remained a point of optimism.
“A widely respected industry survey recently confirmed RE/MAX agents are the most productive in the U.S., outperforming competitors at participating large brokerages 2-to-1, for the 16th year in a row,” Carlson added. “Our industry-leading productivity — a hallmark of our brand — continues to differentiate us from the competition and is a major reason we have succeeded over the past 51 years. It is also why we are confident we will successfully navigate today’s housing market and evolving real estate industry.”
Looking ahead to the second quarter of 2024, the franchiser said it expects agent count to hold steady on an annual basis and for revenue to hit between $75 million and $80 million, including Marketing Funds.
As several major real estate companies’ status in the commission lawsuits that have hit the industry this year remains more in flux, RE/MAX has been able to rest slightly easier in the sense that the firm was one of the first to put forth a settlement, of $55 million, and that settlement, alongside Anywhere’s, was granted preliminary approval by the court back in November. Final approval of the settlements is still outstanding.
