Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 26, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-36101 | |
Entity Registrant Name | RE/MAX Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0937145 | |
Entity Address Line One | 5075 South Syracuse Street | |
Entity Address City or Town | Denver | |
Entity Address State or Province | CO | |
Entity Address Postal Zip Code | 80237 | |
City Area Code | 303 | |
Local Phone Number | 770-5531 | |
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | |
Trading Symbol | RMAX | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001581091 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 18,852,858 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 82,077 | $ 82,623 |
Restricted cash | 45,359 | 43,140 |
Accounts and notes receivable, current portion, net of allowances | 33,182 | 33,427 |
Income taxes receivable | 2,015 | 1,706 |
Other current assets | 13,100 | 15,669 |
Total current assets | 175,733 | 176,565 |
Property and equipment, net of accumulated depreciation | 8,936 | 8,633 |
Operating lease right of use assets | 21,710 | 23,013 |
Franchise agreements, net | 95,841 | 101,516 |
Other intangible assets, net | 18,126 | 19,176 |
Goodwill | 239,930 | 241,164 |
Other assets, net of current portion | 6,446 | 7,083 |
Total assets | 566,722 | 577,150 |
Current liabilities: | ||
Accounts payable | 3,074 | 4,700 |
Accrued liabilities | 104,385 | 107,434 |
Income taxes payable | 1,286 | 766 |
Deferred revenue | 23,214 | 23,077 |
Current portion of debt | 4,600 | 4,600 |
Current portion of payable pursuant to tax receivable agreements | 285 | 822 |
Operating lease liabilities | 8,028 | 7,920 |
Total current liabilities | 144,872 | 149,319 |
Debt, net of current portion | 439,044 | 439,980 |
Deferred tax liabilities | 10,499 | 10,797 |
Deferred revenue, net of current portion | 16,911 | 17,607 |
Operating lease liabilities, net of current portion | 29,358 | 31,479 |
Other liabilities, net of current portion | 3,891 | 4,029 |
Total liabilities | 644,575 | 653,211 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Additional paid-in capital | 556,285 | 550,637 |
Accumulated deficit | (144,155) | (140,217) |
Accumulated other comprehensive income (deficit), net of tax | (105) | 638 |
Total stockholders' equity attributable to RE/MAX Holdings, Inc. | 412,027 | 411,060 |
Non-controlling interest | (489,880) | (487,121) |
Total stockholders' equity (deficit) | (77,853) | (76,061) |
Total liabilities and stockholders' equity (deficit) | 566,722 | 577,150 |
Common Class A | ||
Stockholders' equity (deficit): | ||
Common stock | 2 | 2 |
Common Class B | ||
Stockholders' equity (deficit): | ||
Common stock |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Common Class A | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 18,852,858 | 18,269,284 |
Common stock, shares outstanding | 18,852,858 | 18,269,284 |
Common Class B | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 1 | 1 |
Common stock, shares outstanding | 1 | 1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue: | ||
Total revenue | $ 78,287 | $ 85,401 |
Operating expenses: | ||
Selling, operating and administrative expenses | 45,705 | 49,115 |
Marketing Funds expenses | 20,206 | 21,342 |
Depreciation and amortization | 7,852 | 8,033 |
Total operating expenses | 73,763 | 78,490 |
Operating income (loss) | 4,524 | 6,911 |
Other expenses, net: | ||
Interest expense | (9,256) | (8,245) |
Interest income | 1,001 | 1,004 |
Foreign currency transaction gains (losses) | (372) | 43 |
Total other expenses, net | (8,627) | (7,198) |
Income (loss) before provision for income taxes | (4,103) | (287) |
Provision for income taxes | (1,504) | (392) |
Net income (loss) | (5,607) | (679) |
Less: net income (loss) attributable to non-controlling interest | (2,254) | (8) |
Net income (loss) attributable to RE/MAX Holdings, Inc. | $ (3,353) | $ (671) |
Common Class A | ||
Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock | ||
Basic | $ (0.18) | $ (0.04) |
Diluted | $ (0.18) | $ (0.04) |
Weighted average shares of Class A common stock outstanding | ||
Basic | 18,481,848 | 17,916,841 |
Diluted | 18,481,848 | 17,916,841 |
Cash dividends declared per share of Class A common stock | $ 0.23 | |
Continuing franchise fees | ||
Revenue: | ||
Total revenue | $ 31,085 | $ 32,076 |
Annual dues | ||
Revenue: | ||
Total revenue | 8,225 | 8,618 |
Broker fees | ||
Revenue: | ||
Total revenue | 10,716 | 10,892 |
Marketing Funds fees | ||
Revenue: | ||
Total revenue | 20,206 | 21,342 |
Franchise sales and other revenue | ||
Revenue: | ||
Total revenue | $ 8,055 | $ 12,473 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Net income (loss) | $ (5,607) | $ (679) |
Change in cumulative translation adjustment | (1,248) | 99 |
Comprehensive income (loss) | (6,855) | (580) |
Less: Comprehensive income (loss) attributable to non-controlling interest | (2,759) | 9 |
Comprehensive income (loss) attributable to RE/MAX Holdings, Inc., net of tax | $ (4,096) | $ (589) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Class A Common Stock | Common Class A | Common Class B Common Stock | Common Class B | Additional paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive income (loss), net of tax | Non-controlling interest | Total |
Beginning balance, Value at Dec. 31, 2022 | $ 2 | $ 535,566 | $ (53,999) | $ (395) | $ (449,472) | $ 31,702 | |||
Beginning balance, Shares at Dec. 31, 2022 | 17,874,238 | 1 | |||||||
Net income (loss) | (671) | (8) | (679) | ||||||
Distributions to non-controlling unitholders | (2,889) | (2,889) | |||||||
Equity-based compensation expense and dividend equivalents, Value | 6,635 | (660) | 5,975 | ||||||
Equity-based compensation expense and dividend equivalents, Shares | 593,463 | ||||||||
Dividends to Class A common stockholders | (4,164) | (4,164) | |||||||
Repurchase and retirement of common shares, Value | $ (3,400) | (3,408) | (3,408) | ||||||
Repurchase and retirement of common shares, Shares | (160,405) | (160,405) | |||||||
Change in accumulated other comprehensive income (loss) | 82 | 17 | 99 | ||||||
Shares withheld for taxes on share-based compensation, Value | (3,458) | (3,458) | |||||||
Shares withheld for taxes on share-based compensation, Shares | (185,349) | ||||||||
Other, Value | (235) | (235) | |||||||
Ending balance, Value at Mar. 31, 2023 | $ 2 | 538,743 | (63,137) | (313) | (452,352) | 22,943 | |||
Ending balance, Shares at Mar. 31, 2023 | 18,121,947 | 1 | |||||||
Beginning balance, Value at Dec. 31, 2023 | $ 2 | 550,637 | (140,217) | 638 | (487,121) | (76,061) | |||
Beginning balance, Shares at Dec. 31, 2023 | 18,269,284 | 18,269,284 | 1 | 1 | |||||
Net income (loss) | (3,353) | (2,254) | (5,607) | ||||||
Equity-based compensation expense and dividend equivalents, Value | 8,146 | (585) | 7,561 | ||||||
Equity-based compensation expense and dividend equivalents, Shares | 866,069 | ||||||||
Repurchase and retirement of common shares, Shares | 0 | ||||||||
Change in accumulated other comprehensive income (loss) | (743) | (505) | (1,248) | ||||||
Shares withheld for taxes on share-based compensation, Value | (2,498) | (2,498) | |||||||
Shares withheld for taxes on share-based compensation, Shares | (282,495) | ||||||||
Ending balance, Value at Mar. 31, 2024 | $ 2 | $ 556,285 | $ (144,155) | $ (105) | $ (489,880) | $ (77,853) | |||
Ending balance, Shares at Mar. 31, 2024 | 18,852,858 | 18,852,858 | 1 | 1 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (5,607) | $ (679) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 7,852 | 8,033 |
Equity-based compensation expense | 5,923 | 4,451 |
Bad debt expense | 1,314 | 1,614 |
Deferred income tax expense (benefit) | (202) | (1,579) |
Fair value adjustments to contingent consideration | 34 | (4) |
Loss (gain) on sale or disposition of assets, net | 178 | |
Non-cash lease benefit | (705) | (766) |
Non-cash debt charges | 215 | 212 |
Other, net | (5) | (116) |
Changes in operating assets and liabilities | 562 | (8,280) |
Net cash provided by operating activities | 9,381 | 3,064 |
Cash flows from investing activities: | ||
Purchases of property, equipment and capitalization of software | (2,619) | (1,489) |
Other | 189 | 195 |
Net cash used in investing activities | (2,430) | (1,294) |
Cash flows from financing activities: | ||
Payments on debt | (1,150) | (1,150) |
Distributions paid to non-controlling unitholders | (2,889) | |
Dividends and dividend equivalents paid to Class A common stockholders | (585) | (4,824) |
Payments related to tax withholding for share-based compensation | (2,498) | (3,458) |
Common shares repurchased | (3,408) | |
Payment of contingent consideration | (120) | (120) |
Net cash used in financing activities | (4,353) | (15,849) |
Effect of exchange rate changes on cash | (925) | 34 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 1,673 | (14,045) |
Cash, cash equivalents and restricted cash, beginning of period | 125,763 | 138,128 |
Cash, cash equivalents and restricted cash, end of period | $ 127,436 | $ 124,083 |
Business and Organization
Business and Organization | 3 Months Ended |
Mar. 31, 2024 | |
Business and Organization | |
Business and Organization | 1. Business and Organization RE/MAX Holdings, Inc. (“Holdings”) and its consolidated subsidiaries, including RMCO, LLC (“RMCO”), are referred to hereinafter as the “Company.” The Company is one of the world’s leading franchisors in the real estate industry, franchising real estate brokerages globally under the RE/MAX brand (“RE/MAX”) and mortgage brokerages within the United States (“U.S.”) under the Motto Mortgage brand (“Motto”). The Company also sells ancillary products and services, including loan processing services, primarily to its Motto network through the wemlo brand. The Company focuses on enabling its networks’ success by providing powerful technology, quality education, and valuable marketing to build the strength of the RE/MAX and Motto brands. RE/MAX and Motto are 100% franchised—the Company does not own any of the brokerages that operate under these brands. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying Condensed Consolidated Balance Sheet at December 31, 2023, which was derived from the audited consolidated financial statements at that date, and the unaudited interim condensed consolidated financial statements and notes thereto have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements are presented on a consolidated basis and include the accounts of Holdings and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the Company’s financial position as of March 31, 2024 and the results of its operations and comprehensive income (loss), cash flows and changes in its stockholders’ equity (deficit) for the three months ended March 31, 2024 and 2023. Interim results may not be indicative of full-year performance. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Annual Report on Form 10-K”). Please refer to that document for a fuller discussion of all significant accounting policies. Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Segment Reporting The Company operates under the following four operating segments: Real Estate, Mortgage, Marketing Funds and Other. Due to quantitative insignificance, the “Other” operating segment is comprised of operations which do not meet the criteria of a reportable segment. Revenue Recognition The Company generates most of its revenue from contracts with customers. The Company’s major streams of revenue are: ● Continuing franchise fees, which are fixed contractual fees paid monthly by RE/MAX or Motto franchisees or Independent Region sub-franchisors based on the number of RE/MAX agents or Motto open offices. ● Annual dues, which are fees charged directly to RE/MAX agents. ● Broker fees, which are fees on real estate commissions when a RE/MAX agent assists a consumer with buying or selling a home. ● Marketing Funds fees, which are fixed contractual fees paid monthly by franchisees based on the number of RE/MAX agents or Motto open offices. ● Franchise sales and other revenue, which consists of fees from initial sales of RE/MAX and Motto franchises, renewals of RE/MAX franchises and RE/MAX master franchise fees, as well as data services subscription revenue, preferred marketing arrangements, technology products and subscription revenue, events-related revenue from education and other programs and mortgage loan processing revenue. Deferred Revenue and Commissions Related to Franchise Sales Deferred revenue is primarily driven by Franchise sales and Annual dues, as discussed above, and is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Condensed Consolidated Balance Sheets. Other deferred revenue is primarily related to events-related revenue. The activity consists of the following (in thousands): Balance at Revenue Balance at January 1, 2024 New billings recognized (a) March 31, 2024 Franchise sales $ 24,613 $ 1,299 $ (2,149) $ 23,763 Annual dues 13,282 8,911 (8,225) 13,968 Other 2,789 5,402 (5,797) 2,394 $ 40,684 $ 15,612 $ (16,171) $ 40,125 (a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $2.1 million and $6.1 million, respectively, for the three months ended March 31, 2024. Commissions paid on franchise sales are recognized as an asset and amortized over the contract life of the franchise agreement. The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands): Additions to Balance at contract cost Expense Balance at January 1, 2024 for new activity recognized March 31, 2024 Capitalized contract costs for commissions $ 4,255 $ 357 $ (651) $ 3,961 Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands): Remainder of 2024 2025 2026 2027 2028 2029 Thereafter Total Franchise sales $ 5,178 $ 5,940 $ 4,661 $ 3,302 $ 1,877 $ 742 $ 2,063 $ 23,763 Annual dues 13,294 674 — — — — — 13,968 Total $ 18,472 $ 6,614 $ 4,661 $ 3,302 $ 1,877 $ 742 $ 2,063 $ 37,731 Disaggregated Revenue In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions, where applicable, by segment and by geographical area (in thousands): Three Months Ended March 31, 2024 2023 U.S. Company-Owned Regions $ 31,739 $ 33,861 U.S. Independent Regions 1,468 1,476 Canada Company-Owned Regions 9,903 9,798 Canada Independent Regions 728 724 Global 3,468 3,198 Fee revenue (a) 47,306 49,057 Franchise sales and other revenue (b) 7,142 11,573 Total Real Estate 54,448 60,630 U.S. 15,366 16,305 Canada 4,616 4,763 Global 224 274 Total Marketing Funds 20,206 21,342 Mortgage (c) 3,633 3,188 Other (c) — 241 Total $ 78,287 $ 85,401 (a) Fee revenue includes Continuing franchise fees, Annual dues and Broker fees. (b) Franchise sales and other revenue is derived primarily within the U.S. The decline in other revenue is mostly attributable to a reduction in revenue from the Company’s annual RE/MAX agent convention as a result of lower attendance due the 50 th anniversary celebration in the prior year. (c) Revenue from Mortgage and Other are derived exclusively within the U.S. Cash, Cash Equivalents and Restricted Cash The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands): March 31, 2024 December 31, 2023 Cash and cash equivalents $ 82,077 $ 82,623 Restricted cash: Marketing Funds (a) 17,859 15,640 Settlement Fund (b) 27,500 27,500 Total cash, cash equivalents and restricted cash $ 127,436 $ 125,763 (a) All cash held by the Marketing Funds is contractually restricted, pursuant to the applicable franchise agreements. (b) Represents the net amounts held in the Settlement Fund as part of the settlement of industry class-action lawsuits. See Note 11, Commitments and Contingencies for additional information. Services Provided to the Marketing Funds by Real Estate Real Estate charges the Marketing Funds for various services it performs. These services are primarily comprised of (a) building and maintaining the remax.com and remax.ca websites and mobile apps, (b) dedicated employees focused on consumer facing marketing initiatives, and (c) various administrative services including customer support of technology; accounting and legal. Costs charged from Real Estate to the Marketing Funds are as follows (in thousands): Three Months Ended March 31, 2024 2023 Technology − operating $ 1,050 $ 1,169 Technology − capital (a) — (203) Marketing staff and administrative services 1,505 1,492 Total $ 2,555 $ 2,458 (a) During the first quarter of 2023, the Company determined that certain development projects were no longer needed and therefore $0.2 million, reflecting the cost of work in process assets that would no longer be placed in service, was refunded to the Marketing Funds. Accounts and Notes Receivable As of March 31, 2024, and December 31, 2023, the Company had allowances against accounts and notes receivable of $11.9 million and $10.9 million, respectively. Property and Equipment As of March 31, 2024, and December 31, 2023 the Company had accumulated depreciation of $13.8 million and $13.1 million, respectively. Leases The Company leases corporate offices, a distribution center, billboards and certain equipment. As all franchisees are independently owned and operated, there are no leases recognized for any offices used by the Company’s franchisees. All of the Company’s material leases are classified as operating leases. The Company acts as the lessor for sublease agreements on its corporate headquarters, consisting solely of operating leases. Restructuring and Reduction in Force Charges During the third quarter of 2023, the Company announced a reduction in force and reorganization (the “Reorganization”) intended to streamline the Company’s operations and yield cost savings over the long term. The Reorganization reduced the Company’s overall workforce by approximately 7% and was substantially complete by September 30, 2023. As a result of the Reorganization, the Company incurred a pre-tax cash charge for one-time termination benefits of severance and related costs of $4.3 million and accelerated equity compensation expense of $0.5 million. See Note 6, Accrued Liabilities Severance and Retirement Plan On May 24, 2023, the Compensation Committee of the Board of Directors approved a Severance and Retirement Plan (the “Plan”). The Plan replaces the Severance Pay Benefit Plan adopted by the Company on December 4, 2018. The Plan provides benefits to eligible employees and executive officers of RE/MAX, LLC and its subsidiaries, in the event of (i) involuntary termination of their employment due to position elimination, reduction in force, or other circumstances that the employer determines should result in payment of benefits, or (ii) voluntary termination of employment due to retirement for employees who meet the retirement eligibility criteria in the Plan, subject in both cases to certain restrictions set forth in the Plan. In the case of involuntary termination, these benefits include salary continuation, a health benefits stipend, outplacement services and a possible pro-rated bonus. In the case of retirement, these benefits include modification of vesting of restricted stock awards (for employees who are eligible for restricted stock awards) and a possible pro-rated bonus. Any associated equity compensation expense will be accelerated through the employee's retirement eligibility date. Foreign Currency Derivatives The Company is exposed to foreign currency transaction gains and losses related to certain foreign currency denominated asset and liability positions, with the Canadian dollar representing the most significant exposure primarily from an intercompany Canadian loan between RMCO and the Canadian entity for RE/MAX INTEGRA (“INTEGRA”). The Company uses short duration foreign currency forward contracts, generally with maturities ranging from a few days to a few months, to minimize its exposures related to foreign currency exchange rate fluctuations. None of these contracts are designated as accounting hedges as the underlying currency positions are revalued through “Foreign currency transaction gains (losses)” on the Consolidated Statements of Income (Loss) along with the related derivative contracts. During the three months ended March 31, 2024 and 2023, the Company recognized a net realized gain of $1.2 million and a net realized loss of $0.1 million, respectively. The Company has a short-term $74.0 million Canadian dollar forward contract that matures in the second quarter of 2024 that net settles in U.S. dollars based on the prevailing spot rates at maturity. Recently Adopted Accounting Pronouncements None. New Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which requires greater disaggregation of income tax disclosures related to the income tax reconciliation and income taxes paid. The amendments improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024, and early adoption is permitted. The Company believes the amendments of ASU 2023-09 will not have a significant impact on the Company’s consolidated financial statements and will include all required disclosures upon adoption. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis, primarily disclosure of significant segment expense categories and amounts for each reportable segment. The new standard is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company will adopt ASU 2023-07 in the annual financial statements for the twelve months ended December 31, 2024, and for interim periods beginning in 2025. The Company believes the amendments of ASU 2023-07 will not have a significant impact on the Company’s consolidated financial statements and will include all required disclosures upon adoption. |
Non-controlling Interest
Non-controlling Interest | 3 Months Ended |
Mar. 31, 2024 | |
Non-controlling Interest. | |
Non-controlling Interest | 3. Non-controlling Interest Holdings is the sole managing member of RMCO and operates and controls all of the business affairs of RMCO. The ownership of the common units in RMCO is summarized as follows: March 31, 2024 December 31, 2023 Shares Ownership % Shares Ownership % Non-controlling interest ownership of common units in RMCO 12,559,600 40.0 % 12,559,600 40.7 % Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) 18,852,858 60.0 % 18,269,284 59.3 % Total common units in RMCO 31,412,458 100.0 % 30,828,884 100.0 % The weighted average ownership (“WAO”) percentages for the applicable reporting periods are used to calculate the “Net income (loss) attributable to RE/MAX Holdings, Inc.” A reconciliation of “Income (loss) before provision for income taxes” to “Net income (loss) attributable to RE/MAX Holdings, Inc.” and “Net Income (loss) attributable to non-controlling interest” in the accompanying Condensed Consolidated Statements of Income (Loss) for the periods indicated is detailed as follows (in thousands, except percentages): Three Months Ended March 31, 2024 2023 Holdings NCI Total Holdings NCI Total WAO percentage of RMCO (a) 59.5 % 40.5 % 100.0 % 58.8 % 41.2 % 100.0 % Income (loss) before provision for income taxes (a) $ (2,446) $ (1,657) $ (4,103) $ (168) $ (119) $ (287) (Provision) / benefit for income taxes (b) (907) (597) (1,504) (503) 111 (392) Net income (loss) $ (3,353) $ (2,254) $ (5,607) $ (671) $ (8) $ (679) (a) The WAO percentage of RMCO differs from the percentage allocation of income (loss) before provision for income taxes between Holdings and the non-controlling interest due to certain items recorded at Holdings. (b) The provision for income taxes attributable to Holdings is primarily comprised of U.S. federal and state income taxes on its proportionate share of the flow-through income from RMCO. It also includes Holdings’ share of taxes directly incurred by RMCO and its subsidiaries, including taxes in certain foreign jurisdictions. Distributions and Other Payments to Non-controlling Unitholders Under the terms of RMCO’s limited liability company operating agreement, RMCO makes cash distributions to non-controlling unitholders on a pro-rata basis. The distributions paid or payable to non-controlling unitholders are summarized as follows (in thousands): Three Months Ended March 31, 2024 2023 Dividend distributions (a) $ — $ 2,889 Total distributions to non-controlling unitholders $ — $ 2,889 (a) In the fourth quarter of 2023, the Company announced that its Board of Directors suspended the Company’s quarterly dividend . |
Earnings (Loss) Per Share, Divi
Earnings (Loss) Per Share, Dividends and Repurchases | 3 Months Ended |
Mar. 31, 2024 | |
Earnings (Loss) Per Share, Dividends and Repurchases | |
Earnings (Loss) Per Share, Dividends and Repurchases | 4. Earnings (Loss) Per Share, Dividends and Repurchases Earnings (Loss) Per Share The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings (loss) per share (“EPS”) calculations (in thousands, except shares and per share information): Three Months Ended March 31, 2024 2023 Numerator Net income (loss) attributable to RE/MAX Holdings, Inc. $ (3,353) $ (671) Denominator for basic net income (loss) per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,481,848 17,916,841 Denominator for diluted net income (loss) per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,481,848 17,916,841 Add dilutive effect of the following: Restricted stock (a) — — Weighted average shares of Class A common stock outstanding, diluted 18,481,848 17,916,841 Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock Basic $ (0.18) $ (0.04) Diluted $ (0.18) $ (0.04) Outstanding Class B common stock does not share in the earnings of Holdings and is therefore not a participating security. Accordingly, basic and diluted net income (loss) per share of Class B common stock has not been presented. Dividends Dividends declared and paid during each quarter ended per share on all outstanding shares of Class A common stock were as follows (in thousands, except per share information): Three Months Ended March 31, 2023 Quarter end declared Date paid Per share Class A stockholders ($) Non-controlling unitholders ($) March 31 March 22, 2023 $ 0.23 $ 4,164 $ 2,889 In the fourth quarter of 2023, the Company’s Board of Directors suspended the Company’s quarterly dividend and therefore no dividends were paid during the first quarter of 2024. In light of the pending litigation settlement and ongoing challenging housing and mortgage market conditions, the Company’s Board of Directors believes this action to preserve the Company’s capital is prudent. Share Repurchases and Retirement 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 March 31, 2023, 160,405 shares of the Company’s Class A common stock were repurchased and retired for $3.4 million excluding commissions, at a weighted average cost of $21.24. During the three months ended March 31, 2024, the Company did not repurchase any shares. As of March 31, 2024, $62.5 million remained available under the share repurchase program. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2024 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | 5. Intangible Assets and Goodwill The following table provides the components of the Company’s intangible assets (in thousands, except weighted average amortization period in years): Weighted Average As of March 31, 2024 As of December 31, 2023 Amortization Initial Accumulated Net Initial Accumulated Net Period Cost Amortization Balance Cost Amortization Balance Franchise agreements 12.1 $ 224,566 $ (128,725) $ 95,841 $ 225,716 $ (124,200) $ 101,516 Other intangible assets: Software (a) 4.1 $ 54,498 $ (41,000) $ 13,498 $ 52,918 $ (39,192) $ 13,726 Trademarks 9.1 973 (681) 292 971 (649) 322 Non-compete agreements 5.0 12,948 (8,786) 4,162 13,051 (8,156) 4,895 Training materials — 2,400 (2,400) — 2,400 (2,400) — Other 7.0 870 (696) 174 870 (637) 233 Total other intangible assets 4.5 $ 71,689 $ (53,563) $ 18,126 $ 70,210 $ (51,034) $ 19,176 (a) As of March 31, 2024 and December 31, 2023, capitalized software development costs of $2.1 million and $1.0 million, respectively, were related to technology projects not yet complete and ready for their intended use and thus were not subject to amortization. Amortization expense was $7.2 million and $7.4 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the estimated future amortization expense related to intangible assets includes the estimated amortization expense associated with the Company’s intangible assets assumed with the Company’s acquisitions (in thousands): Remainder of 2024 $ 19,512 2025 23,119 2026 16,091 2027 9,118 2028 8,274 Thereafter 37,853 $ 113,967 The following table presents changes to goodwill by reportable segment (in thousands): Real Estate Balance, January 1, 2024 $ 241,164 Effect of changes in foreign currency exchange rates (1,234) Balance, March 31, 2024 $ 239,930 As of March 31, 2024, there were no events or circumstances that would indicate impairment may have occurred at either reporting unit level. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2024 | |
Accrued Liabilities. | |
Accrued Liabilities | 6. Accrued Liabilities Accrued liabilities consist of the following (in thousands): March 31, 2024 December 31, 2023 Marketing Funds (a) $ 30,451 $ 28,753 Accrued payroll and related employee costs 7,917 14,231 Accrued taxes 2,040 2,567 Accrued professional fees 1,165 937 Settlement payable (b) 55,000 55,700 Other 7,812 5,246 $ 104,385 $ 107,434 (a) Consists primarily of liabilities recognized to reflect the contractual restriction that all funds collected in the Marketing Funds must be spent for designated purposes pursuant to the terms of the applicable franchise agreements. See Note 2, Summary of Significant Accounting Policies for additional information. (b) Represents the net settlement payable as part of the settlement of industry class-action lawsuits. See Note 11, Commitments and Contingencies for additional information. The following table presents a roll forward of the severance and related costs liability as related to the Reorganization and the strategic shift and restructure of the Company’s business, which is in “Accrued payroll and related employee costs” in the table above (in thousands): Balance, January 1, 2024 $ 2,622 Severance and other related expenses (27) Cash payments (1,239) Balance, March 31, 2024 (a) $ 1,356 (a) The remaining liability balance is related to the strategic shift and restructure of the Company’s business that occurred in the third quarter of 2023 . |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt | |
Debt | 7. Debt Debt, net of current portion, consists of the following (in thousands): March 31, 2024 December 31, 2023 Senior Secured Credit Facility $ 447,350 $ 448,500 Less unamortized debt issuance costs (2,738) (2,896) Less unamortized debt discount costs (968) (1,024) Less current portion (4,600) (4,600) $ 439,044 $ 439,980 As of March 31, 2024, maturities of debt are as follows (in thousands): Remainder of 2024 $ 3,450 2025 4,600 2026 4,600 2027 4,600 2028 430,100 $ 447,350 Senior Secured Credit Facility On July 21, 2021, the Company amended and restated its Senior Secured Credit Facility to fund the acquisition of INTEGRA and refinance its existing facility. The revised facility provides for a seven-year $460.0 million term loan facility which matures on July 21, 2028, and a $50.0 million revolving loan facility which matures and must be repaid on July 21, 2026 if any amounts are drawn. The Senior Secured Credit Facility requires the Company to repay term loans at approximately $1.2 million per quarter. The Company is also required to repay the term loans and reduce revolving commitments with (i) 100% of proceeds of any incurrence of additional debt not permitted by the Senior Secured Credit Facility, (ii) 100% of proceeds of asset sales and 100% of amounts recovered under insurance policies, subject to certain exceptions and a reinvestment right and (iii) 50% of Excess Cash Flow (or “ECF”) as defined in the Senior Secured Credit Facility, at the end of the applicable fiscal year if RE/MAX, LLC’s Total Leverage Ratio (or “TLR”) as defined in the Senior Secured Credit Facility, is in excess of 4.25:1. The Company’s TLR is calculated based on RE/MAX, LLC’s consolidated indebtedness and consolidated EBITDA, both defined in the Senior Secured Credit Facility. As of March 31, 2024, RE/MAX, LLC’s consolidated EBITDA, as defined in the Senior Secured Credit Facility, was $42.8 million on a trailing twelve-month basis. If the Company’s TLR as of the last day of such fiscal year is equal to or less than 4.25:1 but above 3.75:1, the repayment percentage is 25% of ECF and if the Company’s TLR as of the last day of such fiscal year is less than 3.75:1, no repayment from ECF is required. The Company evaluated if an ECF payment was required as of December 31, 2023, pursuant to the terms of the Senior Secured Credit Facility and determined no ECF payment was required. In addition, if any amounts are drawn under the revolving line of credit under the Senior Secured Credit Facility, the terms of the Company’s Senior Secured Credit Facility require the Company’s TLR to not exceed 4.50:1 at the last day of any period of four consecutive fiscal quarters. If the Company’s TLR exceeds 4.50:1, access to borrowings under the revolving line of credit is restricted. A commitment fee of 0.5% per annum (subject to reductions) accrues on the amount of unutilized revolving line of credit regardless of the Company’s TLR. As of the date of this report, no amounts were drawn on the revolving line of credit. The Company is also limited in the amount of restricted payments it can make, as defined in the Senior Secured Credit Facility, as it provides for customary restrictions on, among other things, additional indebtedness, restricted payments, liens, dispositions of property, dividends, transactions with affiliates and fundamental changes such as mergers, consolidations, and liquidations. The restricted payments include declaration or payment of dividends, repurchase of shares, or other distributions. In general, the Company can make unlimited restricted payments, if the Company’s TLR is below 3.50:1 (both before and after giving effect to such payments). If the Company’s TLR exceeds 3.50:1, the Company will be limited in the amount of restricted payments – primarily dividends and share repurchases – it can make up to the greater of $50 million or 50% of consolidated EBITDA on a trailing twelve-month basis (unless the Company can rely on other restricted payment baskets available under the Senior Secured Credit Facility). As of March 31, 2024, the Company’s TLR of 8.51:1, exceeded 4.50:1, primarily due to the settlement of industry class-action lawsuits (for additional information see Note 11, Commitments and Contingencies With certain exceptions, any default under any of the Company’s other agreements evidencing indebtedness in the amount of $15.0 million or more constitutes an event of default under the Senior Secured Credit Facility. Prior to July 2023, borrowings under the term loans and revolving loans accrued interest, at the Company’s option on (a) LIBOR, provided LIBOR shall be no less than 0.50% plus an applicable margin of 2.50% and, provided further that such rate shall be adjusted for reserve requirements for eurocurrency liabilities, if any (the “LIBOR Rate”) or (b) the greatest of (i) the prime rate as quoted by the Wall Street Journal, (ii) the NYFRB Rate (as defined in the Senior Secured Credit Facility) plus 0.50% and (iii) the one-month Eurodollar Rate plus 1.00%, (such greatest rate, the “ABR”) plus, in each case, an applicable margin of 1.50%. The Senior Secured Credit Facility includes a provision for transition from LIBOR to the alternative reference rate of Term Secured Overnight Financing Rate (“SOFR”) on or before June 2023 (the LIBOR Rate cessation date) and the Company transitioned from LIBOR to Adjusted Term SOFR on July 31, 2023. Borrowings under the term loans and revolving loans accrue interest based on Adjusted Term SOFR, subject to the same floor of 0.50%, plus the same applicable margin of 2.50%. As of March 31, 2024, the interest rate on the term loan facility was 7.9%. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Measurements | |
Fair Value Measurements | 8. Fair Value Measurements Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering assumptions, the Company follows a three-tier fair value hierarchy, which is described in detail in the 2023 Annual Report on Form 10-K. A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows (in thousands): As of March 31, 2024 As of December 31, 2023 Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Liabilities Motto contingent consideration $ 2,200 $ — $ — $ 2,200 $ 2,170 $ — $ — $ 2,170 Gadberry Group contingent consideration 474 — — 474 590 — — 590 Contingent consideration (a) $ 2,674 $ — $ — $ 2,674 $ 2,760 $ — $ — $ 2,760 (a) Recorded as a component of “Accrued liabilities” and “Other liabilities, net of current portion” in the accompanying Condensed Consolidated Balance Sheets. The Company is required to pay additional purchase consideration totaling 8% of gross receipts collected by Motto each year (the “Revenue Share Year”) through September 30, 2026, with no limitation as to the maximum payout. The annual payment is required to be made within 120 days of the end of each Revenue Share Year. The fair value of the contingent purchase consideration represents the forecasted discounted cash payments that the Company expects to pay. Increases or decreases in the fair value of the contingent purchase consideration can result from changes in discount rates as well as the timing and amount of forecasted revenues. The forecasted revenue growth assumption that is most sensitive is the assumed franchise sales count for which the forecast assumes between 40-90 franchises sold annually. This assumption is based on historical sales and an assumption of growth over time. A 10% reduction in the number of franchise sales and a 1% change to the discount rate applied to the forecast would not change the liability materially. As of March 31, 2024, contingent consideration also includes an amount recognized in connection with the acquisition of the Gadberry Group. The Company measures these liabilities each reporting period and recognizes changes in fair value, if any, in “Selling, operating and administrative expenses” in the accompanying Condensed Consolidated Statements of Income (Loss). The table below presents a reconciliation of the contingent consideration (in thousands): Total Balance at January 1, 2024 $ 2,760 Fair value adjustments 34 Cash payments (120) Balance at March 31, 2024 $ 2,674 The following table summarizes the carrying value and estimated fair value of the Senior Secured Credit Facility (in thousands): March 31, 2024 December 31, 2023 Carrying Amount Fair Value Level 2 Carrying Amount Fair Value Level 2 Senior Secured Credit Facility $ 443,644 $ 417,154 $ 444,580 $ 421,590 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Taxes | |
Income Taxes | 9. Income Taxes Valuation Allowance In the tax year ending December 31, 2023, the Company evaluated the need for a valuation allowance against its deferred tax assets and determined that in accordance with ASC 740 Income Taxes (“ASC 740”), the objective negative evidence of a three-year cumulative pre-tax net loss, primarily due to the settlement of industry class-action lawsuits, prevented the use of the Company’s subjective positive evidence of expected future profitability in evaluating the realizability of its net deferred tax assets. As a result, a full valuation allowance was established against the Company’s deferred tax assets. As of the first quarter of 2024, the Company expects to remain in a three-year cumulative loss and has recorded a $0.2 million valuation allowance against its U.S. net deferred tax assets. Tax Receivable Agreements (“TRAs”) As of March 31, 2024, the Company’s total liability under the TRAs for the tax year ending December 31, 2023 is $0.3 million. This liability is expected to be settled in the fourth quarter of 2024. Uncertain Tax Positions As of March 31, 2024, there have been no material changes to the Company’s uncertain tax positions since December 31, 2023 and a portion of the Company’s uncertain tax positions have a reasonable possibility of being settled within the next 12 months. |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Equity-Based Compensation | |
Equity-Based Compensation | 10. Equity-Based Compensation Equity-based compensation expense under the Holdings 2013 Omnibus Incentive Plan (the “2013 Incentive Plan”) as well as the new Holdings 2023 Omnibus Incentive Plan (the “2023 Incentive Plan” and, together with the 2013 Incentive Plan, the “Incentive Plans”), is as follows (in thousands): Three Months Ended March 31, 2024 2023 Expense from time-based awards (a) $ 3,661 $ 2,504 Expense from performance-based awards (a)(b) 881 717 Expense from bonus to be settled in shares (c) 1,381 1,230 Equity-based compensation expense $ 5,923 $ 4,451 (a) Includes $0.2 million of expense recognized for time-based awards and $0.3 million of expense recognized for performance-based awards for inducement awards granted to the Company's CEO, Erik Carlson, in the fourth quarter of 2023. These equity awards were made pursuant to the inducement award exception under the New York Stock Exchange Rule 303A.08 and were not granted from the 2023 Incentive Plan. All of the restricted stock units remain outstanding as of March 31, 2024. (b) Expense recognized for performance-based awards is re-assessed each quarter based on expectations of achievement against the performance conditions. (c) A portion of the annual corporate bonus earned is to be settled in shares. These amounts are recognized as “Accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets and are not included in “Additional paid-in capital” until the shares are issued. Time-based Restricted Stock The following table summarizes equity-based compensation activity related to time-based restricted stock units and restricted stock awards: Shares Weighted average grant date fair value per share Balance, January 1, 2024 1,066,594 $ 18.70 Granted 1,197,039 $ 8.67 Shares vested (including tax withholding) (a) (375,288) $ 22.59 Forfeited (24,591) $ 20.88 Balance, March 31, 2024 1,863,754 $ 11.45 (a) Pursuant to the terms of the Incentive Plan, shares withheld by the Company for the payment of the employee's tax withholding related to shares vesting are added back to the pool of shares available for future awards. As of March 31, 2024, there was $15.8 million of total unrecognized expense. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 2.1 years. Performance-based Restricted Stock The following table summarizes equity-based compensation activity related to performance-based restricted stock units: Shares Weighted average grant date fair value per share Balance, January 1, 2024 783,231 $ 7.86 Granted (a) 423,449 $ 13.62 Forfeited (54,285) $ 21.79 Balance, March 31, 2024 1,152,395 $ 9.32 (a) Represents the total participant target award. As of March 31, 2024, there was $5.1 million of total unrecognized expense. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 1.9 years. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies A number of putative class action complaints were filed against the National Association of Realtors (“NAR”), Anywhere Real Estate, Inc. (formerly Realogy Holdings Corp.), HomeServices of America, Inc. (“HSA”), RE/MAX, LLC and Keller Williams Realty, Inc (“Keller Williams”). The first was filed on March 6, 2019, by plaintiff Christopher Moehrl in the United States District Court for the Northern District of Illinois (the “Moehrl Action”). Similar actions have been filed in various federal courts. The complaints make substantially similar allegations and seek substantially similar relief. For convenience, all of these lawsuits are collectively referred to as the “Moehrl-related antitrust litigations.” In the Moehrl Action, the plaintiffs allege that a NAR rule that requires brokers to make a blanket, non-negotiable offer of buyer broker compensation when listing a property, results in increased costs to sellers and is in violation of federal antitrust law. They further allege that certain defendants use their agreements with franchisees to require adherence to the NAR rule in violation of federal antitrust law. Amended complaints added allegations regarding buyer steering and non-disclosure of buyer-broker compensation to the buyer. While similar to the Moehrl Action, the Moehrl-related antitrust litigations also allege state antitrust violations and claims against a multiple listing service (“MLS”) defendant rather than NAR. In the Moehrl Action, plaintiffs sought certification of two classes of home sellers: (1) a class seeking an award of alleged damages incurred by home sellers who paid a commission between March 6, 2015 and December 31, 2020, to a brokerage affiliated with a corporate defendant in connection with the sale of residential real estate listed on any of the 20 covered MLSs in various parts of the country; and (2) a class of current or future owners of residential real estate, who are presently listing or will in the future list a home for sale on any of the 20 covered MLSs, seeking to prohibit defendants from maintaining and enforcing the NAR rules at issue in the complaint. On March 29, 2023, the court in the Moehrl Action granted plaintiffs’ motion for class certification as to both classes. On April 12, 2023, RE/MAX, LLC petitioned the United States Court of Appeals for the Seventh Circuit for permission to appeal the Court’s class certification decision. On May 24, 2023, the Seventh Circuit denied the petition. A trial date has not been set. In one of the Moehrl-related antitrust litigations, filed by plaintiffs Scott and Rhonda Burnett and others in the Western District of Missouri (the “Burnett Action”), the court on April 22, 2022 granted plaintiffs’ motion for class certification and a trial was set for October 2023. On September 15, 2023, RE/MAX, LLC entered into a Settlement Term Sheet (the “Settlement”) with plaintiffs in the Burnett Action and Moehrl Action. The proposed Settlement would resolve all claims set forth in the Burnett Action and Moehrl Action, as well as all similar claims on a nationwide basis against RE/MAX, LLC (collectively, the “Nationwide Claims”) and would release RE/MAX, LLC and the Company, their subsidiaries and affiliates, and RE/MAX sub-franchisors, franchisees and their sales associates in the United States from the Nationwide Claims. By the terms of the Settlement, RE/MAX, LLC agreed to make certain changes to its business practices and to pay a total settlement amount of $55.0 million (the “Settlement Amount”) into a qualified settlement escrow fund (the “Settlement Fund”). The Settlement Amount is expected to be deposited into the Settlement Fund in three installments per the Settlement Agreement (as defined below), of which 25% of the Settlement Amount (or $13.8 million) was deposited during the third quarter of 2023 and 25% of the Settlement Amount (or $13.8 million) was deposited during the fourth quarter of 2023. The final 50% is to be deposited within ten business days of final court approval of the Settlement Agreement. The Company has used – and intends to use – available cash to pay the Settlement Amount. In 2023, the Company recorded the Settlement Amount to “Settlement and impairment charges” within the Condensed Consolidated Statements of Income (Loss) with a corresponding liability recorded to “Accrued liabilities” within the Consolidated Condensed Balance Sheets. In addition, the first and second installments the Company paid into the Settlement Fund is included in “Restricted cash” within the Consolidated Condensed Balance Sheets. The Settlement Agreement remains subject to final court approval and will become effective following any appeals process, if applicable. The Settlement Agreement and any actions taken to carry out the Settlement Agreement are not an admission or concession of liability, or of the validity of any claim, defense, or point of fact or law on the part of any party. RE/MAX, LLC continues to deny the material allegations of the complaints in the Burnett Action, the Moehrl Action, the Moehrl-related antitrust litigations, and the Copycat Cases (as defined below). RE/MAX, LLC entered into the Settlement after considering the risks and costs of continuing the litigation. On September 19, 2023, the Burnett court stayed deadlines as to RE/MAX, LLC. On October 5, 2023, RE/MAX, LLC entered into a definitive settlement agreement (the “Settlement Agreement”) containing substantially the same material terms and conditions as provided in the Settlement. On November 20, 2023, the court granted preliminary approval of the Settlement Agreement. The court set May 9, 2024 for the final approval hearing. On October 31, 2023, after a two-week trial, the jury in the Burnett Action found an unlawful conspiracy existed and awarded approximately $1.8 billion against the three remaining defendants NAR, Keller Williams and HSA. The Company expects the award to be trebled. Due to the Settlement Agreement, the Company did not present a defense or participate in the trial. Following the trial, on February 1, 2024, Keller Williams entered into a settlement agreement with plaintiffs agreeing to make certain changes to its business practices and to pay a total settlement amount of $70.0 million. On March 15, 2024, NAR and plaintiffs reached a settlement agreement. As part of that settlement, NAR agreed to pay $418 million and make certain changes to its business practices, including prohibiting offers of compensation to buyer brokers on the MLS and requiring buyer agreements for MLS participants working with a buyer. The court granted preliminary approval of the NAR settlement on April 23, 2024. On April 25, 2024, HSA entered into a settlement agreement with the plaintiffs in which they agreed to certain changes to its business practices and to pay $250.0 million. In one of the other Moehrl-related antitrust litigations, filed by Jennifer Nosalek and others in the District of Massachusetts (the “Nosalek Action”), on June 30, 2023, plaintiffs filed a motion requesting preliminary approval of a settlement with MLS Property Information Network, Inc. (“MLS PIN”). The parties subsequently amended the settlement agreement on September 5, 2023, and January 5, 2024. If approved by the court, the settlement agreement requires MLS PIN to pay $3.0 million, to eliminate the requirement that a seller must offer compensation to a buyer-broker and to amend various rules pertaining to seller notices and negotiation of buyer-broker compensation. On February 15, 2024, the U.S. Department of Justice filed a statement of interest requesting that the court deny preliminary approval of the second amended settlement agreement and recommending that the settling parties propose an injunction that prohibits offers of buyer-broker compensation by MLS PIN participants. No other defendants are part of the MLS PIN settlement. The terms of the Company’s Settlement Agreement extended to plaintiffs in the Nosalek Action. On October 24, 2023, plaintiffs filed a joint notice of pending settlement and a motion to stay the Nosalek case as to RE/MAX, LLC and RE/MAX Integrated Regions, LLC for 30 days, which was granted on October 30, 2023. Plaintiffs subsequently filed a joint motion to continue the stay through final approval of the Settlement Agreement hearing scheduled in the Burnett Action for May 9, 2024. On April 9, 2021, a putative class action claim (the “Sunderland Action”) was filed in the Federal Court of Canada against the Toronto Regional Real Estate Board (“TRREB”), The Canadian Real Estate Association (“CREA”), RE/MAX Ontario-Atlantic Canada Inc. (“RE/MAX OA”), which was acquired by the Company in July 2021, Century 21 Canada Limited Partnership, Royal Lepage Real Estate Services Ltd., and many other real estate companies (collectively, the “Defendants”), by the putative representative plaintiff, Mark Sunderland (the “Plaintiff”). The Plaintiff alleges that the Defendants conspired, agreed or arranged with each other and acted in furtherance of their conspiracy to fix, maintain, increase, control, raise, or stabilize the rate of real estate buyers’ brokerages’ and salespersons’ commissions in respect of the purchase and sale of properties listed on TRREB’s multiple listing service system (the “Toronto MLS”) in violation of the Canadian Competition Act. On February 24, 2022, Plaintiff filed a Fresh as Amended Statement of Claim. With respect to RE/MAX OA, the amended claim alleges franchisor defendants aided and abetted their respective franchisee brokerages and their salespeople in violation of Section 45(1) of the Canadian Competition Act. Among other requested relief, the Plaintiff seeks damages against the defendants and injunctive relief. On September 25, 2023, the Court dismissed the claims against RE/MAX OA, and on October 25, 2023, the Plaintiff appealed the decision and RE/MAX OA has cross appealed. A copycat lawsuit to the Sunderland Action was filed by plaintiff Kevin McFall (the “McFall Action”) on January 18, 2024. The complaint makes substantially similar allegations and seeks substantially similar relief as the Sunderland Action, but alleges a national class. The McFall Action names over On January 25, 2021, a similar action to the Moehrl-related antitrust litigations was filed in the Northern District of Illinois (the “Batton Action) alleging violations of federal antitrust law and unjust enrichment. The complaint makes substantially similar allegations and seeks similar relief as the Moehrl-related antitrust litigations but alleges harm to homebuyers rather than sellers. The Company’s motion to dismiss was granted on May 2, 2022, and the plaintiffs filed an amended complaint adding state antitrust and consumer protection claims. On February 20, 2024, the court dismissed plaintiffs’ claim seeking injunctive relief for violations of the Sherman Act and dismissed certain state law claims in Tennessee and Kansas. The court denied the remainder of the Company’s motion to dismiss. On April 15, 2024, the Company filed its answer and motion to dismiss. The Company intends to vigorously defend against all remaining claims, including against any appeals. If the Settlement is not approved, the Company may become involved in additional litigation or other legal proceedings concerning the same or similar claims. As a result, the Company is unable to reasonably estimate the financial impact of the litigation beyond what has been accrued for pursuant to the terms of the Settlement Agreement and the Company cannot predict, beyond the Settlement Amount, whether resolution of these matters would have a material effect on its financial position or results of operations. The Moehrl-related antitrust litigations, the Batton Action, and the Canadian antitrust litigations consist of: Christopher Moehrl et al. v. The National Association of Realtors, Realogy Holdings Corp., HomeServices of America, Inc., BHH Affiliates, LLC, HSF Affiliates, LLC, The Long & Foster Companies, Inc. RE/MAX, LLC., and Keller Williams Realty, Inc., Scott and Rhonda Burnett et al. v. The National Association of Realtors, Realogy Holdings Corp., HomeServices of America, Inc., BHH Affiliates, LLC, HSF Affiliates, LLC, RE/MAX, LLC, and Keller Williams Realty, Inc., Jennifer Nosalek et al. v. MLS Property Information Network, Inc., Anywhere Real Estate Inc. (f/k/a Realogy Holdings Corp.), Century 21 Real Estate LLC, Coldwell Banker Real Estate LLC, Sotheby’s International Realty Affiliates LLC, Better Homes and Gardens Real Estate LLC, ERA Franchise System LLC, HomeServices of America, Inc., BHH Affiliates, LLC, HSF Affiliates, LLC, RE/MAX, LLC, Polzler & Schneider Holdings Corp., Integra Enterprises Corp., RE/MAX of New England, Inc., RE/MAX Integrated Regions, LLC, and Keller Williams Realty, Inc., Mya Batton et al. v. The National Association of Realtors, Realogy Holdings Corp., HomeServices of America, Inc., BHH Affiliates, LLC, HSF Affiliates, LLC, The Long & Foster Companies, Inc., RE/MAX, LLC, and Keller Williams Realty, Inc., Mark Sunderland v. Toronto Regional Real Estate Board (TRREB), The Canadian Real Estate Association (CREA), RE/MAX Ontario-Atlantic Canada Inc. o/a RE/MAX INTEGRA, Century 21 Canada Limited Partnership, Residential Income Fund, L.P., Royal Lepage Real Estate Services Ltd., Homelife Realty Services Inc., Right At Home Realty Inc., Forest Hill Real Estate Inc., Harvey Kalles Real Estate Ltd., Max Wright Real Estate Corporation, Chestnut Park Real Estate Limited, Sutton Group Realty Services Ltd. and IPRO Realty Ltd., Kevin McFall v. Canadian Real Estate Association, et. al., Copycat lawsuits to the Moehrl-related antitrust litigations were filed by plaintiff Monty March in the Southern District of New York (the “March Action”), plaintiff Christina Grace in the Northern District of California (the “Grace Action”), plaintiff Willsim Latham, LLC in the Eastern District of California (the “Willsim Action”), and plaintiff Dalton Jensen in the District of Utah (the “Jensen Action”) (together, the “Copycat Cases”). The Company intends to vigorously defend against all claims, including seeking to stay the lawsuits in light of the Settlement Agreement. On December 27, 2023, a motion was filed by plaintiffs in another copycat lawsuit that did not name the Company, seeking to consolidate the copycat lawsuits in a multidistrict litigation, including the Grace Action, the March Action, and the Willsim Action, and many lawsuits that did not name the Company, in the Western District of Missouri for purposes of pretrial activities (the “MDL motion”). The MDL motion was denied based on the procedural posture of the litigation and the NAR settlement, without reaching the issue of whether centralization would be appropriate. The Copycat Cases that name the Company consist of: Monty March v. Real Estate Board of New York; Real Estate Board Of New York Listing Service; Brown Harris Stevens, LLC; Christie’s International Real Estate LLC; Coldwell Banker LLC; Compass, Inc.; Core Marketing Services LLC; The Corcoran Group, Inc.; Douglas Elliman, Inc.; Elegran Real Estate, D/B/A Elegran LLC; Engel & Volkers LLC; Fox Residential Group LLC; Halstead Real Estate LLC; Homesnap Inc.; Keller Williams Nyc, LLC; Leslie J. Garfield & Co., Inc.; Level Group Inc.; M.N.S. Real Estate Nyc, LLC; Modern Spaces LLC; The Agency LLC; The Modlin Group LLC; Nest Seekers International LLC; Oxford Property Group LLC; R New York LLC; RE/MAX, LLC; Serhant LLC; Sloane Square LLC; and Sotheby’s International Realty Affiliates LLC, Christina Grace v. National Association of Realtors, RE/MAX Holdings, Inc., Anywhere Real Estate Inc., Keller Williams Realty, Inc., Compass, Inc., eXp World Holdings, Inc., Bay Area Real Estate Information Services, Inc., Marin Association of Realtors, North Bay Association of Realtors, Northern Solano County Association of Realtors, Inc., and Solano Association of Realtors, Inc., Willsim Latham, LLC v. MetroList Services, Inc., Sacramento Association of Realtors, Inc., Placer County Association of Realtors, Inc., El Dorado County Association of Realtors, Lodi Association of Realtors, Yolo County Association of Realtors, Central Valley Association of Realtors, Amador Country Association of Realtors, Nevada County Association of Realtors, Sutter-Yub Association of Realtors, RE/MAX Holdings, Inc., Anywhere Real Estate Inc., Keller Williams Realty, Inc., eXp World Holdings, Inc., Norcal Gold Inc., Century 21 Select Real Estate, Inc., William L. Lyon & Associates, Inc. Paul M. Zagaris, Inc., Guide Real Estate, Inc., Dalton Jensen v. The National Association of Realtors, Anywhere Real Estate Inc., HomeServices of America, Inc., HSF Affiliates, LLC, BHH Affiliates, LC, RE/MAX, LLC, Keller Williams LLC, Keller Williams of Salt Lake, KW St. George Keller Williams Realty, KW Westfield, Equity Real Estate, Century 21 Everest, Realtypath, LLC, Windemere Real Estate SVCS. Co., |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2024 | |
Segment Information | |
Segment Information | 12. Segment Information The Company operates under the following four operating segments: Real Estate, Mortgage, Marketing Funds and Other. Mortgage does not meet the quantitative significance test; however, management has chosen to report results for the segment as it believes it will be a key driver of future success for Holdings. Management evaluates the operating results of its segments based upon revenue and adjusted earnings before interest, the provision for income taxes, depreciation and amortization and other non-cash and non-recurring cash charges or other items (“Adjusted EBITDA”). The Company’s presentation of Adjusted EBITDA may not be comparable to similar measures used by other companies. Except for the adjustments identified below in arriving at Adjusted EBITDA, the accounting policies of the reportable segments are the same as those described in the Company’s 2023 Annual Report on Form 10-K. Three Months Ended March 31, 2024 2023 Continuing franchise fees $ 28,365 $ 29,547 Annual dues 8,225 8,618 Broker fees 10,716 10,892 Franchise sales and other revenue 7,142 11,573 Total Real Estate 54,448 60,630 Continuing franchise fees 2,720 2,529 Franchise sales and other revenue 913 659 Total Mortgage 3,633 3,188 Marketing Funds fees 20,206 21,342 Other — 241 Total revenue $ 78,287 $ 85,401 The following table presents a reconciliation of Adjusted EBITDA by segment to income (loss) before provision for income taxes (in thousands): Three Months Ended March 31, 2024 2023 Adjusted EBITDA: Real Estate $ 20,203 $ 22,692 Adjusted EBITDA: Mortgage (1,161) (2,597) Adjusted EBITDA: Other (49) (175) Adjusted EBITDA: Consolidated 18,993 19,920 Equity-based compensation expense (5,923) (4,451) Acquisition-related expense (a) — (37) Fair value adjustments to contingent consideration (b) (34) 4 Restructuring charges (c) 32 (39) Other (d) (1,064) (410) Interest income 1,001 1,004 Interest expense (9,256) (8,245) Depreciation and amortization (7,852) (8,033) Income (loss) before provision for income taxes $ (4,103) $ (287) (a) Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with the acquisition activities and integration of acquired companies. (b) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. See Note 8, Fair Value Measurements for additional information. (c) During the third quarter of 2023, the Company announced a reduction in force and reorganization intended to streamline the Company’s operations and yield cost savings over the long term. See Note 2, Summary of Significant Accounting Policies for additional information. (d) Other is primarily made up of employee retention related expenses from the Company's CEO transition . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Balance Sheet at December 31, 2023, which was derived from the audited consolidated financial statements at that date, and the unaudited interim condensed consolidated financial statements and notes thereto have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements are presented on a consolidated basis and include the accounts of Holdings and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the Company’s financial position as of March 31, 2024 and the results of its operations and comprehensive income (loss), cash flows and changes in its stockholders’ equity (deficit) for the three months ended March 31, 2024 and 2023. Interim results may not be indicative of full-year performance. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Annual Report on Form 10-K”). Please refer to that document for a fuller discussion of all significant accounting policies. |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Segment Reporting | Segment Reporting The Company operates under the following four operating segments: Real Estate, Mortgage, Marketing Funds and Other. Due to quantitative insignificance, the “Other” operating segment is comprised of operations which do not meet the criteria of a reportable segment. |
Revenue Recognition | Revenue Recognition The Company generates most of its revenue from contracts with customers. The Company’s major streams of revenue are: ● Continuing franchise fees, which are fixed contractual fees paid monthly by RE/MAX or Motto franchisees or Independent Region sub-franchisors based on the number of RE/MAX agents or Motto open offices. ● Annual dues, which are fees charged directly to RE/MAX agents. ● Broker fees, which are fees on real estate commissions when a RE/MAX agent assists a consumer with buying or selling a home. ● Marketing Funds fees, which are fixed contractual fees paid monthly by franchisees based on the number of RE/MAX agents or Motto open offices. ● Franchise sales and other revenue, which consists of fees from initial sales of RE/MAX and Motto franchises, renewals of RE/MAX franchises and RE/MAX master franchise fees, as well as data services subscription revenue, preferred marketing arrangements, technology products and subscription revenue, events-related revenue from education and other programs and mortgage loan processing revenue. Deferred Revenue and Commissions Related to Franchise Sales Deferred revenue is primarily driven by Franchise sales and Annual dues, as discussed above, and is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Condensed Consolidated Balance Sheets. Other deferred revenue is primarily related to events-related revenue. The activity consists of the following (in thousands): Balance at Revenue Balance at January 1, 2024 New billings recognized (a) March 31, 2024 Franchise sales $ 24,613 $ 1,299 $ (2,149) $ 23,763 Annual dues 13,282 8,911 (8,225) 13,968 Other 2,789 5,402 (5,797) 2,394 $ 40,684 $ 15,612 $ (16,171) $ 40,125 (a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $2.1 million and $6.1 million, respectively, for the three months ended March 31, 2024. Commissions paid on franchise sales are recognized as an asset and amortized over the contract life of the franchise agreement. The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands): Additions to Balance at contract cost Expense Balance at January 1, 2024 for new activity recognized March 31, 2024 Capitalized contract costs for commissions $ 4,255 $ 357 $ (651) $ 3,961 Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands): Remainder of 2024 2025 2026 2027 2028 2029 Thereafter Total Franchise sales $ 5,178 $ 5,940 $ 4,661 $ 3,302 $ 1,877 $ 742 $ 2,063 $ 23,763 Annual dues 13,294 674 — — — — — 13,968 Total $ 18,472 $ 6,614 $ 4,661 $ 3,302 $ 1,877 $ 742 $ 2,063 $ 37,731 Disaggregated Revenue In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions, where applicable, by segment and by geographical area (in thousands): Three Months Ended March 31, 2024 2023 U.S. Company-Owned Regions $ 31,739 $ 33,861 U.S. Independent Regions 1,468 1,476 Canada Company-Owned Regions 9,903 9,798 Canada Independent Regions 728 724 Global 3,468 3,198 Fee revenue (a) 47,306 49,057 Franchise sales and other revenue (b) 7,142 11,573 Total Real Estate 54,448 60,630 U.S. 15,366 16,305 Canada 4,616 4,763 Global 224 274 Total Marketing Funds 20,206 21,342 Mortgage (c) 3,633 3,188 Other (c) — 241 Total $ 78,287 $ 85,401 (a) Fee revenue includes Continuing franchise fees, Annual dues and Broker fees. (b) Franchise sales and other revenue is derived primarily within the U.S. The decline in other revenue is mostly attributable to a reduction in revenue from the Company’s annual RE/MAX agent convention as a result of lower attendance due the 50 th anniversary celebration in the prior year. (c) Revenue from Mortgage and Other are derived exclusively within the U.S. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands): March 31, 2024 December 31, 2023 Cash and cash equivalents $ 82,077 $ 82,623 Restricted cash: Marketing Funds (a) 17,859 15,640 Settlement Fund (b) 27,500 27,500 Total cash, cash equivalents and restricted cash $ 127,436 $ 125,763 (a) All cash held by the Marketing Funds is contractually restricted, pursuant to the applicable franchise agreements. (b) Represents the net amounts held in the Settlement Fund as part of the settlement of industry class-action lawsuits. See Note 11, Commitments and Contingencies for additional information. |
Services Provided to the Marketing Funds by Real Estate | Services Provided to the Marketing Funds by Real Estate Real Estate charges the Marketing Funds for various services it performs. These services are primarily comprised of (a) building and maintaining the remax.com and remax.ca websites and mobile apps, (b) dedicated employees focused on consumer facing marketing initiatives, and (c) various administrative services including customer support of technology; accounting and legal. Costs charged from Real Estate to the Marketing Funds are as follows (in thousands): Three Months Ended March 31, 2024 2023 Technology − operating $ 1,050 $ 1,169 Technology − capital (a) — (203) Marketing staff and administrative services 1,505 1,492 Total $ 2,555 $ 2,458 (a) During the first quarter of 2023, the Company determined that certain development projects were no longer needed and therefore $0.2 million, reflecting the cost of work in process assets that would no longer be placed in service, was refunded to the Marketing Funds. |
Accounts and Notes Receivable | Accounts and Notes Receivable As of March 31, 2024, and December 31, 2023, the Company had allowances against accounts and notes receivable of $11.9 million and $10.9 million, respectively. |
Property and Equipment | Property and Equipment As of March 31, 2024, and December 31, 2023 the Company had accumulated depreciation of $13.8 million and $13.1 million, respectively. |
Leases | Leases The Company leases corporate offices, a distribution center, billboards and certain equipment. As all franchisees are independently owned and operated, there are no leases recognized for any offices used by the Company’s franchisees. All of the Company’s material leases are classified as operating leases. The Company acts as the lessor for sublease agreements on its corporate headquarters, consisting solely of operating leases. |
Restructuring and Reduction in Force Charges | Restructuring and Reduction in Force Charges During the third quarter of 2023, the Company announced a reduction in force and reorganization (the “Reorganization”) intended to streamline the Company’s operations and yield cost savings over the long term. The Reorganization reduced the Company’s overall workforce by approximately 7% and was substantially complete by September 30, 2023. As a result of the Reorganization, the Company incurred a pre-tax cash charge for one-time termination benefits of severance and related costs of $4.3 million and accelerated equity compensation expense of $0.5 million. See Note 6, Accrued Liabilities |
Severance and Retirement Plan | Severance and Retirement Plan On May 24, 2023, the Compensation Committee of the Board of Directors approved a Severance and Retirement Plan (the “Plan”). The Plan replaces the Severance Pay Benefit Plan adopted by the Company on December 4, 2018. The Plan provides benefits to eligible employees and executive officers of RE/MAX, LLC and its subsidiaries, in the event of (i) involuntary termination of their employment due to position elimination, reduction in force, or other circumstances that the employer determines should result in payment of benefits, or (ii) voluntary termination of employment due to retirement for employees who meet the retirement eligibility criteria in the Plan, subject in both cases to certain restrictions set forth in the Plan. In the case of involuntary termination, these benefits include salary continuation, a health benefits stipend, outplacement services and a possible pro-rated bonus. In the case of retirement, these benefits include modification of vesting of restricted stock awards (for employees who are eligible for restricted stock awards) and a possible pro-rated bonus. Any associated equity compensation expense will be accelerated through the employee's retirement eligibility date. |
Foreign Currency Derivatives | Foreign Currency Derivatives The Company is exposed to foreign currency transaction gains and losses related to certain foreign currency denominated asset and liability positions, with the Canadian dollar representing the most significant exposure primarily from an intercompany Canadian loan between RMCO and the Canadian entity for RE/MAX INTEGRA (“INTEGRA”). The Company uses short duration foreign currency forward contracts, generally with maturities ranging from a few days to a few months, to minimize its exposures related to foreign currency exchange rate fluctuations. None of these contracts are designated as accounting hedges as the underlying currency positions are revalued through “Foreign currency transaction gains (losses)” on the Consolidated Statements of Income (Loss) along with the related derivative contracts. During the three months ended March 31, 2024 and 2023, the Company recognized a net realized gain of $1.2 million and a net realized loss of $0.1 million, respectively. The Company has a short-term $74.0 million Canadian dollar forward contract that matures in the second quarter of 2024 that net settles in U.S. dollars based on the prevailing spot rates at maturity. |
Recently Adopted and New Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements None. New Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which requires greater disaggregation of income tax disclosures related to the income tax reconciliation and income taxes paid. The amendments improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024, and early adoption is permitted. The Company believes the amendments of ASU 2023-09 will not have a significant impact on the Company’s consolidated financial statements and will include all required disclosures upon adoption. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis, primarily disclosure of significant segment expense categories and amounts for each reportable segment. The new standard is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company will adopt ASU 2023-07 in the annual financial statements for the twelve months ended December 31, 2024, and for interim periods beginning in 2025. The Company believes the amendments of ASU 2023-07 will not have a significant impact on the Company’s consolidated financial statements and will include all required disclosures upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies | |
Schedule of deferred revenue for franchise sales and annual dues | The activity consists of the following (in thousands): Balance at Revenue Balance at January 1, 2024 New billings recognized (a) March 31, 2024 Franchise sales $ 24,613 $ 1,299 $ (2,149) $ 23,763 Annual dues 13,282 8,911 (8,225) 13,968 Other 2,789 5,402 (5,797) 2,394 $ 40,684 $ 15,612 $ (16,171) $ 40,125 (a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $2.1 million and $6.1 million, respectively, for the three months ended March 31, 2024. |
Schedule of commissions related to franchise sales | The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands): Additions to Balance at contract cost Expense Balance at January 1, 2024 for new activity recognized March 31, 2024 Capitalized contract costs for commissions $ 4,255 $ 357 $ (651) $ 3,961 |
Schedule of transaction price allocated to the remaining performance obligations | The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands): Remainder of 2024 2025 2026 2027 2028 2029 Thereafter Total Franchise sales $ 5,178 $ 5,940 $ 4,661 $ 3,302 $ 1,877 $ 742 $ 2,063 $ 23,763 Annual dues 13,294 674 — — — — — 13,968 Total $ 18,472 $ 6,614 $ 4,661 $ 3,302 $ 1,877 $ 742 $ 2,063 $ 37,731 |
Schedule of disaggregated revenue | In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions, where applicable, by segment and by geographical area (in thousands): Three Months Ended March 31, 2024 2023 U.S. Company-Owned Regions $ 31,739 $ 33,861 U.S. Independent Regions 1,468 1,476 Canada Company-Owned Regions 9,903 9,798 Canada Independent Regions 728 724 Global 3,468 3,198 Fee revenue (a) 47,306 49,057 Franchise sales and other revenue (b) 7,142 11,573 Total Real Estate 54,448 60,630 U.S. 15,366 16,305 Canada 4,616 4,763 Global 224 274 Total Marketing Funds 20,206 21,342 Mortgage (c) 3,633 3,188 Other (c) — 241 Total $ 78,287 $ 85,401 (a) Fee revenue includes Continuing franchise fees, Annual dues and Broker fees. (b) Franchise sales and other revenue is derived primarily within the U.S. The decline in other revenue is mostly attributable to a reduction in revenue from the Company’s annual RE/MAX agent convention as a result of lower attendance due the 50 th anniversary celebration in the prior year. (c) Revenue from Mortgage and Other are derived exclusively within the U.S. |
Schedule of reconciliation of cash, both unrestricted and restricted | The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands): March 31, 2024 December 31, 2023 Cash and cash equivalents $ 82,077 $ 82,623 Restricted cash: Marketing Funds (a) 17,859 15,640 Settlement Fund (b) 27,500 27,500 Total cash, cash equivalents and restricted cash $ 127,436 $ 125,763 (a) All cash held by the Marketing Funds is contractually restricted, pursuant to the applicable franchise agreements. (b) Represents the net amounts held in the Settlement Fund as part of the settlement of industry class-action lawsuits. See Note 11, Commitments and Contingencies for additional information. |
Schedule of cost charges to intersegment | Costs charged from Real Estate to the Marketing Funds are as follows (in thousands): Three Months Ended March 31, 2024 2023 Technology − operating $ 1,050 $ 1,169 Technology − capital (a) — (203) Marketing staff and administrative services 1,505 1,492 Total $ 2,555 $ 2,458 (a) During the first quarter of 2023, the Company determined that certain development projects were no longer needed and therefore $0.2 million, reflecting the cost of work in process assets that would no longer be placed in service, was refunded to the Marketing Funds. |
Non-controlling Interest (Table
Non-controlling Interest (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Non-controlling Interest. | |
Summary of Ownership of the Common Units | Holdings is the sole managing member of RMCO and operates and controls all of the business affairs of RMCO. The ownership of the common units in RMCO is summarized as follows: March 31, 2024 December 31, 2023 Shares Ownership % Shares Ownership % Non-controlling interest ownership of common units in RMCO 12,559,600 40.0 % 12,559,600 40.7 % Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) 18,852,858 60.0 % 18,269,284 59.3 % Total common units in RMCO 31,412,458 100.0 % 30,828,884 100.0 % |
Reconciliation from Income Before Provision for Income Taxes to Net Income | A reconciliation of “Income (loss) before provision for income taxes” to “Net income (loss) attributable to RE/MAX Holdings, Inc.” and “Net Income (loss) attributable to non-controlling interest” in the accompanying Condensed Consolidated Statements of Income (Loss) for the periods indicated is detailed as follows (in thousands, except percentages): Three Months Ended March 31, 2024 2023 Holdings NCI Total Holdings NCI Total WAO percentage of RMCO (a) 59.5 % 40.5 % 100.0 % 58.8 % 41.2 % 100.0 % Income (loss) before provision for income taxes (a) $ (2,446) $ (1,657) $ (4,103) $ (168) $ (119) $ (287) (Provision) / benefit for income taxes (b) (907) (597) (1,504) (503) 111 (392) Net income (loss) $ (3,353) $ (2,254) $ (5,607) $ (671) $ (8) $ (679) (a) The WAO percentage of RMCO differs from the percentage allocation of income (loss) before provision for income taxes between Holdings and the non-controlling interest due to certain items recorded at Holdings. (b) The provision for income taxes attributable to Holdings is primarily comprised of U.S. federal and state income taxes on its proportionate share of the flow-through income from RMCO. It also includes Holdings’ share of taxes directly incurred by RMCO and its subsidiaries, including taxes in certain foreign jurisdictions. |
Distributions Paid or Payable | The distributions paid or payable to non-controlling unitholders are summarized as follows (in thousands): Three Months Ended March 31, 2024 2023 Dividend distributions (a) $ — $ 2,889 Total distributions to non-controlling unitholders $ — $ 2,889 (a) In the fourth quarter of 2023, the Company announced that its Board of Directors suspended the Company’s quarterly dividend . |
Earnings (Loss) Per Share, Di_2
Earnings (Loss) Per Share, Dividends and Repurchases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings (Loss) Per Share, Dividends and Repurchases | |
Reconciliation of Numerator and Denominator used in Basic and Diluted EPS Calculations | The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings (loss) per share (“EPS”) calculations (in thousands, except shares and per share information): Three Months Ended March 31, 2024 2023 Numerator Net income (loss) attributable to RE/MAX Holdings, Inc. $ (3,353) $ (671) Denominator for basic net income (loss) per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,481,848 17,916,841 Denominator for diluted net income (loss) per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,481,848 17,916,841 Add dilutive effect of the following: Restricted stock (a) — — Weighted average shares of Class A common stock outstanding, diluted 18,481,848 17,916,841 Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock Basic $ (0.18) $ (0.04) Diluted $ (0.18) $ (0.04) |
Schedule of Dividends Declared and Paid Quarterly per Share | Dividends declared and paid during each quarter ended per share on all outstanding shares of Class A common stock were as follows (in thousands, except per share information): Three Months Ended March 31, 2023 Quarter end declared Date paid Per share Class A stockholders ($) Non-controlling unitholders ($) March 31 March 22, 2023 $ 0.23 $ 4,164 $ 2,889 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Intangible Assets and Goodwill | |
Schedule of components of intangible assets | The following table provides the components of the Company’s intangible assets (in thousands, except weighted average amortization period in years): Weighted Average As of March 31, 2024 As of December 31, 2023 Amortization Initial Accumulated Net Initial Accumulated Net Period Cost Amortization Balance Cost Amortization Balance Franchise agreements 12.1 $ 224,566 $ (128,725) $ 95,841 $ 225,716 $ (124,200) $ 101,516 Other intangible assets: Software (a) 4.1 $ 54,498 $ (41,000) $ 13,498 $ 52,918 $ (39,192) $ 13,726 Trademarks 9.1 973 (681) 292 971 (649) 322 Non-compete agreements 5.0 12,948 (8,786) 4,162 13,051 (8,156) 4,895 Training materials — 2,400 (2,400) — 2,400 (2,400) — Other 7.0 870 (696) 174 870 (637) 233 Total other intangible assets 4.5 $ 71,689 $ (53,563) $ 18,126 $ 70,210 $ (51,034) $ 19,176 (a) As of March 31, 2024 and December 31, 2023, capitalized software development costs of $2.1 million and $1.0 million, respectively, were related to technology projects not yet complete and ready for their intended use and thus were not subject to amortization. |
Schedule of estimated future amortization of intangible assets, other than goodwill | As of March 31, 2024, the estimated future amortization expense related to intangible assets includes the estimated amortization expense associated with the Company’s intangible assets assumed with the Company’s acquisitions (in thousands): Remainder of 2024 $ 19,512 2025 23,119 2026 16,091 2027 9,118 2028 8,274 Thereafter 37,853 $ 113,967 |
Schedule of changes to goodwill | The following table presents changes to goodwill by reportable segment (in thousands): Real Estate Balance, January 1, 2024 $ 241,164 Effect of changes in foreign currency exchange rates (1,234) Balance, March 31, 2024 $ 239,930 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accrued Liabilities. | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): March 31, 2024 December 31, 2023 Marketing Funds (a) $ 30,451 $ 28,753 Accrued payroll and related employee costs 7,917 14,231 Accrued taxes 2,040 2,567 Accrued professional fees 1,165 937 Settlement payable (b) 55,000 55,700 Other 7,812 5,246 $ 104,385 $ 107,434 (a) Consists primarily of liabilities recognized to reflect the contractual restriction that all funds collected in the Marketing Funds must be spent for designated purposes pursuant to the terms of the applicable franchise agreements. See Note 2, Summary of Significant Accounting Policies for additional information. (b) Represents the net settlement payable as part of the settlement of industry class-action lawsuits. See Note 11, Commitments and Contingencies for additional information. |
Schedule of restructure by type of cost | The following table presents a roll forward of the severance and related costs liability as related to the Reorganization and the strategic shift and restructure of the Company’s business, which is in “Accrued payroll and related employee costs” in the table above (in thousands): Balance, January 1, 2024 $ 2,622 Severance and other related expenses (27) Cash payments (1,239) Balance, March 31, 2024 (a) $ 1,356 (a) The remaining liability balance is related to the strategic shift and restructure of the Company’s business that occurred in the third quarter of 2023 . |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt | |
Schedule of debt | Debt, net of current portion, consists of the following (in thousands): March 31, 2024 December 31, 2023 Senior Secured Credit Facility $ 447,350 $ 448,500 Less unamortized debt issuance costs (2,738) (2,896) Less unamortized debt discount costs (968) (1,024) Less current portion (4,600) (4,600) $ 439,044 $ 439,980 |
Schedule of Maturities of Debt | As of March 31, 2024, maturities of debt are as follows (in thousands): Remainder of 2024 $ 3,450 2025 4,600 2026 4,600 2027 4,600 2028 430,100 $ 447,350 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Measurements | |
Liabilities measured at fair value on a recurring basis | A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows (in thousands): As of March 31, 2024 As of December 31, 2023 Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Liabilities Motto contingent consideration $ 2,200 $ — $ — $ 2,200 $ 2,170 $ — $ — $ 2,170 Gadberry Group contingent consideration 474 — — 474 590 — — 590 Contingent consideration (a) $ 2,674 $ — $ — $ 2,674 $ 2,760 $ — $ — $ 2,760 (a) Recorded as a component of “Accrued liabilities” and “Other liabilities, net of current portion” in the accompanying Condensed Consolidated Balance Sheets. |
Reconciliation of the contingent consideration | The table below presents a reconciliation of the contingent consideration (in thousands): Total Balance at January 1, 2024 $ 2,760 Fair value adjustments 34 Cash payments (120) Balance at March 31, 2024 $ 2,674 |
Summary of carrying value and fair value of senior secured credit facility | The following table summarizes the carrying value and estimated fair value of the Senior Secured Credit Facility (in thousands): March 31, 2024 December 31, 2023 Carrying Amount Fair Value Level 2 Carrying Amount Fair Value Level 2 Senior Secured Credit Facility $ 443,644 $ 417,154 $ 444,580 $ 421,590 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Schedule of Employee Stock-Based Compensation Expense | Equity-based compensation expense under the Holdings 2013 Omnibus Incentive Plan (the “2013 Incentive Plan”) as well as the new Holdings 2023 Omnibus Incentive Plan (the “2023 Incentive Plan” and, together with the 2013 Incentive Plan, the “Incentive Plans”), is as follows (in thousands): Three Months Ended March 31, 2024 2023 Expense from time-based awards (a) $ 3,661 $ 2,504 Expense from performance-based awards (a)(b) 881 717 Expense from bonus to be settled in shares (c) 1,381 1,230 Equity-based compensation expense $ 5,923 $ 4,451 (a) Includes $0.2 million of expense recognized for time-based awards and $0.3 million of expense recognized for performance-based awards for inducement awards granted to the Company's CEO, Erik Carlson, in the fourth quarter of 2023. These equity awards were made pursuant to the inducement award exception under the New York Stock Exchange Rule 303A.08 and were not granted from the 2023 Incentive Plan. All of the restricted stock units remain outstanding as of March 31, 2024. (b) Expense recognized for performance-based awards is re-assessed each quarter based on expectations of achievement against the performance conditions. (c) A portion of the annual corporate bonus earned is to be settled in shares. These amounts are recognized as “Accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets and are not included in “Additional paid-in capital” until the shares are issued. |
Time-based awards | |
Schedule of Restricted Stock Units | The following table summarizes equity-based compensation activity related to time-based restricted stock units and restricted stock awards: Shares Weighted average grant date fair value per share Balance, January 1, 2024 1,066,594 $ 18.70 Granted 1,197,039 $ 8.67 Shares vested (including tax withholding) (a) (375,288) $ 22.59 Forfeited (24,591) $ 20.88 Balance, March 31, 2024 1,863,754 $ 11.45 (a) Pursuant to the terms of the Incentive Plan, shares withheld by the Company for the payment of the employee's tax withholding related to shares vesting are added back to the pool of shares available for future awards. |
Performance-based awards | |
Schedule of Restricted Stock Units | The following table summarizes equity-based compensation activity related to performance-based restricted stock units: Shares Weighted average grant date fair value per share Balance, January 1, 2024 783,231 $ 7.86 Granted (a) 423,449 $ 13.62 Forfeited (54,285) $ 21.79 Balance, March 31, 2024 1,152,395 $ 9.32 (a) Represents the total participant target award. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Information | |
Schedule of Revenue from External Customers By Segment | The following table presents revenue from external customers by segment (in thousands): Three Months Ended March 31, 2024 2023 Continuing franchise fees $ 28,365 $ 29,547 Annual dues 8,225 8,618 Broker fees 10,716 10,892 Franchise sales and other revenue 7,142 11,573 Total Real Estate 54,448 60,630 Continuing franchise fees 2,720 2,529 Franchise sales and other revenue 913 659 Total Mortgage 3,633 3,188 Marketing Funds fees 20,206 21,342 Other — 241 Total revenue $ 78,287 $ 85,401 |
Schedule of Revenue and Adjusted EBITDA of the Company's Reportable Segment | The following table presents a reconciliation of Adjusted EBITDA by segment to income (loss) before provision for income taxes (in thousands): Three Months Ended March 31, 2024 2023 Adjusted EBITDA: Real Estate $ 20,203 $ 22,692 Adjusted EBITDA: Mortgage (1,161) (2,597) Adjusted EBITDA: Other (49) (175) Adjusted EBITDA: Consolidated 18,993 19,920 Equity-based compensation expense (5,923) (4,451) Acquisition-related expense (a) — (37) Fair value adjustments to contingent consideration (b) (34) 4 Restructuring charges (c) 32 (39) Other (d) (1,064) (410) Interest income 1,001 1,004 Interest expense (9,256) (8,245) Depreciation and amortization (7,852) (8,033) Income (loss) before provision for income taxes $ (4,103) $ (287) (a) Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with the acquisition activities and integration of acquired companies. (b) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. See Note 8, Fair Value Measurements for additional information. (c) During the third quarter of 2023, the Company announced a reduction in force and reorganization intended to streamline the Company’s operations and yield cost savings over the long term. See Note 2, Summary of Significant Accounting Policies for additional information. (d) Other is primarily made up of employee retention related expenses from the Company's CEO transition . |
Business and Organization (Deta
Business and Organization (Details) | 3 Months Ended |
Mar. 31, 2024 | |
REMAX | Motto | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |
Percentage of company consisting of franchises | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Segment Reporting (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Summary of Significant Accounting Policies | |
Number of operating segments | 4 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Deferred Revenue (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Disaggregation of Revenue [Line Items] | |
Balance at beginning of period | $ 40,684 |
New billings | 15,612 |
Revenue recognized | (16,171) |
Balance at the end of period | 40,125 |
Franchise sales | |
Disaggregation of Revenue [Line Items] | |
Balance at beginning of period | 24,613 |
New billings | 1,299 |
Revenue recognized | (2,149) |
Balance at the end of period | 23,763 |
Revenue recognized related to the beginning balance | 2,100 |
Annual dues | |
Disaggregation of Revenue [Line Items] | |
Balance at beginning of period | 13,282 |
New billings | 8,911 |
Revenue recognized | (8,225) |
Balance at the end of period | 13,968 |
Revenue recognized related to the beginning balance | 6,100 |
Other | |
Disaggregation of Revenue [Line Items] | |
Balance at beginning of period | 2,789 |
New billings | 5,402 |
Revenue recognized | (5,797) |
Balance at the end of period | $ 2,394 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Commissions Related to Franchise Sales (Details) - Capitalized contract costs for commissions $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Capitalized Contract Cost [Line Items] | |
Balance at beginning of period | $ 4,255 |
Additions to contract cost for new activity | 357 |
Expense recognized | (651) |
Balance at end of period | $ 3,961 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Transaction Price (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 37,731 |
Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | 13,968 |
Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | 23,763 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 18,472 |
Performance period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 13,294 |
Performance period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 5,178 |
Performance period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 6,614 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 674 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 5,940 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 4,661 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 4,661 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,302 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,302 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 1,877 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 1,877 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 742 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 742 |
Performance period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2030-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 2,063 |
Performance period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2030-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2030-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 2,063 |
Performance period |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Disaggregated revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 78,287 | $ 85,401 |
Franchise sales and other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 8,055 | 12,473 |
Real Estate | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 54,448 | 60,630 |
Real Estate | Fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 47,306 | 49,057 |
Real Estate | Franchise sales and other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 7,142 | 11,573 |
Marketing Funds | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 20,206 | 21,342 |
Mortgage | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 3,633 | 3,188 |
Mortgage | Franchise sales and other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 913 | 659 |
Other. | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 241 | |
U.S. | Company -Owned Regions | Fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 31,739 | 33,861 |
U.S. | Independent Regions | Fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,468 | 1,476 |
U.S. | Marketing Funds | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 15,366 | 16,305 |
Canada | Company -Owned Regions | Fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 9,903 | 9,798 |
Canada | Independent Regions | Fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 728 | 724 |
Canada | Marketing Funds | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,616 | 4,763 |
Global | Global. | Fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 3,468 | 3,198 |
Global | Marketing Funds | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 224 | $ 274 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Cash, Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents | $ 82,077 | $ 82,623 | ||
Restricted cash | 45,359 | 43,140 | ||
Total cash, cash equivalents and restricted cash | 127,436 | 125,763 | $ 124,083 | $ 138,128 |
Marketing Funds | ||||
Cash, Cash Equivalents and Restricted Cash | ||||
Restricted cash | 17,859 | 15,640 | ||
Settlement Fund | ||||
Cash, Cash Equivalents and Restricted Cash | ||||
Restricted cash | $ 27,500 | $ 27,500 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Services Provided to Marketing Funds by REMAX Franchising (Details) - Marketing funds - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Costs charged | $ 2,555 | $ 2,458 |
Technology - operating | ||
Costs charged | 1,050 | 1,169 |
Technology - capital | ||
Costs charged | (203) | |
Technology - capital | Work in progress assets | ||
Costs charged | 200 | |
Marketing staff and administrative services | ||
Costs charged | $ 1,505 | $ 1,492 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Accounts and Notes Receivable (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Summary of Significant Accounting Policies | ||
Accounts and notes receivable, allowance | $ 11.9 | $ 10.9 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Summary of Significant Accounting Policies | ||
Property and equipment, accumulated depreciation | $ 13.8 | $ 13.1 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Leases (Details) | Mar. 31, 2024 lease |
Leases | |
Number of franchisees' leases recognized by the Company | 0 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Restructuring and Reduction in Force Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Sep. 30, 2023 | |
Summary of Significant Accounting Policies | ||
Restructuring and related cost percent | 7% | |
Severance and related costs | $ (27) | $ 4,300 |
Accelerated equity compensation expense | $ 500 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Foreign Currency Derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Derivative [Line Items] | ||
Recognized net realized gain (loss) | $ 1.2 | $ (0.1) |
Foreign Currency Exchange | ||
Derivative [Line Items] | ||
Notional amount | $ 74 |
Non-controlling Interest - Owne
Non-controlling Interest - Ownership of common units in RMCO (Details) - RMCO, LLC - shares | Mar. 31, 2024 | Dec. 31, 2023 |
Shares | ||
Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) | 18,852,858 | 18,269,284 |
Total number of common stock units in RMCO | 31,412,458 | 30,828,884 |
Ownership Percentage | ||
Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) | 60% | 59.30% |
Total percentage of common stock units | 100% | 100% |
RIHI | ||
Shares | ||
Non-controlling interest ownership of common units in RMCO | 12,559,600 | 12,559,600 |
Ownership Percentage | ||
Non-controlling interest ownership of common units in RMCO | 40% | 40.70% |
Non-controlling Interest - Net
Non-controlling Interest - Net income reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Minority Interest [Line Items] | |||
Income (loss) before provision for income taxes attributable to Holdings | $ (2,446) | $ (168) | |
Income (loss) before provision for income taxes: NCI | (1,657) | (119) | |
Income (loss) before provision for income taxes | (4,103) | (287) | |
(Provision)/benefit for income taxes attributable to Holdings. | (907) | (503) | |
(Provision)/benefit for income taxes: NCI | (597) | 111 | |
(Provision)/benefit for income taxes | (1,504) | (392) | |
Net income (loss) attributable to Holdings. | (3,353) | (671) | |
Net income (loss): NCI | (2,254) | (8) | |
Net income (loss) | $ (5,607) | $ (679) | |
RMCO, LLC | |||
Minority Interest [Line Items] | |||
WAO percentage | 100% | 100% | |
RMCO, LLC | Weighted Average | |||
Minority Interest [Line Items] | |||
WAO percentage attributable to Holdings. | 59.50% | 58.80% | |
WAO percentage | 100% | 100% | |
RIHI | RMCO, LLC | Weighted Average | |||
Minority Interest [Line Items] | |||
WAO percentage: NCI | 40.50% | 41.20% |
Non-controlling Interest - Dist
Non-controlling Interest - Distributions Paid or Payable (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Dividends Payable [Line Items] | |
Total distributions to non-controlling unitholders | $ 2,889 |
Tax distributions | |
Dividends Payable [Line Items] | |
Distributions paid or payable to or on behalf of non-controlling unitholders | 2,889 |
Dividend distributions | |
Dividends Payable [Line Items] | |
Distributions paid or payable to or on behalf of non-controlling unitholders | $ 2,889 |
Earnings (Loss) Per Share, Di_3
Earnings (Loss) Per Share, Dividends and Repurchases - Reconciliation of the numerator and denominator used in basic and diluted EPS calculations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator | ||
Net income (loss) attributable to RE/MAX Holdings, Inc. | $ (3,353) | $ (671) |
Common Class A | ||
Denominator for basic net income (loss) per share of Class A common stock | ||
Weighted average shares of Class A common stock outstanding | 18,481,848 | 17,916,841 |
Denominator for diluted net income (loss) per share of Class A common stock | ||
Weighted average shares of Class A common stock outstanding | 18,481,848 | 17,916,841 |
Weighted average shares of Class A common stock outstanding, diluted | 18,481,848 | 17,916,841 |
Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock | ||
Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic | $ (0.18) | $ (0.04) |
Net income (loss) attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted | $ (0.18) | $ (0.04) |
Earnings (Loss) Per Share, Di_4
Earnings (Loss) Per Share, Dividends and Repurchases - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Dividends Payable [Line Items] | ||
Dividends to Class A common stockholders | $ 4,164 | |
Dividend paid | $ 0 | |
Common Class A | ||
Dividends Payable [Line Items] | ||
Cash dividends declared per share of Class A common stock | $ 0.23 | |
Quarterly dividend | Common Class A | ||
Dividends Payable [Line Items] | ||
Cash dividends declared per share of Class A common stock | $ 0.23 | |
Dividends to Class A common stockholders | $ 4,164 | |
Dividend to Non-controlling unitholders | $ 2,889 |
Earnings (Loss) Per Share, Di_5
Earnings (Loss) Per Share, Dividends and Repurchases - Share Repurchases and Retirement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Jan. 31, 2022 | |
Share Repurchases And Retirement [Line Items] | |||
Shares repurchased and retired, Value | $ 3,408 | ||
Common Class A | |||
Share Repurchases And Retirement [Line Items] | |||
Authorized amount | $ 100,000 | ||
Shares repurchased and retired, Shares | 0 | 160,405 | |
Shares repurchased and retired, Value | $ 3,400 | ||
Shares repurchased, average cost | $ 21.24 | ||
Share repurchase value of remaining | $ 62,500 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Components of Company's Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Finite Lived Intangible Assets [Line Items] | |||
Net Balance | $ 95,841 | $ 101,516 | |
Amortization expense | 7,200 | $ 7,400 | |
Franchise agreements | |||
Finite Lived Intangible Assets [Line Items] | |||
Initial Cost | 224,566 | 225,716 | |
Accumulated Amortization | (128,725) | (124,200) | |
Net Balance | $ 95,841 | $ 101,516 | |
Franchise agreements | Weighted Average | |||
Finite Lived Intangible Assets [Line Items] | |||
Useful life of intangible assets | 12 years 1 month 6 days | 12 years 1 month 6 days | |
Other Intangible Assets | |||
Finite Lived Intangible Assets [Line Items] | |||
Initial Cost | $ 71,689 | $ 70,210 | |
Accumulated Amortization | (53,563) | (51,034) | |
Net Balance | $ 18,126 | $ 19,176 | |
Other Intangible Assets | Weighted Average | |||
Finite Lived Intangible Assets [Line Items] | |||
Useful life of intangible assets | 4 years 6 months | 4 years 6 months | |
Software | |||
Finite Lived Intangible Assets [Line Items] | |||
Initial Cost | $ 54,498 | $ 52,918 | |
Accumulated Amortization | (41,000) | (39,192) | |
Net Balance | $ 13,498 | $ 13,726 | |
Software | Weighted Average | |||
Finite Lived Intangible Assets [Line Items] | |||
Useful life of intangible assets | 4 years 1 month 6 days | 4 years 1 month 6 days | |
Software Development | |||
Finite Lived Intangible Assets [Line Items] | |||
Capitalized software development costs | $ 2,100 | $ 1,000 | |
Trademarks | |||
Finite Lived Intangible Assets [Line Items] | |||
Initial Cost | 973 | 971 | |
Accumulated Amortization | (681) | (649) | |
Net Balance | $ 292 | $ 322 | |
Trademarks | Weighted Average | |||
Finite Lived Intangible Assets [Line Items] | |||
Useful life of intangible assets | 9 years 1 month 6 days | 9 years 1 month 6 days | |
Non-compete agreements | |||
Finite Lived Intangible Assets [Line Items] | |||
Initial Cost | $ 12,948 | $ 13,051 | |
Accumulated Amortization | (8,786) | (8,156) | |
Net Balance | $ 4,162 | $ 4,895 | |
Non-compete agreements | Weighted Average | |||
Finite Lived Intangible Assets [Line Items] | |||
Useful life of intangible assets | 5 years | 5 years | |
Training materials | |||
Finite Lived Intangible Assets [Line Items] | |||
Initial Cost | $ 2,400 | $ 2,400 | |
Accumulated Amortization | $ (2,400) | $ (2,400) | |
Training materials | Weighted Average | |||
Finite Lived Intangible Assets [Line Items] | |||
Useful life of intangible assets | 0 years | 0 years | |
Other | |||
Finite Lived Intangible Assets [Line Items] | |||
Initial Cost | $ 870 | $ 870 | |
Accumulated Amortization | (696) | (637) | |
Net Balance | $ 174 | $ 233 | |
Other | Weighted Average | |||
Finite Lived Intangible Assets [Line Items] | |||
Useful life of intangible assets | 7 years | 7 years |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Estimated Future Amortization of Intangible Assets, Other Than Goodwill (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
Remainder of 2024 | $ 19,512 |
2025 | 23,119 |
2026 | 16,091 |
2027 | 9,118 |
2028 | 8,274 |
Thereafter | 37,853 |
Estimated future amortization expense | $ 113,967 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Changes in Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Changes to goodwill | |
Beginning Balance | $ 241,164 |
Ending Balance | 239,930 |
Real Estate | |
Changes to goodwill | |
Beginning Balance | 241,164 |
Effect of changes in foreign currency exchange rates | (1,234) |
Ending Balance | $ 239,930 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accrued Liabilities. | ||
Marketing Funds | $ 30,451 | $ 28,753 |
Accrued payroll and related employee costs | 7,917 | 14,231 |
Accrued taxes | 2,040 | 2,567 |
Accrued professional fees | 1,165 | 937 |
Settlement payable | 55,000 | 55,700 |
Other | 7,812 | 5,246 |
Accrued liabilities | $ 104,385 | $ 107,434 |
Accrued Liabilities - Rollforwa
Accrued Liabilities - Rollforward related to restructure (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Sep. 30, 2023 | |
Accrued Liabilities. | ||
Beginning balance | $ 2,622 | |
Severance and other related expenses | (27) | $ 4,300 |
Cash payments | (1,239) | |
Ending balance | $ 1,356 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt | ||
Senior Secured Credit Facility | $ 447,350 | $ 448,500 |
Less unamortized debt issuance costs | (2,738) | (2,896) |
Less unamortized debt discount costs | (968) | (1,024) |
Less current portion | (4,600) | (4,600) |
Debt, net of current portion | $ 439,044 | $ 439,980 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt | ||
Remainder of 2024 | $ 3,450 | |
2025 | 4,600 | |
2026 | 4,600 | |
2027 | 4,600 | |
2028 | 430,100 | |
Long term debt | $ 447,350 | $ 448,500 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jul. 21, 2021 | Mar. 31, 2024 | Jun. 30, 2023 | |
Senior Secured Credit Facility Refinancing | |||
Debt Instrument [Line Items] | |||
Excess cash flow payment | $ 0 | ||
Excess cash flow repayment (as a percent) | 50% | ||
Leverage ratio under debt covenant | 8.51 | ||
Amount of consolidated EBITDA | $ 42.8 | ||
Constitutes an event of default | $ 15 | ||
Percentage of proceeds of additional debt incurred not permitted by credit facility required to repay term loans | 100% | ||
Percentage of proceeds of assets sales required to repay term loans and reduce revolving commitments | 100% | ||
Percentage of amounts recovered under insurance policies required to repay term loans and reduce revolving commitments | 100% | ||
Senior Secured Credit Facility Refinancing | Equal To or Less Than 4.25 But Above 3.75 Percent | |||
Debt Instrument [Line Items] | |||
Percentage of excess cash flow repayments | 25% | ||
Senior Secured Credit Facility Refinancing | Less Than 3.75 Percent | |||
Debt Instrument [Line Items] | |||
Excess cash flow payment | $ 0 | ||
Leverage ratio under debt covenant | 3.75 | ||
Senior Secured Credit Facility Refinancing | Below 3.50 Percent | |||
Debt Instrument [Line Items] | |||
Leverage ratio under debt covenant | 3.50 | ||
Senior Secured Credit Facility Refinancing | Above 3.50 Percent | |||
Debt Instrument [Line Items] | |||
Leverage ratio under debt covenant | 3.50 | ||
Amount of restricted payments limit | $ 50 | ||
Percentage of restricted payments limit | 50% | ||
Senior Secured Credit Facility Refinancing | Above 4.50 Percent | |||
Debt Instrument [Line Items] | |||
Leverage ratio under debt covenant | 4.50 | ||
Senior Secured Credit Facility Refinancing | Not Exceeding 4.50 Percent | |||
Debt Instrument [Line Items] | |||
Leverage ratio under debt covenant | 4.50 | ||
Senior Secured Credit Facility Refinancing | Excess of 4.25 Percent | |||
Debt Instrument [Line Items] | |||
Leverage ratio under debt covenant | 4.25 | ||
Senior Secured Credit Facility Refinancing | Maximum | Equal To or Less Than 4.25 But Above 3.75 Percent | |||
Debt Instrument [Line Items] | |||
Leverage ratio under debt covenant | 4.25 | ||
Senior Secured Credit Facility Refinancing | Minimum | Equal To or Less Than 4.25 But Above 3.75 Percent | |||
Debt Instrument [Line Items] | |||
Leverage ratio under debt covenant | 3.75 | ||
Senior Secured Credit Facility Refinancing | Federal Reserve Bank of New York | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Senior Secured Credit Facility Refinancing | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
Senior Secured Credit Facility Refinancing | London Interbank Offered Rate (LIBOR) | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Senior Secured Credit Facility Refinancing | SOFR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
Senior Secured Credit Facility Refinancing | SOFR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Term loan | Senior Secured Credit Facility Refinancing | |||
Debt Instrument [Line Items] | |||
Credit facility, borrowing capacity | $ 460 | ||
Mandatory principal payments | $ 1.2 | ||
Loan term | 7 years | ||
Debt instrument, interest rate | 7.90% | ||
Revolving loan facility | |||
Debt Instrument [Line Items] | |||
Amounts drawn on line of credit | $ 0 | ||
Revolving loan facility | Senior Secured Credit Facility Refinancing | |||
Debt Instrument [Line Items] | |||
Credit facility, borrowing capacity | $ 50 | ||
Revolving loan facility commitment fee on average daily amount of unused portion | 0.50% | ||
ABR loans | Senior Secured Credit Facility Refinancing | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.50% | ||
ABR loans | Senior Secured Credit Facility Refinancing | Eurodollar | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1% |
Fair Value Measurements - Compa
Fair Value Measurements - Company's liabilities measured at fair value on a recurring basis (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) item | Dec. 31, 2023 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of gross revenues to be paid yearly | 8% | |
Change in franchise sales - percentage | 10% | |
Annual payment period | 120 days | |
Change in discount rate | 1% | |
Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ 2,674 | $ 2,760 |
Level 3 | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 2,674 | 2,760 |
Motto | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 2,200 | 2,170 |
Motto | Level 3 | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 2,200 | 2,170 |
Gadberry | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 474 | 590 |
Gadberry | Level 3 | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ 474 | $ 590 |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assumed number of franchises sold annually | item | 40 | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assumed number of franchises sold annually | item | 90 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of the contingent consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value adjustments | $ 34 | $ (4) |
Cash payments | (120) | $ (120) |
Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at Beginning | 2,760 | |
Balance at Ending | 2,674 | |
Level 3 | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at Beginning | 2,760 | |
Fair value adjustments | 34 | |
Cash payments | (120) | |
Balance at Ending | $ 2,674 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Senior Secured Credit Facility (Details) - Senior Secured Credit Facility Refinancing - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Carrying amounts | ||
Debt Instrument [Line Items] | ||
Long term debt, carrying amount | $ 443,644 | $ 444,580 |
Level 2 | Estimated fair value | ||
Debt Instrument [Line Items] | ||
Long term debt, fair value | $ 417,154 | $ 421,590 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Income Taxes | |
Increase (decrease) of deferred tax valuation allowance | $ 0.2 |
Amounts payable under tax receivable agreements | $ 0.3 |
Equity-Based Compensation - 202
Equity-Based Compensation - 2023 Omnibus Incentive Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Employee stock-based compensation expense | ||
Equity-based compensation expense | $ 5,923 | $ 4,451 |
Time-based awards | ||
Employee stock-based compensation expense | ||
Equity-based compensation expense | 3,661 | 2,504 |
Time-based awards | CEO | ||
Employee stock-based compensation expense | ||
Equity-based compensation expense | 200 | |
Performance-based awards | ||
Employee stock-based compensation expense | ||
Equity-based compensation expense | 881 | 717 |
Performance-based awards | CEO | ||
Employee stock-based compensation expense | ||
Equity-based compensation expense | 300 | |
Bonus settled in shares | ||
Employee stock-based compensation expense | ||
Equity-based compensation expense | $ 1,381 | $ 1,230 |
Equity-Based Compensation - Tim
Equity-Based Compensation - Time-Based Restricted Stock (Details) - Time-based awards $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) $ / shares shares | |
Restricted Stock Units | |
Nonvested at beginning of period | shares | 1,066,594 |
Granted | shares | 1,197,039 |
Shares vested (including tax withholding) | shares | (375,288) |
Forfeited | shares | (24,591) |
Nonvested at end of period | shares | 1,863,754 |
Nonvested at beginning of period, Weighted average grant date fair value per share | $ / shares | $ 18.70 |
Granted, Weighted average grant date fair value per share | $ / shares | 8.67 |
Shares vested (including tax withholding) , Weighted average grant date fair value per share | $ / shares | 22.59 |
Forfeited, Weighted average grant date fair value per share | $ / shares | 20.88 |
Nonvested at end of period, Weighted average grant date fair value per share | $ / shares | $ 11.45 |
Unrecognized compensation cost | $ | $ 15.8 |
Period for recognition of RSU compensation expense | 2 years 1 month 6 days |
Equity-Based Compensation - Per
Equity-Based Compensation - Performance-based Restricted Stock (Details) - Performance-based awards $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) $ / shares shares | |
Restricted Stock Units | |
Nonvested at beginning of period | shares | 783,231 |
Granted | shares | 423,449 |
Forfeited | shares | (54,285) |
Nonvested at end of period | shares | 1,152,395 |
Nonvested at beginning of period, Weighted average grant date fair value per share | $ / shares | $ 7.86 |
Granted, Weighted average grant date fair value per share | $ / shares | 13.62 |
Forfeited, Weighted average grant date fair value per share | $ / shares | 21.79 |
Nonvested at end of period, Weighted average grant date fair value per share | $ / shares | $ 9.32 |
Unrecognized compensation cost | $ | $ 5.1 |
Period for recognition of RSU compensation expense | 1 year 10 months 24 days |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | |||||||||
Apr. 25, 2024 USD ($) | Mar. 15, 2024 USD ($) | Feb. 01, 2024 USD ($) | Jan. 18, 2024 defendant | Oct. 31, 2023 USD ($) defendant | Sep. 15, 2023 USD ($) installment D | Sep. 05, 2023 USD ($) | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Apr. 22, 2023 class item | |
HomeServices of America, Inc. [Member] | Subsequent Event | ||||||||||
Commitments and Contingencies | ||||||||||
Total settlement amount | $ 250 | |||||||||
Moehrl Related Antitrust Litigations | ||||||||||
Commitments and Contingencies | ||||||||||
Number of classes of home sellers | class | 2 | |||||||||
Number of covered multiple listing service | item | 20 | |||||||||
Moehrl Related Antitrust Litigations | Pending Litigation | MLS Property Information Network, Inc [Member] | ||||||||||
Commitments and Contingencies | ||||||||||
Settlement amount | $ 3 | |||||||||
Moehrl Related Antitrust Litigations | Settled Litigation | National Association of Realtors, HomeServices of America, Inc., Keller Williams Realty, Inc [Member] | ||||||||||
Commitments and Contingencies | ||||||||||
Conspiracy existed and awarded | $ 1,800 | |||||||||
Number of Defendants | defendant | 3 | |||||||||
Moehrl Related Antitrust Litigations | Settled Litigation | Keller Williams Realty, Inc [Member] | ||||||||||
Commitments and Contingencies | ||||||||||
Total settlement amount | $ 70 | |||||||||
Moehrl Related Antitrust Litigations | Settled Litigation | National Association Of Realtors [Member] | ||||||||||
Commitments and Contingencies | ||||||||||
Total settlement amount | $ 418 | |||||||||
Nationwide Claims | Settled Litigation | ||||||||||
Commitments and Contingencies | ||||||||||
Settlement amount | $ 55 | |||||||||
Number of installments | installment | 3 | |||||||||
The percentage of amount deposited in the settlement fund | 25% | 25% | ||||||||
The amount deposited in the settlement fund | $ 13.8 | $ 13.8 | ||||||||
Nationwide Claims | Settled Litigation | Scenario, Plan [Member] | ||||||||||
Commitments and Contingencies | ||||||||||
The percentage of amount deposited in the settlement fund | 50% | |||||||||
Number of business days of final court approval of settlement | D | 10 | |||||||||
Toronto Regional Real Estate Board [Member] | Pending Litigation | ||||||||||
Commitments and Contingencies | ||||||||||
Number of Defendants | defendant | 70 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Segment Information | |
Number of operating segments | 4 |
Segment Information - Revenue (
Segment Information - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information | ||
Total revenue | $ 78,287 | $ 85,401 |
Real Estate | ||
Segment Reporting Information | ||
Total revenue | 54,448 | 60,630 |
Mortgage | ||
Segment Reporting Information | ||
Total revenue | 3,633 | 3,188 |
Marketing Funds fees | ||
Segment Reporting Information | ||
Total revenue | 20,206 | 21,342 |
Other. | ||
Segment Reporting Information | ||
Total revenue | 241 | |
Continuing franchise fees | ||
Segment Reporting Information | ||
Total revenue | 31,085 | 32,076 |
Continuing franchise fees | Real Estate | ||
Segment Reporting Information | ||
Total revenue | 28,365 | 29,547 |
Continuing franchise fees | Mortgage | ||
Segment Reporting Information | ||
Total revenue | 2,720 | 2,529 |
Annual dues | ||
Segment Reporting Information | ||
Total revenue | 8,225 | 8,618 |
Annual dues | Real Estate | ||
Segment Reporting Information | ||
Total revenue | 8,225 | 8,618 |
Broker fees | ||
Segment Reporting Information | ||
Total revenue | 10,716 | 10,892 |
Broker fees | Real Estate | ||
Segment Reporting Information | ||
Total revenue | 10,716 | 10,892 |
Franchise sales and other revenue | ||
Segment Reporting Information | ||
Total revenue | 8,055 | 12,473 |
Franchise sales and other revenue | Real Estate | ||
Segment Reporting Information | ||
Total revenue | 7,142 | 11,573 |
Franchise sales and other revenue | Mortgage | ||
Segment Reporting Information | ||
Total revenue | $ 913 | $ 659 |
Segment Information - Reconcili
Segment Information - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | ||
Adjusted EBITDA | $ 18,993 | $ 19,920 |
Equity-based compensation expense | (5,923) | (4,451) |
Acquisition-related expense | (37) | |
Fair value adjustments to contingent consideration | (34) | 4 |
Restructuring charges | 32 | (39) |
Other | (1,064) | (410) |
Interest income | 1,001 | 1,004 |
Interest expense | (9,256) | (8,245) |
Depreciation and amortization | (7,852) | (8,033) |
Income (loss) before provision for income taxes | (4,103) | (287) |
Real Estate | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | ||
Adjusted EBITDA | 20,203 | 22,692 |
Mortgage | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | ||
Adjusted EBITDA | (1,161) | (2,597) |
Other. | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | ||
Adjusted EBITDA | $ (49) | $ (175) |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (3,353) | $ (671) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Modified | false |
Rule 10b5-1 Arrangement Modified | false |